LBank Labs Weekly Digest (February 18–24) #34

LBank Labs
13 min readFeb 26, 2024

*All on-chain data is dated as of 12:00 a.m. EST on Sunday, February 25th.

Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Feb.18–24).

Author: LBank Labs Research team — Hanze, Johnny

Keywords: #ETF #Layer2

After a blockbuster 2023 for stocks, investors are getting more of the same in 2024. PHOTO: MICHAEL M. SANTIAGO/GETTY IMAGES

1. Macro Market Overview

AI Mania Lifts Stock Indexes to Records. According to WSJ, stock bulls found much to cheer for this week. All three major U.S. equity indexes added at least 1.3% for the week, marking six weekly gains in the eight weeks of 2024 so far. The S&P 500 and Dow Jones Industrial Average closed at new records on Thursday, then did it again Friday. The Dow on Thursday rose above 39000 for the first time. Some investors are optimistic because the current rally appears to be driven by strong earnings reports, rather than expectations for interest-rate cuts. Hope that the Federal Reserve might begin slashing interest rates as early as March helped drive stocks higher last fall. But central bank officials have recently cautioned that cutting rates too soon might allow inflation to grow entrenched, and market expectations for cuts have been pushed back. Fed officials have all but taken a March rate cut off the table. The “no need to rush” message was reinforced again this week, both with the release of the minutes from the Fed’s last meeting and in statements from Fed officials.

After the market closed last Wednesday, Nvidia reported quarterly sales that tripled from a year ago and beat Wall Street expectations. Shares rose roughly 6% in postmarket trading, shortly after the results were released. Investors on Wednesday also pored over newly released minutes from the Federal Reserve’s policy meeting in late January. The minutes signaled that most Fed officials are worried about cutting interest rates too soon. A recent string of economic reports underscored that inflationary pressures remain, further clouding the outlook for Fed rate cuts. The Labor Department said the economy added twice as many jobs as forecasters had anticipated in January and inflation also came in above expectations. Last week, all three major U.S. stock indices experienced gains, with the technology-focused Nasdaq Composite Index rising by 1.4%, the Dow Jones Industrial Average increasing by 1.3%, and the S&P 500 climbing by 1.7%. In contrast, web3-related stocks performed poorly last week, with COIN falling by 8%, MARA declining by 11%, and MSTR dropping by 2%.

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

Macro indexes

Last week, the U.S. Dollar Index (DXY) displayed a contrary trend after witnessing gains in the U.S. stock market on Wednesday. It briefly fell from around 104.400 to near 103.400 and ultimately closed at 103.961 on Friday. This represented a decrease of approximately 0.3% compared to the previous week.

DXY (Source: TradingView)

According to data from the Chicago Mercantile Exchange (CME) Group, interest rate futures indicate that currently only about 4% of investors believe that the Federal Reserve may cut interest rates at its March meeting. This figure has further decreased compared to the 10% reported last week.

Left: EFFR, Right: Target Rate Probabilities for March 2024 Fed Meeting (Source: Federal Reserve Bank of New York, CME FedWatch Tool)

Bond yields remained relatively stable compared to the previous week, with the benchmark being the yield on the U.S. 10-year Treasury bond (US10Y). Last Friday, it rose to a high of 4.350% and ultimately closed at 4.252%.

US10Y (Source: TradingView)

A $30 Billion RIA Platform Greenlights Just Four Spot Bitcoin ETFs. BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), Bitwise Bitcoin ETF, and Franklin Bitcoin ETF. Grant Engelbart, Vice President and Investment Strategist at the company, stated that Carson prioritized “significant asset growth” and trading volume when choosing IBIT and FBTC. At the same time, the $1.2 billion Bitwise Bitcoin ETF and the $100 million Franklin Bitcoin ETF (eventually charging fees of 0.2% and 0.19%, respectively) are among the most cost-effective products in this field.

Blackrock iShares Bitcoin Trust ETF signage in New York. Photographer: Michael Nagle/Bloomberg

The cumulative net inflow for Bitcoin spot ETFs reached a total of $5.63 billion as of last week. Currently, BlackRock’s ETF IBIT has a total historical net inflow of $5.91 billion, followed by Fidelity’s ETF FBTC, with a total historical net inflow of $4.11 billion. Grayscale’s ETF GBTC has a total historical net outflow of $7.44 billion.

Left: Bitcoin Spot ETF Overview, Right: Daily Trading Activity of Bitcoin Spot ETF (Source: Blockworks, SoSo Value)

2. Crypto Market Pulse

Market Data

Last week, the total market capitalization of the cryptocurrency market saw another increase, rising by over 30 billion dollars in the span of seven days and reaching a current total of 1.98 trillion dollars. Bitcoin experienced fluctuations without significant price changes, with its spot price reaching 51,630 dollars as of the early morning of February 25, remaining relatively stable compared to the previous week. Ethereum, as the second-largest cryptocurrency, currently has a price of 3,031 dollars, marking an increase of over 8% in the past seven days. Furthermore, the market capitalization of Bitcoin and Ethereum is approximately 1.02 trillion dollars and 363 billion dollars, respectively, maintaining around 51% and 18% of the total market capitalization.

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

$JASMY, $WLD, and $AGIX emerged as Top 3 gainers, while $STRK, $DYM, and $SEI were Top 3 losers. In the top 100 cryptocurrency projects ranked by market capitalization, $JASMY emerged as the biggest winner with a weekly gain of over 148%. $JASMY, or JasmyCoin, is an innovative cryptocurrency issued and promoted by Jasmy Corporation, a leading IoT company based in Japan. The recent surge in the value of JASMY is primarily attributed to Binance planning to list Jasmy’s contract trading. The $JASMY token, based on the Ethereum ERC-20 standard, possesses interoperability and security within the Ethereum network. Users can participate in various data trading activities within Jasmy’s ecosystem by holding and using $JASMY tokens.

The second and third tokens last week were both related to artificial intelligence projects, namely $WLD and $AIGX, each experiencing gains of over 70% within seven days. Worldcoin ($WLD) was introduced as a financial network aimed at providing global identity (World ID) through a biometric cryptocurrency system. $AGIX, issued by SingularityNET, can be used for transaction management and decentralized community governance. The reasons for the surge in both tokens last week are not only the recent upward trend in many cryptocurrency markets, leading to increased demand, but also the spike in prices of AI-related tokens driven by NVIDIA.

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

Last week, the total supply of stablecoins continued to rise, reaching a new high of 132.6 billion dollars. In the past seven days, the net position change in stablecoin supply remained positive, although the net growth rate slowed down, indicating that the demand for stablecoins in the cryptocurrency market is still increasing. Additionally, observing the net position data of stablecoins on exchanges in the past week, there was a brief net inflow for two days, followed by a resumption of the net outflow trend that has been ongoing since February. This suggests that selling pressure on crypto assets is still easing, indicating a potentially positive outlook for the market in the future.

Stablecoins Market Cap (Data: Glassnode)

In the derivatives market, the open interest for Bitcoin and Ethereum perpetual contracts remained relatively stable. Over the past seven days, the total open interest in the futures market has been influenced by the continuous price fluctuations of Bitcoin and Ethereum, generally aligning with the overall price trends. Liquidation data indicates that the volatility in the prices of Bitcoin and Ethereum last week resulted in the liquidation of a significant number of both short and long positions. Various data sources suggest that the current cryptocurrency market is in a phase of fluctuating upward movement.

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

In the decentralized finance (DeFi) market, the total locked value (TVL) continued to increase last week, reaching a current total of 81 billion US dollars. In the past seven days, the trading volume on decentralized exchanges (DEX) rose to 27.9 billion US dollars, showing a 9% increase compared to the previous week. The market share gap between decentralized exchanges (DEX) and centralized exchanges (CEX) has remained relatively stable, with DEX now accounting for 14% of the total CEX trading volume. In the past week, due to the recent enthusiasm in the cryptocurrency market, the TVL of most of the top ten ranked blockchains has increased. Ethereum grew by 7% in the past seven days, and Bitcoin grew by 6%.

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

Last week, the market capitalization of non-fungible tokens (NFTs) continued to increase, reaching 10.4 billion US dollars. Meanwhile, the total trading volume continued to heat up, growing by 6% in the past seven days, with a total volume of 200 million. However, among the top-ranked NFT collections, most exhibited fluctuations in their floor prices and average prices. The floor price and average price of CryptoPunks remained relatively stable. The floor price of Bored Ape Yacht Club (BAYC) increased by 2%, while the average price decreased by 1%. On the other hand, the floor price of Mutant Ape Yacht Club (MAYC) rose by 1%, while the average price decreased by 1%. The blue-chip index, denominated in cryptocurrency, dropped from 5623 to 5562.

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

3. Major Project News

[Ethereum] Ethereum All Core Developers Consensus Call #128 Writeup. Galaxy Research Vice President Christine Kim summarized the 128th Ethereum Core Developers’ Consensus (ACDC) call in a post, stating that developers have agreed to commence work on the Electra upgrade. Currently, developers have reached a consensus to include three Ethereum Improvement Proposals (EIPs) in the upgrade, which are: 1. EIP 6110, providing validators’ deposits on-chain; 2. EIP 7002, enabling layer-one-triggered exits; 3. EIP 7549, moving committee indices out of certification. Additionally, developers will focus on the conceptual verification and inclusion of EIP 7547 in the coming weeks. If developers find that the code changes for EIP 7547 are reasonably easy to implement and test, adding them to Electra will not delay the implementation of the aforementioned three EIPs. In that case, developers agree to add the inclusion of the list as the fourth EIP in Electra.

(Source: galaxy.com)

[Layer2] StarkGate 2.0 is live on mainnet. Starknet, on the X platform, has announced the launch of the mainnet for StarkGate 2.0, a cross-chain bridge. It now supports features such as one-click withdrawals, withdrawal limits, and fast withdrawals. Additionally, the platform offers permissionless bridging and smart deposit services.

(Source: Twitter@Starknet)

[Layer2] OP Chain launches Delta upgrade: Fixed operating costs reduced by 90%. At Feb 22 00:00:00 UTC 2024, the OP chain upgraded with the introduction of span batches functionality, which reduces the fixed costs of OP chain operations by over 90%. This is the first OP stack feature built by Test in Prod, as a core developer of the Optimism Collective.

(Source: docs.optimism.io)

[Layer2] Polygon, StarkWare Tout New ‘Circle STARKs’ as Breakthrough for Zero-Knowledge Proofs. Polygon has collaborated with StarkWare to introduce “Circle STARKs.” According to the whitepaper, the new Circle STARKs will accelerate the proof generation process for rollups, thereby enhancing the scalability and efficiency of blockchain. Additionally, the finalization speed of Circle STARK proofs is expected to be much faster than the current STARK proofs. The release date for Circle STARKs has not been determined yet. Brendan Farmer, co-founder of Polygon, mentioned in an interview, “This will be in our new proof system Plonky3. We expect 7 to 10 times improvement.”

(Source: eprint.iacr.org)

[Layer2] Fuel Labs unveils ‘Rollup OS’ strategy ahead of Q3 2024 mainnet release. According to The Block, Fuel Labs, the developer behind the Optimistic Rollup project Fuel V1, has announced today that the project will evolve into “Rollup OS” before the mainnet launch in the third quarter of 2024. The transition to “Rollup OS” is specifically aimed at addressing key limitations of the current Rollup architecture on Ethereum.

With the mainnet launch later this year, Fuel will introduce a dedicated virtual machine designed to enhance the performance of Ethereum aggregates (developed using the platform) by enabling parallel transaction execution, allowing concurrent processing of multiple transactions. In this way, it will compete with projects like Monad and Sei, which also offer EVM parallelization, although these competitors are alternative Layer 1 networks.

The project will also utilize state minimization techniques to combat state bloat, referring to the continuously increasing data accumulation that must be fully stored and managed by nodes on the blockchain to ensure proper chain verification and state transitions. These state minimization techniques also contribute to improving the performance of Rollups. Fuel claims that such features will enable Fuel-driven Rollups to scale — inheriting Ethereum-level security while maintaining minimal node operational costs.

(Source: fuel.mirror.xyz)

[Polygon] Polygon ID Release 6: Introducing the First-Ever Implementation of Dynamic Credentials by a Privacy Protocol. Polygon Labs has announced the launch of Polygon ID version 6, a digital identity solution featuring dynamic credentials for the first time. This version’s highlight is the inaugural implementation of dynamic credentials, a W3C specification allowing users to automatically refresh expired credentials from their wallets. The implementation of dynamic credentials includes a new service integrated into the issuer node and the implementation of the refresh protocol on mobile and JS-sdk.

This new feature brings numerous benefits for many use cases: 1. Issuers can create new business models based on recurring revenue through short-term credentials, as refreshes can be charged. 2. Polygon ID can support truly interoperable KYC/AML credentials, providing the best user experience. KYC credential issuers can issue short-term credentials and only need to perform AML checks at each refresh. 3. Users can have continuously valid and up-to-date “permanent” credentials. 4. Polygon ID supports unstable data that needs constant refresh, similar to credit scores. For validators, this means they are essentially “subscribing” to the user’s data stream.

(Source: polygon.technology)

4. Key Fundraising Data

Last week witnessed a total of 27 financing events, raising a substantial amount of over $236.4 million*. Compared to last week, financing activities continue to remain active in terms of both trading volume and total funding. The decentralized finance (DeFi) sector leads with the highest number of funding events, totaling up to five. The blockchain infrastructure sector recorded the highest total funding amount, raising a total of 118 million dollars, representing 50% of the overall funding. The largest funding event was led by EigenLayer, successfully raising one hundred million dollars. EigenLayer is a platform to leverage Ethereum security through the innovative method of restaking. More detailed information is provided below.

* 6 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. [GameFi] Monkey Tilt secures a $21 million investment in a funding round led by Polychain Capital.

GambleFi platform Monkey Tilt has announced the completion of a $21 million financing round. The funding was led by Polychain Capital, with participation from Hack VC, Poker Go, Accomplice, Paper Ventures, and Folius Ventures.

This substantial investment is likely to be utilized for further development and expansion of the Monkey Tilt platform, which is a growing part of the GambleFi ecosystem. The platform aims to provide users with a decentralized and secure gaming experience, leveraging blockchain technology to ensure fairness and transparency.

  1. [Infra] Andreessen Invests $100 Million in Crypto Startup EigenLayer.

Venture firm Andreessen Horowitz invested $100 million in crypto startup EigenLayer, suggesting that some of the industry’s top backers are still betting on blockchain despite a steep downturn in crypto venture funding.

EigenLayer was founded by Sreeram Kannan, who previously was an associate professor at the University of Washington. The startup facilitates a process called “restaking” that has gained major traction in recent months and is a takeoff on the method that runs Ethereum, where tokens are deposited or “staked” to the network to help validate transactions on the blockchain. Restaking allows new projects building on top of Ethereum to lever the blockchain’s security for their own networks.

  1. [Chain] Layer-1 Network Flare Raises $35M From Kenetic, Aves Lair.

Layer-1 blockchain Flare has raised $35 million in a private round that included investment from Kenetic, Aves Lair and others, according to a press release. Dubbed a layer-1 network for data, Flare supports the creation of smart contract protocols and focuses on pricing oracles, which relay asset prices to and from various decentralized finance (DeFi) applications.

Early investors in the project have voluntarily agreed to extend token distribution from 2024 to the first quarter of 2026. A selling limit of 0.5% of daily trade volume has also been imposed to reduce market sell pressure.

  1. [Infra] AltLayer, Platform for Launching Rollups, Raises $14.4M From Polychain, Hack VC.

According to CoinDesk, the Rollup-as-a-Service protocol AltLayer has completed a $14.4 million strategic funding round, co-led by Polychain Capital and Hack VC. Other participants in the funding round include OKX Ventures, HashKey Capital, Bankless Ventures, Primitive Ventures, SevenX, Bas1s Ventures, Mask Network, IOSG, and TRGC. The funding round concluded in September 2023. The statement mentions that the new funds will be used to expand the AltLayer team and further develop its Rollup infrastructure. AltLayer did not disclose its valuation.

AltLayer is a platform designed to launch native and re-collateralized Rollups, supporting both Optimistic and ZK Rollup stacks. The project is also the 45th project on Binance Launchpool.

See you next week! 🙌

🎙Forum: Feel free to leave your comments on our official LBank Labs Twitter account, and don’t hesitate to ask questions about the tokens or projects that interest you. We will diligently gather them and discuss them in the recap section of our weekly digest!

📢 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.

--

--