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tl;dr: frantic September ahead, Pudgy’s resurgence, Arbitrum resumes takeoff, DigiDaigaku’s $200M explosion, Berachain confirmed, & stablecoin wars are coming

Token & Protocol Developments:

ETH Ecosystem:

• Arbitrum (token soon) completes Nitro migration upgrade, reducing transaction costs further, while increasing speed and scalability of the optimistic rollup

• AAVE officially passes vote for creation of over collateralized stablecoin GHO

• OP thread on the future of Optimism, their Bedrock upgrade, rollup decentralization, and potential for OP’s Bedrock to implement ZK-tech

• Frax Finance (FXS) — flurry of updates and products in development including frxETH a liquid ETH staking derivative, Frax Rollup, Fraxlend, and Fraxswap

• Immutable X (IMX) L2 support added natively into GameStop’s Wallet; NFT collection Worldwide Webb to launch season 1 on IMX

• Coinbase announces liquid staking token cbETH ahead of merge

• MakerDAO’s vault and real world asset integration is live

• Synthetix (SYN) to end token inflation, cap supply at 300M through SIP-276

• Redacted Cartel (BTRFLY) officially launches Redacted v2

Cosmos Ecosystem:

• ATOM upgrades coming in whitepaper 2.0 — monetary changes to ATOM include “hub as fund, sound money”; Interchain Service updates include “multi-hop routing, interchain security, and protocol controlled value”

• Berachain confirmed to exist — “DeFi focused EVM compatible L1 built on Cosmos SDK powered by Proof of Liquidity Consensus” — launching Q1

• THORSwap (RUNE) launches full-featured ETH DEX aggregator allowing transfer of native BTC to any Uniswap supported ERC-20 and vice versa

• dYdX’s (DYDX) migration to standalone Cosmos SDK chain 55% complete

• CANTO is live — new Cosmos L1 chain with an EVM execution layer and liquidity mining program launching soon; breakdown here

Other Protocol Developments:

• SOL — Jump Crypto building new validator client for Solana to improve scalability and reliability; thread on best protocols SOL summer hackathon here

• Ticketmaster partners with FLOW blockchain to distribute tickets as NFTs for select events — pilot program saw 5M+ tickets minted over 6 months

• Helium (HNT) proposes HIP-70 which would result in migrating the Helium ecosystem to Solana for increased scalability

• Arweave (AR) launches suite of six new services/protocols, breakdown here

• Flashbots open sources the Flashbots Relay MEV-Boost stating “multiple relays at the merge—rather than a single default—is key to Ethereum’s health”

• Monero (XMR) protocol upgrade completes slew of new enhancements

• Dogechain launches native token (DC)

• Defi Kingdoms (DFK) leaving Harmony for Klyton (KLAY) blockchain

• Chiliz (CHZ) invests $100M into Barca Studios expanding FC Barcelona’s partnership with Socios as FC Barcelona expands its web3 strategies

Thoughts & Notes:

Heading into August, all eyes were on the upcoming, and final, ETH testnet Goerli merge. Fortunately, the simulated merge was successful and ETH’s long awaited transition to PoS has since been scheduled sometime on or around September 15th. Unfortunately, ETH’s upcoming merge was overshadowed by two separate federal actions in the form of sanctions and interest rate policies. Sanctions from the U.S. Treasury’s OFAC were levied against Tornado Cash and numerous associated ETH addresses while the FED reiterated its commitment to fighting inflation through decreasing demand and asset prices by raising rates. After a sharp July rally off the bottom, BTC (-15%), ETH (-5.5%), SOL (-26%) and countless tokens across the ecosystem declined throughout August as the market continually digests decreasing liquidity, increased regulatory oversight, equity selloffs and macro uncertainty.

While macro uncertainty hovers affecting the broad crypto market, several sectors remained unfazed through a combination of fundamental and narrative tailwinds that were led by ATOM (+20%) and the corresponding Cosmos ecosystem, CHZ (+51%) and associated fan tokens, XMON (+16%) adding liquidity and semi-fungibility to what is left of NFT volume, and DPX (+76%), GMX (+21%), and MAGIC (+60%) leading the ongoing real yield and L2 rotation as Arbitrum launches their Nitro upgrade and prepares to reignite the Arbitrum Odyssey.

Looking ahead, September appears to be an extremely volatile and active month across the ecosystem. The obvious elephant in the room is ETH’s merge and the downstream effects of its success on various sectors specifically L2s and DeFi. Crypto’s correlation to macro isn’t changing anytime soon, and the main macro events in September include new CPI numbers (Sept. 13th) and the next FOMC meeting (Sept. 20th). Beyond macro, the crypto ecosystem has numerous upcoming catalysts that market participants should be aware of including:

• The merge (~Sept. 15th), CPI data (Sept. 13th), & FOMC (Sept. 20th)

• ATOM’s continued relative strength ahead of upcoming Cosmoverse conference (Sept. 26-28) and developments of ATOM 2.0 including tokenomics upgrades & launch of Interchain Security

• Potential XMON and sudo token distribution/tokenomics information as sudoswap continues eating into OpenSea’s dominance

• The ongoing bid for “real-yield” narrative tokens including GMX, DPX, BTRFLY, SNX, etc. along with RWA developments and adoption from MKR

• Protocol upgrades including FXS’s Fraxlend and liquid staking solution frxETH, YFI’s rollout of v3, and BTRFLY’s pirex, hidden hand, and v2 adoption

• Merge related tokens including LDO, RPL, and FOLD

• L2s — Arbitrum’s rollout of Nitro and likely resumption of Arbitrum Odyssey and the downstream effects to the broad Arbitrum ecosystem including information on ARBI token

• Ongoing rollout of zkSync’s mainnet 2.0 launch expected October 31st along with token updates from Starkware & zkSync

• Rollout of various stablecoins from AAVE, CRV, and DPX

• CHZ and Socios.com developments surrounding the explosion of the fan token ecosystem as we approach the World Cup (November 20th)

• LINK SmartCon conference September 28-29 and more information regarding the rollout of token staking and tokenomics changes

Funding & News:

the below funding and news developments are not a comprehensively list of every announcement, but are a selection of the most impactful announcements in August

• Famed macro fund Brevan Howard raises $1B+ for new flagship crypto fund

• CoinFund announces launch of new $300M crypto fund

• Shima Capital raises $200M for first crypto fund from Bill Ackman, Dragonfly, Animoca, Andrew Yang, and others to invest in early stage crypto

• Dragonfly Capital rebrands to Dragonfly, acquires crypto fund Metastable Capital ($400M+ AUM) founded in 2014

• Animoca Brands Japan raises $45M @ $500M pre-money valuation

• Bitcoin Depot, crypto ATM company, to go public in SPAC with $885M valuation

• Tomorrow Crypto, BTC/ETH mining infrastructure company, to go public through SPAC merger valuing the company at around $310M

• Messari, crypto data platform, plans to raise $35M @ $300M valuation

• Spartan Labs spins out of Spartan Group with $100M to invent/launch products

• LongHash Ventures announces new $100M fund

• LVMH backed Aglae Ventures to launch $102M crypto fund

• U.S. Treasury’s OFAC adds Tornado Cash and associated addresses to Specially Designed Nationals (SDN) list.

• Steve Cohen launches crypto focused fund “On-Chain Investments”

• SEC once again delays decision on VanEck BTC ETF

• BlackRock launches trust for institutional investor access to spot BTC exposure; BlackRock taps Coinbase to offer institutional crypto exposure

• ETH foundation confirms Bellatrix upgrade on September 6th enabling merge to commence when TTD threshold reached, projected on September 15th

NFT Review:

This is by no means a comprehensive list of the ongoings in NFT land. These projects are covered in more depth throughout past Page One posts, so find more info on all of these there.

Familiar Faces:

• 10KTF’s Wagmi-san prepares for war with the Combat Sale

• Bored Apes (and others) avoid liquidation in BendDAO liquidity crisis

• Bridgeworld Harvesters go live, bringing TreasureDAO into its next phase

• Clone X debuts expansive line of phygital goods for holders

• CryptoDickButts run to new highs early in the month

• CryptoPunks and Meebits receive long-awaited IP agreement updates

• Moonbirds go CC0, announce Moonbirds 2 at Future PROOF

• Pudgy Penguins choose toy representatives, introduce new advisory council, announce children’s book and price go up

• RENGA mints final portion of supply ahead of reveal (date TBA)

New Entrants:

• 8liens mint for free and run to nearly 1Ξ after reveal

• 9dcc, crypto-native luxury fashion house from gmoney, launches first items

• Castaway, island survival game, releases genesis Rafts

• Cats Project releases with new IP strategy aiming to blend the best parts of commercial rights ownership and CC0

• DigiDaigaku mints, runs to 15Ξ after parent company Limit Break announces $200M raise from Paradigm and others

• Finiliar, cute avatars that will react to crypto price changes via oracles, mints

• NFTiff, CryptoPunk pendants made by Tiffany & Co., mints for 30Ξ

• PROOF Grails II mint and reveal, includes Snowfro, Grant Yun, Tom Sachs

• Rare Apepe Yacht Club mints out and runs to 1Ξ

• Webaverse, open metaverse protocol, sells out via Metadrop auction

Market News and Announcements:

• Blur continued rolling out private beta access in preparation for public launch

• Facebook and Instagram now support NFT sharing

• Gem integrates sudoswap purchases, more updates coming soon

• Magic Eden launches Ethereum marketplace, payments with Ethereum

• OpenSea rolls out Solana launchpad

• Reddit is launching their community points system on Arbitrum Nova

• sudoswap gains traction, sees ~$30M in volume and stirs up royalty debates

• X2Y2 introduces option to choose how much to pay in royalties