LBank Labs Weekly Digest (August 6–12) #7
*All on-chain data is dated as of 12:00 a.m. EST on Sunday, August 13th.
Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Aug.6–12).
Author: LBank Labs Research team — Hanze, Dannie
Keywords: #ETF #Layer2 #PYUSD
1 Macro Market Overview
U.S. Stocks’s summer rally cools off. According to WSJ, inflation has been back in focus, with data points sending investors conflicting signals. On Friday, the producer-price index showed supplier prices ticking up from June’s flat reading, prompting some concern after a largely encouraging July consumer-price index report the day before. Later in the morning, the University of Michigan’s August gauge of consumer sentiment inched down from a nearly two-year high, but showed Americans expect slightly lower inflation next year. Earlier last week, the US stock market received a boost on Thursday from CPI, while concerns were sparked by higher-than-expected jobless claims data. Significant volatility was seen on Wednesday, with major constituents like NVIDIA, Tesla, and Meta Platforms experiencing sharp declines that dragged down the Nasdaq Composite Index. On Tuesday, the market downturn was primarily attributed to a credit downgrade for 10 smaller US banks.
Last week, the S&P 500 declined by 0.3%, the Dow Jones fell 0.6%. The tech-heavy Nasdaq Composite, which is more sensitive to interest rates, dropped 1.9% and fell for two consecutive weeks for the first time this year. The largest technology firms have soared higher this year, prompting concern over what Wall Street sees as expensive valuations.
Web3-focused stocks continued their overall downward trend. Despite positive market sentiment from factors like Paypal’s launch of stablecoin, COIN and MARA dropping by 7.2% and 6.1%, respectively, while MSTR saw a 2.0% increase.
Cathie Wood’s Ark 21Shares Bitcoin ETF Application Decision Pushed Out by SEC. The U.S. Securities and Exchange Commission extended its review of the Ark 21Shares Bitcoin ETF application, as it continues to look at applications from traditional finance heavyweights such as BlackRock and Fidelity Investments. The SEC published an order calling for public input on the Ark 21Shares Bitcoin ETF application, a standard move that pushes any decision by another several weeks. The SEC has a total of 240 days to make a final decision on an application after it starts reviewing one. The SEC is giving the general public three weeks to weigh in on the proposal itself, and an additional five weeks to respond to those initial slate of comments.
Earlier, Bloomberg Senior ETF Analyst Eric Balchunas tweeted, “According to ‘contacts’ from inside BlackRock and Invesco, the approval of a Bitcoin ETF is a matter of ‘when, not if,’ likely in ‘four to six months’ — as stated by Galaxy CEO Mike Novogratz on an earnings call this morning.”
2 Crypto Market Pulse
Market Data
Cryptocurrency market saw a slight uptick last week, characterized by narrow fluctuations and historically low volatility. BTC briefly crossed the $30,000 threshold twice during the week, although it couldn’t sustain that level despite the impact of PayPal’s new stablecoin. BTC closed the week with a 1.27% increase, settling at $29,399 per unit as of 12:00 AM on August 13. ETH followed a similar trajectory, concluding the week at $1,849 per unit, marking a 0.93% rise.
The global cryptocurrency market cap stood at $1.174T last week, marking a 0.95% increase from the previous week’s $1.163T. Bitcoin held a 48.7% market share with a valuation of $572B, while Ethereum accounted for 18.9%, with a valuation of $222.1B.
$RUNE, $PEPE, and $TON emerged as Top 3 gainers, while $GMX, $MBT, and $OP were Top 3 losers. $RUNE, the native governance token of the ThorChain network, was this week’s first-biggest gainer, rising 15.95% to $1.08. $RUNE started its price rally on Tuesday, after ThorWallet announced the introduction of Visa Cards and Swiss bank accounts for users. $PEPE has recently shown signs of recovery, bolstered by substantial investments from influential investors and a surge in social interactions. For $TON’s rise, one of the main reasons was its developer report released on August 2nd, indicating a 102% increase in developer engagement since last year. However, $GMX, $MNT, and $OP all experienced significant declines last week due to ongoing selling pressure.
Last week, the market cap of stablecoins reached to approximately $121.2B. The total market capitalization of the stablecoin market has been declining for 16 consecutive months, indicating a capital outflow during the bearish market conditions. The recent issuance of US bonds and the rise in yields have further exacerbated this trend. Additionally, PayPal’s announcement this week about entering the cryptocurrency stablecoin space is expected to impact the overall landscape of the stablecoin market in the future.
In the derivatives market, the total open interest rose this week, with trading activity peaking around the 8th, aligning with the overall trend in the crypto market. BTC and ETH saw a brief surge on Tuesday, followed by individual liquidation highs. However, a divergence emerged between the liquidation patterns of long and short positions for BTC and ETH during the first half of the week.
The DeFi market’s TVL reached $41.96B, marking a 3.05% increase from the previous week. With the diminishing impact of the Curve incident, the DeFi market is showing signs of upward momentum. Last week, the total 7-day trading volume on DEX reached $10.8B, experiencing a 27.2% decrease compared to the previous 7 days. Additionally, DEX vs CEX dominance dropped to 7.06%. Among the top ten blockchains by TVL, Ethereum, Polygon, and Solana showcased remarkable performance, each experiencing gains of over 6 percentage points in the past 7 days.
The NFT market experienced a slight 0.55% dip last week, resulting in a market capitalization decrease to $5.68B. Simultaneously, influenced by factors such as whale burn operations and the popularity of gaming guild governance token $YGG, the trading volume surged by 7.21% within a span of seven days, reaching a total of $62.10M.
LBK Labs’ Recap
The entire market is still in a range-bound ($28500-$31000) after a slight rally. Market liquidity tightened further last week, reaching its lowest level since the beginning of the year. The market was unmoved by the SEC’s expected delay of the ARK ETF application. Bitcoin Fear and Greed Index: 54, stays neutral.
TVL rebounded slightly but stayed on its long-term downward path with stablecoins. Short-term funding is neutral without large flows.
Analysis of the on-chain UTXO distribution shows that over 5% of all Bitcoin is clustered around a price of $28,829. The heavy clustering of tokens around a tight price range with very low market liquidity signals high risk. The daily selling chips below $28,829 are negligible, indicating that the market still has confidence in future performance. The chips bought above $30,000 are slowly flowing out daily, from the highest proportion of 1.45% in July to the current 0.81%. This indicates that the market washout may be nearing its end. Investors should be alert and aware of this potential for increased volatility if the market starts trending.
Weekly Factors
08/14
- 8:00 AM (UTC+8) — The Sandbox unlocks over 332 million SAND tokens, representing 16.16% of the circulating supply.
08/15
- 8:00 PM (UTC+8) — Binance opens trading for $SEI and $CYBER.
08/16
- 12:00 AM (UTC+8) — Crypto exchange KuCoin halts mining pool services.
08/17
- 2:00 AM (UTC+8) — US Federal Reserve releases monetary policy meeting minutes.
- 8:00 AM (UTC+8) — Over 15 million ApeCoin (APE) tokens unlock, representing 4.23% of circulating supply.
08/18
- SEC files opening brief for lawsuit against Ripple.
08/19
- 10:00 AM (UTC+8) — Web3 prediction platform Acara conducts the first IDO for 2% of the total token supply.
Price Range
- BTC price optimistic: $31000 — $33500
- BTC price neutral: $29500 — $31000
- BTC price pessimistic: $26500 — $29500
3 Major Project News
[Stablecoin] PayPal Launches U.S. Dollar Stablecoin. PayPal USD is designed to contribute to the opportunity stablecoins offer for payments and is 100% backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents. PayPal USD is redeemable 1:1 for U.S. dollars and is issued by Paxos Trust Company.
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” said Dan Schulman, president and CEO, PayPal. “Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD.”
[Service] Visa has wrapped up testing a way for users to pay on-chain gas fees directly in fiat with a credit or debit card. The experiment, which was conducted on the Ethereum Goerli testnet, uses a paymaster contract to sponsor gas fees on behalf of users, according to a statement. It means users can send blockchain transactions without having to worry about maintaining a balance of ether. Visa believes the contract could make transactions more accessible to a wider range of users.
“Our experiment aims to offer a promising approach to substantially addressing the challenges of blockchain-based transactions,” Visa’s technical team wrote. “By leveraging the innovative concept of a paymaster, in conjunction with account abstraction and the ERC-4337 standard, we explored the potential for a process that could redefine blockchain-based transactions.”
[Service] Circle Seeks to Make Crypto Payments Easier With New ‘Programmable Wallets’. USDC stablecoin issuer Circle Internet Financial on Tuesday released a new, programmable web3 wallet platform that the company says can help businesses offer digital-asset payments to customers. Developers and merchants can integrate and personalize Circle’s “programmable wallets” into their applications and build services on top, letting consumers send, receive and store cryptocurrencies, including Circle’s USDC stablecoin and non-fungible tokens, or NFTs.
The service is available in a public beta version on the Ethereum (ETH), Avalanche (AVAX) and Polygon (MATIC) networks for developers, with plans to expand to other blockchains later this year, Circle said.
[Layer2] The on-chain TVL of Base has surpassed 100,000 ETH. According to the latest data from L2BEAT, the L2 blockchain Base, launched by Coinbase, has achieved a TVL exceeding 100,000 ETH. At the time of writing, it reached 107,146.34 ETH (equivalent to approximately $198M at current prices), ranking as the fifth-largest locked value on Ethereum’s Layer 2 blockchains. The Base ecosystem now encompasses over 100 DApps and service providers.
[Layer2] Volition is set to launch the Starknet testnet in Q4, aiming to assist users and developers in reducing costs. Volition will allow developers to regulate data availability on Ethereum (L1) or on Starknet (L2). Reducing L1 onchain data can radically reduce costs. Flexibility in data availability modes will allow, once again, greater freedom for Starknet developers and users, letting them choose the most suitable security level for their specific needs in a cost-effective manner. The upside of employing Volition on Starknet is vast, potentially opening doors for innovative app development.
[DeFi] PancakeSwap Deploys on Ethereum Scaling Network Arbitrum in Expansion Drive. PancakeSwap has been listed on Arbitrum to expand its user base and increase revenue. Deployed on Arbitrum will provide PancakeSwap users with lower fees and faster transactions. Users can currently transact with fees as low as 0.01%. PancakeSwap has previously been deployed on BNB Chain, Ethereum, Polygon zkEVM, zkSync and Aptos blockchains.
[Ethereum] Devnet 8 is launching early next week. Galaxy Research Vice President Christine Kim summarized the 115th Ethereum Core Developers Consensus (ACDC) meeting, stating that Devnet 8 is scheduled for an early release next week. This marks the first dedicated testnet encompassing all completed EIPs from the Cancun/Deneb upgrade.
Additionally, the Holesky testnet is slated for a late September launch, featuring 1.4 million validators, twice the size of the mainnet. Developers also reiterated the decision to rewrite EIP 4788 as a regular contract.
[Fantom] Fantom is exploring adding optimistic rollups to connect to Ethereum. Fantom Foundation co-founder and architect Andre Cronje said that Fantom is actively considering and investigating a similar move to integrate optimistic rollups to connect the Fantom blockchain to Ethereum.
“We have been looking at Optimistic Stacks, Arbitrum Stack, all of these things to see how their canonical bridges use these proofs to be able to have a higher security guarantee,” Cronje said. “Are we considering one of their stacks to become our own canonical bridge? Yes, we are. And we are actively investigating that.”
4 Key Fundraising Data
Last week witnessed a total of 20 financing events, raising a substantial amount of over $74.1 million*. Financing activities remained vibrant last week, with a significant increase observed in both the number of funding events and the cumulative raised amount. The Service and DeFi sectors continued to command substantial attention, contributing to a total of 12 funding rounds, constituting 60.00% of the overall count, and the total funding amount reached $50.1 million, encompassing 67.61% of the total funds raised. The week’s largest funding endeavor was led by HAY, securing $10 million. HAY is a groundbreaking USD over-collateralized decentralized stablecoin backed by BNB. Further details are outlined below.
*3 events of unknown amount are included, which have been excluded from the remaining data
Below, we listed the most noteworthy fundraising deals for you:
1.[Stablecoin] Binance Labs Invests $10M to Accelerate Helio Protocol’s Liquid Staking Pivot.
HAY is a groundbreaking USD over-collateralized decentralized stablecoin backed by BNB. Binance’s venture arm Binance Labs has invested $10 million into Helio Protocol to help expand the protocol’s ongoing pivot to becoming a liquid staking platform.
Though Helio is currently built on the proof-of-stake network BNB Chain, this new funding is expected to help the platform expand to other chains. “Helio’s objective is to launch on Ethereum, and subsequently with prominent L2 networks like Arbitrum and Zksync,” stated a spokesperson from Binance Labs.
- Official Link: https://helio.money/
Web3 security company SphereX announced $8.2 million in seed funding, with investors including Aleph, Pillar VC, Fabric Ventures, Mensch Capital Partners, and other angel investors. The company also launched SphereX Protect, the company’s advanced security solution for smart contracts.
With the $8.2 million Meron and Fine raised, they plan to begin marketing their software to Web3 developers and grow their team to combat the ever-changing landscape of hacking.
- Official Link: https://www.spherex.xyz/
3.[Service] Web3 Security Startup Cube3.ai Emerges From Stealth With $8.2M Seed Funding.
Cube3.ai, a cryptocurrency-focused security startup that protects smart contracts by blocking malicious transactions, has emerged from stealth mode having raised $8.2 million of seed funding. The fundraising was led by Blockchange Ventures with participation from Dispersion Capital, Symbolic Capital, Hypersphere Ventures, Iclub and TA Ventures.
The company intends to use the funding for the development of its platform that enables smart contract deploys to deal with cyberattacks and vulnerabilities.
- Official Link: https://www.cube3.ai/
4.[Social] Spearbit raises $7M to improve security audits in crypto through its open marketplace.
Spearbit is a decentralized network of security experts providing security consulting services to clients in Web3. The startup raised $7 million in a funding round led by Framework Ventures with Nascent, 1kx, Volt Capital, Breed VC, Robot Ventures and others participating, the company exclusively told TechCrunch. The startup previously raised a pre-seed round of $1.5 million in late 2021, bringing its total capital raised to $8.5 million today. The startup did not disclose a valuation, but PitchBook data pegs its worth at around $48 million on a post-money basis.
The capital will go toward building out Cantina, its open marketplace for web3 security auditors, as well as hiring more software engineers to automate its services and product marketplace workflow, company co-founder Spencer Macdonald shared.
- Official Link: https://spearbit.com/
5.[DeFi] LBank Labs Backs Puffer Finance’s Seed Round Led By Lemniscap and Lightspeed Faction.
LBank Labs, a leading blockchain venture fund, is excited to announce its investment in Puffer Finance along side with investors such as Brevan Howard, Bankless Ventures, Animoca Ventures, and others to help create a capital-efficient and permissionless staking pool through its open-source project Secure-Signer.
Jason Vranek and Amir Forouzani, Co-founders of Puffer, expressed excitement about the collaboration with LBank Labs, highlighting the synergy between Puffer and LBank Labs’ scale across the market. “We are thrilled to have LBank Labs partnering with us at Puffer Finance. Their deep understanding of the liquid staking, combined with their keen industry insight, makes them an invaluable ally. This collaboration signals an exciting chapter of innovation and growth for us both.”
- Official Link: https://www.puffer.fi/
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.
