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Weekly Report (25/10 – 1/11)

  • 02/11/2021

Macro-environment

Why crypto is a lot different today than in 2017

The biggest change in the crypto landscape is that many protocols have evolved from R&D phase startups into cash flow generating businesses. The definition of protocol revenues: “Share of fees/yield that go to the protocol’s treasury or directly to its token holders through e.g. a burn mechanism (similar to a stock buyback)”.

  • Aave generates $1.6M in aggregate interest rate revenue per day. Of that, $170k is directed to the protocol’s treasury that is managed by $AAVE holders.
  • Compound generates $1.2M in aggregate interest rate revenue per day. Of that, $122k is directed to the protocol’s treasury that is managed by $COMP holders.
  • Lido earns $732k in aggregate staking reward revenue per day. Of that, $73k is directed to the protocol’s treasury that is managed by $LDO holders.
  • Yearn generates $720k in aggregate yield per day. Of that, $236k is directed to the protocol’s treasury that is managed by $YFI holders.
  • SushiSwap generates $1.6M in aggregate trading fee revenue per day. Of that, $274k is directed to the protocol’s treasury that is managed by $SUSHI holders.
  • Trader Joe generates $440k in aggregate trading fee revenue per day. Of that, $73k is directed to the protocol’s treasury that is managed by $JOE holders.
  • BENQI generates $279k in aggregate interest rate revenue per day. Of that, $55k is directed to the protocol’s treasury that is managed by $QI holders.

More traditional businesses are joining the crypto space.

  • Adobe is launching a system built into Photoshop that can help prove that the person selling an NFT is the person who made it. It’s called Content Credentials, and NFT sellers will be able to link the Adobe ID with their crypto wallet, allowing compatible NFT marketplaces to show a sort of verified certificate proving the art’s source is authentic.
  • Mastercard is preparing to announce that any of the thousands of banks and millions of merchants on its payments network can soon integrate crypto into their products. This means owners of bitcoin wallets, credit and debit cards can spend digital assets and earn rewards in crypto. In September, Mastercard acquired a crypto forensics company, CipherTrace, to help Mastercard expand its crypto-related business

Altcoins last week

  • NEAR  had an impressive performance last week with new All-Time High at $13.10
  • NEAR just announced a $800 million Global Ecosystem Fund; the fund includes a $350 million grant DAO from Proximity Labs. The fund will focus on developing DeFi projects.
  • $100 million will be allocated to Startup Grant Pools. More than 20 startups will be identified and given $5M each in funding to redistribute to key stakeholders.
  • Some $250 million will be allocated to ecosystem grants helping existing projects further develop and scale. 
  • $100 million will be allocated to Regional Funds: money allocated to foster the development of NEAR’s largest community regions in Asia, Europe, and the US. 
  • Other factors that contributed to the NEAR ATH are:
    • NEAR is integrated with the Graph, and the integration will enable developers to build subgraphs on the NEAR network using The Graph. “The Graph enables developers to query blockchain data. According to the Co-Founder of NEAR, the Graph enables NEAR developers to build decentralized applications faster as it provides essential tools to build query-required representations of blockchain data.
    • Refer and Earn a referral program for projects in the NEAR ecosystem. Each user can nominate a project that has potential to grow. If the referred project is accepted into the Grants Program, the noninator will receive a $1,000 NEAR token bonus for sourcing the grant.
    • The overall positive market sentiment toward cryptocurrencies.
  • BTC falls back to below $60,000 level, several altcoins are up
  • NEAR up to new all-time high at $13.10.
  • 1Inch is up 84.6% to $6.29 after the announcement of a giveaway of 200,000 tokens to celebrate reaching 1M users on Ethereum.
  • FTM reached new ATH on Oct 28 at $3.47, about 3 times its price early this month.
  • CRV price hit $5.51 on Oct. 28 as its 24-hour trading volume spiked 89% to $1.3 billion. A major factor behind CRV’s rally is Curve’s incentives for holders that lock their tokens on the protocol long-term and earn rewards from staking. About 88.75% of CRV tokens are locked for an average vesting time of 3.68 years, reducing the amount of CRV in circulation. Another reason for the uptrend in CRV price is the ongoing Curve war between protocols like Yearn.finance and Convex Finance who find themselves competing to offer the most attractive yields to entice CRV holders to lock tokens in their vaults.

Metaverse

Metaverse has become a hot trend now after Facebook changed its name to Meta. According to Google trends, the word Metaverse score increased from 7 (Oct 27) to 100 (Oct 29). Facebook’s new name illustrates the company’s vision of virtual reality and metaverse. As Facebook has expanded, the relationship with its users has become more and more extractive. Platforms like Facebook benefit from advertising revenue at the expense of their user’s time and information. The extractive and monopoly power of Facebook over its users are not what we expect from Metaverse.

Following the Facebook rebranding, metaverse tokens witnessed an increase in price. For example, MANA (Decentraland – a virtual place with its own economy) price jumped from around $0.8 (Oct 28) to ATH at $3.86 on Oct 31. Sandbox (SAND) reached ATH on the same day at $2.29. AXS token price reached ATH on October 29 at $159.03.

(Credit: Messari)

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