JZL Capital Blockchain Industry Weekly Report No. 31: Economic data did not meet expectations, cautious fomo in the middle of the rebound
Overview of the week
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- Kucoin launched a way to buy NFTs using NFT ETFs.
1. Summary of Industry Dynamics
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1. Summary of Industry Dynamics
This week, the entire encryption market followed the U.S. stock market and completed an unexpected rebound. It has risen for four consecutive weeks throughout July. Bitcoin rose by 24.33% in a single month, and ETH’s single-month rise reached a terrifying 66.4%. The entire market seems to have come to a turning point Turning point, this phenomenon is especially evident in various small-cap currencies. ETH-related currencies such as MATIC rose 111.66% within a month, Layer 2 concept currency OP rose 222.29% within a month, and the DeFi sector also rose significantly, such as Yearn Finance , AAVE, SNX, etc. all have an increase of nearly 100%.
The U.S. stock market has wiped out its decline since the second half of the year. The Nasdaq rose 12.51% throughout July, which is also the first intra-month positive line since March this year. Judging from the daily line, the Nasdaq is also in the process of stabilizing its bottom. Whether it was the 75 basis point rate hike last week, the higher-than-expected core PCE or the second consecutive quarter of GDP contraction, none of them had an impact on the rise in the risk asset market. The two consecutive quarters of economic contraction have compounded the basic concept of economic recession at the technical level. The reasons for the economic contraction include that the real estate market has been hit by rising interest rates, and high inflation has caused business and consumer spending to lose momentum. However, there are also economists including Powell It was also pointed out at the meeting that the current very strong job market is still supporting the US economy from entering a recession, and it is not enough for the Fed to abandon its tightening policy. The core PCE 4.8% exceeded expectations by 0.1%, the highest since 1982, but as early as the middle of the month, the CPI had already exceeded expectations, and the prices under the name card did not have any substantial impact on the market. What can be expected is that the CPI announced on 8/10 may fall. Oil prices have fallen for two consecutive months in June and July. After falling 7.75% in June, the price in July fell by 6.75%. The current price is 98.62. The entire month of August has entered a policy window period. The focus of August is the possible fermentation of more geopolitical events, Powell’s speech at the Jackson Hole economic conference at the end of August and the release of inflation data.
2. Macro and technical analysis
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2. Macro and technical analysis
The market is in a short-term vacuum before raising interest rates in September. The United States has fallen into a technical recession. Now that the tightening is over and the epidemic is expected to rise, we judge that BTC will rebound with Nasdaq in the short term.
BTC stood at 22000USDT, and we judged to follow the trend of the Nasdaq. The current upward trend of the Nasdaq is more obvious.
ETH rebounded by 50% and then stagnated, and BTC is more cost-effective in the short term.
Nasdaq turned its head up after the FOMC meeting landed. The market is currently in a strong long-term mood and is still bullish in the short term.
U.S. bond interest rate: The 2-year U.S. bond is sideways. The current interest rate is 2.91, which has reflected the current interest rate as of now, and also reflects the expectation of easing next year.
Ahr999: 0.44, this position is not as cost-effective as before, but still has a certain cost-effectiveness.
2. MVRV: 1.057, the cost performance is the same as Ahr999.
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3. Summary of investment and financing
1) Investment and financing review
3. Summary of investment and financing
1) Investment and financing review
During the reporting period, 23 investment and financing events were disclosed, and the financing amounted to approximately US$4.4 billion, an increase of 32% month-on-month. In terms of specific tracks, the Web 3.0 & NFTs track has 17 projects ($168 million) accounting for 63%, the Defi track has 3 projects ($12 million), the Cefi track has 2 projects ($3.3 million), and the Infrastructure competition 1 project ($150 million);
During the reporting period, one financing project deserved attention, namely:
2) Previously on March 15, Aptos had completed a US$200 million strategic financing led by a16z, with participation from Tiger Global, Katie Haun, Multicoin Capital, Three Arrows Capital, FTX Ventures and Coinbase Ventures.
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2) Institution of the week - Hoo Exchange
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On July 25th, Hoo Exchange (Hoo), facing a liquidity crisis, announced the "Hoo Debt-to-Currency Conversion Plan" yesterday. In order to implement the plan, it will stop all trading services, cancel pending orders, and convert user assets into equivalent debt. The main terms are as follows:
1) The user's cryptocurrency will be converted into an equivalent amount of bonds, for example: 1 USDT = 1 HUSDT (Hoo USDT), bonds can be freely traded in the innovative trading area
2) Hoo will launch the stable currency token IUSD (Investment USD), 1 IUSD = 1 USD, and IUSD is the pricing unit in the investment of partners
3) Users hold bonds. In addition to trading, they can also exchange bonds into IUSD through the flash exchange function and then participate in partner investment business. The bond exchange price is anchored to the market price
4) Users holding IUSD can transfer funds between users in the platform
There is a problem
1) Mainstream currencies cannot be withdrawn: At least 73 kinds of encrypted assets have been opened for withdrawal, most of which are niche encrypted assets with low market value rankings, including USN, MIM, USDD, and TUSD 4 US dollar stablecoins. Assets are only open for trading on Hoo;
2) There is a reflected premium: Except that MAC is only traded on Hoo, STRP, WNCG, PNG, GFI, HE, VOLT, LUNCH and other tokens can be traded on other centralized exchanges or decentralized exchanges, and appear when users withdraw coins 50%-80% withdrawal premium;FTX.US
3) Decoupling of HUSDT and USDT: When opening HUSDT/USDT transactions, the value of 1 HUSDT is not necessarily equal to 1 USDT, which may lead to further losses of user assets.
As we all know, the order flow business (PFOF) accounts for 70%-80% of Robinhood's total revenue, of which the Options business order flow revenue accounts for more than 70%+. It is not difficult to imagine that if the US gets involved in options trading services, it will have an impact on Robinhood's revenue and stock price.
4. Encrypted ecological tracking
1. NFTs
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4. Encrypted ecological tracking
1) Dynamic summary:
In the past month, the NFT market has shown a fluctuating upward trend. However, from the analysis of the ETH standard, blue-chip projects have not rebounded significantly in the past 30 days. Combined with the transaction volume data maintained at the bottom, the secondary market of NFT is still weak.
2) Focus on dynamics:
The American jewelry brand Tiffany & Co announced that it will issue NFT at 10:00 am Eastern Standard Time on August 5, 2022. The NFT is called NFTiff, limited to 250 pieces, and each is priced at 30 ETH, about $51,000. In addition, Tiffany claims that it is taking NFT to a new level. Available exclusively to CryptoPunks holders, the NFTiff transforms an NFT into a custom pendant handcrafted by Tiffany & Co artisans. Will also receive an additional NFT version of the pendant. It is reported that each customer can purchase up to 3 NFTiffs.
According to OpenSea information, the ENS domain name tiffany.eth was sold at a price of 29ETH (about 50,000 US dollars). In March, Tiffany entered the NFT field and purchased Rocket Factory's OkapiNFT for 115ETH.
The Sandbox officially stated that the virtual metaverse platform has launched an avatar avatar area. Currently, hip-hop star Snoop Dogg avatar NFT The Doggies, World of Women, and People of Crypto have been launched.
On July 29, VeeFriends announced the completion of its seed round financing, led by a16z. The specific financing amount has not been disclosed yet. The financing is used to support the future intellectual property to build 283 VeeFriends characters, and to fuel expansion plans for its creative, technical and experiential businesses. There are 10,255 VeeFriends in the first phase (floor price 6.6ETH), and 54,168 in the second phase (floor price 0.43ETH).
3) Highlights:
On July 29, cryptocurrency exchange KuCoin offered retail investors fractional ownership of top NFTs in the form of an exchange-traded fund (ETF) denominated in USDT and offering fractional ownership of a collection of five blue-chip NFTs, such as Bored Ape Yacht Club (BAYC).
The product is delivered through a partnership with Fracton Protocol, a service dedicated to fusing valuable NFTs into fungible Ethereum-based ERC-20 tokens. Each ERC-20 token included in KuCoin’s NFT fund represents one millionth of ownership in a BAYC collection, represented, for example, by hiBAYC tokens. KuCoin's "NFT ETF Trading Zone" will first list 5 NFT ETFs, covering hiBAYC, hiPUNKS, hiSAND33, hiKODA, and hiENS4 as underlying assets.
In the operation of the Fracton protocol, there are three token standards. Among them, ERC-721, that is, BAYC NFT ranks the highest, because it is the real asset in BAYC Vault and also the value basis of the entire BAYC liquidity pool.
The ERC-1155 tokens—Blind Box and People's BAYC—are middle layer assets that connect existing BAYC and liquidity token hiBAYC in the system. The quantity of these ERC1155 tokens is directly anchored to the quantity of BAYC, and the ETH raised by issuing the Blind Box will be used to acquire BAYC for the treasury. In addition, People's BAYC can be directly exchanged for BAYC. Therefore, these ERC1155 tokens can be considered as ABS of BAYC.
The ERC-20 token, or hiBAYC, ranks lowest in the protocol hierarchy. They are anchored to People's BAYC and Blind Box numbers, but cannot be redeemed directly for BAYC. hiBAYC can be seen as a middle layer asset - the ABS of Blind Box/People's BAYC.
First, users can join public fundraising. After receiving People's BAYC (ie ERC-1155), users can exchange them for smaller hiBAYC (ie ERC-20 tokens) at a ratio of 1:1000.
If the financing is successful, Fracton Protocol will acquire the target NFT (randomly purchased near the floor price) and deposit it in the Ministry of Finance. Then ERC-1155 holders can immediately exchange enough People's BAYC for real BAYC.
Income bis reverse taxation, the switch from low-level tokens to high-level tokens reduces the overall liquidity of the system, and its impact is similar to conflicting monetary policies. The agreement will impose a 0.3% reverse tax on these contract conversions. Specifically, for every 1,000 hiBAYC exchanges, users need to prepare 3 more hiBAYC. Likewise, users need to pay a total of 1003 People's BAYC to redeem one BAYC from the vault. The reverse tax will flow into the treasury and be distributed through DAO governance.
2. GameFi blockchain games
overall review
https://www.coingecko.com/en/categories/gaming?
2. GameFi blockchain games
overall review
Last week, mainstream tokens in the Gaming sector continued to follow the market rebound, but the overall strength was still slightly weaker than ETH, Layer2 and DeFi tokens. The market is currently in the mid-stage of a bear market rebound. In the case of a game of stock funds, the Gaming sector, which lacks new narratives, is obviously not as favored by funds as related sectors that benefit from the merger of Ethereum.
https://twitter.com/VitalikButerin
Ethereum and ENS developer Dean Eigenmann tweeted that from the perspective of gamers, he doesn’t think the metaverse will happen in the current field of VC investment. At the same time, he said that he would rather spend time in “World of Warcraft” than participate in the current "Metaverse garbage" and criticized most VCs for never playing video games.
Vitalik responded to this Twitter, agreeing with Dean Eigenmann's point of view, saying that the "metaverse" may be realized, but he does not think it will be created by companies currently interested in creating a metaverse.
We don’t think it’s necessary to make premature conclusions about emerging concepts such as metaverse and GameFi, because the development cycle of high-quality games is relatively long, and the early projects are mainly blockchain games in the “digging, withdrawing and selling” mode (short life cycle, speculative hype, etc.) Strong), the long-term investment value and playability of existing early game projects are relatively poor. However, as the bubble subsides during the bear market, more opportunities will emerge for potential projects. We will analyze and continue to track new projects in the weekly report.
We recommend planning high-quality new projects after the third quarter, waiting for the next round of hot spots to explode, and focusing on the sustainability of the playability and economic model.
Project of the Week – Mighty Bear Games
On July 26, game studio Mighty Bear Games announced the completion of $10 million in financing through token sales, led by Framework Ventures, Mirana, Sfermion, Spartan, Dune Ventures, Sanctor Capital, Folius Ventures, Polygon, Play Future Fund, Everblue, Ancient8, Ready Player DAO, Razer, Avocado DAO and other institutions participated in the investment. This round of financing will be used to develop its Web3 battle royale game Mighty Action Heroes.
https://venturebeat.com/2022/07/26/mighty-bear-games-raises-10m-for-mighty-action-heroes-web3-game/
Mighty Bear Games was founded in 2016, formerly known as Singapore game studio NonStop Games - the company was acquired by King (Candy Crush developer, acquired by Activision Blizzard in 2015) in 2014, and Nonstop Games was dissolved by King in 2016. The main team members of Mighty Bear Games are from King, Ubisoft, Disney, NVIDIA and other companies, and have operation and project development experience in the field of traditional games. The company has developed multiplayer battle mobile games Butter Royale and Disney Melee Mania.
According to the information disclosed so far, the basic gameplay of "Mighty Action Heroes" may be similar to the mobile game "Brawl Stars" (released by Supercell, the developer of "Royal Clash" at the end of 2018, which once achieved an average monthly turnover of 50 million US dollars. ), and the team members have entrepreneurial experience in game studios and development experience in the same type of Web2 games, and are expected to perform well in terms of gameplay and operation. In addition, investors include Polygon, and the project can obtain support in blockchain technology, community marketing and ecological integration.
3. Infrastructure
We believe that the project is based on a mature team, game mode and technical gameplay, and it is expected that the project will have good competitiveness in the chain game track.
3. Infrastructure
1) Dynamic summary of the public chain
In the encryption market TVL last week, with the market recovery and the good news of ETH, the overall lock-up volume (including staking) of each public chain reached 78.8 billion US dollars, an increase of about 3.3% from the 76.3 billion US dollars at the end of last week;
On August 1st, US digital content producer Terapin Studios announced the completion of US$93 million in financing. This round of financing was participated by Singapore private equity firm Affirma Capital and Korean private equity firm NPX Private Equity. Terapin Studios produces digital content such as web novels and web comics in South Korea, aiming to create immersive experiences in the form of games, metaverses, and NFTs. Terapin Studios said the new funds will be used to acquire adult anime Toomics, one of the top 5 webtoon platforms in South Korea.
4. DAO Decentralized Autonomous Organization
ILUMA
NFT leasing infrastructure reNFT announced the completion of $5 million in strategic financing, led by Mechanism and gumi Cryptos Capital (gCC), Animoca Brands, Gemini, The Sandbox, OpenSea, Sfermion, Morningstar Ventures, EveryRealm, OP Crypto, Longhash Ventures, Fourth Revolution Capital , Metastreet and others participated in the investment. The new financing will be used to accelerate recruitment, integrate more blockchains, expand the product suite, and explore the blockchain game market. It is reported that reNFT’s mortgage-free leasing and lending tools have been launched on Ethereum and Avalanche, and will be released on Polygon and Solana soon.
4. DAO Decentralized Autonomous Organization
ILUMA, a DAO data collection solution, completed a pre-seed financing of US$2.5 million, led by Acrew Capital, with participation from HiveHatch and Orange DAO. ILUMA is built based on the AI operating system, and its core model is to collect and organize key DAO data and build a DAO knowledge base.
The main function of ILUMA is similar to the combination of Notion + Discord + Snapshot, providing DAO organizations with functions such as member login, member management, and task assignment.
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JZL Capital is a professional organization registered overseas, focusing on blockchain ecological research and investment. The founder has rich experience in the industry. He has served as the CEO and executive director of many overseas listed companies, and has led and participated in eToro's global investment.
The team members are from top universities such as University of Chicago, Columbia University, University of Washington, Carnegie Mellon University, University of Illinois at Urbana-Champaign and Nanyang Technological University, and have served Morgan Stanley, Barclays Bank, Ernst & Young, KPMG, HNA Group , Bank of America and other well-known international companies.
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