Monday, 7 November 2022

Market Summary

Market Summary 7 November 2022

Bitcoin Price: US$ 20,905.58 (-1.85%)
Ethereum Price: US$ 1,568.29 (-3.61%) 

 

Exploring DYAD: A New Approach to Decentralized Stablecoins

  • DYAD is a new algo-stablecoin slated to launch by end of year or early next year. It borrows some concepts from Ampleforth and DAI and ties them in a novel way by throwing NFTs into the mix. In this report we will break down its components. But right off the bat, here are its main characteristics:
    • It uses ETH as the sole collateral asset.
    • It’s built on immutable smart contracts. No governance mechanism and/or governance token.
    • It can only be minted by holders of 10,000 limited-supply dNFTs (DYAD NFTs).
  • DYAD enters into circulation through two steps. In the first step, NFT holders deposit ETH into what’s called an “ETH collateral vault.” For every $1 worth of ETH deposited, 1 DYAD gets minted. 
  • However, the newly-minted DYAD doesn’t enter into circulation just yet. It sits in what’s known as the “DYAD damping vault.” The NFT that minted DYAD into existence is marked as its exclusive owner. Only the holder of that NFT can withdraw it from the damping vault. NFTs keep track of their share of the damping vault. Thus, an alternative way to think of DYAD in a damping vault is as an NFT’s DYAD balance. 
  • This balance is dynamic and changes based on ETH’s price; it expands when price is up and contracts when price is down. Expansion and contraction is automatically executed by the protocol. This allows the DYAD damping vault to match the USD value of ETH in the collateral vault regardless of ETH’s price. As expansions or contractions occur, NFT holders will notice an increase or decrease in their DYAD balances in the damping vault (an experience Ampleforth users are accustomed to). 
  • DYAD inside the NFT can only be released into circulation by the NFT holder. When the NFT holder withdraws DYAD from their NFT balance (or more precisely, from the damping vault, which each NFT owns a share of), DYAD goes directly to the NFT holder’s address. From there on, it can be freely transferred as an ERC20 token. Thus, withdrawn DYAD can be thought of as getting out of the NFT and entering into circulation. As a result, the NFT’s DYAD balance decreases.
  • Once DYAD is in circulation, its supply can no longer be expanded or contracted by the protocol. This allows DYAD to be used as a stablecoin in DeFi, payments, or other use cases. Also, anyone (not just NFT holders) can redeem circulating DYAD for the ETH that backs it in the collateral vault; 1 DYAD being redeemable for $1 worth of ETH.
  • Continue on Delphi… 

 

Binance to Sell Rest of FTX Token Holdings as Alameda CEO Defends Firm’s Financial Condition

  • Binance’s CEO, responding to a CoinDesk scoop about trading firm Alameda Research’s balance sheet, tweeted Sunday that he will sell the remaining FTT tokens held on his books that he took on as part of his exit from Alameda sister company FTX last year.
  • Binance CEO Changpeng “CZ” Zhao did not say how much FTT his firm will sell, but that as part of the cryptocurrency exchange’s exit from FTX equity last year, Binance received roughly $2.1 billion worth in the form of BUSD (Binance’s stablecoin) and FTT.

 

Layoffs sweep crypto as economic concerns mount; Dapper Labs, Bitmex among hardest hit

  • Crypto layoffs have continued into November.
  • The industry faces not only an ongoing bear market marked by depressed digital asset prices, but also a tough macroeconomic environment where inflation and a series of U.S. interest rate hikes have intensified fears of a recession.  
  • Coinbase, which recently restructured its product team and laid off staff earlier this year, is one company worried that conditions might worsen.
  • “For 2023, we’re preparing with a conservative bias and assuming that the current macroeconomic headwinds will persist and possibly intensify,” the company wrote in its third-quarter shareholder letter.

 

Solana’s SOL Spiked 15% on a Suggestive Tweet From Google Cloud

  • The SOL native token for Solana surged about 15% after Google Cloud tagged the blockchain’s co-founder in a tweet that suggested an important disclosure was in the offing.
  • “Hey @aeyakovenko,” the cloud-services giant tweeted Saturday, “Should we tell our followers the big news?”
  • Google Cloud an hour later – after SOL had leapt – tweeted what this was about: “Now that we got your attention… check this out: Google Cloud is running a block-producing @solana validator to participate in and validate the network.”
  • While such a vague yet market-moving disclosure might not technically run afoul of financial regulations, it does raise the question of whether it’s OK to pump up the price of an asset with security-like qualities in this manner.

 

Helium, Building Out Mobile Network, Plans to Give Free Trials to Solana Phone Users

  • Nova Labs, the company behind Helium Network and a new crypto-powered cellular service called Helium Mobile, said it would provide SIM cards and free trials to customers of Solana Labs’ new Saga phones.
  • The companies declined to disclose financial details on the plan, which comes after Helium Network community members voted in September to ditch its own blockchain and migrate over to the larger Solana blockchain.
  • Under the agreement, Saga phones sold in the U.S. will get a 30-day free subscription to Helium Mobile, according to a press release. Saga phones are Solana’s flagship Android device, tightly integrated with the Solana blockchain.
  • The Helium Network is a decentralized grid of wireless hotspots that aims to provide an alternative to hard-wired internet or mobile data service. The services are powered by cryptocurrencies; people who participate in the network receive rewards for doing so.

 

DLT is finding favor among financial market infrastructures and participants

  • Distributed ledger technology (DLT) is becoming increasingly mainstream among financial market infrastructures and global market participants, according to a new Citi white paper.
  • Most of those surveyed, 88%, told Citi that their organizations are either actively participating in or exploring digital assets or DLT. A bigger percentage, 92%, said tokenization benefits market liquidity and tradable-asset variety.
  • More than half said market infrastructure based on distributed ledger technology could reduce post-trade processing costs by 10% to 30%. Additionally, 79% of respondents said atomic settlement may be achievable in less than 10 years.
  • “We are seeing a greater sense of momentum and purpose in all developments across the industry, in particular the determination to move to a T+1 settlement cycle,” Okan Pekin, global head of securities services at Citi, said in an email. “Delivering these changes will be no small feat but in due course offer the prospect of very substantial cost savings and efficiencies.”
  • Citi’s second Securities Services Evolution white paper includes quantitative and qualitative data from 12 financial market infrastructures and almost 300 market participants from banks, broker-dealers, asset managers, custodians and institutional investors.

 

Litecoin Mining Difficulty Is Hitting New Highs, Foundation Says

  • Litecoin mining difficulty is at a new high, peaking at just under 18 million hashes, according to a post by the Litecoin Foundation on cryptocurrency market data site, coinmarketcap.com.
  • Mining difficulty measures the average number of hashes required to “solve” a block. Litecoin miners compete by generating random hashes to find one lower than the target set by the network’s mining algorithm. Whoever wins this computationally intensive lottery gets to add a new block to the Litecoin blockchain and earns a reward.
  • The increase in Litecoin’s mining difficulty likely means the competition for miner rewards is heating up.
  • The cryptocurrency, sometimes referred to as “digital silver,” also has a “halvening” event on the horizon. When Litecoin was launched in 2011, miners received 50 litecoins (LTC) for successfully mining a block. That reward (called a “subsidy”) is halved every 840,000 blocks (roughly every four years). The third halving takes place in 2023 and reduces the current 12.5 LTC subsidy to 6.25 LTC.

 

Web3 Gaming Studio Mythical Games Lays Off 10% of Its Employees

  • Web3 gaming studio Mythical Games has let go of 10% of its staff, the company said Friday. Mythical did not respond immediately when asked how many people this represented, but Mythical’s LinkedIn page says it has about 320 employees.
  • The firm cited the economic downturn, likely exacerbated by the harsh crypto winter, as the reason for the layoffs.
  • “[We] have had to reevaluate and restructure some areas in our business accordingly,” a spokesperson from Mythical told CoinDesk. “Unfortunately, as a result, we had to make the painful decision to let some of the members of our team go.”

 

With Twitter and OpenSea deal adrift, Magic Eden emerges as key NFT partner

  • When Twitter debuted its Tweet Tiles NFT pilot program last week, the roster of partners included a who’s who of NFT marketplaces: Magic Eden, Rarible, Dapper Labs and Jump.trade. OpenSea, considered by many the dominant platform, was noticeably absent.  
  • The new feature — initially available only to a small test group — allows people to advertise NFTs for sale. Posted NFTs that are listed on marketplaces with partnerships with Twitter also include a click-through button to help interested parties seamlessly purchase the digital asset. 
  • Although OpenSea and Twitter discussed working together on the social media company’s new program, the two sides could not agree on terms, according to a person familiar with the matter. That impasse between OpenSea and Elon Musk’s newly acquired company has paved the way for Magic Eden to emerge as perhaps the most significant marketplace partnering with Twitter. A few months ago, Magic Eden overtook OpenSea to become the largest marketplace by number of monthly transactions.   

 

DeFi Lender MakerDAO Goes TradFi and Doubles Revenue

  • Investing in traditional finance assets has helped increase lagging revenue for the biggest player in DeFi.
  • MakerDAO now generates half of its revenue from real-world assets, like short-term bond ETFs, and staking rewards on its holdings of Gemini’s USD-pegged stablecoin.
  • Currently, MakerDAO estimates it will see $20.2 million in annual revenue, Sebastien Derivaux, the DAO’s asset-liability lead, told Decrypt—and that’s not counting the real-world asset revenue, which takes longer to be reflected in blockchain data.
  • “Doubling revenues over the last few weeks and it’s only the beginning,” he wrote on Twitter. “I’m starting the discussion to reward DAI holders to supercharge growth.”

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