Wednesday, 28 September 2022

Market Summary

Market Summary 28 September 2022

Bitcoin Price: US$19,079.13 (-0.77%)
Ethereum Price: US$ 1,328.02 (-0.61%) 


ATOM Outperforms Major Layer-1s Amid Market Drawdown

  • Cosmos releases a new whitepaper with a new issuance model for ATOM and revamped Cosmos Hub.
  • FTX US wins the auction to buy assets of Voyager Digital for $1.4 billion. Elsewhere, Brett Harrison steps down as President of FTX US.
  • California, New York and 6 other US charge crypto lender Nexo for offering unregistered securities.
  • Alex Mashinsky steps down as CEO of bankrupt Celsius Network. Ashwin Prithipaul is also resigning as CFO after a 5-month term.
  • Binance will use fees from LUNC spot and margin trading pairs to buy and burn LUNC.
  • In the midst of a macro-driven bear market, major layer-1s are still battered. When compared to their previous ATHs in November 2021, the majority of layer-1 tokens are deep in negative territory. While the bearish sentiment persists, ATOM has gained more than 95% in the last 3 months.
  • ATOM’s relative outperformance can be attributed, in part, to the announcement of Cosmos 2.0, as well as the build-up to the annual Cosmos conference which took place yesterday.
  • Cosmos Hub is a blockchain that acts as an intermediary between all independent zones or blockchains created within the Cosmos Network.
  • The long-awaited release of interchain security allows Cosmos app chains to rely on the Cosmos Hub for security, which may result in increased ATOM usage and staking.
  • Currently, more than 66% of all ATOM is staked or delegated to validators. ATOM stakers are subject to a 21-day lock-up period.
  • With the announcement of ATOM 2.0 and an updated whitepaper, the project also proposes a new issuance schedule for ATOM and the introduction of liquid staking. It no longer requires exponential ATOM issuance to drive adoption.
  • Uniswap has generated a total of ~$370m in revenue over the last 180 days — all of which was distributed to liquidity providers (LPs).
  • There is a fundamental understanding that Uniswap generates this revenue because of LPs, and LPs deposit capital to the DEX knowing this fee-based revenue will accrue to them.
  • In terms of token rewards, Uniswap is unique as it does not reward its LPs with its own token (UNI). Instead, it solely relies on fees to incentivize liquidity provision. Over 50% of UNI’s token supply was retroactively airdropped to users, and the current circulating supply is ~76% of its max total supply.
  • All the revenue generated by Uniswap is organic and real. None of the generated revenue is due to token incentives, which suggests that the user base is sticky.
  • Since all protocol revenues go to LPs (and not token holders), one could argue the UNI token itself does not have an immediate value accrual mechanism. So, even though there is no token inflation, there’s no direct advantage for those who own UNI.
  • Talks of turning on the fee switch have ravaged the UNI community as the conversation has devolved into controversy, with small-to-medium token holders harboring a degree of animosity towards the team and larger token holders.
  • If this fee switch is turned on, it will be an immediate catalyst for UNI. But until then, UNI’s merit rests on its potential future value rather than tangible cash flows.


OpenSea NFT Marketplace Adds Support for Optimism

  • NFT marketplace OpenSea announced on Tuesday that it has expanded its offerings to include projects built on Ethereum layer-2 scaling solution Optimism.  
  • Optimism joins five other existing networks now supported by the marketplace: Ethereum, Solana, Polygon, Klatyn, and—as of last week—Arbitrum, another Ethereum scaler.


‘There Are No Safe Havens’ When the Dollar Is Strong, Veteran Trader Says

  • Bitcoin (BTC) may be up but that doesn’t necessarily mean the digital currency has a rosy future.
  • “There are no safe havens,” Glen Goodman, eToro crypto consultant, told CoinDesk TV on Tuesday, referring to price action in crypto, various world currencies and even U.S. Treasury bonds because of the increasing strength of the U.S. dollar.
  • “We’ve got a situation where as much money in the world as possible is going into dollars,” Goodman said during an appearance on CoinDesk TV’s “First Mover.” “That means everything else is starved.”
  • Even U.S. Treasury bonds – long considered to be the safest of safe havens by investors – “have been plummeting and plummeting, which in itself is a major danger to both the U.S. economy and the world economy,” he added.
  • As for bitcoin, he noted that its price has risen, despite a lack of “good news.”
  • “So imagine what a bit of good news like pausing interest rate [hikes] would mean to traders in the stock market and in the crypto market. Because stocks and crypto are so tightly correlated these days, it would be fantastic if opposing interest rates could just cheer everybody up,” he said.


Robinhood Beta Tests New Web3 Wallet With Polygon as First Blockchain

  • Trading app Robinhood has rolled out a new Web3 self-custody wallet for select iOS customers, the company announced Tuesday. 
  • Ten thousand Robinhood users who joined the waitlist in May will be able to beta test the product, the company said. The new product, called Robinhood Wallet, will support Polygon’s proof-of-stake chain as its first blockchain. 
  • “We chose Polygon due to its scalability, speed, low network fees, and robust developer ecosystem to provide one of the best trading experiences for customers,” Robinhood wrote in a Tuesday blog post. 
  • Polygon also became the first Ethereum-compatible blockchain, after Ethereum itself, to be supported by Coinbase for withdrawals and deposits of ether, Polygon’s native token MATIC, and the USDC stablecoin, in June.


The Fed has ‘not decided to proceed’ with a digital dollar, says Powell

  • Jerome Powell, chair of the Federal Reserve, shut down expectations for a U.S. central bank digital currency (CBDC) to be issued in the near future. 
  • The central bank leader said that the U.S. has “not decided to proceed” with the issuance of a CBDC for the time being.
  • “We do not see ourselves making that decision for some time,” he said Tuesday, speaking remotely on a panel about the role of central banks in digital markets during a conference in Paris.
  • Instead, the U.S. central bank will be working in collaboration with Congress and the executive branch to evaluate the policy and the technological issues. 
  • Powell went on to outline a multi-year period during which the Fed would focus on “building public confidence in our analysis and ultimate conclusions, which we certainly haven’t reached yet.”


US Fed Chair Powell Urges Caution on Regulating DeFi

  • Regulation of decentralized finance (DeFi) needs to be done “carefully and thoughtfully” given its limited impact on the real economy, U.S. Federal Reserve Chair Jerome Powell said at an event hosted by the French central bank on Tuesday.
  • His remarks appear to urge some caution on those policymakers keen to rush into imposing rules in the wake of recent scandals exposed by the recent crypto crash, such as the collapse of the terraUSD (UST) algorithmic stablecoin, which used various mechanisms to help the coin maintain its peg.
  • “The DeFi winter … didn’t have significant effects on the banking system and broader financial stability” due to the lack of links between them, Powell told a panel.
  • “I think it demonstrates the weaknesses and the work that needs to be done around regulation, carefully and thoughtfully, and gives us a little bit of time,” he said. He added that it is central bankers who, as inflation risks began to materialize, may have inadvertently triggered the collapse of many DeFi initiatives.
  • “The monetary policy normalization that we’re seeing all over the world, all it did was reveal … significant structural issues in the DeFi system, and conflicts of interest,” Powell said. “All of those things have been revealed now that the tide has gone out.”


S. Korean Authorities Look to Freeze $67M Bitcoin Tied to Terra’s Do Kwon

  • Authorities in South Korea have requested crypto exchanges OKX and KuCoin to freeze some 3,313 bitcoin (BTC), worth around $67 million, tied to Terraform Labs co-founder Do Kwon, CoinDesk Korea reported on Tuesday.
  • The bitcoin was transferred to digital wallets of the exchanges shortly after an arrest warrant was issued for Kwon in South Korea on Sept. 14, according to the report. Authorities accused the crypto entrepreneur of violating the country’s securities laws and issued the warrant just months after the collapse of the $40 billion Terra ecosystem, which triggered a market downturn and the collapse of other major players in the industry.
  • While Kwon has maintained he is not on the run, South Korean authorities had asked Interpol for assistance in locating him. On Monday, Interpol put out a Red Notice, which is a request to law enforcement around the world to locate and provisionally arrest Kwon pending extradition, surrender or similar legal action.
  • Blockchain data analytics platform CryptoQuant says a digital wallet for the Luna Foundation Guard (a nonprofit set up in Singapore to promote Terra’s growth) was “suddenly” created on crypto exchange Binance on Sept. 15. In the three days that followed, 3,313 BTC were transferred to KuCoin and OKX. In the months before Terra collapsed, the Luna Foundation Guard bought around $1.5 billion worth of bitcoin to beef up the reserves for its stablecoin UST.


Galaxy Digital Offers Crypto Price Data on Chain Via Chainlink

  • Financial services firm Galaxy Digital (GLXY.TO) has teamed up with Chainlink Labs to bring crypto pricing data to blockchains.
  • The initiative will utilize Chainlink’s oracle network, and the data will be directly distributed to multiple blockchain applications including those in the decentralized finance (DeFi) ecosystem.
  • “Blockchains don’t come preloaded with external data, so we’re providing reference prices for spot digital assets that will be able to power a variety of complicated financial structures that only have traditionally been the domain of our existing financial system,” Zane Glauber, Galaxy’s head of strategic opportunities, told CoinDesk.


Glassnode: in Youtube

  • The Week On-chain video report is now live!
  • In this edition, we cover:
    • #Bitcoin on-chain activity momentum
    • HODLer behaviour at all-time-highs
    • Risks associated with Short-Term Holder $BTC
    • Price/supply regions of interest

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