LBank Labs Weekly Digest (September 10–16) #12

LBank Labs
13 min readSep 18, 2023

*All on-chain data is dated as of 12:00 a.m. EST on Sunday, September 17th.

Welcome back to LBank Labs Weekly Digest! Here we list all you need to know about crypto market in the past week(Sep.10–16).

Author: LBank Labs Research team — Hanze, Dannie

Keywords: #CPI #ETF #Non-EVM

Beatrice Wong, Hong Kong, Shortlist, Open Competition, Architecture, Sony World Photography Awards 2023

1 Macro Market Overview

U.S. Stocks Weighed Down by Tech Stocks. According to WSJ, tech stocks, the market’s stars this year, were some of the worst performers. The S&P 500’s information technology sector lost almost 2%, dragging the broad stock-market gauge into the red for the week. Shares of Adobe dropped 4.2% after the company’s earnings Thursday, and were among the biggest market laggards. The swoon in the software company’s shares led some investors to take a more cautious stance toward other tech companies, too.

Thursday’s slate of economic news was heavy: Consumers spent more than expected in August, suppliers faced rising prices, and the European Central Bank lifted interest rates to the highest level in its history. Producer inflation and retail sales reports — along with the consumer-price index the prior day — showed gas prices are surging. Investors shrugged off rebounding inflation Thursday, scooping up stocks in a bet that a strong U.S. consumer and resilient labor market will keep the market humming. Many traders expect the Federal Reserve to keep rates steady at its meeting next week, though the outlook for the rest of the year is murkier.

The S&P 500 and Nasdaq posted slim declines of 0.17% and 0.41% for the week, while the Dow eked out a small gain by 0.1% .

On the other hand, Web3-related stocks experienced a downturn overall last week. Due to uncertainty stemming from sustained macroeconomic inflation, MARA and MSTR both fell by 10.1% and 4.4% respectively, while COIN only saw a slight increase of 0.2%.

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

Macro indexes

The consumer-price index (CPI) rose 0.6% in August from the prior month, the fastest pace in more than a year. Higher gasoline prices were responsible for more than half of the increase. Core prices — which exclude volatile food and energy categories and are the preferred gauge of the Fed — rose a more modest 0.3%, slightly above the 0.2% estimate of economists surveyed by The Wall Street Journal.

Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city average. (Source: U.S. BUREAU OF LABOR STATISTICS)

As of the closing, the U.S. Dollar Index (DXY) reported 105.33, and the weekly trend appears set to mark its ninth consecutive week of gains, making it the longest weekly winning streak since a 12-week run in 2014.

DXY (Source: TradingView)

The Effective Federal Funds Rate (EFFR) was at 5.33%, still residing within the historical high range of 5.25–5.50%.

EFFR (Source: Federal Reserve Bank of New York)

The 10-year Treasury yield (US10Y) rose for a second consecutive week and settled at 4.334% on Friday, around its highest levels of the year. It’s worth noting that at the beginning of the new week, the 10-year US Treasury yield reached a 22-year high at 4.4%, with continued pressure on risk assets.

US10Y (Source: TradingView)

SEC Chairman Gensler: Currently reviewing multiple Bitcoin spot ETP applications. On September 12th, according to Bloomberg Senior ETF Analyst, SEC Chairman Gensler stated during a recent hearing: “We’re reviewing that decision. There are multiple spot ETP filings (beyond Grayscale) that we’re also reviewing and I’m looking forward to the Staff’s recommendation”

Additionally, last week, Hashdex submitted an application for a Spot Ethereum ETF, joining ARK Invest and VanEck in pursuing this type of ETF. Franklin also filed for a spot Bitcoin ETF. Currently, there are now 15 Ethereum futures ETF applications, 12 spot Bitcoin ETF applications, and 3 spot Ethereum ETF applications in the pipeline.

(Source: Twitter@EricBalchunas)

2 Crypto Market Pulse

Market Data

The cryptocurrency market cap rebounded slightly last week. Despite the impact of high-interest rates at the macro level and selling pressure resulting from the liquidation of the FTX cryptocurrency exchange, there were also new positive developments. These include the partnership between the German banking giant Deutsche Bank and the Swiss crypto firm Taurus, aimed at providing Bitcoin and cryptocurrency custody solutions to institutional clients. Furthermore, the recent surge in Bitcoin and Ethereum ETF applications has contributed to investors buying on dips, further supporting the steady rise in Bitcoin prices.

$BTC, after experiencing frequent fluctuations last week, closed at $26,530 per coin as of 12:00 AM on September 17th. $ETH is currently priced at $1,629, holding relatively steady. The total market cap of the cryptocurrency market also saw a 1.5% increase last week, now standing at $1.057T. Furthermore, $BTC’s dominance in the overall market has further risen to 48.9%, currently at $517B, while $ETH has slightly declined to 18.5%, now at $196B.

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

$TON, $RUNE, and $MKR emerged as Top 3 gainers, while $APE, $ASTR, and $FLR were Top 3 losers. The increase in the value of $TON was driven by the announcement that Telegram had integrated The Open Network blockchain’s Web3 wallet into its messaging application, providing simplified access to TON for its 800M users. Meanwhile, $Rune, the native governance token of the ThorChain network, started gaining momentum on Wednesday and has been attracting more investor interest since the lending feature went live on the protocol on August 21st. The rise in $MKR can be attributed to recent execution proposals initiated by Maker DAO, additional investments in RWA, and a new round of gains fueled in part by whales. As for the top losers, the most significant decline was observed in $APE, which recently initiated its fourth batch of staking rewards by distributing 1500 $APE tokens to stakers. However, the ongoing inflationary nature of the token has led to the potential dilution of its price. Similar potential selling pressure contributed to the decline of some altcoins last week.

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

The market capitalization of stablecoins remained relatively stable overall last week. Exchange net position change showed net outflows during the first half of the week, followed by a return to net inflows in the latter half. This indicates an improvement in current market investment sentiment. In the context of the higher interest rate environment due to potential interest rate hikes in the United States, the prolonged net outflows have reflected the result of capital withdrawal during bearish market conditions.

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

In the derivatives market, the total open interest for Bitcoin saw a slight increase last week, indicating new capital entering the market. Market activity peaked around the 11th and 14th, corresponding to the low and high points in the prices of $BTC and $ETH for the previous week. Additionally, based on liquidation results, there were significant long liquidations for both assets around the 12th.

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

In the DeFi market, the TVL experienced a slight increase last week, reaching $38.7 billion. The seven-day trading volume for DEXes reached $12B, marking a 30.11% increase compared to the previous week. Furthermore, DEX vs CEX dominance increased to 10.8%, which further indicates the recent uptick in DeFi market activity. Additionally, among the top 10 blockchain platforms ranked by TVL, Tron witnessed significant growth of 17.27% in the past 7 days, continuing its previous trend.

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

The NFT market experienced a decline last week, with a 1.11% decrease, bringing the total market cap to $4.69 billion. However, there was a 24.83% increase in trading volume within the past seven days,BAYC dropping by 12%, MAYC witnessing a 9% decline, and Milady experiencing a substantial 31% decrease. Overall, the market sentiment remains subdued.

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

LBank Labs’ Recap

While the price volatility has decreased in the last 10 days, there are some positive signals from on-chain data. The number of active BTC and ETH addresses has increased significantly, and the supply of stablecoins has been growing steadily since mid-August. This suggests that market sentiment is improving in the short term, but there is no major new capital inflow or positive events. Although the BTC market may rebound slightly in the short term, bears should be aware of the possibility of a short squeeze and have appropriate stop-loss in place. In the long term, the court’s approval of FTX exchange to liquidate $3.4 billion in token assets leans bearish for the overall outlook in the coming months.

Notable events:

  • U.S. approved the sale of $34 billion in assets by FTX to repay user debts. They can sell up to $2 billion in crypto assets per week, with about $7 billion of the assets expected to be sold for $SOL.
  • Traditional financial giant Franklin Templeton filed an application for a spot BTC ETF. The positive news temporarily halted the market’s decline.

Next week:

  • 09/21 02:00 (UTC+8), the Federal Reserve will announce the interest rate decision.
  • $ID will unlock more than 6% of its circulating supply.

Price Range

  • BTC price optimistic: $26800 — $29500
  • BTC price neutral: $24800-$26800
  • BTC price pessimistic: $22800 — $24800

3 Major Project News

[Ethereum] The latest Ethereum All Core Developers Meeting (ACDE). The latest ACDE was summarized by Ethereum core developer Tim Beiko on the X platform. The meeting covered updates on the Devnet, additions to Dencun, and provided a comprehensive overview of Reth.

Additionally, there were previous reports that the Ethereum Holesky testnet failed to launch due to network configuration errors. Blockchain tool and infrastructure developer Nethermind has announced that developers plan to relaunch Holesky within a week, with the scheduled time being September 22nd. Furthermore, Ethereum developer Michael Sproul mentioned in a pull request on GitHub that the expected relaunch date is September 28th.

(Source: Twitter@TimBeiko, cryptoslate.com)

[Layer2] BNB Chain’s L2: opBNB Mainnet Goes Live. opBNB, an Ethereum Virtual Machine (EVM)-compatible Layer 2 chain based on Optimism OP Stack, dedicated to advancing the industry by providing lower gas fees and democratized access to blockchain technology. Moreover, there are over 150 projects committed to integrating or building on opBNB, with some protocols already live.

It will focus on enhancing the network’s resilience and decentralization through Proof Enhancement, account abstraction, BNB Greenfield data availability, interoperability with BNB Greenfield, and decentralized sequencers.

(Source: Twitter@BNBCHAIN)

[Ton] Messaging App Telegram Gives Endorsement to TON Project. Messaging app Telegram has endorsed the TON network as its blockchain of choice for Web3 infrastructure, and will integrate it into the app’s user interface. Toncoin (TON), the blockchain’s native token, surged after the news, adding 6.5% in 30 minutes.

The TON-built Web3 wallet that’s already available as a standalone bot in Telegram and has 3 million registered users is being integrated into the app and will be available to all 800 million users through their settings. A self-custodial version named TON Space is being rolled out to all Telegram users outside the U.S. The rollout should be completed by November, TON Foundation said in an email.

(Source: Twitter@ton_blockchain)

[Polygon] Polygon releases proposals on 2.0 upgrade and POL token migration. Polygon has officially proposed changes for its upcoming Polygon 2.0 upgrade. Initially introduced in June, Polygon 2.0 aims to establish a comprehensive network of interconnected Layer 2 chains, driven by zero-knowledge proofs. Last week, Polygon Labs released three Polygon Improvement Proposals (PIPs) that detail the outline of the transition, specifications for the upgraded Polygon 2.0 architecture and updates to its native token.

Additionally, Astar Network, an intelligent contract platform in the Polkadot ecosystem, is collaborating with Polygon Labs to launch the Ethereum Layer 2 network called Astar zkEVM. Astar Network aims to expand its cross-chain capabilities with the introduction of Astar zkEVM, creating a technology stack with the goal of becoming a gateway between the Ethereum and Polkadot ecosystems. Astar is committed to achieving interoperability between existing Astar VMs and is working with partners like LayerZero and Gelato to enhance cross-contract interoperability for other DApps.

(Source: Twitter@0xPolygonLabs)

[Sui] Sui Adds Login with Google and Twitch, Removes Major Barrier to Web3 Adoption. Sui announced through Sui Foundation, the launch of zkLogin, a web 3 authentication solution that allows end users to login to decentralized applications (dApps) using the same social accounts they are accustomed to leveraging in the traditional web.

zkLogin makes it possible for users to join the Sui ecosystem without having to install a wallet or manage seed phrases. Instead, through Sui’s new network primitive, developers can offer users the ability to authenticate with their favorite dApps using their existing accounts with Google, Facebook, Twitch, and other third-party providers. Future plans include similar integrations with Microsoft, Apple, WeChat and Amazon. Most importantly, these users will still benefit from the distinct privacy and ownership which are offered by blockchain-based applications, but unavailable in conventional web applications.

(Source: sui.io)

[EigenLayer] EigenLabs gears up to launch upcoming data availability solution. EigenLabs, the developer behind the EigenLayer re-staking protocol, plans to unveil EigenDA, a solution designed to reduce data storage costs for Layer 2 Ethereum rollups. It is expected to go live by the end of 2023. The solution has piqued the interest of projects like Celo, Mantle, Fluent, Offshore, and Layer N, which are looking into integrating this mechanism into their Layer 2 setups, according to EigenLabs.

Introduced in June, the primary role of EigenLayer is to leverage ether (ETH) staked with Ethereum validators and other liquid staking tokens to secure other blockchain protocols. The protocol can also validate add-on services (like EigenDA) built on top of it, with nodes expected to receive service payments.

(Source: Twitter@eigenlayer)

4 Key Fundraising Data

Last week witnessed a total of 22 financing events, raising a substantial amount of over $111.9 million*. The fundraising activities have demonstrated consistent growth on a weekly basis, with both the total funds raised and the number of fundraising events increasing. The GameFi sector garnered significant attention last week, accounting for four out of the total fundraising events, representing 18.18% of the total. The total fundraising amount reached $31M, making up 27.70% of the total funds raised. However, the largest fundraising event of the week was in the NFT sector, the Mocaverse project, which raised $20M. Mocaverse is the membership NFT collection for Animoca Brands’ extraordinary family of companies, projects, investments, shareholders, and partners. Further details are outlined below.

*4 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.[NFT] Animoca Brands raises $20 million to expand web3 identity project Mocaverse.

Animoca Brands, a Hong Kong-based web3 investor focused on gaming and the metaverse, raised $20M through the issuance of new ordinary shares for Mocaverse, a project that’s building web3-native tools for gaming and entertainment products. Animoca said in a statement that it envisions Mocaverse as the identity and point system for web3 gaming, culture and entertainment.

The funding round was led by CMCC Global, with the participation of investors including Kingsway Capital, Liberty City Ventures and GameFi Ventures. Some business figures such as Aleksander Larsen, co-founder of Sky Mavis, and Gabby Dizon, founder of Yield Guild Games, also contributed to the funding round.

2.[GameFi] Pahdo Labs raises $15M Series A to bring an anime-inspired game world and UGC platform to players.

Pahdo Labs, a game development studio based in New York, has raised $15M in Series A financing led by Andreessen Horowitz (a16z) with continued support from Pear VC, BoxGroup, Long Journey Ventures, Neo, and Global Founders Capital. The company had also previously raised $2.5M in Seed financing from prominent angel investors such as Kevin Hartz, Mark Pincus, and Cyan Banister.

Pahdo Labs’ mission is to cultivate a virtual world built by players. Their upcoming title will enable players to create their own anime-style worlds through tools enhanced by AI or procedural generation, bringing creative and social features to the forefront of the anime RPG genre.

3.[DeFi] Seedify Raised $10 Million From LDA Capital.

Seedify is a Web3 incubator and launchpad empowering innovators with access to funding, community building, marketing, and a high-caliber content creator and partnership network, to help drive the adoption of blockchain technologies.

The Seedify team is pleased to share it has received a $10M commitment of growth capital from Madrid-based LDA Capital, which has collectively executed over 250 transactions across 43 countries with transaction values of over $11B.

4.[CeFi] Flashwire Group Closes $10 Million Series A Funding and Launches Several Innovative Products.

Flashwire Group, an innovative financial group, today announced that it closed a $10M Series A funding round earlier this year. This round of funding has attracted renowned institutional investors from crypto industry, including Legend Trading, Cobo, GATE.io, VeChain, CyberX, SuperChain Capital, and more. Flashwire’s investors cover a wide range of sectors, including traditional banking, blockchain technology, cryptocurrency trading, liquidity, asset custody, and investment. All of them firmly recognize Flashwire’s revolutionary technology and business model.

Since the funding round, Flashwire has been committed to designing and implementing its unique and leading financial services solutions.

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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