GM everyone!
Crypto markets have been taking a slight breather to cool off after an explosive few weeks, but there’s still plenty to evaluate as we head into December.
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Now, let’s begin with a look at developments around Blast, the proposed new protocol that’s been grabbing the spotlight but dividing opinion.
Here’s what’s in today’s issue:
- Sam shares his thoughts on Blast’s TVL rising, MSTR and COIN hitting new highs, the UK allowing tokenized asset management, Wallet of Satoshi ceasing US operations & an update on the KyberSwap Hack.
- This week on chain.
- This week’s trending coins by Rebecca.
Thanks to Phemex for sponsoring today’s newsletter.
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Blast TVL Up, Hits Back at Criticism
In-development new protocol Blast launched a preliminary stage last week, and it’s been getting mixed reactions so far.
Just to recap, Blast aims to be “the only Ethereum L2 with native yield for ETH and stablecoins”, but is currently centered around a multisig wallet to which would-be users can send funds across a one-way bridge.
Funds are locked until mainnet launch next February, and in the meantime are used to generate yield through Lido, and MakerDAO’s T-Bill protocol, with depositors earning airdrop points–to be distributed next May–in return.
You might think eliciting deposits like that is a big ask, but it turns out that one-way bridging to an under-construction L2 can gain traction, and Blast now has close to $520 million locked up, placing it–in terms of TVL–roughly alongside working protocols such as Base and zkSync Era.
What’s more, founder Tieshun Roquerre (aka Pacman, and also the founder of NFT exchange Blur) has hit back at heavy criticism, arguing against accusations that Blast is a Ponzi and defending the platform’s invite mechanism, while Blast’s account has posted in defense of its security setup.
So on the one hand, Blast is likened to an unregulated hedge fund and a pyramid scheme, and on the other, it’s presented as a novel attempt to construct a yield-generating L2.
How do you feel about Blast, have you sent any funds there, or are you steering clear? Send us a reply to this email and let us know your thoughts.
MSTR and COIN Hit New Highs
It’s possible to invest in crypto without actually buying any crypto, by getting hold of crypto-related stock instead, and two major companies to look at if that’s your preferred approach are MicroStrategy and Coinbase, both of which recently hit new price highs for this year.
Over at MicroStrategy, the share price just reached a 2023 high of around $520, giving a YTD return of almost 270%. And at Coinbase, the price has hit 2023 highs of almost $117, giving a YTD return of around 226%.
Notably, both of these stocks have outperformed BTC this year, and with no requirement to actually handle crypto or convert from fiat.
As for what this tells us about the state of crypto, it’s reasonable to infer that traditional investors might be looking for exposure without holding coins.
MSTR acts almost as a proxy for spot BTC ETFs, and Coinbase is the exchange that ETF applicants are opting to work with if they’re allowed to launch.
If this interest in MSTR and COIN indicates sustainable interest in crypto, then it looks like those spot BTC ETFs (and perhaps spot ETH ETFs later) may be set to receive the substantial long-term inflows that a lot of analysts have been predicting.
UK to Allow Tokenized Asset Management?
When it comes to crypto adoption in the UK, it’s a mixed bag.
Although there’s been talk (including from the Prime Minister himself) of Britain becoming a Web3 hub, UK-based crypto traders will have noticed some exchanges limiting their services in Britain as crypto regulation remains a work in progress.
There’s been some positive news recently though, with a new report detailing ways to tokenize traditional assets through blockchain use.
The report is called UK Fund Tokenisation: A Blueprint for Implementation, and it’s published by The Investment Association, which is a trade body representing the investment management industry, and whose members collectively manage £8.8 trillion of assets.
The report was produced while engaging closely with HM Treasury and the Financial Conduct Authority, and was accompanied by a press release explaining that its approaches can be implemented within existing legal and regulatory frameworks, setting the foundation for tokenized asset management.
It remains to be seen how this plays out from here, but it appears that the wheels are in motion and financial regulators are playing ball.
Wallet of Satoshi Ceases US Operations
If you use the Bitcoin Lightning network, then you’ll be familiar with Wallet of Satoshi, which is one of the top Lightning payment platforms.
However, in a blow for US users, Wallet of Satoshi has–for the time being, at least–halted its services in America, with its app now removed from the US Google Play Store and Apple App Store.
US users can still access and transfer out their funds, and Wallet of Satoshi has clarified the move on X, explaining that it “will not serve U.S. customers going forward”, but not detailing exactly why the decision was necessary.
This looks like part of the ongoing battle around crypto regulation in the US, where authorities are taking a generally hostile approach, and it’s perhaps relevant that Wallet of Satoshi is a custodial service.
The company did also offer a positive note though, stating: “We’re hopeful that future developments will allow us to revisit and possibly resume our operations in the U.S.”
KyberSwap Hack: Deadline Passed
Among the spate of hacks hitting crypto recently, KyberSwap–which was drained of nearly $50 million last week–has yet to find a resolution, despite an on-chain message from the KyberSwap team to the hacker which offered a 10% bounty in exchange for the stolen funds, and with a deadline for the deal set for November 25th.
A quick glance at the calendar tells us that the deadline has passed, and the latest update is that 90% of funds taken on Polygon and Avalanche–accounting for $5.7 million of losses–have been returned, while KyberSwap has stated that it “will continue to support law enforcement and cybersecurity on track down and recovery of users’ funds from the perpetrator of the exploit attack.”
There’s already huge anticipation for the next year in crypto, and that’s reflected in the way bitcoin holders are keeping possession of their Sats.
This has been an ongoing trend for a long time now, and it keeps getting stronger, as the amount of BTC that has been held onto for over a year reaches almost 71%, a new all-time high, and a pretty remarkable figure.
What’s more, you can see that figure trending upwards recently, even as prices climb, indicating that holders have high conviction and are not inclined–at the moment–to cash in their gains.
And if you were wondering about whether a fully firing bull market is near, then one factor to consider is the global money supply.
By that measure, we’re close to previous levels of liquidity, with the current figure at $91 trillion, while the high before (coinciding with the previous crypto bull market as supply climbed), reached $93 trillion.
There are increasingly positive signs if we take a look at stablecoin supply too, where we can see the stablecoin total market cap now clearly trending up from its lows to approach $125 billion.
And looking at inflows into crypto, this week saw the amount coming into the space surpass $1 billion for the year so far, with the vast majority of that pouring into bitcoin, followed in second place (by a considerable distance) by Solana, which has been a very strong performer in 2023 and has strong sentiment pushing it forward.
Another major Layer 1 alternative to watch is Avalanche, and if we look at fees on its smart contract-handling C-chain, we can see a huge spike recently, due to Ordinals inscriptions being made.
In case you missed them, inscriptions–which utilize what’s called Ordinals protocol–were pioneered on Bitcoin earlier this year, enabling the creation of NFT-like on-chain assets and ERC-20-style fungible tokens (which on Avalanche are called ASC-20 tokens.)
This method is now being experimented with on chains other than Bitcoin, including Avalanche, and you can also find daily transactions spiking on Solana (at over 50 million) and Polygon (at around 16 million) partly as a result of these developments, with SPL-20 inscriptions on Solana, and the PRC-20 version on Polygon.
Solana
Polygon
Over at the PancakeSwap DEX, there’s a shift occurring in the mint and burn process of native token CAKE. The protocol is now burning more of the token than it’s creating, causing a deflationary effect if there’s increased demand for the platform’s services.
Last week saw 8.7 million tokens burned, compared to just 5.4 million minted, creating a net mint of minus 3.3 million.
Meanwhile, cross-chain asset-swapping network Thorchain has been making a big impact recently, and has seen its monthly volume hit an all-time high of over $5 billion. It’s also now among the top ranked DEX protocols by volume, and its token, RUNE, did around a 4X in price across October and November.
Finally, over in the world of ETFs, one way to gauge confidence in the likelihood of SEC approval for spot BTC and ETH ETFs is to check the discounts on GBTC and ETHE to NAV (GBTC and ETHE referring to Grayscale’s Bitcoin and Ethereum trusts.)
Right now, the GBTC discount has fallen to below 8%, and for ETHE, it’s below 13%. Or in other words, investors are leaning towards ETF approval coming through soon. This is particularly the case for those BTC ETFs, which are first in line before the possibility of ETH ETFs rolls round later in 2024.
Here are my key takeaways from the trends this week and it’s all about those gaming tokens and memecoins.
- Baby Doge Coin is a memecoin on BNB Chain that’s partnered with LaborX, a blockchain-based jobs platform giving users the option to be paid in BABYDOGE. The token has also been listed on P2B exchange.
- ArbDoge AI is a memecoin created by AI on Arbitrum that’s been regularly featured on Binance Smart Chain’s social media accounts. It’s also been named the most-traded highlight project on BNB Chain in the past 7 days.
- Pyth Network is an oracle network that’s launched its PYTH token with an airdrop of around 250M tokens and completed its first day of trading with a market cap of around $500M.
- IQ is the world’s largest blockchain encyclopedia that’s teasing the upcoming v3 which will include new dApps.
- SuperVerse is a gaming and NFT ecosystem on Ethereum that’s teasing an upcoming game.
- WAGMI Games is a play-to-earn (P2E) gaming franchise that’s announced George Tung of CryptosR_Us as an official advisor. WAGMI Games has also partnered with GameSwift.
- AllianceBlock is a protocol to bridge DeFi and TradFi that’s launched its trading overview page allowing traders to access the top 100 crypto tokens available in Uniswap.
- Decimated is a post-apocalyptic game that’s announced on social media its had $7.3M locked on HTX Global and has been blocked on LinkedIn by Justin Sun.
- Myria is a Web3 gaming platform that’s announced Alex Becker as the newest member of its advisory board.
- Beam is a gaming network that’s seen Merit Circle introduce a grants program. Almost 80% of all Merit Circle tokens have been migrated over to BEAM.
- GameSwift is a Web3 gaming platform that’s announced partnerships with KuCoin Labs and WAGMI Games. GameSwift has also received a grant from Casper Network leading to a 79% gain in token price in 24 hours.
- Aave is a lending protocol on Ethereum that’s been overtaken by Tron’s JustLend protocol as the largest lending protocol in Web3 based on total-value locked (TVL). Aave also recently announced a rebrand to Avara.
- Bonk is a Solana-based meme token that’s been listed on Binance for futures trading. This pushed the price to a new all-time high after jumping 50% in a day and 2,300% in a month.
- Sidus is a Web3 gaming ecosystem that’s hit a new high of 26,500 token holders. It also burned 23% of its total circulating supply meaning 6.8 billion tokens are permanently gone.
- Bittensor is a decentralized machine-learning protocol that’s seen 26 subnets registered over the past month and are currently in development.
Thank you so much for your support, and I truly hope that today’s issue will give you insights needed to help you master your wealth.
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