Friday, 5 November 2021

Market Summary

Market Summary 5 November 2021

Axie’s New DEX and a DeFi Update

  • AXS and SLP are having a great day on the back of Axie Infinity’s latest announcement: a native DEX (Katana) for its Ronin sidechain. The DEX will be bootstrapped with AXS/ETH and SLP/ETH pairs, offering token rewards to liquidity providers. The kicker is token rewards come in the form of a new token — RON, a governance token for the Ronin sidechain.
  • With the exception of CRV, Ethereum DeFi tokens have under-performed ETH over the last month. ZRX and MKR are the closest to matching ETH’s performance, but they still aren’t quite as strong.
  • DeFi tokens have been out of favor for what feels like an eternity now. Price has been consolidating for the better part of this year, and it’s only a matter of time before things get volatile again.
  • Their tokens may not see it yet, but DEX usage is beginning to trend higher. Last week, the top Ethereum spot DEXes cumulatively recorded their highest volume week since the chaos of May. Excluding the month of May, this was the highest volume week for spot DEXes.
  • Between v2 and v3, Uniswap continues to dominate the DEX landscape. Curve’s market share increased by a fair amount in recent weeks, and that could be a consistent theme over the next few months. Curve v2 will see the DEX evolve from a pegged-asset AMM to a general purpose one, and it could prove to be a worthy challenger of Uniswap v3.
  • After the CREAM exploit, notable DeFi developers warned that Aave may be vulnerable to a similar situation. Tensions flared, and lenders started to pull idle liquidity from Aave. This sequence of events caused a quick 25% dip in Aave’s liquidity. For a brief period, borrowing rates on Aave were far higher than Compound and Maker.
  • Aave governance voted through a proposal to mitigate this risk, bringing rates closer to the market average. And despite this, Aave still has nearly $7B in outstanding loans and over $16B of liquidity across several pools. DeFi money markets grew steadily through the gloom in the middle of this year. With this scare now behind Aave, the path of least resistance is back up.

 

Square’s Cash App Bitcoin profits fall 23% — Will opening it to teenagers help?

  • Jack Dorsey’s payments company Square Inc. revealed in its Q3 earnings report that mobile payments app Cash App saw a 23% drop in quarterly profits generated by Bitcoin.
  • But Bitcoin profits and revenue are both up year on year.
  • Square attributes the drop off in quarter-on-quarter Bitcoin revenue and gross profit to the “relative stability of the price of Bitcoin, which affected trading activity compared to prior quarters.”

 

Crypto.com Coin Hits All-Time High After Listing From Rival Coinbase

  • Publicly traded cryptocurrency exchange Coinbase has been aggressively listing crypto assets of late. But that has extended beyond little-noticed coins and tokens such as Jasmy Coin and ARPA Chain to a more surprising asset: Crypto.com Coin (CRO).
  • Coinbase announced yesterday that trading of Ethereum-based CRO would begin immediately. The listing has been a boon for CRO, which reached an all-time high today of $0.29. It’s risen 13% in the last 24 hours, with over 20% of trading volume during that span coming from Coinbase, according to CoinGecko. It now ranks as the 32nd-largest cryptocurrency by market capitalization, with $7.3 billion, just above FTX Token.

 

Layer-2 and multi-chain DeFi platforms see record inflows as Ethereum fees soar

  • Since October, Multi-chain compatible DeFi platforms saw record inflows as investors and developers attempted to avoid the Ethereum network due to soaring gas fees.
  • As a result of persistently high Ethereum fees, a growing number of users are bridging assets to lower-cost Ethereum Virtual Machine (EVM) compatible networks. Data from Dune Analytics shows that the total value locked on bridge protocols has been on the uptrend since the beginning of October.

 

Hawkish Fed comments and fears of stablecoin regulation spark market sell-off

  • The bullish optimism seen earlier in the week was dialed back on Nov. 4 after recent comments from United States Federal Reserve Chairman Jerome Powell confirmed that the central bank would soon start to taper its monetary policy of easing and bond-buying. 
  • These statements appear to have kicked off a series of price decreases across the crypto market and both Bitcoin (BTC) and Ether (ETH) are under pressure at the moment.

 

Ethereum Game Axie Infinity Launches Ronin DEX, SLP Token Spikes 74%

  • Ethereum-based play-to-earn game Axie Infinity exploded in popularity this summer following the launch of Ronin, a custom sidechain that enabled speedy, low-cost transactions. Now Ronin has picked up added utility with the rollout of its own decentralized exchange (DEX), and the game’s tokens are surging in price today.
  • Launched early this morning, Katana is a DEX that runs natively on Ronin, making it easier for Axie Infinity players to swap tokens directly on the sidechain itself. That means that players don’t have to bridge tokens to Ethereum first, for example, which introduces additional fees and hassle to the process.

 

Bitcoin on-chain metric suggests 2017-style bull run will continue

  • Dubbed MVRV, the risk metric represents the ratio of Bitcoin’s market value to its realized value — similar to the price to book (P/B) ratio that compares a company’s market value to its book value. In doing so, MVRV attempts to identify whether an asset is under or overvalued.
  • Lennard Neo, head of research, explained in a new Stack Funds report published on Nov. 4 that the current MVRV rebound is similar to the one spotted during the 2017 bull run, forming a sequence of higher highs and higher lows as the Bitcoin price rises.

 

Chainlink’s total value secured surpasses $75B as DeFi continues to surge

  • The total value secured by the Chainlink network has officially surpassed $75 billion, marking a new milestone for the decentralized oracle solution that has become synonymous with price data services for the rapidly growing DeFi sector. 
  • With the milestone, Chainlink has become “one of the most value securing forms of decentralized consensus on the planet,” according to protocol co-founder Sergey Nazarov. Chainlink is also one of the fastest-growing networks in all of crypto, with smart contract value secured growing by a factor of ten since last year. 

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