The Weekly Airdrop: 0x60
April 14, 2023 // Overall market (+10.2%) rallied, led by ETH (+13.0%) as the Shapella upgrade passed successfully, putting to end fears of massive sell pressure and an "ETH death spiral"
MARKET UPDATE
The overall market (+10.2%) showed strong performance as BTC crossed the $30k mark, and ETH broke out above $2k, driven by a successful Shapella upgrade
BTC: +9.8%
ETH: +13.0%
Onchain Activity
ETH is rallying despite the net change in staked balance of -151.5k ETH as deposits begin to outpace withdrawals
Bitcoin remains at the forefront of the market, with a monthly increase of +41.7% in BTC TVL across its L2s and dApps supporting native BTC, now ~$210.2m. It is steadily approaching its ATH, with the TVL of the Lightning Network alone reaching an impressive $162.8m
Offchain Activity
Uniswap mobile wallet is now live on the App Store, offering support for L2 transactions, a fiat onramp, and an enhanced user experience, driving crypto adoption
In light of the March CPI data revealing a lower than expected inflation rate of 5.0% y/y (vs 5.2% expectations), the FED is indicating a readiness to pause the Fed Funds Rate increase in May/June
DEFI OVERVIEW
Onchain Activity
Aevo, a decentralized options trading platform built by Ribbon Finance has launched as an app chain using OP Stack. While the access to the platform is limited for now, it’s already attracted $1.9m of TVL offering CEX-like UX
zkSync ERA continues to show impressive growth numbers as TVL increased by +48.5% w/w to $221.5m as SyncSwap, native DEX on ERA led with +103.0% w/w TVL increase to $64.5m
Offchain Activity
Derivatives (+6.8%) led by LVL (35.9%) and PENDLE (+22.9%) as Pendle’s tokenized yield trading volume increased by +40.1% since the beginning of April reaching $62.8m in total
Maple Finance to introduce a lending pool for U.S. Treasury bonds, aiming to attract demand from accredited investors and corporate treasuries outside of the U.S.
WEB3 OVERVIEW
Onchain Activity
The Graph revenue hit a 3-month high of 58.9k GRT, +185.9% w/w due to rapid growth of usage across L2s driven by the amount of active subgraphs on Arbitrum, which crossed 100
LayerZero reached an ATH of over 20k daily users and over 260k daily transactions on April 8th as users speculate on a potential airdrop
Offchain Activity
Bandwidth (+12.5%) led by HNT (+30.7%) as Helium migration to Solana is happening in 4 days which is expected to improve the operational efficiency of Helium significantly through the vast range of composable Solana developer tools, features, and applications
RNDR (+32.0%) has positioned itself as one of the most promising protocols for facilitating Web3 AI development. With a massive supply of high-density GPUs, Render offers the essential resource for AI model training. Additionally, Render's upcoming migration to Solana will provide high throughput and low transaction fees, making it an efficient platform for Web3 AI development.
NARRATIVE HIGHLIGHT: SHAPELLA UPGRADE
On April 12th at epoch 194,048, Ethereum completed its first major upgrade since The Merge, the Shapella Upgrade, which is a combination of the Shanghai and Capella forks. This enables ETH stakers to withdraw their staked ETH from the Beacon chain for the first time.
Withdrawals
Shapella opened up two types of withdrawals: partial and full withdrawals.
Partial withdrawals allow validators to withdraw their balance over the required 32 ETH needed for a validator node. Each Ethereum block will allow for 16 validators to make partial withdrawals.
Full withdrawals allow validators to completely exit their stake, which includes the required 32 ETH along with any accrued rewards. However, at the current churn limit, only 1800 validators can withdraw per day, which equates to 57.6k ETH ($115m).
Implications
The Shapella Upgrade spurred intense discussion and FUD over the potential for over 18m staked ETH to unlock and be sold on market.
However, we have long predicted that these concerns are overblown and we expect the supply of staked ETH to continue higher after a brief dip.
Many investors (including institutional ones) may start seeking the opportunity to stake ETH. In fact, we're already starting to see this play out as ETH deposits have already begun to outpace withdrawals
Network Metrics:
24.4k validators waiting for full exit, equating to 875k ETH
19.1m ETH staked on Beacon Chain or 14.5% of the total supply
THE NEWSROOM
About M31 Capital
M31 Capital is a global investment firm dedicated to crypto assets and blockchain technologies that support individual sovereignty.
Website: https://www.m31.capital/
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