Tuesday, 29 March 2022

Market Summary

Market Summary 29 March 2022

Bitcoin Price: US$ 47,122.21 (+0.63%)
Ethereum Price: US$ 3,332.92 (+1.13%)


L1 Recovery, AVAX Activity, & Intro to Crypto Raiders

  • NEAR led the L1 recovery by growing by ~50% over the past month, a significant lead against the rest. The outperformance over the past week was catalyzed by the Bastion Lockdrop, which attracted $293M in capital. NEAR, WBTC, ETH, USDT, USDC were available to be locked for 1-12 months.
  • DOT showed a steadied recovery and continues hosting parachain slot auctions. Equilibrium, a cross-chain money market, won the 12th parachain slot auction. And Phala Network, a privacy-preserving cloud computing service, is leading the current auction.
  • LUNA had an overall great month as it hit a new ATH of $103.88 on March 9th. In addition, the Luna Foundation Guard (LFG) has been acquiring BTC as a reserve for UST, allowing it to be partially collateralized. LFG currently has 27,784.97 BTC (~$1.3B) in its wallet. With LFG putting buy pressure on BTC, it has outperformed multiple other L1s like CRO, AVAX, BNB, and ATOM.
  • ATOM has stagnated after EVMOS failed its launch. 
  • One of the key drivers of AVAX’s recent strength has been the anticipation for the ecosystem’s upcoming subnet functionality. On March 8, Avalanche Foundation announced a new $290M Multiverse incentive program to promote the adoption of subnets. $15M of the program is already allocated to the popular game DeFi Kingdoms. As a refresher, subnets are independent networks that can run one or many app-specific chains. Avalanche ecosystem will have many tailor-made interoperable subnets catered for different specific use cases such as identity, DeFi primitives, gaming, oracles, institutional use cases, etc. The proven market fit of the Cosmos’ independent app-chain thesis only strengthens Avalanche’s multiverse vision.


DAO Insights – Amouranth’s DAO Brings ‘SimpFi’ to Crypto, and the Why of Token Swaps

  • Cow DAO is running a vote to transfer funds raised by Gnosis DAO to Cow Services LDA. A Portuguese development company, Cow Services LDA will continue development on the Cow Protocol. Cow Services will receive $6m for one year of operating costs.
  • Iris Network is voting to create GRAV<>IRIS, gUSDC<>IRIS, and gETH<>IRIS liquidity pools on Coinswap. Iris and Gravity will jointly provide incentives for these pools.
  • Terra is voting on the following stages of its multichain strategy. Terra split the proposal into two votes, one for Convex/Curve, and another for everything else.
  • Curve Wars: This section of the proposal presents the following stages on how Terra can increase UST liquidity across Fantom, Avax, Arbitrum, Optimism, and Ethereum. It proposes extending their use of Convex and Votium bribes to incentivize liquidity in their pools. It also recommends paying bribes in UST instead of LUNA to increase adoption further.
  • Amouranth, a twitch stream powerhouse with 5m followers, teases her new fan DAO, DAOnBad. From what we can tell, her team has coined the term ‘SimpFi.’
  • Element Finance announces they are searching for delegates to lead their DAO, while their co-founder goes down the rabbit hole on DAOs and NFTs.
  • The Alchemix core team presents their budget for 2022, asking for 450k per quarter.
  • Anchor talks about redirecting their airdrops, and an ex-Anchor team member presents a proposal for Anchor’s long-term sustainability.
  • Gnosis receives word of an airdrop for GNO holders and an offer of partnership from Erigon.
  • Maker DAO debates how to increase stETH use as collateral and leans into real-world assets to scale Maker.
  • Rome DAO opens discussions around adopting new tokenomics and abandoning rebasing.
  • Discussions around an Avax<>RSK bridge, tokenomics, marketing, and liquidity rewards dominate Sovryn’s forum.
  • The Sushi team presents a proposal to integrate Stargate, draws the curtain back on Shoyu 2.0, and receives a proposal from Pie DAO to manage their treasury.
  • Terra receives a proposal from Jump Trading and Risk Harbor on how it can use its BTC reserve to defend the UST peg.
  • Tribe DAO presents their tokenomics upgrade xTRIBE.


Bitcoin price surges, but derivatives metrics reflect pro trader’s neutral sentiment

  • As Bitcoin (BTC) finally broke out of the $46,000 resistance on March 27, traders were quick to conclude that the bearish trend was gone for good. Even as the price hit its highest level in 84 days, derivatives metrics and Asia’s Tether premium still show a lack of bullish sentiment.
  • While analysts will struggle to find a rationale for the modest 5.8% 24-hour gain that pushed Bitcoin above $48,500, we still have to account for the daily 3.8% average volatility.
  • Currently, the Tether premium stands at 99.9%, which is neutral. Thus, data shows retail demand is not picking up despite the price improvement, which is odd considering that the total cryptocurrency capitalization jumped 15.3%.
  • At the moment, there are no signs of bullishness from Asian retail traders, as measured by the CNY Tether premium and there is no indication of pressure from leverage longs (buyers) on futures markets. Therefore, the overall crypto market sentiment is neutral.


Crypto tax rules will reduce US budget deficit by $11B over ten years — White House

  • The United States government’s budget for the 2023 fiscal year included roughly $11 billion in revenue over the next decade from modernizing rules around digital assets.
  • According to U.S. President Joe Biden’s FY2023 budget, which was released by the White House on Monday, modifying the tax rules on digital assets will reduce the deficit by $10.9 billion from 2023 to 2032. The White House said it will “modernize rules” to include certain taxpayers reporting holdings of digital assets in foreign accounts, amending mark-to-market rules to include digital assets and requiring financial institutions and crypto brokers to report additional information. In addition, it proposed “treating loans of securities as tax-free to include other asset classes and address income inclusion.”
  • The Biden administration estimated that modernizing tax rules to include digital assets will bring the government $4.9 billion in revenue in 2023. In addition, the budget included $52 million to combat “the misuse of cryptocurrency” by expanding the Department of Justice’s ability to address cyber threats to the United States. The funding will provide the government body with “more agents, enhanced response capabilities and strengthened intelligence collection and analysis capabilities.”
  • President Biden said his administration was on track to reduce the U.S. deficit by more than $1.3 trillion in 2022. Among the president’s proposals to increase revenue for the government is one requiring a 20% income tax rate from U.S. households worth more than $100 million — roughly 0.01% of households, according to the White House.


From taxes to electricity, blockchain adoption is growing in Austria

  • Austria has been actively transforming into an attractive location for providers of blockchain-based products, with the government itself experimenting with the technology and trying to create a legal basis upon which companies can use it. 
  • The first pilot project of the APSB and BIA involves data certification and notarization. Here, digital fingerprints of files are placed on the blockchain to be able to prove the unaltered nature of the data at a later point in time. 
  • In addition, the Austrian Economic Chamber has provided companies and startups with information about blockchain tech, including a detailed guidebook to help determine whether blockchain makes sense for specific applications. 
  • To more strongly promote the technology in the economy, the Austrian Economic Chamber set up a blockchain working group. Its participants primarily exchange information on blockchain topics, discuss current initiatives and best practices, and regularly organize events. 


Gold industry taps blockchain for supply chain management and fraud prevention

  • Some of the most prominent organizations in the gold industry have joined forces to launch a new “integrity program” that utilizes blockchain technology for supply chain management — a move that’s intended to help market participants verify the authenticity of their bullion.
  • London Bullion Market Association (LBMA) and the World Gold Council (WGC) announced Monday that they are collaborating to develop an “international system of gold bar integrity, chain of custody and provenance” that’s based on blockchain technology developed by companies aXedras and Peer Ledger. The ledger will be used to register and track gold bars at each stage of the production and distribution cycle, including mining, vaulting and purchase by jewelry manufacturers. 
  • The so-called Gold Bar Integrity Programme is being supported by organizations such as CME Group, Metalor, Barrick Gold, Brinks, Royal Canadian Mint, Newcrest Mining, Hummingbird Resources, Argos Heraeus SA, Asahi, Aura Minerals, Perth Mint and others.
  • Initially developed as a pilot, the program will eventually be promoted for use across the gold industry, LBMA and WGC said.


Interoperability-focused Stargate Finance (STG) aims to kick off DeFi 3.0

  • “Stargate Finance” has been trending on Twitter for the past week and while it’s too early to call for a full-blown DeFi bull market, traders have been shoveling funds into the project, which claims to be a “composable omni-chain native asset bridge.”
  • According to Startgate Finance, this helps to simplify the swap process and maximizes the degree of flexibility by making the process more convenient for users and opening new opportunities for cross-chain applications.
  • The project also offers instant guaranteed finality, which ensures that any transfer request committed on the course chain will also be committed on the destination chain as well. Unified liquidity eliminates the need for intermediate tokens as each supported chain has a pool of liquidity for the supported native assets.
  • The networks currently supported by Stargate F include Ethereum (ETH), BNB Smart Chain (BSC), Polygon (MATIC), Avalanche (AVAX), Arbitrum, Optimism and Fantom (FTM).


Russian government official calls to legalize mining ‘as soon as possible’

  • Russian Deputy Minister of Energy Evgeny Grabchak proposed eliminating the legal vacuum around crypto mining in the country and introducing clear regulations. This statement continues the recent streak of support for the crypto industry among the country’s officials. 
  • Speaking at the first national conference of legal crypto miners in Irkutsk on Saturday, Grabchak called for introducing a regulatory framework for the sector as soon as possible:
  • “The legal vacuum makes it difficult to regulate this area and set clear rules of the game. This legal vacuum needs to be [eliminated] as soon as possible. If we want somehow to get along with this activity, and we have no other options in the current reality, we must introduce legal regulation, adding the concept of mining to the regulatory framework”.
  • The deputy minister also suggested that it would be more prudent to let the regional authorities — not their federal counterparts — set the sites for mining and the possible energy quotas. “Perhaps, it should be synchronized with the regions’ development strategies and other industry sectors’ plans,” he added.

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