Industry Weekly | Kusama parachain auction is coming, ETH seller liquidity continues to shrink

Market overview

[Interpretation] Grayscale's existing products all adopt the same business model: initiate private placement, obtain public quotations in the secondary market, become an SEC reporting company, and convert to ETF.

According to OKEx data, as of 16:00 on May 14, 2021, BTC was temporarily at $50,275.8, down 9.58% in the past seven days, and OKB was at $34.761, up 6.61% in the past seven days. The long-short position ratio of the OKEx BTC contract is 1.9, and the number of multiple parties is dominant; the total position of the BTC contract is 2.18 billion US dollars, a decrease of 3.28% from the same day last week.

1. Institutional and company dynamics

1. Grayscale: Form 10 documents have been submitted to the US SEC for the Grayscale Digital Large Market Value Fund

On May 13, Grayscale tweeted that it has submitted Form 10 documents to the SEC for Grayscale Digital Large Market Value Fund (GDLC). The third acts as a digital currency investment vehicle for SEC reporting companies.

[Interpretation] Grayscale's existing products all adopt the same business model: initiate private placement, obtain public quotations in the secondary market, become an SEC reporting company, and convert to ETF.

2. Investment bank Cowen will provide cryptocurrency custody services to hedge funds and asset management companies

Cowen Inc., a century-old investment bank, said it will hold cryptocurrencies for hedge funds and asset managers, Bloomberg News reported on May 13. The firm will partner with Standard Custody & Trust Co. to provide “institutional-grade” custody services for cryptocurrencies and various other digital assets. It will also invest $25 million in Standard's parent company, PolySign Inc.

[Interpretation] More and more banks have seen the demand for encrypted assets from institutional customers. Cowen CEO Jeffrey Solomon said that digital asset transactions will be opened in the near future.

According to news from Jinshi, institutional analysis shows that Bitcoin fell back below $50,000, and many people blamed it on Musk's change of rhetoric. However, there are more reasons why Bitcoin is falling. Ironically, Bitcoin’s drop came after a sharp rise in U.S. inflation data. Bitcoin enthusiasts claim that cryptocurrencies are potential inflation hedges, but in reality, there is no quantitative evidence that real interest rates or breakeven inflation rates are linked to digital currencies. Instead, Bitcoin is a high-risk asset, driven by hopes that it will have mass adoption and future uses, all of which are still unknown. That makes it more like a tech startup stock.

[Interpretation] Musk's one sentence is up, and one sentence is down. Is everyone amplifying Musk's "influence", or can Musk really lead the encrypted world to a more environmentally friendly and energy-saving future?

4. CryptoQuant CEO: If the US Bitcoin ETF is approved, it will trigger a global BTC buying frenzy

2. Cryptocurrency market

1. Tether announced the reserve data: 76% is cash or cash equivalents, and digital currency accounts for only 1.64%

According to news from Decrypt on May 13, Tether has disclosed detailed data on its reserves for the first time since 2014. As of March 31, 2021, nearly 76% of Tether's reserves were in cash or cash equivalents, with the remainder in secured loans, bonds, and other investments, including Bitcoin. Specifically, commercial paper made up the bulk of its cash and cash equivalents, accounting for a 65% share. Trust deposits accounted for 24%, reverse repurchase bills accounted for 3.60%, treasury bills accounted for about 3%, and actual cash accounted for only 3.87%.

[Interpretation] After Coinbase launches USDT trading, it marks that USDT is officially compliant, so you can use it with confidence.

According to Bitcoin.com news, investment management company Ark Invest recently released a research report, emphasizing three reasons why the price of Ethereum has repeatedly hit new highs. The firm pointed to increased institutional interest, strong on-chain signaling and an upcoming protocol upgrade as key reasons for its price increase.

[Interpretation] God V is called God V not only because he developed Ethereum, but the spirit of altruism in him is worth learning from colleagues in the encryption circle.

3. Data: Public interest in Dogecoin surpasses Bitcoin for the first time

According to Cointelegraph, according to Internet search statistics, the global public's interest in Dogecoin has surpassed that of Bitcoin for the first time. According to data from Google Trends, DOGE scored 56 from May 2 to 8, compared with 48 for BTC. Google Trends scores out of 100.

[Interpretation] It confirms that sentence: Musk can successfully send Space X to the sky and recover it, and he can push Dogecoin to a position that you and I can't even imagine.

4. Ark Invest report: There are three main reasons why Ethereum keeps hitting new highs

According to Bitcoin.com news, investment management company Ark Invest recently released a research report, emphasizing three reasons why the price of Ethereum has repeatedly hit new highs. The firm pointed to increased institutional interest, strong on-chain signaling and an upcoming protocol upgrade as key reasons for its price increase.

[Interpretation] Ethereum is accelerating in the direction of surpassing BTC.

5. Musk’s Twitter vote ends, more than 3 million people want Tesla to accept Doge payment

1. The Polkadot test network KSM launched a referendum on the parachain launch, and the parachain auction will be launched after the voting ends on May 15

3. Polkadot/DeFi dynamics

1. The Polkadot test network KSM launched a referendum on the parachain launch, and the parachain auction will be launched after the voting ends on May 15

According to official news, on May 13, the Kusama parachain of the Polkadot test network announced that it had passed the v0.9.1 upgrade, and opened a referendum on the parachain launch. The voting will end at 6:00 on May 15, Beijing time. Code related to auctions and crowdfunding.

[Interpretation] The Polkadot auction has finally taken another big step forward. With the arrival of the Kusama parachain auction, Polkadot will officially have its own ecosystem, and the DeFi trend will come with a destructive momentum.

2. Metis, the second layer protocol of Ethereum, announced the completion of financing of 4 million US dollars

3. V God: UNI should become an oracle token

[Interpretation] The frequent financing of the Ethereum second-tier network indicates that this sector will explode in the near future.

3. V God: UNI should become an oracle token

According to official news, on May 12, Vitalik Buterin, the founder of Ethereum, initiated a proposal discussion at the Uniswap Governance Forum, suggesting that Uniswap can provide predictive price data for ETH/USD, and that UNI become an oracle token, rather than other oracle machines. Also use ETH/USDC to feed the price. Vitalik Buterin explained that algorithmic stablecoins need to provide asset price feeds for off-chain fiat currencies, not on-chain USD stablecoins. The oracle machine needs to have a token to prevent Sybil Attack. The cost of this attack is half of the total market value of the token minus the value of tokens that do not participate in voting. The two project tokens with the highest market value in Ethereum Yes LINK and UNI, but Chainlink is a complex system with many functions and there needs to be a simple alternative to complement Chainlink to optimize incentives and minimize costs.

[Interpretation] If UNI becomes the oracle governance token, where should Chainlink be placed?

1. Grayscale CEO: May we brainstorm together to find a green cryptocurrency solution

[Interpretation] Arbitrum is an Ethereum Layer 2 solution led by the Offchain Labs team. It adopts Optimistic Rollup technology. In the next few months, Arbitrum and Optimism will form the main force of the Ethereum Layer 2 network. Wait and see.

4. Industry voice

1. Grayscale CEO: May we brainstorm together to find a green cryptocurrency solution

On May 13, Grayscale CEO Michael Sonnenshein quoted Musk’s tweet saying: Renewable energy has a huge opportunity to play an increasingly important role in the future of cryptocurrency (and mining). If you play games too, I'd love to bring together some of the brightest minds so we can brainstorm and identify measurable solutions.

3. Ouyi CEO Jayhao: Grasping structured opportunities to invest will become the new normal in the encryption market

On May 13, Galaxy Digital CEO Mike Novogratz tweeted: "My take on Elon Musk is to take his word for it. He cares about the environment and he's using his considerable influence to push Bitcoin mining Towards a greener future. Many companies in this space are already working on this. Stay tuned and buy BTC."

[Interpretation] From the perspective of green energy, Musk's behavior may be promoting the development of the encryption market in a green direction.

3. Ouyi CEO Jayhao: Grasping structured opportunities to invest will become the new normal in the encryption market

On May 13, OKEx CEO JayHao said on Weibo that from various economic signals, the global economy is still in a stage of upward inflation, which leads to the continuous depreciation of money in people's hands. How to realize the preservation and appreciation of wealth has become one of the important issues that everyone needs to consider. Therefore, it is an inevitable choice to achieve a reasonable allocation of financial assets, and it is necessary to grasp structural opportunities, rather than blindly casting the net. Facing the encryption market, Jay said that recently, the price of Bitcoin has been hovering in the range of US$50,000-60,000, while the prices of assets such as YFI and DOGE have doubled; at the same time, Bitcoin is also at 2.6 trillion The share of the total market value of the US dollar encryption market has dropped from about 70% in early 2021 to 43%, which shows that more value depressions have begun to rise, and allocating funds in different proportions will become a trend in investing in the encryption market. Although the future direction of mainstream assets is not clear in the short term, in the long run, diversified enterprise-level investment is still a strong support for the market. Focus on structural opportunities. I believe this is the value consensus after several rounds of bull and bear markets.

[Interpretation] YFI, DOGE, DeFi, Layer 2, and Polkadot parachain auctions are all structured opportunities, but it is difficult for ordinary investors to seize all opportunities at once. Focusing on one or two areas may be the kingly way.

4. CryptoQuant CEO: The reduction in ETH exchange holdings has exacerbated the squeeze on seller liquidity

On May 12, Ki Young Ju, CEO of CryptoQuant, just tweeted that, unlike Bitcoin, the holdings of ETH in derivatives/spot exchanges are decreasing, exacerbating the liquidity crunch on the seller. The Ethereum ecosystem and its usability has driven ETH away from centralized exchanges.

ETH

Kusama

Industry Weekly | Kusama parachain auction is coming, ETH seller liquidity continues to shrink

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