Round Tripping
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as always, thanks for reading and follow me here
tl;dr: Merge success, ATOM ecosystem remains strong, CPI & macro overlords persist, evaluating the narrative vacuum past the merge, and news & funding galore
BTC dominance 38% | ETH dominance 17% | DeFi TVL $54.5B |
Total Crypto Market Cap $1.02T | Stablecoin Supply $152B |
Musings:
“Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security, reducing the issuance requirement to somewhere between zero and 0.005X per year.”
The above quote was written by Vitalik in 2014 as he expressed the vision for Ethereum in its whitepaper. Eight years later and Ethereum successfully completed it’s long-awaited transition to PoS this week. Going into the night, many, including myself, were expecting some brief chaos in the blocks and hours after the merge, but those worries were alleviated with an absolutely seamless transition. Shoutout to the developers working tirelessly to ensure success as the Ethereum and broad crypto community salutes you.
Elsewhere market wise, the success of arguably the biggest and most challenging software update ever was overshadowed by the latest CPI print released Tuesday morning. Waxing poetic about the reaction in the price of ETH depending on the result of the merge was ubiquitous while the answer was always going to be largely determined by Tuesday’s CPI numbers.
Last week, I wrote, “the idiosyncratic bid for crypto assets has been missing for months, and unfortunately a successful merge isn’t changing that near term. Parsing the data, narratives, and hindsight analysis of the price of ETH’s reaction to the merge will be difficult.” Undoubtedly, the mid-to-long-term effects of the reduction in ETH’s issuance and sell-pressure will be felt through reflexivity in upward trending markets in the future, but macro economic conditions and weak crypto inflows remain in control for the time being.
Speaking of idiosyncratic bids, ATOM and the Cosmos ecosystem once again displayed immense strength this week. I’ve spoken ad nauseam about this in recent weeks, but will remind readers it is almost certainly due to the Cosmoverse conference happening September 26th-28th. It’s widely expected, and has been alluded to numerous times over the past month+, that ATOM 2.0, including details on revamped tokenomics and value accrual to the ATOM token, will be released on September 28th.
Staking ATOM across the Cosmos ICS network of chains for security and fee capture along with potential implementations of fee burns and “sound money” similar to EIP-1559 have been rumored which are fueling ATOM’s recent appreciation and relative strength. Furthermore, if you squint hard enough after a glass of Woodford Reserve, you can faintly see that Cosmos has built and established an extremely similar vision to what ETH if progressing to over the coming years. The fragmentation of liquidity, communication, users, developers, value accrual for protocol tokens, etc. has a relatively straightforward solution within Cosmos and is something that ETH L2s will have to work through in the coming months and years as the conversation and narrative around appchains and L2s accelerates.
Outside of Cosmos and ETH, there are plenty of crypto/token specific catalysts coming in the next few weeks that I outlined in the August Recap. As the ecosystem progresses past the merge, it’ll be interesting to watch if specific tokens and narrative catalysts display more sustained strength moving forward. The merge has been a narrative vacuum for months now, and moving past that, along with reduced capital needed to support ETH as native sell pressure is diminished through issuance reduction, potentially frees some excess capital to chase and sustain rotations for longer. Of course, let’s all hope that our macro overlords will play along.
funding:
North Island Ventures launches their second crypto fund with $125M to deploy
NEAR Foundation launches $100M venture fund & lab for new initiatives
NFT collection Doodles raises $54M @ $704M valuation
Former Citadel execs raise $50M & launch new crypto market maker Portofino Technologies
Diamond Standard, startup that tokenizes diamonds, raises $30M series A
Ownera, tradfi tokenized asset infrastructure provider, raises $20M
Goldsky, crypto data platform, raises $20M seed round
Magna, token management platform, raises $15M seed @ $70M valuation
Alchemy, crypto development platform, raising $12M for new venture fund
Thirdwave, blockchain discovery engine for gaming teams, raises $7M
NEAR non-custodial wallet Sender raises $4.5M @ $45M valuation
news:
Citadel, Charles Schwab, Fidelity Digital Assets, Paradigm, Sequoia, and Virtu form consortium to launch digital asset exchange EDX Markets
KKR, private equity giant, makes their Health Care Strategic Growth Fund available on AVAX giving investors access through a “tokenized feeder fund”
Linux Foundation to launch OpenWallet Foundation to advance and develop a “secure, open-source, and interoperable digital wallet”
Fidelity to launch BTC trading for retail investors on its brokerage platform
Starbucks reveals crypto strategy — includes Starbucks Rewards loyalty program as NFTs or “digital collectible stamps” after partnering with MATIC
OFAC clarifies some sanctions regarding Tornado Cash including awareness of dusting attacks which they’re not prioritizing enforcement of, publishing Tornado Cash code is allowed, and trapped funds can apply for withdrawal
Museum of Modern Art (MoMA) to auction off $70M in historical masterpieces as MoMA looks to boost digital art reach including potentially buying NFTs
OpenSea to launch OpenRarity for “NFT Rarity Made Simple”
Leading derivatives exchange CME group launches ETH options contracts
BigCommerce, Nasdaq-listed e-commerce company, partners with BitPay and CoinPayments to provide “crypto payment solutions to merchants”
Epic Games lists its first NFT powered, blockchain gaming title Mythical Games’ Blankos Block Party available in its marketplace
Coinbase integrates policy efforts and local political leader sentiment towards crypto natively within their app
Infura, dominate ETH API provider, planning to deploy decentralized protocol for ETH’s app layer early next year with help of qualified infrastructure providers
tokens & protocols:
COMP launches crypto-backed loans for institutional clients
Aztec Network integrates YFI vaults for its zk-enabled private DeFi ecosystem
Oasys, gaming focused blockchain launching this year, confirms Square Enix to become its 21st validator joining SEGA, Ubisoft, Bandai Namco & others
Nitro Labs announced, a SOL VM compatible optimistic rollup
SWEAT launches on NEAR & commits to 50% of profits for buy & burn/yield
SOL — winners of Summer Hackathon & their projects detailed in this thread
Ribbon (RBN) announces expansion to the credit market with Ribbon Lend
Sudoswap (XMON/SUDO) metric site sudo.fyi launched
OSMO updates including native USDC to ATOM details coming @ Cosmoverse
reading:
“2022 Global Crypto Adoption Index” — Chainalysis Team
Chainalysis releases several reports throughout the year that span all ends of the crypto spectrum. From stablecoins to illicit use of crypto to policy/regulation and everything in between, Chainalysis likely has a data driven report on what you’re looking for. This week, they released their yearly Global Crypto Adoption Index with plenty of information to absorb. The report largely focuses on grassroots, individual adoption as their methodology describes:
“The goal..is to measure where the most people are putting the biggest share of their money into cryptocurrency. While institutional activity is important to that, we want to highlight the countries where individual, non-professional investors are embracing digital assets the most.”
If you don’t read the entire report, as I know most of this space doesn’t like reading, here are the key takeaways as written by the Chainalysis team:
“Overall adoption slows worldwide in bear market, but remains above pre-bull market levels”
“Emerging markets dominate the Global Crypto Adoption Index”
“Vietnam holds to top spot, U.S. jumps to fifth, China back in top ten”
“Bear markets can’t wipe out bull market adoption”
around the ecosystem:
ZeePrime’s @long_solitude examining the Cosmos (ATOM) ecosystem
Katherine Wu’s transcription of Senator Toomey pressing Gensler on decentralization
Vitalik detailing his thoughts on “What kind of layer 3s make sense?”
Nic Carter’s response to the White House’s comments on crypto mining
tweets:
