Crypto Market Weekly Recap - May Week1

Wayne

There's a voice in the market that DeFi is over, and the hotspots are all in NFT. Whether DeFi will have another wave of opportunities in the future, we don't know yet.

Hello everyone,

The holidays are coming, happy Labour Day.

This week let's firstly take a look at the performance of Ethereum in Q1. Compared to Q1 2021:

  • Network revenue increased 46%, from $1.6 billion to $2.4 billion
  • ETH Staked rose 111%, from $5.2 million to $10.9 million
  • DeFi's TVL increased 82%, from 49.1 billion to $89.5 billion
  • Layer 2's TVL increased nearly 10x, from $68.69 million to $7.3 billion.
  • Stablecoin circulation increased 188%, from $42.3 billion to $122.1 billion
  • The trading volume of the NFT marketplace has increased by nearly 200 times, from $663 million to $116.4 billion

For more detailed content, read the article published by Bankless: https://newsletter.banklesshq.com/p/state-of-ethereum-q1-2022

DeFi's tokens have fallen to a very exaggerated level, and most projects have fallen by more than 90% from ATH. Looking closer, many projects' FDV may actually be lower than when institutional investment was raised. Under such circumstances, yesterday Ondo Finance, a protocol helping users make money through liquidity mining, announced a $30 million funding. It means the minimum valuation of this project at the time of funding may be $100 million, or even $300 million, which is equivalent to the FDV of the DeFi project. There will also be a public offering on CoinList. I haven't figured out why this is the case anyway. Similar liquidity provision protocols and fixed rate protocols, which also represent the DeFi 2.0 concept, have all fallen a lot, but why Ondo can still raise so much.

There's a voice in the market that DeFi is over, and the hotspots are all in NFT. Whether DeFi will have another wave of opportunities in the future, we don't know yet.

Another interesting data is the revenues of different protocols. As the largest protocol of DeFi, Uniswap's revenue is no longer comparable to LooksRare in NFT.

Another big event that happened a few days ago was that Optimism announced its native token $OP. Many people should have got airdrops. Stimulated by this news, TVL on Op has also increased a lot. By now, among the leading Layer 2 protocols, only Arbitrum does not have any action on launching tokens. In contrast, Arbitrum's TVL exceeds $3 billion, which is 5 times that of Optimism. In the history of Crypto, in addition to the bull market of Bitcoin halving, the issuance of tokens by star projects can also drive a wave of opportunities to a certain extent, and the tokens of the same track or related projects can grow as well.

Layer2 is an important part to complete the Ethereum ecosystem, and the ideal Ethereum network should be a three-dimensional network. At present, a large proportion of the transactions in the mainnet will be transferred to the surrounding Layer 2 for processing. Among them, there are Optimism and Arbitrum that deal with general transaction behavior, as well as dYdX that deals with derivatives transactions. NFT and Game-related applications may use IMX to carry out.

The formation of a complete ecological situation may be one of the factors that will allow Ethereum to realize its true greatest potential in the future.

Long Live ETH!!!

Market Dynamics

Some of the major events in Crypto in the past few days.

  • OpenSea has announced the acquisition of NFT transaction aggregator Gem, which will continue to operate as a separate brand after the acquisition is completed. Gem's NFT aggregation is currently doing quite well and the page has rankings for individual NFT.
  • Central African Republic to adopt Bitcoin as legal currency. The Central African Republic becomes the first country in Africa to adopt Bitcoin as a payment currency.
  • BendDAO will be voting on governance proposals such as the Uniswap liquidity incentive on Snapshot. The vote has now closed and the proposal was passed with 90.62% support.
  • BAYC Instagram suspected to have been hacked. The hackers stole a total of 765.3 $ETH and 91 NFT in this incident, and notably, the hackers also donated 1.4 $ETH to Ukraine by the way.
  • SushiSwap released Sushi 2.0 community proposal. Key elements include talent retention and recruitment and the creation of a formal compensation committee. The vote has now closed and passed with 89% support.
  • Otherdeed NFT will not use the Dutch auction. The official explanation is that they are afraid of causing a gas war and describe the Dutch auction as "bullshit", calling on other parties not to use this method either. It is true, every time there is a major NFT sale, it tends to cause a gas war, and Dutch auction will only make it worse due to its nature.
  • Optimism has officially announced the native token $OP and will have multiple rounds of airdrops. The total initial supply is 4,294,967,296 tokens, however, it is an incremental model, with incremental issues at 2% per year. For those interested, check out the Whitepaper below.
  • Trader Joe is about to launch NFT marketplace Joepegs. Joepegs includes an NFT launchpad "LaunchPEG" that supports Dutch auctions, markup auctions, fixed price sales and whitelist sales methods.
  • Crypto investment house Asymmetric seeks $1 billion in funding. Founded by former Microsoft Strategy executive Joe McCann, the team is still relatively deep.
  • MetaMask integrates with MoonPay and supports users to buy cryptocurrencies via credit and debit cards, etc. MetaMask users can now buy coins using major credit and debit cards, Apple Pay and Google Pay.
  • DEUS Finance attackers have transferred 5,541 $ETH to Tornado.Cash. I wonder how the leaders of DEUS Finance feel about this now, it's a devastating blow to the whole project.
  • Ribbon Finance will launch the V3 version. New features include 2x leverage strategy, Auction Flow Reservation auction mechanism.
  • Aave founder Stani Kulechov's Twitter account has been suspended. It was unblocked today, but to be honest I think it's not a big deal, just joking. But still get 15 hours blocked, no freedom of speech at all.

This week's daily news roundup is here, in English and Chinese.

DeFi

Ethereum

NFT

Wayne

I write about crypto and Web3, while trying to catch the wave of it shaping the future.