Wednesday, 3 August 2022

Market Summary

Market Summary 3 August 2022

Bitcoin Price: US$ 22,987.79 (-1.20%)
Ethereum Price: US$ 1,630.91 (+0.04%) 

 

ETH Active Addresses Surge, Deep Dive on Soulbound Tokens

  • Nomad Bridge was exploited, with over $190M of liquidity drained by hundreds of addresses.
  • Chiliz invested $100M for 24.5% stake in FC Barcelona’s digital content creation and distribution arm.
  • Pyth Network announced Pythnet, a solution to aggregate first-party data at sub-second speeds and deliver pricing to other chains via Wormhole.
  • Aspect Mainnet is launched, becoming the first NFT marketplace on Starknet Mainnet.
  • On July 26, the number of daily active addresses on Ethereum broke all previous records, as 1.06 million addresses made at least one transaction. While a steady rise in active addresses may indicate organic growth, such a sudden rise requires further on-chain investigation.
  • Since August 2021, Ethereum blocks have been fully filled at an average gas limit of 30M units. Since then, the average gas fee has typically remained above 40 gwei, with even higher fees during popular NFT mints and surges in DeFi interactions. More recently, the average gas fee has trended lower around 25 gwei.
  • A sharp increase in daily transactions in a low gas fee environment may indicate more smaller-sized, basic transactions. Simply put, when we see a lot of transactions during periods of low gas fees, it is likely that they are basic send and receive token transfers.
  • Furthermore, Binance began consolidating their hot wallets on the same day. The number of transfers received by the exchange’s wallets spiked precisely during this period with a high number of average transfers per block. In total, 621,691 transfers were received by the Binance wallet with an average amount transferred of 0.45 ETH.
  • The recent surge can also be attributed to the hype cycle around the upcoming Merge. Goerli and Prater testnets are scheduled to implement the upgrade between August 6 and 12. A successful Merge on the testnets will increase certainty around the same occurring on Ethereum’s mainnet as scheduled.
  • Soulbound Tokens: The Basis of a Decentralized Society w/ Glen Weyl

 

Michael Saylor will step down as MicroStrategy CEO but remain as executive chair

  • Bitcoin (BTC) maximalist Michael Saylor has announced that he will step down as the chief executive officer of MicroStrategy, the business intelligence firm he helped co-found in 1989.
  • In a Tuesday notice on its second quarter earnings for 2022, MicroStrategy said Saylor would be assuming the new role of executive chair at the company, while president Phong Le will become CEO. The changes are expected to take effect on Aug. 8.
  • “I believe that splitting the roles of Chairman and CEO will enable us to better pursue our two corporate strategies of acquiring and holding Bitcoin and growing our enterprise analytics software business,” Saylor said.

 

CoinShares reports $21.7M loss tied to Terra implosion

  • On Tuesday, European cryptocurrency investment firm CoinShares posted its interim Q2 2022 results. Compared to the prior year’s quarter, the firm’s revenue declined from 19.6 million pounds ($23.89 million) to 14.2 million pounds ($17.31 million). At the same time, its net income fell from 26.6 million pounds ($32.42 million) in Q1 2021 to 0.1 million pounds ($0.12 million). 
  • CoinShares explained that the losses were largely tied to its exposure to the Terra (LUNA) — now called Terra Classic (LUNC) — ecosystem, which collapsed in May of this year:
  • “While our Asset Management business continued to generate solid profit, the Capital Markets business experienced a one-off loss of £17.7 million following the de-pegging of Terra Luna. The financial impact of this episode, despite being relatively small when compared to the losses incurred by other players in our industry, had a material impact on our quarter.”
  • Coinshare Capital Markets typically does not take directional positions and was not directly exposed to the Terra Luna collapse. However, at the time of the incident, the firm was carrying a book linked to the TerraUSD stablecoin, resulting in an exceptional loss.

 

Crypto users spent $2.7B minting NFTs in first half of 2022: Report

  • According to new market research published by blockchain data firm Nansen, crypto users spent 963,227 Ether (ETH), worth $2.7 billion, minting nonfungible tokens (NFTs) on the Ethereum blockchain in the first half of 2022. An overwhelming majority of minting took place on OpenSea.io. 
  • Minting occurred across 1.088 million unique wallet addresses on Ethereum during this period, Nansen said. In comparison, about $107 million worth of NFTs were minted on BNB Chain and $77 million for Avalanche. A total of 263,800 unique wallet addresses were involved in NFT minting on the two blockchains.
  • Sixty-nine NFT collections launched on May 22 alone, resulting in daily minting volume surpassing 120,000 ETH. The total number of NFT collections minted and sold on Ethereum during the first half of the year was 28,986. Over two-thirds of the NFT projects raised less than 5 ETH, although 140 collections raised well over 1,000 ETH. Cumulatively, the top five NFT collections on Ethereum accounted for 8.4% of overall minting. These include Pixelmon-Generation 1, Moonbirds, VeeFriends Series 2, Genesis Box and World of Women Galaxy. 

 

Zipmex gradually resuming Z Wallet withdrawals, says debt moratorium is not bankruptcy

  • Crypto exchange Zipmex, which operates in Thailand, Indonesia, Singapore and Australia, released a statement this week denying reports that it has filed for bankruptcy and announcing its progress in resuming withdrawals from its Z Wallets. 
  • Zipmex customers can withdraw Solana (SOL) from their wallets Tuesday and will be able to withdraw XRP on Thursday and Cardano (ADA) on August 9, the company said.
  • Zipmex provides its customers with two wallets: the Z Wallet, used for Zipmex services and receipt of earnings and bonuses, and the Trade Wallet, where fiat currency and funds for trading are held. Zipmex paused all withdrawals from its platform on July 20 but resumed withdrawals from Trade Wallets two days later. The company cited its exposure to Babel Finance and Celsius defaults as necessitating the wallet freeze. Babel Finance owed Zipmex $48 million and Celsius owed it $5 million.
  • Now altcoins in Z Wallets will be transferred to Trade Wallets, leaving only Bitcoin (BTC), Ether (ETH) and stablecoins frozen in Z Wallets. Zipmex promised customers that it would “start to release some of these tokens [BTC, ETH and stablecoins] into your Trade Wallet starting in the middle of August.”

 

Aave devs propose freezing Fantom integration, citing lack of traction and potential vulnerability

  • On Tuesday, Marc Zeller, integration lead at decentralized finance (DeFi) borrowing and lending protocol Aave, proposed to freeze the platform’s v3 Fantom market. Created in 2018, Fantom is a directed acrylic graph smart contract platform that provides DeFi services and on which Aave is currently bridged. 
  • Zeller explained the rationale for removing the Fantom bridge:
  • “After the Harmony bridge event and the recent Nomad bridge exploit, the Aave community should consider the risk/benefits of keeping an active Aave V3 market on Fantom as this network is dependent on any swap (multichain) bridge.”
  • Zeller further explained that the Aave v3 Fantom market did not gain noticeable traction, with a current market size of $9 million and $2.4 million of open borrowing. In comparison, the Aave protocol has a total value locked of $3.48 billion. Meanwhile, the Fantom market on Aave only generates approximately $300 per day for the borrowing-lending protocol, of which $30 goes to the Aave Treasury.
  • If passed, the Aave Improvement Protocol would allow users to repay their debts and withdraw but block further deposits and borrowings in this market. After five days, a community vote will be held to determine the future of Aave v3 Fantom. The Aave team wrote:
  • “The risk of exposing users to potentially losing millions of $ due to causes exterior to intrinsic Aave security is considered not worth the $30 of daily fees accrued by the Aave treasury.”

 

New York financial regulator fines Robinhood’s crypto division $30M

  • The New York Department of Financial Services, or NYDFS, has announced a $30 million penalty on Robinhood’s cryptocurrency arm for alleged violations related to anti-money laundering, cybersecurity and consumer protection laws.
  • In a Tuesday announcement, NYDFS superintendent Adrienne Harris said Robinhood Crypto will pay a $30 million penalty to the state “for significant failures in the areas of bank secrecy act/anti-money laundering obligations” as well as cybersecurity failures that allegedly violated New York regulations. According to Harris, Robinhood’s crypto unit will also be required to hire an independent consultant to evaluate the firm’s compliance and remediation efforts.
  • “As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance,” said Harris. “All virtual currency companies licensed in New York State are subject to the same anti-money laundering, consumer protection, and cybersecurity regulations as traditional financial services companies.”

 

Ledger reportedly seeking additional $100 million in funding

  • Having raised a mammoth $380 million funding at a $1.5 billion valuation in June, French cryptocurrency hardware wallet maker Ledger is looking to raise an extra $100 million, according to a Monday report from Bloomberg.
  • In June, Ledger raised $380 million in a funding round led by 10T Holdings. Now, according to reports, the company is seeking an additional $100 million to help it continue its rapid expansion. Business is said to be thriving as investors seek cold storage for their cryptocurrency, according to sources quoted by Bloomberg.
  • Hardware storage wallets from Ledger are a type of offline storage that isn’t connected to the internet, making them more secure against hacking than online wallets. This allows users to manage their own cryptocurrency without worrying about their provider’s liquidity.
  • The company’s products have been popular in recent years as investors seek to protect their digital assets from the hacks and liquidity problems that have plagued the cryptocurrency industry recently. Ledger’s business is reportedly expanding at a time when lenders and exchanges are experiencing liquidity concerns, according to Bloomberg’s source.

 

Metaverse market share to surpass $50 billion by 2026, says new report

  • A new report by technology research and advisory firm Technavio reveals an upward trend for the Metaverse within the next four years. 
  • The report, titled “Metaverse Market in Finance by Component and Geography — Forecast and Analysis 2022–2026,” analyzed the metaverse from two viewpoints: software and hardware, and through its impact on various geographical regions.
  • According to the study, the Metaverse will hit a market share value of $50.37 billion by the year 2026. Metaverse growth was analyzed within the five timeframes between 2021–2026. Moreover, market growth momentum has acceleration projections of a CAGR of nearly 21%. This year alone, growth is projected at 20.11%.
  • In terms of regional growth, 32% percent will come from the North American region, with Canada and the United States as leaders. Other key consumer countries included China and Germany.
  • This year, Germany and the United States shared the top spot in global crypto rankings due to their more progressive regulations and the rate of institutional adoption.

 

Bitcoin network activity decline suggests longer bear market: Glassnode

  • With several on-chain metrics for Bitcoin (BTC) still in a bearish range, a continuation of the recent price recovery will require increased demand and fees spent over the network, says Glassnode. 
  • The assessment of mediocre market growth over the past week came from blockchain analysis firm Glassnode in its latest “The Week On Chain” report on Monday.
  • In it, analysts pointed to sideways growth in transactional demand, active Bitcoin addresses remaining in “a well defined downward channel” and lower network fees as reasons to temper investors’ excitement about the 15% spike in BTC price over the past week. However, BTC is currently down 2% over the past 24 hours, trading below $23,000 to $22,899, according to CoinGecko.
  • The report begins by highlighting the characteristics of a bear market, which includes a decline in on-chain activity and a rotation from speculative investors to long-term holders. It suggests that the Bitcoin network is still demonstrating each of those traits.

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