Wednesday, 16 March 2022

Market Summary

Market Summary 16 March 2022

Bitcoin Price: US$ 39,280.33 (-0.99%)
Ethereum Price: US$ 2,617.73 (+1.09%)

 

Stablecoin Growth, MakerDAO Budgeting, & Intro to MetaMundo

  • The supply of the top 5 stablecoins has grown by $20B in 2022. USDC was responsible for the bulk of the growth, expanding $10B in supply, or half of the growth year-to-date.
  • USDT’s supply recently crossed $80B, but its growth remains flat this year. USDT has been the subject of recent criticism, with hedge fund Fir Tree announcing that they’re shorting USDT on the basis that the high-yield commercial papers that Tether holds are linked to Evergrande Crisis. This comes after USDT recently reduced its exposure to commercial paper by $6.2B in February.
  • UST’s growth has been nothing but impressive, growing by 44% YTD. In absolute terms, UST’s supply growth ranks at 2nd, adding $4.4B in supply YTD. This was catalyzed by LFG raising $1B to form BTC reserve for UST, with an additional 12M Luna donated by Terraform Labs to LFG to be burned and further grow LFG’s UST reserves.
  • Maker DAO delegate Doo_Nam has started a conversation in Maker DAOs forum regarding budgeting and transparency. They feel there is an increasing amount of Maker DAO core units requesting budget increases while profit is declining. According to the thread, Maker DAO expenses are about $70m per year, and according to makerburn.com, the estimated annual income is about $67m per year. They also point out that budgets are often not examined as carefully as they should be due to the sheer amount of budgets to review and implicit social pressure to pass budgets without question. To remedy this situation, Doo_Nam, recommends the following:
    • Freezing core unit budgets for six months to a year after a budget increase.
    • Cap budget reviews to 1-2 per cycle.
    • Require or encourage budget submissions to include market rates for services.
    • Rethink the structure of the core units.
  • Con Arguments: The only real strong counterpoint is that some core units’ actions are not directly measurable by ROI. This counterpoint means that evaluating core unit performance and budget allocations will require more nuance than directly questioning how much revenue they bring to Maker DAO.

 

Ethereum Merge testing on Kiln mostly successful, save for one minor bug

  • On Tuesday, Ethereum (ETH) developer Tim Beiko tweeted that Kiln successfully passed the Ethereum Merge, with validators producing post-merge blocks containing transactions. Kiln will be the last Merge testnet (formerly Ethereum 2.0) before existing public testnets are upgraded. “Merge” involves taking Ethereum’s Execution Layer from the existing Proof of Work layer and merging it with the Consensus Layer from the Beacon chain, turning the blockchain into a proof-of-stake network. The Foundation writes: 
  • “This merge signals the culmination of six years of research and development in Ethereum and will result in a more secure network, predictable block times, and a 99.98%+ reduction in power use when it is released on mainnet later in 2022.”
  • However, it appears not everything went according to plan during testing. According to Kiln Explorer, there were several errors relating to contract creation. In a follow-up tweet, Beiko said a client was not producing blocks consistently, though “the network is stable, with >2/3rd of validators correctly finalizing.” A fellow Ethereum developer, Marius Van Der Wijden commented on the matter as well, pointing out that Prysm was proposing bad blocks during the transition on Kiln. 

 

GRT rallies 39% as subgraphs migrate to The Graph’s decentralized mainnet

  • As the growing digital economy undergoes a transition from Web2 to Web3, oracle and data providers are becoming an increasingly important sector for ensuring the reliable sharing and transfer of information. 
  • The Graph (GRT) is one protocol that is spearheading the integration of blockchain technology with data management and retrieval through the creation of open APIs known as subgraphs.
  • Data from Cointelegraph Markets Pro and TradingView shows that since hitting a low of $0.3155 on March 13, GRT has climbed 38.6% to a daily high of $0.44 on March 15 where it is now attempting to flip this major resistance level into support.
  • The biggest development surrounding GRT is the ongoing migration of Ethereum subgraphs to the decentralized mainnet of the Graph network.
  • A second development that has helped provide a boost to GRT and mainnet migrations was the release of The Graph Grants by The Graph Foundation.
  • A third factor bringing extra attention to The Graph was the announcement that the project will be hosting this year’s “Graph Day” beginning June 2 in San Francisco.
  • The event includes a day of presentations from leading protocol and DApp developers in the crypto industry who are focused on expanding the Web3 community and will be followed by a three-day hackathon where hackers and developers will attempt to find vulnerabilities in the project. This is the first official hackathon for The Graph and will take place between June 3–5.

 

Helium Roaming Services Brings New Opportunities for Partners

  • The team is very excited to announce Helium Roaming Services! Roaming with Helium gives public and private LoRaWAN network providers around the world the ability to leverage Helium’s ubiquitous coverage, enabling both these providers and their customers to expand into new markets globally.
  • Helium Roaming Services allows roaming partners to view and analyze their data through the new Roaming dashboard, giving them full visibility into metrics.

 

ConsenSys raises $450M in Series D funding, doubles valuation in four months

  • On Tuesday, ConsenSys, the leading Ethereum and decentralized protocols software company with product suites such as MetaMask, Infura and Truffle, announced the close of a $450-million Series D funding round led by ParaFi Capital. Notable new investors included Temasek, SoftBank Vision Fund 2, Microsoft, Anthos Capital, Sound Ventures and C Ventures. The deal more than doubles its valuation since the firm’s $200-million Series C raise in November 2021. 
  • Proceeds from the round will, in part, be converted to Ether (ETH) to rebalance the ratio of ETH to United States dollar equivalents in ConsenSys’ treasury. The firm actively seeks to use its own financial infrastructure to earn yields on such assets in decentralized finance (DeFi), protocols and via staking. The proceeds will also support the expansion of MetaMask, with a major redesign scheduled for release later in 2022 and the roll-out of a plug-in extensibility system that will allow integration with a wide variety of blockchain protocols and account security schemes.

 

Bitcoin risks final ‘bear market capitulation’ as rich investors continue BTC selloff — analyst

  • Bitcoin (BTC) could undergo one last bear market capitulation if “whales” — addresses that hold more than $1 million worth of Bitcoin — ramp up their selling pressure, according to on-chain analyst Willy Woo.
  • Woo assessed the average price at which short-term investors entered the Bitcoin market across history and charted the daily change in the value. That resulted in a cost basis, a metric that signals when “inexperienced” traders sell BTC to “experienced” traders during a BTC free fall, which typically coincides with the market bottom.
  • Woo’s outlook appeared in line with the rising speculations about Bitcoin’s next big drop. For instance, Christopher Yates, the editor at AcheronInsights, said BTC’s price could crash to $30,000 due to the “deteriorating macro environment.”

 

Legal DAOs: Why are the Marshall Islands betting on a decentralized future?

  • The Republic of the Marshall Islands made history in the second week of February after it formally recognized decentralized autonomous organizations (DAOs) as legal entities. 
  • The Marshall Islands revised its Non-Profit Entities Act 2021, making it possible for any DAO to register and commence operations in the country. The amendments to the law mean DAOs can now incorporate as nonprofit LLCs with bylaws and membership that can be recorded on the blockchain.
  • David Paul, Minister-in-Assistance to the President and Environment Minister of the Republic of the Marshall Islands, played a key role in formulating and pushing the DAO legislation. Speaking to Cointelegraph, Paul explained why the country has bet its money on becoming a hub for DAOs:
  • “The Republic of the Marshall Islands sees DAOs as the first major step toward becoming an internationally recognized and premier hub for the blockchain industry. In whatever shape or form, the digital economy is the way of the future and we want to position ourselves as the jurisdiction of choice. We specifically recognize DAOs at this moment as an early-stage innovation in the blockchain sector, and the Marshall Islands wants to be a leader in the DAO sector.”

 

Bitcoin stealing malware: Bitter reminder for crypto users to stay vigilant

  • An unfortunate Bitcoin (BTC) user was duped out of 0.255 BTC, almost $10,000, due to malware running on their computer. 
  • Louis Nel, a tech blogger and crypto enthusiast, flagged the issue on Twitter, referring to his friend as ‘C.’
  • Nel told Cointelegraph that C’s “Bitcoin was sent from Kraken to VALR, a South African exchange,” however, “malware running on his computer intercepted the copied data and inserted a new wallet address when he pasted this without realizing.”
  • VALR exchange confirmed that the wallet address does not belong to them; in further warning signs, Nel added that “there are nine transactions into that wallet, so others have been duped as well.”

 

Binance awarded Bahrain crypto service provider license

  • Crypto exchange Binance will provide fully regulated services to its first country in the Middle East, thanks to a license granted by Bahrain’s central bank.
  • Bahrain was able to issue the license to the world’s largest exchange through the Cooperation Council for the Arab States of the Gulf (GCC). CEO Changpeng Zhao announced the crypto-asset service provider license on Monday.
  • Binance’s new license allows it to offer crypto services, including trading, custody and portfolio management for customers in the Middle East’s smallest economy. Last December, Binance received an in-principal approval to operate in Bahrain. That approval has now become a full-fledged license.
  • Central Bank of Bahrain (CBB) Governor HE Rasheed Al Maraj said that the bank was “developing regulations aligned with global trends” that “enable innovation and best practices.”
  • The license allows Binance to continue its expansion efforts across global jurisdictions while complying with local regulations. Last week, CZ stated that he wanted Binance to “identify and invest in” traditional businesses in every economic sector worldwide with the express intent of tying them into cryptocurrency.

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