Wednesday, 8 December 2021

Market Summary

Market Summary 8 December 2021

Bitcoin Price: U$50,588.95 (+0.29%)
Ethereum Price: U$4,306.40  (-0.95%)


Terra’s TVL Growth, Lido’s LUNA Benefits, DEX Valuations

  • Total Value Locked on Terra Network overtook Avalanche and Solana, now making it the 3rd largest blockchain by TVL after Ethereum and Binance Smart Chain. #LUNAtics rejoice!
  • It’s important to note that TVL numbers are highly reflexive alongside native token prices as they are very commonly used as collateral in DeFi and as base pairs for native DEXes. In Terra’s case, DEX base pairs usually utilize UST instead of LUNA, therefore this growth in TVL is primarily contributed by value growth in Lido bLUNA (more on that below).
  • The increase in UST Supply from under $3b to $7b across mid-November was due to this proposal to mint UST with LUNA in the community pool to grow the Terra ecosystem through UST usage.
  • UST did another ~$1b of growth in circulating supply after 19th November, and is likely attributed to the Abracadabra Degenbox strategy and this TFL proposal to incentivize growing UST liquidity on Ethereum.
  • Another beneficiary of a higher LUNA price is liquid staking protocol Lido, whose bLUNA derivative tokens are used as collateral assets on Anchor.
  • TVL on the Terra network has increased meaningfully since the 27th of November, around the same time the LUNA price took off. Over the same period, the number of bLUNA Lido had decreased slightly by ~0.3% while TVL was up 24%. Lido currently has ~67.9m of LUNA staked as liquid staking derivatives which represents ~17.6% of all circulating LUNA supply.
  • Separately, Lido has also recently integrated with MakerDAO, allowing Lido’s wstETH token to be used as collateral to mint DAI on Maker Protocol.
  • Amidst the drama and infighting among past and present members of the Sushi team, we took a look at how the token trades relative to its peers (i.e. the relative valuation of DEXs across multiple networks).
  • The Price-to-Sales ratio is used here instead of a Price-to-Earnings ratio as it is more universal (though some protocols like Uniswap have no “earnings” or protocol revenue because all fees go to liquidity providers).
  • Interestingly, SUSHI always seems to trade at a cheaper valuation compared to its Ethereum peers. There are many potential reasons for its persistent discount, including its slightly more controversial beginnings and its more volatile management structure, though it’s important to reiterate there are also nuances behind the economics of each DEX token.
  • Having said that, SUSHI typically trades more in line with its cross-chain peers such as Trader Joe, Pancakeswap, and Quickswap. This also implies that DEXs on alternative Layer 1s are generally priced at a discount to those on Ethereum (at least on a P/S basis).


SiennaSwap adds Bitcoin, Monero trading pairs in push for privacy-focused DeFi

  • Cross-chain DeFi protocol Sienna Network has enabled Bitcoin (BTC) and Monero (XMR) trading pairs on its decentralized exchange, giving users the ability to transact privately in two of the world’s most recognizable cryptocurrencies. 
  • Effective immediately, users of the privacy-focused SiennaSwap DEX will have the ability to trade BTC and XMR against the protocol’s native Sienna token, chief evangelist Monty Munford confirmed with Cointelegraph. The decision to incorporate Bitcoin and Monero transactions follows a “huge amount of requests for additional yield options” from both communities, he said.
  • Sienna’s infrastructure is built on the Secret Network, a custom blockchain that supports private transactions but, perhaps just as critically, doesn’t endorse trading techniques based on anonymity. Regulators have cast a dark shadow over cryptocurrencies that provide enhanced anonymity, with several exchanges moving to delist privacy-centric cryptocurrencies XMR, Zcash and Dash earlier this year.


Coinbase adds ‘ETH2’ despite tomorrow’s Ethereum upgrade postponing difficulty bomb

  • Cryptocurrency exchange Coinbase has added a mirrored version of the Ethereum blockchain’s native token Ether (ETH) to its crypto price index, just ahead of a key network upgrade on Dec. 10.
  • Dubbed “ETH2,” the symbol appeared to have been tracking the original Ether market data synchronously. For instance, the cost to purchase ETH2 came out to be the same as that for ETH. Meanwhile, their market capitalization, volume, circulating supply and price changes were also identical.
  • The Arrow Glacier update aims to delay a so-called “difficulty bomb,” an incentive hardcoded inside the Ethereum blockchain since its launch in 2015, which would make it difficult for people to mine Ether. In doing so, the BOMB, if triggered, would slow down the Ethereum network, for as long as it remains proof-of-work.
  • Tim Beiko, one of the core developers working on the Ethereum upgrade, noted that Arrow Glacier might be the last upgrade before Ethereum 2.0 goes live next year. Meanwhile, Coinbase appears to have been treating the Arrow Glacier fork to ensure that there would exist a new token called ETH2 after the Ethereum 2.0 upgrade.


Tezos blockchain records 70% increase in energy efficiency in 2021: PwC report

  • Tezos, a privacy-focused blockchain network, released its carbon footprint report from PricewaterhouseCoopers Advisory SAS, a French member firm of the PwC network. 
  • The PwC report reflects drastic improvements in energy efficiency for Tezos both in terms of reduced carbon footprint and lowers energy consumption.
  • The PwC report highlighted a significant decline in carbon emission by Tezos network despite a rise in network activity. The Tezos blockchain accounted for 50 million transactions while, according to the report, the whole network constituted an energy footprint of 17 world citizens. 
  • The energy efficiency for each transaction on the network increased by 70% while the estimated electricity requirement per transaction was 30% lower than in 2020.


Nasdaq Stockholm lists Bitcoin and Ether exchange-traded notes

  • Nasdaq Stockholm has announced that 21Shares has listed its first two physically backed exchange-traded notes (ETN) on the Swedish trading platform. 
  • The two instruments listed, with Bitcoin (BTC) and Ether (ETH) as underlying assets, represent a new segment for ETNs — a type of unsecured debt security that tracks an underlying index of equities and trades on a major exchange. 
  • According to the announcement, the new ETNs will provide investors access to investment opportunities in cryptocurrencies such as Bitcoin and Ether. 


Gemini partners with Colombia’s biggest bank for crypto trading

  • New York-based crypto exchange Gemini has announced that it will be expanding into Latin America through an upcoming partnership with Colombia’s largest bank, Bancolombia.
  • The partnership will take effect on Dec. 14, and will permit customers from Bancolombia to trade four crypto assets: Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
  • A limited number of users will be able to buy crypto directly from their Bancolombia bank accounts through the Gemini exchange, which will provide crypto-specific infrastructure for exchange and custody of assets. It remains unclear whether the users will be able to withdraw the crypto holdings directly from their accounts.


Australian women owning crypto has doubled in 2021: Survey

  • A new survey shared with Cointelegraph has found that the proportion of Australian women who own crypto assets has doubled in the last year.
  • The 2021 Independent Reserve’s Cryptocurrency Index (IRCI) of 2000 Australians found that the number of women who currently or have previously invested in crypto rose from 10.3% in 2020 to 20% in 2021. The percentage of female Bitcoin owners also rose from 8.3% to 14.8%, according to the survey.


Korean crypto investment firm Hashed reportedly under tax investigation

  • Crypto investment firm Hashed is currently under investigation by the National Tax Service (NTS) in South Korea, according to local media.
  • On Tuesday, local media reported that the exact nature of the investigation is not clear.
  • An official from the regional tax office told reporters that although they could not confirm the exact nature of the investigation, “intense investigations on small businesses without any prior notice are not uncommonly related to slush fundraising or tax evasion on the part of the company’s CEO.”
  • The investigation began early last month and is set to conclude no later than the end of February 2022, just a few days before the South Korean presidential election takes place on March 9, 2022.

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