LBank Labs Weekly Digest (August 20–26) #9

LBank Labs
12 min readAug 28

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*All on-chain data is dated as of 12:00 a.m. EST on Sunday, August 27th.

Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Aug.20–26).

Author: LBank Labs Research team — Hanze, Johnny

Keywords: #Fed #ETF #Layer2

Imma Barrera, United States of America, Shortlist, Professional, Landscape (Professional competition), 2019 Sony World Photography Awards

1 Macro Market Overview

U.S. Stocks close higher after a bumpy week. According to WSJ, Federal Reserve Chair Jerome Powell told investors that the central bank would “proceed carefully” on any further rate increases in his much-anticipated speech Friday in Jackson Hole. Powell cautioned that past interest-rate increases had yet to fully slow the economy but noted that stronger and sustained growth could require higher rates to keep inflation declining. Stocks moved between gains and losses after Powell’s speech, before closing higher. The sharp rise in stocks helped the three major indexes temper losses from earlier this week. Stocks edged lower Tuesday after disappointing earnings reports from retailers cast doubt on the strength of the U.S. consumer. Nvidia’s record quarter wasn’t enough to lift the stock market on Thursday, as weak manufacturing and strong jobs data offer precarious signs ahead of Fed Chair Jerome Powell’s speech.

The Dow was the sole decliner last week, registering a 0.5% decrease. The S&P 500 marked a 0.8% gain, while the technology-focused Nasdaq Composite observed an increase of 2.3%.

Web3-related stocks experienced a slight overall increase last week, influenced by Coinbase’s new stake and anticipated moves by the Federal Reserve. COIN and MSTR saw respective gains of 1.4% and 2.0%. However, MARA faced a decline of 6.5%.

Left: Three Indexes, Right: Nasdaq, COIN & MARA & MSTR (Source: Yahoo Finance)

ARK Invest and 21Shares have collaborated to submit 2 Ethereum futures ETF applications. The applications are for the ARK 21Shares Active Ethereum Futures ETF (ARKZ) and the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY).

Furthermore, cryptocurrency asset management firm Hashdex has applied to hold spot BTC in its Bitcoin futures ETF (DEFI). If approved, this change will also lead to a modification of the ETF’s name. Notably, this application does not rely on Coinbase’s Share Supervisory Agreement (SSA). Hashdex aims to use the Exchange for Physical (EFP) mechanism on the CME market to exchange a portion of futures contracts for equivalent spot BTC, rather than directly purchasing BTC from exchanges with cash. Earlier reports stated that in September 2022, Hashdex announced the launch of the Hashdex Bitcoin Futures ETF (DEFI) and listed it on NYSE Arca.

(Source: Twitter@JSeyff)

2 Crypto Market Pulse

Market Data

The cryptocurrency market experienced a slight downturn last week. After BTC dipped to $25,000, Bitcoin attempted a recovery, while the overall sentiment in the crypto market shifted towards neutrality, leading to a phase of consolidation. Ethereum also displayed signs of weakness, but some investors remain optimistic about its long-term trajectory due to expectations surrounding Ethereum futures ETFs. Currently, the crypto market continues to be directly impacted by macroeconomic events, with the open attitude of Federal Reserve members towards further interest rate hikes to curb US inflation introducing instability to the crypto market.

At the conclusion of the week, BTC saw a 0.38% decrease, closing at $26,000 per unit by 12:00 AM on August 27. ETH is currently priced at $1,654 per unit, indicating a decline of 0.90%. The overall global cryptocurrency market cap experienced a decline of 0.66%, reaching $1.049T last week. Bitcoin upheld its dominant position with a 48.24% market share, valued at $506B, while Ethereum accounted for 18.88% of the market, with a valuation of $198B.

Left: Market Cap, Right: BTC&ETH Price (Data: CoinMarketCap)

$BONE, $TON, and $DYDX emerged as Top 3 gainers, while $PEPE, $RUNE, and $APE were Top 3 losers.

$BONE’s recent surge could be attributed to the upcoming relaunch of Shiba Inu’s (SHIB) Shibarium network, leading to a more than 20% increase in the past 7 days. Additionally, investors might be seeking long-term gains from BONE delegation, a potentially profitable endeavor. $TON has experienced a nearly 10% rise in the past week, driven by the development of projects within its ecosystem. $DYDX is gearing up for the launch of dydx V4 in the coming months, and a surge in support from venture capital firms has propelled its price upward. Among the top losers, many have faced selling pressure, with $PEPE being the biggest loser last week. This decline can be attributed to a scandal involving former team members initiating a sell-off.

Top 10 Gainers & Losers (Data: CoinMarketCap, LBank Labs)

The market cap of stablecoins remained relatively stable compared to the previous week. Coinbase’s acquisition of Circle shares last week to support USDC underscores the significance of stablecoin interest income for the company’s profits. The overall exchange net position change continued to show a net outflow trend this week, with brief net inflows observed on the 23rd and 24th, indicating that the crypto market is still in a cooling-off phase.

Stablecoins Market Cap & Exchange Net Flow Volume (Data: Glassnode)

In the derivatives market, trading activity peaked around the 21st last week. BTC and ETH experienced significant fluctuations from Tuesday to Thursday, each reaching liquidation peaks. Bullish and bearish sentiments coexisted, reflecting the current market investor sentiment divergence and the complexity of market factors.

Left: BTC & ETH Open Interest, Right: BTC & ETH Total Future Liquidations (Data: Glassnode)

Over the past week, the TVL in the DeFi market experienced a slight decline, reaching $37.69B. Recent security incidents have extended the recovery period for the DeFi sector. The total trading volume on DEX decreased to $12.08B, marking a 23.8% drop compared to the previous week. Furthermore, the market share ratio between DEX and CEX also decreased to 7.12%. Among the top 10 blockchains by TVL, only Tron showed positive growth last week, with a net increase of 7.09% within 7 days, while others experienced varying degrees of decline.

Left: TVL & Volume, Right: Top 10 chains (Data: DefiLlama)

Last week, the NFT market experienced 7.5% decline in its market cap, dropping the total value to $4.83B. Simultaneously, the trading volume plummeted by 36.81% over the course of seven days, reaching $48.39M. The overall NFT market continues to face a widespread downturn. Within this context, Blur TVL fell below $90M last week, marking a decrease of approximately 50% from its peak two months ago. Additionally, blue-chip NFT floor prices remain on a downward trend, with BAYC falling below 23 ETH.

Market Cap & Volume, 7D (Data: NFTGo)

LBK Labs’ Recap

After previous week’s volitile drop in BTC price. The market is back to horizontal line which is swinging around $26,000. It is holding well compared to the traditional stock market. With BTC spot ETF gradually fading out news stream. There are several newsworthy events that have taken place. Inlcuding:

  • Allegations surrounding Binance’s purported sale of BTC to maintain the value of BNB.
  • The decision of the founding team behind $PEPE to divest their treasury tokens.
  • Mastercard’s impending termination of its Visa card partnership with Binance.
  • The notable slump in TVL within the DeFi sector, reaching its lowest point since February 2021.
  • A paradoxical observation in the Bitcoin ecosystem: despite the recent price downturn, mining difficulty has surged by 6% to achieve a new all-time high.
  • Setting the stage for Q2 2024, trial dates for the XRP lawsuit have been scheduled, coinciding with the departure of three legal professionals from the SEC’s legal team.

During the latest market turmoil on the 22nd, a substantial influx of buying activity was evident at the $25,200 level. Notably, this decline did not breach the previous low, implying a perception among both institutional and retail investors that the prevailing price point is in close proximity to a possible bottom. As analyzed in the prior LBank Labs weekly market report, the existing environment of limited market liquidity has created an opportune landscape for sophisticated quant traders. Leveraging relatively modest capital requirements, these traders have the capacity to exert notable influence on market movements. Therefore, we anticipate the recurrence of a sharp decline akin to the event on August 17th, unless substantive improvements in market liquidity transpire. This prediction is in line with the notion that low liquidity markets present an environment ripe for the manipulation of prices by adept quant traders. As the market continues to evolve, it remains crucial for investors and stakeholders to remain vigilant and adaptable in response to such dynamics.

Price Range

  • BTC price optimistic: $26500 — $29500
  • BTC price neutral: $25500 — $26500
  • BTC price pessimistic: $23500 — $25500

3 Major Project News

1.[Layer2] StarkWare is open-sourcing the STARK stone Prover code under Apache 2.0 license. The STONE (STark ONE) Prover enables anyone to create Cairo proofs that can be verified for validity. The code has powered over $1T in cumulative transaction volume, 500M transactions, and minted over 100M NFTs, all without any failures. Now, it can empower developers worldwide to build their own proving systems atop its battle-tested foundations. Furthermore, Cairo v2.2.0 has been released, bringing VSCode autocomplete functionality to Cairo. Simultaneously, Starknet v0.12.1 has officially launched on the mainnet, marking the completion of the Starknet Mainnet Quantum Leap.

(Source: Twitter@Starknet)

2. [Layer2] Farcaster will be moving to OP Mainnet. Farcaster is planning to migrate the Farcaster identity and storage contracts to OP Mainnet in the coming weeks. Many of their most active users & developers are building on the OP Stack across OP Mainnet, Base & Zora. Meanwhile, Farcaster v3 rollout starts on Tuesday, August 29th. Additionally, modular Oracle infrastructure RedStone Oracles and cross-chain brokerage Prime Protocol were successively launched on the OP Mainnet last week. Concurrently, the Optimism bridge interface now enables the bridging of any standard ERC20 token to the OP Mainnet.

(Source: Twitter@optimismFND, Twitter@dwr)

3. [Layer2] Aave V3 has been launched on the Base network. Earlier, the proposal to “Activate Aave V3 on the Base Network” received unanimous approval and has been executed on-chain. This proposal enables Aave to finalize all initial configurations and activate essential liquidity pools for wETH, cbETH, and USDbC on Aave V3 on the Base network. In addition, several well-known projects announced their participation in the Base ecosystem last week to establish collaborative support. This includes notable projects like Unibot, Arkham, and more.

(Source: Twitter@BuildOnBase)

4. [Layer2] Base, Optimism unveil shared governance and revenue-sharing framework. The two networks will share profits and governance using multisignature wallets, and a “security council” will be formed as the ecosystem grows. Developers behind the Base and Optimism networks have jointly announced a revenue-sharing and governance-sharing agreement. Coinbase, the parent company of Base, has also published a list of “principles of neutrality” it will follow to prevent Base from becoming centralized. This announcement was made through three separate blog posts on Aug. 24: one from the jointly controlled Optimism Collective, one from Base and one from Coinbase. According to the Optimism Collective’s post, Base’s smart contracts can only be upgraded via a two-of-two multisignature wallet account. One signature is controlled by Base and the other by the Optimism network’s team (called the “Optimism Foundation”). This means that Base cannot be upgraded without the consent of the Optimism team. As more chains opt to use the OP Stack and become part of the “Superchain,” governance will be handed over to a “security council” with representatives from all of the chains that comprise this ecosystem.

(Source: Twitter@optimismFND, Twitter@BuildOnBase)

5. [Service] Chainlink’s Staking V0.2 is expected to launch in the fourth quarter of this year. The initial expansion pool size will consist of 45M LINK tokens. The V0.2 Beta upgrade will be introduced in 3 phases: a migration period prioritizing V0.1 stakers, a preview period, and an open-access period. Chainlink Staking V0.2 aims to provide greater flexibility for community members and node operators participating in staking while maintaining the secure and non-custodial design of LINK staking. It also strengthens the security of oracle services supported by Chainlink Staking. The modular architecture allows for iterative support of future improvements and supplementary solutions for Chainlink Staking, such as expansion to additional services. A dynamic reward mechanism is incorporated as well.

(Source: blog.chain.link)

6. [Polkadot] Astar Network is set to launch Astar 2.0 on September 13th. The announcement was made on Twitter through a video teaser, confirming the release of Astar 2.0 on that date. Prior to this, Astar Network unveiled Astar Tokenomics 2.0, which includes features such as token burning, tiered incentives for builders, significant reduction in inflation rate, and higher rewards for DApps driving Astar’s growth.

(Source: Twitter@AstarNetwork)

4 Key Fundraising Data

Last week witnessed a total of 13 financing events, raising a substantial amount of over $324.1 million*. Financing activities remain active, with a significant growth in cumulative fundraising. The Service sector has garnered the widest attention, accounting for 23.08% of the total number of financing events. The overall funding amount reaches $313.4M, constituting 96.70% of the total funds raised. The largest financing project this week is led by Ramp, securing $300M. Ramp is a global financial technology company focused on creating solutions that bridge the crypto economy and contemporary financial infrastructure. Further details are elaborated below.

*8 events of unknown amount are included, which have been excluded from the remaining data

Top Left: Stats in Areas; Top Right: Stats in Rounds; Bottom: All Events. (Data: Cryptorank, Foresights, LBank Labs)

Below, we listed the most noteworthy fundraising deals for you:

1.[Service] Fintech startup Ramp raises $300M at a 28% lower valuation of $5.8B.

Fintech startup Ramp has raised $300M in a funding round co-led by existing backer Thrive Capital and new investor Sands Capital at a post-money valuation of $5.8B. Other investors participating in the latest financing include General Catalyst, Founders Fund and other existing backers.

The company is using its new capital to accelerate product development, expand into adjacent categories and “hire significantly” in the second half of this year.

2.[Service] Anytype announce a $13.4 million round of fresh funding.

Decentralized local point-to-point open-source tool, Anytype, has officially announced the completion of a $13.4M new funding round. The round is led by Balderton Capital, with participation from Inflection, Square One, Script Capital, Protocol Labs, Connect Ventures, New Forge, Foreword VC, and a group of prominent angel investors in the Web3 space.

This funding empowers Anytype to further fulfill the commitment of providing accessible digital sovereignty through elegant product experiences.

3.[DeFi] Maple Finance Eyes Asian Expansion With $5M Investment, Returns to Solana.

Blockchain-based credit marketplace Maple Finance has turned its attention to Asia and will expand into the region with a $5M investment round. BlockTower Capital and Tioga Capital led the fundraising round with Cherry Ventures, The Spartan Group, GSR Ventures and Veris Ventures participating. Previous investors Maven 11 and Framework Ventures also committed capital.

“This funding round marks a pivotal moment in our evolution as we embark on a strategic expansion into the APAC (Asia-Pacific) region as part of a comprehensive growth plan for Maple,” CEO Sidney Powell said in a statement.

4.[Social] Raleon Secures Funding to Build the Future Tools of Web3 Marketing.

Raleon, a Web3 user engagement platform, has announced the successful closure of a $3.8M new funding round. The round saw participation from Blockchange, Play Ventures, Alliance DAO, and Portal Ventures.

With this capital, Raleon will be expanding their team and continuing to build the engagement and retention platform in Web3, including their latest product, Embedded Quests.

See you next week! 🙌

📢 Disclaimer: The weekly crypto market insights are provided for informational purposes only and should not be considered as financial advice. The cryptocurrency market is highly volatile and unpredictable. Prices and trends can change rapidly, and past performance is not indicative of future results. Always conduct thorough your own research and consult with a qualified financial professional before making any investment decisions.

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