LBank Labs Weekly Newsletter (June 25-July 1) #1
*All on-chain data is dated as of 0am EST on Sunday, July 1st.
Author: LBank Labs Research team-Claire
Welcome to LBank Labs Newsletter Weekly. Here we list all you need to know about the crypto market in the past week(Jun. 25 — Jul.1).
1 Macro Market Overview
US stock indexes climbed as the tech rally pushed on, and web3-related stocks surged due to mixed positive factors. According to Barrons, the tech-heavy Nasdaq composite on Friday ended its best first half of the year in four decades — marking the third-biggest gain to start a year in the index’s history. The Dow Jones Industrial Average gained 2.0%, while the S&P 500 finished up 2.3%. The Nasdaq, meanwhile, climbed 2.2%, settling at 13,787.92 points, marking a new high for 2023. Friday’s significant surge in the market can be attributed to multiple factors, including an unexpected downside in the PCE inflation figure and the impressive performance of tech stocks. In addition to these positive macroeconomic factors, web3 stocks experienced a further boost due to the anticipation surrounding the Bitcoin ETF application. Notably, Coinbase (NASDAQ: COIN) saw a substantial increase of 16.4%, while Marathon (NASDAQ: MARA) witnessed a notable climb of 9.1%. MicroStrategy (NASDAQ: MSTR), currently the largest Bitcoin holder in Nasdaq, also benefited from the flourishing web3 wave, recording a gain of 4.1%.
SEC Says Spot Bitcoin ETF Filings Are Inadequate. The Securities and Exchange Commission informed exchanges Nasdaq and Cboe Global Markets, which filed the applications on behalf of asset managers including BlackRock and Fidelity Investments, that they aren’t sufficiently clear and comprehensive. The exchanges or asset managers can update them to address the regulator’s feedback and refile. Cboe updated and refiled its applications Friday afternoon to address the regulator’s feedback, pointing out that Coinbase will be a surveillance partner, according to WSJ. Bitcoin’s dollar value fell 5% after the SEC’s decision was first reported, before rebounding slightly. Till now, 8 TradFi giants have placed a bet on web3 and plan to launch their ETFs for SEC’s approval, and the number is still expected to grow.
2 Crypto Market Pulse
The whole market remains ‘unchanged’ after a week of fluctuation. This week, the market experienced a downward trend in the first half, followed by a subsequent recovery. The overall market capitalization concluded at $1.19 trillion, while the closing prices of BTC and ETH stood at $30,523.84 and $1,915.40 respectively. Notably, ETH exhibited a relatively stronger performance in comparison to Bitcoin, demonstrating a surge on the first day of July. The distribution of dominance reflected similar movements, as BTC dominance decreased by approximately 0.5% to reach 49.59%, while ETH experienced a slight increase from 19.16% to 19.28%.
Among the top 100 cryptocurrencies, Top3 gainers were XEC, BCH, and BSV, while the Top3 losers were CFX, KAVA, and SUI. Notably, the coins associated with Proof of Work (PoW) continued to display strength this week, seemingly unaffected by the SEC’s concerns regarding security. The listing prospect on EDX continued to have a positive impact on the prices of BCH and BSV.
The stablecoin market cap continued to decline, experiencing daily net outflows from exchanges. Last week, the market cap decreased by over $1 billion, reaching $122.58 billion. The trend of negative net outflows persisted throughout the week, with significant losses recorded on June 27th and July 1st. Concurrently, the dominance of USDT (Tether) rose from 67.22% to 67.99%, while USDC (USD Coin) dominance increased from 22.35% to 23.99%. The relative dominance of DAI and BUSD also saw an upward trajectory, indicating a flow of funds toward these top stablecoins.
The derivatives market experienced significant volatility on Jun.30, mainly influenced by the rejection of the Bitcoin ETF. Both BTC and ETH witnessed the highest levels of liquidation on that day, totaling $46.3 million and $30.24 million respectively. ETH exhibited a relatively stronger performance compared to BTC. ETH’s future open interest increased by 6.91% to reach 2.54 million ETH, while BTC’s open interest decreased by 4.46% to 0.29 million BTC.
The DeFi market capitalization concluded at $45.33 billion, showcasing notable growth in Solana, Optimism, and the Ethereum Mainnet. Throughout last week, the overall DeFi market cap remained stable. On June 30th, the highest daily volume was recorded, coinciding with the impact of the ETF rejection. The best-performing chains were Solana, Optimism, and Ethereum Mainnet, experiencing increases of 6.74%, 4.36%, and 2.61% respectively.
NFT market’s ‘Blue Chips’ are experiencing a crash. Last week, Azuki brought full activity to the market. The market cap dropped by 6.88% to $6.13 billion, while the 7-day volume saw a 40% increase. The number of holders grew by 0.7%. Azuki, the star of the week, faced a significant decline as its floor price plummeted by 57.34% to 6.39 ETH. Furthermore, the floor price of Elementals (0.94 ETH) fell below its initial mint price of 2 ETH. Prominent ‘Blue Chips’ such as CryptoPunks, BAYC, and Art Blocks were all affected to some extent by this crisis.
3 Major Project News
[Layer2] Polygon 2.0 Roadmap Calls for ‘Unified Liquidity,’ Restaking, New Chains on Demand
Polygon, a staking solution for Ethereum, says its new architecture will include a shared bridge and a “coordination layer” that connects all of Polygon’s chains, with an emphasis on zero-knowledge technology that has become one of this year’s hottest blockchain trends.
Polygon 2.0, aiming to establish Polygon as the Value Layer of the Internet — a foundational protocol that will allow anyone to create, exchange, and program value the same way the Internet allows anyone to create and exchange information.
This upgrade would be an important step toward creating the Value Layer, given that it would allow the entirety of Polygon PoS users, assets, and state to migrate to the Polygon 2.0 ecosystem.
Ethereum layer-2, zkSync Era, has introduced ZK Stack, a modular framework for a series of custom blockchains called Hyperchains. Like Optimism’s Superchains, these chains will operate as a new layer on top of the existing layer-2 protocol and will be composable and interoperable, allowing for near immediate liquidity and flash loan transfers between protocols.
The Hyperchains will be used by projects with specific requirements around privacy, speed, and data availability, such as games, social networks, exchanges, and banks. Recursive scaling will be used by ZK Stack, where transactions are batched into ZK proofs, which are then batched into a single proof for increased compression. The system may hypothetically scale up to meet any demand. The code is under the MIT/Apache license, which is open-source and free.
[Layer2] Coinbase’s Base Prepares for Mainnet Launch With Slew of Security Audits
Base, the layer 2 blockchain developed by Nasdaq-listed crypto exchange Coinbase (COIN), has completed a series of security audits as it prepares to launch its Mainnet with the aim of attracting as many as 1 million new crypto users in coming years.
Base, which is built on the OP stack in collaboration with Optimism, was announced in February. To battle test the blockchain itself and the OP stack’s security, Coinbase commissioned a six-month internal audit from its protocol security team, according to a press release.
[DeFi] Decentralized exchange DYDX to launch public testnet of Cosmos-based blockchain on July 5
The DYDX Chain, built in the Cosmos ecosystem, completed its Milestone 4 and contains over 40 validators running the platform’s software. The testnet is set to launch ahead of schedule at 1:00 p.m. ET (17:00 UTC) on July 5, the platform said on Twitter.
Some of the functions to be tested at launch include connecting wallets, viewing the order book, placing market orders, and viewing account information. At launch, the public testnet will only work with Bitcoin and Ethereum markets, but DYDX plans to include over 30 more markets through future network upgrades.
[DeFi] Decentralized Exchange PancakeSwap Goes Live on Polygon zkEVM Blockchain.
Decentralized exchange (DEX) PancakeSwap will go live on the Polygon zkEVM network in line with broader plans to expand its user base and build protocol revenues, developer “Chef Cocoa” shared with CoinDesk.
As a DEX, PancakeSwap relies on smart contracts instead of middlemen to process trading, lending, and lottery services for users on the BNB Chain, Ethereum, and Aptos blockchains. The protocol held over $1.54 billion worth of tokens as of Wednesday, DefiLlama data shows.
[NFT] Azuki New NFT Collection Elementals Encounters Severe Mint Mishap
Azuki Elementals NFT collection was undoubtedly the most-hyped and largest NFT offering in recent months. During the presale, the Azuki team quickly earned 20,000 ETH. However, the community soon showed great disappointment with the new collection due to the short presale window and the ‘Basically identical’ artwork. Later, the Azuki team announced that it would take a series of actions to rebuild the community, including releasing a new NFT collection called Green Beans and offering a new NFT background, etc.
4 Key Fundraising Data
Last week witnessed a total of 19 financing events, raising a substantial amount of over $157.76 million. Notably, Blockchain Service and GameFi sectors garnered the most attention, accounting for 10 financing events (52.63%) and raising $105.55 million (66.91%). The majority of financing rounds are still at the Seed stage, but there were two significant deals in Stage B&C, which indicates a positive sign of vibrancy within the industry. We are optimistic about seeing more companies gaining momentum in the near future.
* 2 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 [CEX] Bitpanda Pro spins out under Josh Barraclough, raises €30 million
June 28, Bitpanda Pro, a unit of the Austrian crypto firm targeting institutional and professional traders, has spun out into a new entity under the leadership of Josh Barraclough, a former digital innovation head at JPMorgan. The new entity will be named One Trading and has raised €30 million in a Series A round. Peter Thiel’s Valar Ventures led the raise, alongside MiddleGame Ventures, Speedinvest, Keyrock, and Wintermute Ventures. Bitpanda will retain a stake in the company.
- Official Link: https://onetrading.com/
2 [Game] Web3 gaming firm Mythical Games raises $37 million in Series C1 funding
The web3 video game development firm Mythical Games raised $37 million in a Series C1 funding round led by digital asset manager Scytale Digital. New investors in the company included Cathie Wood’s ARK Invest, Animoca Brands, PROOF, Stanford Athletics, and MoonPay. Existing funders Andreessen Horowitz, WestCap, Gaingels, Signum Growth, and Struck Capital also participated.
- Official Link: https://mythicalgames.com/
3 [Service] Anzu Completes $48 Million Series B Funding Round Led by Emmis
Anzu, an intrinsic in-game advertising solution platform, announced a $48 million Series B funding round, led by Emmis Corporation, one of America’s most respected media, sports, and entertainment companies, with additional investments from PayPal Ventures, Evolution, Simon Equity Partners, and Bandai Namco Entertainment 021 Fund, a corporate venture arm of a Japanese multinational entertainment company, Bandai Namco Entertainment.
- Official Link: https://www.anzu.io/
4 [FOF] LBank Labs Announces Strategic Investment in ArkStream Capital to Accelerate Web3 Innovation
ArkStream Capital has earned accolades as one of the best-performing funds during the 2020–2022 cycle. Leveraging its strategic and discerning investment approach, the firm has successfully supported over 70 portfolio companies, including prominent industry players like Flow, SEI, Republic, Manta, LiveArtX, and Mask.
LBank Labs, known for its protocol and exchange-agnostic approach, is committed to supporting projects through direct funding, acceleration, incubation, and extensive networking.
The collaboration will bring together the expertise and resources of two prominent players in the blockchain industry, contributing to driving the advancement of Web3 innovation.
- Official link: https://arkstream.capital/, https://www.lbanklabs.com/
