Round Tripping
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tl;dr: Gary’s trying to protect, BLUR launches, market doesn’t care about your news, MKR announces Spark, AAVE’s GHO stable to testnet & Tether profits $700M in Q4
BTC dominance 41% | ETH dominance 17% | DeFi TVL $50.6B |
Total Crypto Market Cap $1.16T | Stablecoin Supply $136B |
To no one’s surprise it’s been another beautifully insane week+ in crypto. Essentially every possible emotional reaction between the spectrum of “it’s over” and “we’re so back” has been evoked since I’ve last written. Currently, we’re residing on the latter of that spectrum as BTC (+9%) and ETH (+7%), combined with BLUR’s launch and equities playing nice, have lifted the market up with them in the past 24 hours.
As for the former of the spectrum, a regulatory crackdown aptly named Operation Choke Point 2.0 (h/t Nic Carter), caused panic last week with numerous FUD inducing headlines that are summarized below:
SEC sues Kraken for failing to register the offer and sale of its “crypto asset staking-as-a-service program”; Kraken settles for $30M & agrees to end on-chain staking services (minus staked ETH) for U.S. clients only (Feb. 9th)
Coinbase adamant staking services don’t meet criteria in Howey Test (Feb. 10th)
SEC planning to sue Paxos for listing Binance’s BUSD stablecoin, alleging it’s an unregistered security (Feb. 12th)
Brian Armstrong says, “Coinbase’s staking services are not securities. We will happily defend this in court if needed.” (Feb. 12th)
NYDFS orders Paxos to stop issuing BUSD stablecoin from Feb. 21st (Feb. 13th)
Binance to continue issuing BUSD for “foreseeable future” but ready to adjust, could move away from BUSD as main pair (37% of spot vol) for trading (Feb 13th)
Paxos statement says, “categorically disagrees with the SEC because BUSD is not a security under the federal securities laws…we will engage with SEC staff on this issue and are prepared to vigorously litigate if necessary.” (Feb. 13th)
Despite the coordinated regulatory crackdown crypto prices appear to continue wanting to expand upwards. Since the Monday lows, BTC is currently up ~14% while numerous alts are up multiples of that. In the January 22nd edition of Round Tripping, in reference to the DCG saga, I wrote, “the swift processing of potentially negative news and small rallies in spite of bad news signals broad market strength as we’ve entered the bad news doesn’t affect markets stage of the ongoing rally.”
While the news this week certainly affected prices, we’re now a week removed from a coordinated effort to stifle crypto development in the U.S. that resulted in some of the worst regulatory decisions we’ve endured in years yet markets currently sit higher than they were before the news started last Wednesday. Of course, the long-term implications of any overstepping regulatory actions and fighting to keep crypto innovation available in the U.S. outweighs short-term price action, but the point remains. Until disproven, crypto is consistently displaying strength in the face of bad news and I’ll continue to embrace that instead of fading it.
BLUR captured the mindshare of the crypto ecosystem this week as news hit that they’re raising at a valuation of $1B the same morning of their planned airdrop. BLUR was initially priced around ~$.30 when liquidity developed, a price that has since risen ~280% to ~$1.10.
What’s fueling BLUR’s rise, and has since the token was live, is an overwhelming demand of BLUR from large market participants. As the percentage of eligible BLUR claimed steadily increased, so did the number of sells and it’s price. Despite the growing number of sells, BLUR, evidenced from the picture above, was steadily accumulated within the first day of trading as the distribution of the sell/buy ratio reached as high as 5:1.
As you can see, this still continues to be the case as the number of sellers are overwhelmed by the volume of buys. Many where prepared for a large opening dump followed by an eventual pump higher, but with the current state of market participants being mostly advanced and surviving the catastrophe that was last year, the usual airdrop playbook was speed ran into a transfer of tokens from thousands of willing sellers securing “free” money to those willing to watch their free money multiply.
One final note on BLUR centers around ETH and what I highlighted last week regarding the reduction in ETH’s supply since the fundamental changes of EIP-1559 and the merge. Well, it turns out that this can be massively reinforced through a new token launch where tens of thousands of wallets need to submit transactions to claim free money ($BLUR) and potentially swap that to stables or ETH.
BLUR’s launch day induced sustained, extreme gas fess which of course means that ETH was burned. In fact, around ~7k ETH ($11.5M, $4.2B annualized) was burned on Tuesday and ETH’s supply has reduced by ~10k ETH ($16.5M, $6B annualized) since the last time I wrote while the supply since EIP-1559 was passed has diminished -1%.
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funding:
Worldcoin, eye-ball scanning protocol, raising ~$120M @ $3B valuation
Carbonplace, bank-backed carbon credit transaction network, raises $45M
Coincover, recovery & protection services, raises $30M series B
Mino Games raises $15M to create Dimensionals game with crypto features
Dymension, EVM compatible modular “RollApp” builder, raises $6.7M in SAFT
Cub3, customer loyalty program with rewards in tokens, raises $6.5M series A
Ajuna, platform allowing Unreal/ & Unity to integrate with blockchains, raises $5M
Sesame Labs, “marketing platform for web3”, raises $4.5M seed
Vault, music NFT & content platform, raises $4M series A @ $42M valuation
VRRB Labs, developing L1, raises $1.4M pre-seed @ $20M valuation
news:
Tether (USDT) provides latest attestation, reports $700M in net profit for Q4
Binance to use zk-SNARKs for verifying its proof-of-reserves
UK central bank launches digital pound project, issued solely by the central bank
DefiLlama launches LlamaSwap on CANTO & announces Llamalend, an aggregator for NFT loans
Kraken settles with SEC and pays $30M over charges regarding staking program
tokens & protocols:
ATOM/AVAX — details on Landslide which enables Cosmos/IBC subnet on AVAX
UNI — vote passes to deploy UNI v3 on BNB
MKR — announces Spark Protocol, growth focused arm of MKR building lending protocol Spark Lend; MKR will also integrate LINK oracle to Keeper Network
CANTO — proposes 30% reduction in emissions & new liquidity mining incentives
AAVE — protocol native GHO stablecoin now on ETH’s Goerli testnet
SAND — signs “memorandum of understanding” in collab with Saudi Arabia
OP — distributes 11.7M OP tokens in Airdrop #2
CHZ — validates genesis block of new L1 Chiliz blockchain
SUSHI — acquires ATOM-based derivatives platform Vortex Protocol
StarkWare — joins LINK’s SCALE program with oracle feeds available on StarkNet
Infinity Pools — DEX with unlimited leverage on any asset introduced
JPEGz — index token tracking 10 popular NFT collections launched
Caldera — announces one-click deployable rollup app solutions
AltLayer — rollups-as-service platform opens to 100 devs before mainnet launch
Flux Finance — US Treasury yield on-chain to permissionless lenders announced
around the ecosystem:
SEC Commissioner Hester Pierce’s dissent regarding the SEC’s action v. Kraken
Nic Carter’s explanation of Operation Choke Point 2.0
Ansem outline’s his February Market Outlook
tweets:
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