Thursday, 24 February 2022

Market Summary

Market Summary 24 February 2022

Bitcoin Price: US$ 37,250.01 (-2.56%)
Ethereum Price: US$ 2,579.71 (-2.15%)

 

X2Y2 vs LooksRare, Aave V3 Portal, & DAO Proposals

  • X2Y2 is the latest NFT marketplace that launched in hopes of siphoning away liquidity from the leading NFT marketplace, OpenSea.
  • Similar to LooksRare, it initially gained traction through its airdrop to OpenSea users. If you have traded any amount on OpenSea before, you will qualify for some reward, but you’ll have to weigh the costs if it is worth claiming your allocation. The maximum airdrop claim is 1000 $X2Y2 per wallet, which is worth ~$950 as of today. 
  • LooksRare notably gained traction for its volume-based trading rewards largely resulted in wash trading. X2Y2 goes the other route by promoting rewards for NFT listings. X2Y2’s reward methodology makes it tough to game, as you’ll have higher risk by owning the NFT. Plus, they calculate rewards based on last sale, current floor price, and other factors.
  • Aave is currently the fourth largest DeFi protocol with ~$15bn in TVL,  equating to more than a 6 fold increase since the beginning of 2021. This growth is due, in no small part, to their cross-chain expansion efforts on Avalanche and Polygon, where it has cemented itself as the leading money market on both chains. The team will soon deploy on Arbitrum while also setting their sights on Boba, Optimism, and Starkware. With the imminent launch of Aave v3, it wouldn’t be surprising to see them launch on a few other chains either to continue amassing liquidity. This brings us to the first key feature of Aave v3: Portals. 
  • In the event that liquidity becomes scarce on Avalanche, Aave’s interest rate computation module will move interest rates up on Avalanche to ensure people are incentivized to deposit. Since Portals is not a trustless feature (yet), Aave’s governance is also expected to introduce a credit limit cap, and only reputable protocols will be whitelisted to avoid introducing too much risk into the system.
  • If risks are properly managed, Portals is most definitely a net positive for Aave, liquidity providers and bridge protocols. A new business model should arise from this development, as bridge protocols provide the infrastructure while Aave v3 provides the liquidity that is needed to power that infrastructure instead of having to perpetually subsidize liquidity with token emissions.
  • Aave is currently voting on three proposals.
    • Cronos Chain: As readers can probably guess, this proposal asks the Aave community to signal a willingness to launch Aave v3 on Cronos.
    • Adding alUSD: Aave is also running a vote to add the Alchemix stablecoin, alUSD, as a borrowable asset to Aave v2.
    • AgEUR for v3: This proposal, from Angle Protocol, is asking Aave holders to approve adding agEUR to v3 on Polygon when it launches.
  • The Gnosis DAO community is deciding on whether or not to burn 715k GNO vested to the DAO. According to the proposal, this is being considered to better decentralize the supply of GNO. This represents 7.15% of the total supply.

 

Avalanche price rallies 20% after report reveals $25M inflows into AVAX investment vehicles

  • Avalanche (AVAX) rallied by around 20% in the last two days as a new report revealed millions of dollars flowing into AVAX-based investment products.
  • Penned by CoinShares, an institutional crypto fund manager, the report highlighted that Avalanche-based investment vehicles attracted about $25 million in the week ending Feb. 21, the second-biggest inflow recorded in the said period after Bitcoin’s (BTC) $89 million.
  • In contrast, Ether (ETH), Avalanche’s top rival in the smart contracts sector, witnessed an outflow totaling $15 million. On the whole, Avalanche and similar cryptocurrency investment products attracted around $109 million, recording their fifth week of positive inflows in a row.

 

Warner Music Group announces partnership with blockchain gaming developer Splinterlands

  • On Wednesday, Warner Music Group announced it had entered into a partnership with fantasy-themed collectible card game developer Splinterlands. The two companies will collaborate and enable opportunities for WMG artists to create and develop play-to-earn, arcade-style blockchain games. Last month, WMG made its first entry into the nonfungible token, or NFT, metaverse realm in a partnership with The Sandbox with the goal of providing WMG artists another outlet with which to engage their fans. In a statement, Oana Ruxandra, chief digital officer and executive vice president of business development at WMG, said:
  • “By partnering with Splinterlands to build custom tokenized games, we’ll unlock new revenue streams for our artists who have an interest in the space while elevating the role of fandom and community.”

 

Mexican senator to propose crypto law: ‘We need Bitcoin as legal tender’

  • Amid El Salvador reporting on cases of the positive impact of the country’s Bitcoin (BTC) adoption, a government official in Mexico has once again urged that the country should follow El Salvador’s example on Bitcoin.
  • Indira Kempis, a senator representing Nuevo León state, is confident that Bitcoin should be legal tender in Mexico because its adoption can potentially drive global financial inclusion.
  • The senator is now developing a cryptocurrency bill based on El Salvador’s “Bitcoin Law.” She expects to introduce the bill to the Mexican Congress this year, Kempis said in an interview with El Salvador In English publication after visiting El Salvador a few weeks ago.
  • “It is clear to me that financial exclusion is one of the public problems that few of us have addressed with feasible alternatives, and that this type of technology is allowing us to generate an alternative so that millions of people can be included in the financial system,” Kempis said.

 

‘You’d better buy some Bitcoin’ — BTC figures defy Canada gov’t as ETF assets hit record

  • BTC remains the best bet when it comes to avoiding Canada lawmakers’ overreach, proponents argue.
  • Canada’s war on Bitcoin (BTC) appears to be backfiring as the country’s flagship exchange-traded fund (ETF) adds thousands of BTC.
  • Data from on-chain monitoring resource Coinglass shows that over the two weeks to Feb. 23, the Purpose Bitcoin ETF has increased its holdings from 28,854 BTC to 32,257 BTC — 11.8%.

 

Hedge fund report says Bitcoin price is ‘at a relatively inexpensive place’

  • Despite holding interest rates at record low levels, the cracks in the system have become more prominent as yields for U.S. Treasury Bonds “have been rising dramatically” according to markets analyst Dylan LeClair, who posted the following chart showing the rise.
  • The declines in the crypto market have thus far been highly correlated with the traditional markets as noted by Pantera Capital, but that could soon change as “crypto tends to be correlated with them for a period of roughly 70 days, so a bit over two months, and then it begins to break its correlation.”
  • When it comes to a timeline to recovery, Morehead suggested that the turnaround could come sooner than many expect and only be a matter of “weeks or a couple of months until we’re rallying very strongly.”
  • Morehead said, “We are quite bullish on the market, and we think prices are at a relatively inexpensive place.”

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