Round Tripping
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tl;dr: onchain volume sputters, Hong Kong’s coming retail access, L2 growth, airdrops & new tokens/ecosystems dominate attention, & Optimism’s potential tailwinds
BTC dominance 48% | ETH dominance 20% | DeFi TVL $48B |
Total Crypto Market Cap $1.2T | Stablecoin Supply $129B |
We’re back again, covering what was a relatively slow week throughout the crypto ecosystem. As the week progressed, tokens began to move a few percentage points higher as BTC and ETH followed legacy markets upwards thanks to Nvidia’s insane performance. In after hours trading last Wednesday, NVDA gained an Ethereum and more (~$250B) worth of market cap on the strength of earnings fueled by the explosion of demand for AI tooling since the start of the year.
Since October, NVDA’s market cap has now gained ~$750B as the frenzied demand for AI continues to accelerate. NVDA’s rally combined with their forward guidance and growth projections will add fuel to the fire that is the pivot from crypto to AI. While Page One is excited about the eventual future synergies between crypto and AI, we want to state on the record that we’ll never pivot to covering AI as we’re stuck in the crypto hole for eternity.
Now, back to what we know, crypto specific developments. First, the memecoin narrative and rotation is clearly fizzling out with onchain trading volume and ETH gas prices slowly coming back down to Earth. As you can see from the below dashboard, after peaking at around $2.7B of weekly trading volume in the start of May, the “Meme Total Trading Volume” was around ~$375M last week.
While not a perfect metric as exchanges have been quicker to add high volume tokens removing the on chain aspect, the chart combined with the number of blatant cash grabs we’ve seen develop paint a relatively bleak picture. Opportunities in crypto remain endless if you’re looking in the right areas, but the amount of time available to capture them shrinks as the PvP nature of the market increases where unrealized wins can quickly become losses.
When the onchain environment sours, smart market participants usually reallocate their time and energy to exploring newer domains and airdrop farming. Since the market has continued to range for the past ~3 months, this has clearly been the case as evidenced by ETH’s collective L2s reaching new monthly highs of publishing fees to mainnet in May.
The fees paid to batch and settle transactions to mainnet reached ~$17M this month as the memecoin and onchain trading volume spiked gas fees and market participants continue to explore and farm for future airdrops of L2s and their developing protocols. Artemis’ dashboard showing the 3 month change in daily active users across chains highlights the daily active address growth we’ve seen across ETH L2s in recent months. In addition, while most crypto TVL metrics remain around recent lows, zkSync Era, Polygon’s zkEVM, and Starknet all hit new ATHs in TVL recently while all conveniently not yet releasing a token.
Speaking of ETH L2s, Optimism likely has a volatile week+ ahead beginning with a token unlock later today worth ~$600M that represents ~9% of the token’s entire supply. On the other side of that, the L2s long-awaited Bedrock upgrade that will provide a flurry of benefits including “improving the security and resiliency of the OP Mainnet bridge” and significantly reduce transaction costs will take place on June 6th. While Arbitrum has since dominated the L2 landscape, OP’s Bedrock upgrade along with Coinbase’s Base and Worldcoin’s eventual launches and commitment to OP’s Superchain vision should provide tailwinds to Optimism’s growth and adoption.
Lastly, overall crypto adoption and trade volumes could see a sizable boost later this week as Hong Kong enables retail access to crypto trading starts June 1st. For their part, OKX’s exchange will initially list 16 tokens (BTC, ETH, SOL, ADA, MATIC, DOT, UNI, LINK, SAND, LTC, AVAX, AXS, ATOM, XLM, USDT & USDC) available for retail investors to buy, sell and trade natively in their app which are purchasable with HKD, P2P or via ApplePay, Visa and Mastercard.
The ability of retail in HK to directly access crypto comes at a time when visibility, tolerance and awareness for crypto appears to be growing in China as Beijing recently “released a web3 white paper to promote the industry’s development” and CZ claims (obviously in Binance’s best interests) Chinese speaking communities are “buzzing” after the CCTV (China Central Television) broadcasted a segment about cryptocurrencies that featured BTC’s logo and NFTs. Hong Kong joins countries throughout Europe and Latin America that are positioning themselves to benefit from the US continuing to push crypto offshore.
As a reminder, the P1 team consisting of myself, MoonOverlord, terv & boffin are always reachable at contact@pageone.gg. If you want to contact us in regards to sponsoring the newsletter, pitch a guest post, tell us about your protocol or to collaborate on anything in general, you can always reach us there or @PageOneGG.
funding:
Tools for Humanity, team behind Worldcoin, raises $115M Series C
Dispersion capital raises $40M for debut crypto fund, will focus on infrastructure
Azteco, BTC voucher company, raises $6M
LabDAO, decentralized open-source drug discovery protocol, raises $3.6M
Sort, platform enabling smart contract integration to apps, raises $3.5M seed
Openfort, wallet-as-a-service for crypto gaming, raises $3M seed
FastLane, MEV protocol on Polygon, raises $2.3M seed
news:
Ava Labs launches Ava Cloud, a “Web3 launchpad for deploying/scaling no-code, fully managed custom blockchains”
Eventual launch of FTX 2.0 seems likelier by the day
Circle launches eruo-backed stablecoin on AVAX
Binance enters NFT lending space, allowing users to borrow ETH against BAYC, MAYC, Azuki, and Doodles; rates around ~8% with LTV ranging from 40-60%
Fred Wilson writes in “The Freedom to Innovate” that USV to “double down” on crypto investing — “when they want to shut it down, I say double down”
Paradigm shifts crypto-only focus to include AI investing
Stably to launch dollar backed stablecoin for BTC’s growing ordinals ecosystem
Coinbase launches Wallet-as-a-Service product on ETH mainnet
tokens & protocols:
STEPN — granted approval from Apple to release mobile app that allows users to buy, sell and trade NFTs natively in their app, will pay 30% tax to Apple
TENET — Cosmos-based, EVM compatible L1 token is now live
FTM — launches gas monetization, devs can earn 15% of dapp gas generation
MKR — proposal to raise the DAI savings rate to 3.33%
Connext — launches Chain Abstraction allowing seamless cross-chain functions
Ark — L2 protocol for cheap, anonymous, off-chain BTC payments introduced
Base — Coinbase’s coming L2 outlines their path to mainnet launch
Astaria — NFT-backed lending protocol launches on mainnet
around the ecosystem:
0xsmac & Compound Crypto release an exploration of “A Crypto Future”
Joel John’s “Moneyed JPEGs” detailing the landscape of NFT finance products
Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions.