The Weekly Airdrop: 0x78
August 18, 2023 // Overall market (-10.2%): Tesla write-off BTC position; SEC secures appeal in Ripple case; $1bn+ of assets liquidated; THORChain crosses $100m in daily volume
MARKET UPDATE
After back to back weeks where the markets were screaming out for some liquidity and/or volatility, something had to give. The lack of market strength was clearly exposed this week after news that SpaceX wrote down their BTC holdings by ~$378m, coupled with global market concerns stemming from China, triggered a market wide sell off and subsequent liquidation cascade. This resulted in over ~$1.04bn in liquidations over the last 24h, 80% skewed towards longs.
$500m in BTC liquidations (higher than 3AC capitulation levels) caused BTC (-10.4%) to wick to as low as $25.2k.
The fact that BTC ETF approvals were delayed to early 2024, didn’t help the market either and even a BTC spot ETF listing in Europe couldn’t help revive the market.
On the flip side, there is growing optimism around an ETH futures ETF being approved by the SEC, and going live as early as October. This didn’t do much for ETH (-9.4%) that fell with the rest of the market (-10.2%).
DEFI OVERVIEW
Onchain Activity
3.6k MKR were burned in August via their smart buyback engine, effectively creating ~$4.0m of buy pressure for MKR. The buybacks occur when a DAI surplus buffer accumulates >50m of DAI from protocol revenues. As of now, surplus is at 53.8m DAI which can potentially result in additional 3.8m of DAI to be allocated for buybacks
THORChain's daily volume surged this week, hitting a high of $101.2m, after the protocol launched their interest and liquidation free lending product. This propelled a +41.6% w/w TVL increase to $195.7m, and a +35.2% RUNE price increase. The lending service will enables users to deposit native assets (like BTC) as collateral, and take loans without liquidation risk, or interest payments
Offchain Activity
Synthetix V3 is set to be implemented on Base after receiving unanimous support with a 100% voting result for expansion, and dYdX V4’s public testnet has gone live, with over 30+ assets
Yearn is preparing to launch v3 following the YIP-XX proposal. The Upgrade aims to make yield generating vaults and strategies permissionlessly deployable by anyone
WEB3 OVERVIEW
Onchain Activity
Base has made significant strides in generating chain activity since launch, with over ~560k total transactions over the last week, putting it on par with both Arbitrum and Optimism. This is driven by usage of social app friend.tech (a marketplace to speculate on social media accounts) and has resulted in $1.1m fees generated over past week for the L2
Livepeer daily active addresses surge to 1k, +1,755.5% m/m as daily livestreams of Base’s “Onchain Summer” are being hosted by the protocol. This has resulted in $19.1k in fees earned in August, +26.3% over the last 30 days, keeping it on track to see a 3rd consecutive month of revenue growth
Offchain Activity
Helium Mobile debuts crypto wireless network in Miami for $5 a month. The subscription includes unlimited calls, text and data and users will also earn MOBILE rewards
'Grand Theft Auto' dev Take-Two’s mobile gaming publishing subsidiary Zynga, releasing “Sugartown,” a web3 game built on Ethereum
Protocol Highlight: THORchain
Thorchain is a decentralized cross-chain liquidity protocol that allows users to swap native assets across multiple blockchains without the need for wrapped or pegged assets, built on the Cosmos SDK
Key Features:
THORSwap: crosschain decentralized exchange/DEX aggregator built on the THORChain network. It supports native assets’ swaps across 9 blockchains
Cross-chain liquidity: Thorchain allows users to swap native assets across 9 blockchains at the moment where all native assets paired with RUNE and swaps are routed through RUNE first
Synths: fully collateralized representations of an asset and backed by THORChain’s liquidity pools. Synths enable cheap and instant settlement of assets with no risk of impermanent loss or liquidation
Impermanent Loss Protection: IPL is paid out if the impermanent loss exceeds the LP's revenue from providing liquidity. LPs receive linear IL protection over 100 days, meaning that they receive an additional 1% protection every day they provide liquidity
Savings: Single-sided asset exposure using Synths
Developments:
THORChain lending: 0% interest, no liquidations, and no expiration loans backed by the liquidity of RUNE-ASSET pools
Streaming Swaps: Similar to a Time Weighted Average Price (TWAP) trade, limited to a 24-hour period giving users control over the timeframe, enabling better price optimisation. Large swaps can be divided into smaller ones over specific intervals without additional L1 fees
Key Metrics:
TVL increased by +41.6% w/w, reaching $195.7m
Monthly trade volume +35.3% to $393.3m, showing growth for 4 consecutive months
Unique Swapper Count showing consistent growth since Nov 2022, reaching 2 years high of 3k per day
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/
Twitter: https://twitter.com/M31Capital