Macro-environment of the crypto market
SEC Approves Bitcoin ETF
- The Securities and Exchange Commission (SEC) greenlighted bitcoin futures ETFs after the Friday meeting. The first Bitcoin Strategy ETF by ProShares is expected to launch on Monday, Oct. 18, though the fund may not begin trading immediately.
- As trader expectations on the approval of the Bitcoin future ETF increased, Bitcoin price rose to $61,000 on Friday.
- The benefit of Bitcoin futures ETF is that it allows traditional investors to be exposed to Bitcoin without actually holding the Bitcoin. In addition, they don’t have to think about secure crypto wallets or go to crypto exchanges, things many traditional investors are not familiar with. However, Bitcoin futures track the future price of Bitcoin rather than the spot price. So the ETF could be traded at a premium during the crypto bull market or at discount during the bear market. There is an additional cost to the Bitcoin ETF because many middlemen are involved including hedge funds and ETF providers. When using future contracts, the provider (of Bitcoin futures) must buy futures contracts and renew the contracts once they expire, the cost of buying and renewing futures will be passed to investors.
- FTX and Coinbase launched their own NFT Marketplace following Binance NFT.
The development of NFT Marketplace is an indication of growing adoption of the “creator economy”. OpenSea became the unicorn in the crypto space with trading volume last month of more than $2.7 billion, according to the Block data, which have increased more than 30 times over the past few months. The success of OpenSea can be attributed to its low barrier to entry for creators, and its UX design to search for trending projects with customized filters. Users don’t need to pay a fee upfront when minting an NFT; the fee will be deducted when the NFT is sold.
- Solana NFT Marketplace is live on FTX
This is only available for Solana Metaplex NFTs. Users can deposit current Solana NFTs to FTX’s wallet or mint new NFTs. The FTX’s NFT marketplace supports bank transfers, wire transfers, or credit cards to purchase NFTs. The ability to buy NFT with traditional payment methods could boost mainstream adoption of NFT. FTX has been a big supporter of Solana, so it is understandable that FTX now supports Solana NFT. In the future, FTX also plans to roll out support for ethereum-based tokens, which account for the majority of NFTs that are trading.
However, To deposit, buy, and sell NFTs on FTX, users must at least pass level 1 KYC. You may need to pass KYC level 2 in order to withdraw NFTs above a certain dollar value. Having to go through KYC could be a problem with some buyers who wish to stay anonymous. In addition, FTX US charges a 2% fee on all NFT sales; the charge is lower than that of Opensea, which currently charges 2.5% fee.
- Coinbase will soon launch Coinbase NFT
Coinbase NFT will be a peer-to-peer marketplace, users will be able to mint, purchase, and showcase their NFTs. The Coinbase NFT marketplace focuses on ease of use with simple UX design. Coinbase NFT will support ETH’s NFT standards first, then move on to multi-chain NFT. Currently, Coinbase opens the waitlist for people older than 18 and who reside in the US, though it will add more countries in the future. For the NFT Marketplace, Coinbase will use self-custody wallets and forgo the know-your-customer (KYC) checks. About 1 million people have filled the waitlist for Coinbase NFT.
- Steam is removing NFT games from the platform, while Epic Games said it’s “open” to blockchain games.
Steam has updated its onboarding page for partners and Steamworks users with a line that makes it clear that it will soon ban NFT trading games from the platform. Game creators are reporting that their games utilising NFTs are being removed from the platform because NFT items have value and Steam doesn’t allow items that have real-world value existing on its platform. In contrast, according to Tim Sweeney, Epic CEO and Co-founder, “Epic Games Store will welcome games that make use of blockchain tech provided they follow the relevant laws, disclose their terms and are age-rated by an appropriate group. Though Epic's not using crypto in our games, we welcome innovation in the areas of technology and finance”. Epic Games wants to develop Metaverse in the future so virtual economy, which may include cryptocurrency and blockchain, will be a big part of the Metaverse.
Smart Contract Platform
BNB climbed almost 20% after it announced the launch of a $1 billion incentive fund.
BNB price grew from $392.44 to $467.89 after the news. Binnace’s fund this time is the largest accelerator fund up-to-date. The fund will be divided into 4 groups:
- $100M funds are reserved for Talent Development including education and mentoring programs, academic scholarships, boot camps, and R&D of blockchain technology.
- $100 Million will be used for the Liquidity Incentive Program, with Derivatives projects like MCDEX.io and Deri.finance being the first pilots to join this liquidity reward program.
- $300 Million is for the Builder & Incubation Program. Out of which $100M will be utilized to conduct regional and global hackathons. The remaining $200M will be used to expand Most Valuable Builder and incubate 100 innovative dApps and infrastructure protocols.
- $500 Million is reserved to accelerate mainstream adoption. This fund will be utilized to grow decentralized computing, gaming, metaverse, virtual reality, artificial intelligence, and financial services.
- After the news was published, BNB price increased from $395 to around $466, an increase of 17.9%.
- Recently, Binance also launched its own NFT Marketplace for NFT arts and NFT games. The Binance NFT marketplace will be the main platform for exchanging NFT game items because a high number of gamefi projects are built in BSC.
Polkadot price surged 25% after the announcement of launching parachains
- The parachains are ready to launch, and the auction for parachains will start on November 11. Parachains are their own blockchains that run alongside the main network, using it for security and to validate transactions. Since the number of parachains is limited to around 100, users need to DOT to secure a place to build a prarachain. As a result, the demand for DOT increased. In May, Polkadot launched parachains on Kusama network, which is a sort of Polkadot testnet.
- To help onboarding new users to its network, Polkadot created Polkadot and Kusama Gifts. The gift has a 16-digit number code and the recipient claims the gift using that code. The Polkadot and Kusama Gifts work similarly to Amazon gift cards. When claiming the gifts, the recipients will be guided to set up a new account and wallet. If they already have an account, they can simply claim the gift to their existing address. (Other programs such as Valkyrie Protocol, supported by Do Kwon - founder of Terra, also turned to referral incentives to attract more users. Instead of focusing on offering high yields for early farmers, Valkyrie Protocol focuses on acquiring and retaining active users using Share2Earn model. The model allows referrers to earn activation rewards of new users. The referral model is a long-used marketing method for traditional businesses, particularly banks).
- Polkadot Hackathon series will kick-off in Asia Pacific on October 22. The total price for the Polkadot hackathon is USD $30,000.
Avalanche invests in Colony.
Colony is a community-driven ecosystem accelerator, bringing early-stage funding to projects and empowering teams to build on Avalanche to reach their full potential. Colony’s business model consists of four main activities: providing early-stage funding to Avalanche-built projects, providing Liquidity to existing Avalanche Defi protocols, purchasing and stakes Avalanche (AVAX) and upcoming subnets tokens, and purchasing selected Avalanche projects to form an Index. Currently, Colony is a community-driven fund but soon it will be turned into a DAO.
Colony has recently closed a seed round after raising more than $1 million. Since the Colony is built into a community-driven fund, investors can participate in Colony by owning and staking $CLY, the Colony token. The minimum amount is a few $CLY tokens for a minimum time of 20 days. Investors will receive staking rewards with AVAX, in addition, they will receive airdrops from promising projects incubated by Colony. For professional investors, they can practice in open governance and vote on projects to invest in.