The Weekly Airdrop: 0x79
August 25, 2023 // Overall market (-0.02%): Jerome Powell speaks at Jackson Hole; Bitcoin Hashrate hits ATH; RWA TVL at ~$1.1bn; Base to share revenue with Optimism
MARKET UPDATE
After a significant downturn in the market due to events in the past week, we have remained within a tight range for BTC at $25.5k to $26.5k and holding after Powells speech at Jackson Hole this morning. Powell remained open to further hikes and reiterated a need for a softening labor market and the Fed’s commitment to its 2% target rate of inflation, causing a repricing of Fed futures to indicate a November hike.
The U.S. took actions against Tornado Cash founders as OFAC announced that Roman Semenov has been added to its Specially Designated Nationals list and the FBI arrested Roman Storm, in another hit to open source software
In the midst of these challenging market conditions, capital is eagerly seeking new opportunities and finding them. The emergence of Friend.tech has been a breath of fresh air, providing traders with a way to speculate on their "Friends" and generating income for influencers. While DeFi remains stagnant, one specific sector is drawing increasing capital – RWA tokenization. By bringing UST yield onchain, protocols offer genuine, non-PvP yield to investors.
Despite a decrease in the DSR rate from 8% to 5%, DAI supply remains strong above $5bn. Pendle's integration of sDAI and fUSDC enables its users to earn yield from RWA.
The combined TVL of RWA assets onchain has reached $1.16bn.
Taking a broader perspective of the market, Bitcoin's hashrate has reached an all-time high, while mining difficulty has also increased significantly. Simultaneously, miner reserves have been consistently growing since a sharp decline in May. This suggests that miners are currently accumulating the majority of their mined BTC. Another potential reason for this trend is that miners have activated all their machines to maximize profits before the upcoming halving, which will cut the reward in half
DEFI OVERVIEW
Onchain Activity
Maverick Protocol becomes the 4th largest DEX by volume over past 7 days. Due to active liquidity management, the protocol increases capital efficiency for LPs while keeping liquidity tight for swaps resulting in monthly trade volume reached ATH of $2.27bn in August
The Restaking ecosystem is expanding as Pendle, Stader, and RestakeFI announce their intentions to utilize restaked ETH for creating derivatives and yield products. Simultaneously, EigenLayer's vaults have experienced rapid growth, hitting TVL caps almost instantly, accumulating $241.4 million in total staked ETH
Offchain Activity
TRON DAO Ventures has invested $2m into CRV, aiming to introduce them to the TRON and BTTC networks. This move aligns with the increasing popularity of stUSDT, a yield-bearing RWA product on TRON, indicating a strategic push to enhance stUSDT liquidity through Curve integration on TRON
RUNE(+3.7%) is closing another good week in terms of performance as Lending went live. Despite the price still up on a weekly basis, the launch of lending emerged as a “Sell the news“ event as only 29.9 BTC and 193 ETH as of now deposited as collateral
WEB3 OVERVIEW
Onchain Activity
Optimism Superchain's benefits are emerging as evident from Base's commitment. They will contribute either 2.5% of their sequencing revenue or 15% of L2 transaction profits (after deducting L1 data submission costs). With Base's $2.74m revenue over 30 days ($32.8m annualized), this move might yield $4.9m yearly for Optimism. This funding aims to incentivize Superchain usage through retroactive public goods funding
Despite a significant decrease in trading volume, a substantial majority of Bitcoin transactions, around 60%, still involve ordinals. On August 20th, there were 411.5k ordinal inscriptions. Meanwhile, the Bitcoin network had a total of 567.7k daily transactions during the same period. This highlights the continued significance of ordinals in Bitcoin's activity
Offchain Activity
Osmosis, Circle, and Akash are collaborating to bring Fee Abstraction to Cosmos, and Akash. This innovation will enable users to pay gas fees in USDC for deploying AI workloads on Akash. The protocol will then purchase AKT on the backend, streamlining the process for users
Farcaster, a decentralized social media protocol, is set to migrate its entire project, including apps and smart contracts, from Ethereum to the OP. This migration is a significant move that will transition the platform from invite-only to permissionless sign-ups, expanding accessibility to a wider user base
Protocol Highlight: Friend.tech
While the SocialFi concept isn't new in the crypto world, it has taken center stage in the last 2 weeks due to the launch of Friend.tech on Base. Despite being in beta phase with limited access, the platform gained remarkable traction last week. Its straightforward onboarding process and the opportunity to speculate on creators' "shares” (now called keys) contributed to this success. The app's buzz even led to the creation of forks like Shares Finance, which offers revenue sharing via its token SHARES, and the development of methods to wrap "keys" as ERC-20 tokens for DeFi usage or speculation beyond the platform.
Key Features:
When a user creates a chat room, they are issued a certain number of shares - “Keys“, which can then be bought and sold by other users and by creator itself
Obtaining the key grants users access to a group chat with the creator, which not only enhances the speculative value of the purchase but also adds significant worth in terms of direct communication with the creator
Unlike traditional assets, the pricing model for these personal shares is based on a quadratic relationship
All transactions on friend tech come with a 10% fee. 5% to the protocol and 5% to the creators
Friend.tech plans to airdrop a cumulative total of 100 million points, which will be recorded off-chain and distributed every Friday with future utility inside the app
Friends’ Expansion:
Crypto community already introduced a new layer of complexity to the Friend.tech - "wrapped friends". This tool enables the minting of ERC20 tokens from Friend.tech keys, allowing them to live outside the platform
Aerodrome, Base's liquidity protocol set to launch next week, has revealed its liquidity pools for wrapped keys. This introduces a new type of asset to DeFi that could potentially offer yield uncorrelated to the overall market performance
Key Metrics:
Total M.Cap. of keys reached $5.8m
A total of $6.98m in fees was generated, with $3.48m being distributed to creators
Amount of unique users reached 113.1k
THE NEWSROOM
About M31 Capital
M31 Capital is a global investment firm dedicated to crypto assets and blockchain technologies that support individual sovereignty.
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