Friday, 18 February 2022

Market Summary

Market Summary 18 February 2022

Bitcoin Price: US$ 40,515.70 (-7.65%)
Ethereum Price: US$ 2,891.87 (-7.38%)


Cronos Expands, LooksRare Stalls, $MAGIC Growth, Intro to Celestia

  • Cronos Chain is the EVM sidechain running in parallel to the Chain. Users and developers enjoy the EVM compatibility of their go-to wallets and solidity code base when using Cronos Chain.
  • Since December, Total Value Locked (TVL) on Cronos has grown from $1B to near $2.5B today, a whopping 2.5x despite uncertain market conditions.
  • The growth is mainly led by MM Finance (AMM) and MM Optimizer (Yield Aggregator), which grew their TVLs by 46% and 56% respectively over the past 7 days.
  • Cronos’s growth has been interesting to observe as the main bulk of their TVL comes from their users. This means there are more new entrants that have their first DeFi experience on the Cronos chain.
  • As expected, trading volumes on LooksRare dropped steeply after the halving of trading rewards from 9 Feb. This is because majority of volume on LooksRare is still due to wash trading for rewards. The number of daily active users tell a more genuine story about platform adoption: we can see that LooksRare is still far from capturing meaningful marketshare from OpenSea.
  • $LOOKS token price has also fallen >60% since the beginning of February. This is in part due to yield farmers selling and moving on because the APR is no longer as high, but also related to recent controversy over the token incentive model where the team was able to collect staking rewards for their unvested tokens. Over 23,000 ETH (~$73M) was cashed out by the team and sent to Tornado Cash. This token incentive model has been transparently stated in their documents, although it has led to some obvious questions as to whether it is equitable for team members to be earning so much in this way.
  • Celestia’s vision is a marriage of Cosmos’ sovereign interoperable zones and a rollup-centric Ethereum with shared security.”
  • A monolithic chain where everyone executes all transactions is inherently not scalable. Indeed, this is why almost every major ecosystem is building for a multi-chain world. Celestia was born in search of an answer to the following question; “what’s the least a blockchain can do to offer shared security for other blockchains (i.e. rollups)?”


SEC chair hints at no spot Bitcoin ETFs yet, but cites ‘careful consideration’ for future

  • Gary Gensler, chair of the U.S. Securities and Exchange Commission, has responded to a letter from lawmakers calling the regulator denying approval of Bitcoin spot exchange-traded funds “unacceptable.”
  • In a Tuesday letter from Gensler addressed to Minnesota Representative Tom Emmer, the SEC chair hinted that the regulatory body was no closer to approving a Bitcoin (BTC) spot ETF in the United States capable of preventing “fraudulent and manipulative acts and practices” by the standards of the Exchange Act. Gensler reiterated his stance of being technology-neutral, but that he would give “careful consideration” to the concerns Emmer raised in November.


FBI is launching team to address crypto exploitation: US Deputy Attorney General

  • U.S. Deputy Attorney General Lisa Monaco has announced that the Federal Bureau of Investigation will be increasing efforts to address enforcement in the digital asset space with the formation of a new team.
  • Speaking at the Munich Cyber Security Conference on Thursday, Monaco said the FBI was creating a “specialized team dedicated to cryptocurrency” called the Virtual Asset Exploitation Unit. The unit will include crypto experts and as well have the means for blockchain analysis that may eventually be used to track and seize illicit funds.
  • The formation of the FBI team comes more than four months after Monaco announced the launch of the Justice Department’s National Cryptocurrency Enforcement Team. The two will be working together to pursue actors who “abuse cryptocurrency to commit crime.”


DCG leads $205M growth fund for The Graph

  • Blockchain data indexing protocol The Graph has launched a $205 million ecosystem fund to lure new developers to its platform, offering further evidence that venture capital firms were still keen to support growth funds centered around decentralized applications.
  • The ecosystem fund was financed by Digital Currency Group, Multicoin Capital, Reciprocal Ventures, Gumi Cryptos Capital, NCG and HashKey. The fund’s stated purpose is to accelerate the growth and development of key projects in The Graph’s ecosystem.
  • HashKey Capital managing director Deng Chao said the company will provide resources and guidance to decentralized application developers and projects looking to gain access to institutional markets. Digital Currency Group, better known as DCG, already serves as a delegator for The Graph and will further support the ecosystem’s development around decentralized finance and the Metaverse.


Sequoia Capital launches crypto fund worth up to $600M

  • American venture capital firm Sequoia Capital has launched a new cryptocurrency fund as part of its ongoing efforts to bootstrap the next generation of blockchain-focused startups.
  • Bloomberg reported Thursday that Sequoia is allocating up to $600 million towards the new sector-specific fund. Shaun Maguire, a partner at Sequoia, described crypto as a “megatrend over the next 20 years” and called it “the future of money.”
  • The new crypto fund is part of three new sub-funds that were introduced by Sequoia on Thursday. The new funds, which operate under the Sequoia Capital Fund, will rely on capital that’s already committed by the firm’s limited partners.


Bitcoin extends decline below $42K ahead of fresh Fed comments on inflation

  • Bitcoin (BTC) fell further with stocks on the Wall Street open Feb. 17 as nervous markets awaited further U.S. economic policy cues and battled geopolitical tensions.
  • Data from Cointelegraph Markets Pro and TradingView showed BTC/USD losing the $42,000 mark for the first time in several days at the start of trading.
  • The Fed and tensions over Ukraine had already formed a backdrop to lackluster market performance both in crypto and beyond, with that trend staying firmly in force on the day.
  • With the likelihood increasing that a rate hike could come from the United States next month, attention was on James Bullard, president of the St. Louis Fed, ahead of a statement due less than an hour from the time of writing.


Interchain Accounts is the biggest upgrade to Cosmos since Stargate

  • On Thursday, the Interchain Foundation, a nonprofit steward of the Cosmos ecosystem, announced the release of Interchain Accounts.
  • The Inter-Blockchain Communications protocol (IBC) enables an entire blockchain to control an account on a separate chain. It is the largest software upgrade to the Cosmos ecosystem since Stargate. To date, there are 38 projects utilizing IBC, including Terra, Chain and Gravity Bridge, with 8.4 million transactions in the past 38 days.
  • With Interchain Accounts, one blockchain can access the application features of another blockchain, such as staking, voting, swapping tokens, etc. “Enabling composability in IBC allows innovation in distinct applications to be deployed without needing to upgrade the entire Interchain,” said Charleen Fei, IBC product lead at the Interchain Foundation.
  • The same day, deBridge, a cross-chain interoperability and liquidity transfer protocol, announced the launch of its mainnet. Through deBridge, users will be able to transfer assets and data between blockchain networks starting with Ethereum, BNB Chain, Heco Chain, Arbitrum, and Polygon. For example, Solana users can interact with protocols in Polygon directly from their Phantom wallets without switching wallets or networks.

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