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Crypto Alpha - Week 40 2024
All things Crypto, Web3 and Blockchain to keep you updated
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TL;DR
HBO Documentary Proposes Bitcoin Creator's Identity
Spot Bitcoin ETFs Face Largest Outflows Since September
Vitalik Proposes Ethereum Alignment Metrics
Fidelity Ethereum ETF Sees Record Outflows
Snowden Criticizes Solana; Developer Responds
Solayer Launches Yield-Bearing $sUSD Stablecoin
Levana Partners with THORChain and Kujira
LAVA Expands to PancakeSwap and Osmosis
3thix Launches Decentralized Ad-Tech on Avalanche
GLV Launches on Avalanche
SEC Wins Case Against Rivetz's $18M ICO
PayPal Completes First PYUSD Business Transaction
And much more!
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THORChain is a liquidity protocol that facilitates native asset settlement between Bitcoin, Ethereum, BNB Chain, Avalanche, Cosmos Hub, Dogecoin, Bitcoin Cash & Litecoin.
THORChain is secured by its token, RUNE, which deterministically accrues value as more assets are deposited into the network.
Anyone can use THORChain to swap native assets between any supported chains or deposit their assets to earn yield from swaps.
Bitcoin Highlights of the Week
HBO’s upcoming documentary "Money Electric: The Bitcoin Mystery," set to release on October 9, claims to reveal the identity of Bitcoin’s mysterious creator, Satoshi Nakamoto. Directed by Cullen Hoback, the film suggests that Len Sassaman, a prominent cypherpunk who passed away in 2011, could be Nakamoto, as noted by Galaxy Digital’s Head of Research.
While this new theory is expected to reignite debate within the crypto community, the documentary’s conclusion is unlikely to settle the matter. Given the many individuals who have been speculated to be Nakamoto over the years, the true identity may remain unsolved.
Japan’s Metaplanet Inc. earned 23.972 BTC ($1.46 million) by selling bitcoin put options, increasing its total holdings to 530.717 BTC. The firm sold 223 put options with a $62,000 strike price, set to mature on December 27, 2024. If bitcoin's price drops below the strike price, Metaplanet will buy more bitcoin, further boosting its reserves.
CEO Simon Gerovich highlighted the strategy as a way to capitalize on bitcoin’s volatility, generating additional returns while maintaining significant pure bitcoin holdings. The company has been on a bitcoin buying spree, securing additional holdings to strengthen its financial position.
U.S. spot bitcoin ETFs saw $242.53 million in net outflows on Tuesday, the largest since early September, ending an eight-day streak of positive inflows. Fidelity’s FBTC led the outflows with $144.67 million, followed by Ark and 21Shares' ARKB at $84.35 million, and Bitwise’s BITB at $32.7 million. BlackRock's IBIT was the only ETF to record positive inflows, with $40.84 million. Total trading volume for spot bitcoin ETFs reached $2.53 billion.
Spot Ether ETFs also experienced significant outflows, totaling $48.52 million. The Grayscale Ethereum Trust led with $26.64 million in outflows, while Fidelity’s FETH saw its largest-ever daily outflows at $24.97 million.
U.S. spot Bitcoin ETFs have accumulated 312,488 BTC since their approval nine months ago, vastly outpacing the 169,942 BTC created by miners. These ETFs, including BlackRock's, have seen consistent inflows, with institutions, pension funds, and wealthy investors pouring in. Despite this, smaller Bitcoin holders are selling their BTC to these ETFs, missing out on long-term wealth-building potential.
Many of these coins are being locked in ETFs, where investors only redeem for US dollars, losing the key benefits of Bitcoin’s decentralized nature. Holding BTC long-term remains one of the best strategies for building wealth in a sovereign way.
Ohio State Senator Niraj Antani has introduced a bill to mandate the acceptance of Bitcoin and other cryptocurrencies for state and local tax payments. This legislation aims to normalize cryptocurrency usage within Ohio’s financial framework, positioning the state among the few to adopt such measures.
Antani emphasized that cryptocurrency represents the present and future of the economy, drawing on Ohio’s past attempt in 2018 to allow Bitcoin tax payments, which failed due to regulatory hurdles. The new bill seeks to enable state universities and pension funds to invest in cryptocurrencies, marking a significant step toward broader crypto engagement in Ohio.
Daily Alphas of the Week
Ethereum Highlights of the Week
Vitalik Buterin has introduced a set of metrics aimed at measuring the alignment of Ethereum-based projects with the core values of the Ethereum ecosystem. In his recent blog post, he emphasized the need for collective efforts to create a unified ecosystem rather than a collection of isolated projects.
Proposed criteria for evaluation include open-source accessibility, interoperability with ERC standards, and project resilience in the absence of core teams. Buterin stressed that maintaining Ethereum's credible neutrality is essential and that alignment should be assessed by a project's positive contributions to the community and society, including financial inclusion efforts.
The EIGEN token from EigenLayer commenced trading recently, achieving a fully diluted market valuation of $7 billion. Following its initial "stakedrop" launch in April, EIGEN briefly reached a high of $4.44 before settling around $4.20. The token distribution included two stakedrops, resulting in an estimated circulating supply of 200 million tokens.
This launch is viewed as a significant milestone for the restaking ecosystem, with plans for Programmatic Incentives aimed at rewarding stakers and those supporting Autonomous Validation Services (AVSs). Additionally, features like Intersubjective Slashing are set to enhance the overall security of the protocol.
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Grayscale Investments has introduced the Grayscale Aave Trust, enabling qualified investors to gain exposure to AAVE, the governance token of the Aave decentralized finance platform. This fund adds to Grayscale's existing suite of single-asset crypto investment products and follows the launch of trusts for other protocols.
Aave, which facilitates transparent borrowing and lending through smart contracts, has seen significant growth, boasting nearly $12 billion in total value locked (TVL) and a 110% price increase over the past year. The recent tokenomics upgrade, approved by Aave tokenholders, channels a portion of protocol revenues to AAVE stakers, enhancing the token’s attractiveness.
On October 1, the Fidelity Ethereum Fund (FETH) experienced unprecedented outflows, exceeding $25 million, marking the highest daily withdrawal for U.S.-based spot Ether ETFs, excluding Grayscale. Total outflows across nine Ether ETFs reached $48.6 million, with FETH, Grayscale's Ethereum Trust (ETHE), and Bitwise Ethereum ETF (ETHW) contributing significantly.
Meanwhile, only 21Shares’ Core Ethereum ETF (CETH) and VanEck Ethereum ETF (ETHV) recorded positive inflows. Despite the outflows, FETH maintains a solid total investment of $453.5 million, trailing only BlackRock’s iShares Ethereum Trust (ETHA), which surpassed $1.14 billion.
On October 1, asset manager Hashdex submitted an amended registration for its proposed Nasdaq Crypto Index US ETF, signaling progress towards a potential listing in the U.S. The filing comes after the SEC requested additional time to decide on the fund’s trading authorization in August.
Initially, the ETF will consist of Bitcoin and Ether, the only assets currently included in the Nasdaq Crypto US Index, but may later expand to include more cryptocurrencies. Industry experts view crypto index ETFs as the next significant focus for issuers, following recent launches of Bitcoin and Ether ETFs, with total U.S. ETF assets recently surpassing $10 trillion.
Solana Highlights of the Week
Edward Snowden criticized Solana for being centralized, prompting Mert Mumtaz, CEO of Helius Labs, to challenge him to a live debate. Snowden accused the network of prioritizing speed and efficiency at the cost of decentralization, asserting that it is primarily used for meme coins and scams.
Mumtaz defended Solana, claiming thousands of full nodes are geographically distributed, and emphasized that the largest validator controls only 3% of the stake, contrasting it with Coinbase’s 11% on Ethereum. However, concerns about stake concentration remain, as some validators could potentially collude to censor the network.
Solayer has introduced $sUSD, Solana’s first yield-bearing stablecoin, in partnership with OpenEden, a tokenized Treasury Bill issuer. This innovative stablecoin, backed by U.S. Treasury Bills, allows users to swap their $USDC for $sUSD, enabling them to earn a consistent yield of 4-5% APY.
To enhance usability, Solayer has developed a decentralized RFQ (Request For Quote) protocol for $sUSD deposits and redemptions. While the stablecoin will be integrated into various Solana DeFi applications, Solayer's total value locked (TVL) has seen a recent decline to $180 million, primarily attributed to $SOL price fluctuations amidst a competitive market.
Amid volatile market conditions, Drift Protocol excelled by processing over $3 million in liquidations without incurring any bankruptcies. The exchange demonstrated resilience as crypto assets, including $SOL, faced abrupt downturns due to geopolitical tensions, leading to a 7% drop in $SOL's price.
The Drift Protocol Insurance Fund benefited significantly from the chaos, generating over $200,000 in liquidation revenue on October 1 and increasing its value by 167% year-to-date. However, the protocol's governance token, $DRIFT, declined 21% month-to-date, falling from $0.66 at the start of Uptober to $0.52, reflecting broader market pressures.
Nandan Nilekani, co-founder of Infosys, is promoting the "finternet," an innovative financial system aimed at integrating blockchain technology with traditional finance. This initiative, linked to India's successful Unified Payments Interface (UPI), seeks to utilize Solana's infrastructure for seamless cross-asset transactions.
In a recent demonstration at the Global Fintech Fest, Nilekani and Siddharth Shetty illustrated the capability of transferring and settling funds using Solana. While still in its infancy, the finternet represents a significant shift toward onchain finance, attracting attention from major institutions and signaling a potential transformation in the global financial landscape.
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