JZL Capital Blockchain Industry Weekly Report No. 34: Fan tokens soared, Nasdaq fell under pressure
Overview of the week
first level title
- Nasdaq and S&P 500 both snapped a 4-week winning streak on technical corrections, what happens in the last week of August?"merge"merge
1. Industry dynamics last week
Right now, people are choosing sides between PoS and PoW. What opportunities will there be?
1. Industry dynamics last week
This Friday, the Nasdaq peaked and retreated, and the currency market fell accordingly. BTC fell by 8.57% on Friday, which was exactly four times the decline of the Nasdaq. As of the writing date, BTC closed at 21422.4, a 12.65% drop within the week, the largest drop in the past 9 weeks ; ETH also fell below the support level continuously, closing at 1621.36, a drop of 18.28% within the week. This round of crypto market’s rebound driven by stock funds ended with the skyrocketing of fan tokens. Like last year’s MEME coin frenzy, taking advantage of the World Cup approaching, nearly ten Binance club tokens rose this Thursday and Friday. More than 30%, the most exaggerated is SANTOS FC FAN TOKEN, which ranks tenth in the Brazilian First Division, rose 152.9% within a day on Thursday. The leading fan token CHZ is led by a16z, and it has reached a strategic agreement with Binance as early as 2020 The cooperation agreement, the rise of fan tokens this time has a lot to do with Binance’s vigorous publicity. The general flow of funds in this round of rebound is basically: Ethereum→Bitcoin→Layer 2→DeFi→Others→Fan Token. The market may enter a consolidation next week, waiting for more policies to be implemented and the market of the encryption market itself to appear.
There are opponents, of course there are supporters. The most popular Ethereum fork token is EthereumPoW (ETHW). ETHW has released the initial version, disabled the difficulty bomb, adjusted the difficulty of mining, and plans to disable EIP1559 wait. There are also several exchanges such as MEXC, Gate, and Justin Sun’s Poloniex have launched derivatives to support ETHW. Among them, Justin Sun also stated that if the hard fork is successful, Poloniex will donate part of ETHW to community construction. Exchange users can use 1ETH 1:1 to exchange 1ETHS + 1ETHW, where ETHS is the PoS version of the Ethereum token, and ETHW is the PoW version of the hard fork token after the hard fork. If the Ethereum hard fork is successful, the user's ETHS Automatically convert 1:1 to upgraded ETH, and get the PoW token with the largest computing power. If the hard fork of Ethereum fails, users can reverse convert back to the original ETH. However, such actions may cause greater selling pressure for ETHW, and instead smash the PoW version of "Ethereum Classic II". In any case, The Merge will be the general trend. The hard fork tokens face many difficulties, but there are many opportunities for arbitrage. For users with high risk appetite, there is the possibility of arbitrage.
2. Macro and technical analysis
This Friday, the broader market experienced a relatively large decline. The Nasdaq fell 2.01%. The Nasdaq rose 23% all the way in this rebound, and the S&P index also rebounded by nearly 18% in the past 41 trading days. The logic of this round of rebound is to bet that inflation will peak, and the fall in inflation is the hope of slowing down the pace of interest rate hikes. In the process, in addition to the fall in inflation, the yield of U.S. bonds has also fallen, and long-term returns will no longer rise. However, oil prices and U.S. bonds did not crash all the way. Since this week, U.S. bond yields have started to rise again, and oil prices have also rebounded. Correspondingly, the Nasdaq has been under pressure. This is the result of a sensitive game in the market. Hawkish officials, including the Federal Reserve, still insist on raising interest rates sharply. "Eagle King" Bullard expressed his opinion that September is inclined to raise interest rates by 75 basis points. He believes that there is no reason to delay raising interest rates until next year. Pai Daly also thinks that a 75 basis point rate hike is okay. Therefore, next week the market will mainly bet on the interest rate hike tendency before Jackson Hole, and the market may enter a sideways range. Nvidia in the chip sector will release its financial report next week, which is also one of the financial reports that have an important impact on the overall market. Before the financial report, Nvidia ended its rebound and began to fall sharply. It fell 5% on Friday. US stock analysts have lowered their future PE expectations for Nvidia. , This is also related to the decline in the overall demand for the chip industry, which may enter a cycle of slowing performance in the future.
2. Macro and technical analysis
The market fell in response to the hawkish speeches of Fed officials. It is strongly recommended to pay attention to the annual meeting of global central banks. We judge that the overall decline has come to an end for the time being. If Powell’s speech is to raise interest rates by 75bp, then it is expected that the bad news will fall, and the market may have a wave of rebound.
After the release of the minutes of the FOMC meeting in July, BTC fell in response to the hawkish speeches of the Federal Reserve officials, and has now fallen to 21,000 USDT.
Due to the violent rise in the early stage, ETH has also fallen more violently, and has fallen by 20% from the high point.
The speech of the hawks directly caused the Nasdaq index to start to decline without touching the annual line. Pay attention to Powell's speech at the global central bank annual meeting.
U.S. bond interest rate: The 2-year U.S. bond is sideways because the voting committee’s speech is basically hawkish, so it is still sideways, reflecting the expectation of three interest rate hikes of 125bp in the next three years in 2022.
Number of ETH currency holding addresses: The overall number of addresses has increased steadily, and the address area with currency holdings below 100 has entered the market rapidly.
Number of ETH currency holding addresses: The overall number of addresses has increased steadily, and the address area with currency holdings below 100 has entered the market rapidly.
3. Summary of investment and financing
1. Review of investment and financing
3. Summary of investment and financing
1. Review of investment and financing
In terms of specific tracks, the 11 projects on the Web 3.0 & NFTs track (62.8 million US dollars) accounted for nearly 60%, and the Defi track, Infrastructure track and Cefi track completed few financing projects during the reporting period.
Introduction
2. Agency of the Week – B2C2
1) Established in the UK in 2015, B2C2, which is a subsidiary of SBI Financial Services, a wholly-owned subsidiary of Japan's SBI Holdings, is one of the largest cryptocurrency liquidity providers in the industry and a leader in OTC over-the-counter transactions
Acquisition history
2) B2C2 Ltd is the parent company, and according to the client's jurisdiction and business needs, services are provided by wholly-owned subsidiaries established in the United States, the United Kingdom, Japan and Cayman (as shown below);
Acquisition history
1) In July 2020, SBI Financial Service, a wholly-owned subsidiary of SBI Holdings, acquired a small stake in B2C2, and in September of the same year, B2C2 was added to the "VCTRADE Pro" market maker provided by SBI VC Trade, a virtual currency exchange of SBI Holdings ranks;
2) In December 2020, B2C2 submitted the change of actual controller to Company House. UK, and SBI Holdings, Inc became the actual controller of B2C2 with more than 75% of the equity;
3) After the completion of this acquisition, B2C2 will become a cryptocurrency-focused department of SBI Holdings Inc., helping B2C2 to consolidate and improve its position in the global liquidity market and expand SBI's influence in the encryption field;
4) In the Crypto Trading Report released by PWC in 2022, B2C2 beat Genesis Trading, Jump Trading and other institutions, and was selected as the most popular OCT DESK for institutional clients in 2021.
Business structure
1) Background: London is one of the largest financial markets in the world, with the largest foreign exchange and commodity trading scale in the world, which has promoted the rapid development of the market maker system in the UK. Wintermute, GSR and B2C2 were all established in the UK;
2) B2C2 mainly does two businesses, namely digital currency bulk trading and market making business. Additionally, B2C2 started over a year ago to complement its significant spot trading business:
a) Provide transaction execution services for alpha-focused institutions such as hedge funds;
b) Provide basic services for companies such as crypto miners, enterprises and wealth management companies that need to hedge risk and cash flow, or design more complex products for them;
c) Provide British customers with Contract for Difference (CFDs) products through its FCA-regulated B2C2 OTC Ltd. This product predicts the rise and fall of cryptocurrency prices and uses leverage to make high-risk investments to earn potential net profits.
business planning
With the entry of SBI Holding Inc., and the joining of CEO of US, Nicola White, B2C2 is gradually expanding into traditional business fields while consolidating its position as a leading market maker in the encryption field:
b) Join the International Swaps and Derivatives Association (ISDA), the Futures Industry Association (FIA), etc.;
Risks and Measures
c) Nicola White stated at the annual meeting of the International Swaps and Derivatives Association held in Madrid in May this year that "B2C2 is considering applying for a SWAP DEALER license in the United States to further expand into the traditional swap trading field."
Risks and Measures
1) Liquidity risk
a) maintain sufficient balances to meet payment and business operating needs;
b) Use internal margin tools to coordinate positions and margin ratios.
2) Foreign exchange risk
a) Hedging by matching assets with liabilities and holding offsetting currency exposures
3) Credit risk
a) Avoid cooperation with unregulated exchanges and monitor risk exposure in real time
Core member
Core member
The founder team has a "development" + "transaction" background, and the management team comes from well-known Wall Street investment banks and the Big Four accounting firms.
team composition
The founder team has a "development" + "transaction" background, and the management team comes from well-known Wall Street investment banks and the Big Four accounting firms.
1) Combined with the income scale of B2C2 in the past three years (the income in 2021 is 64.5 million pounds, an increase of 270% compared with 2020), the IT team has always maintained a relatively high staff composition (13-15 people), even if the main business income is insufficient 8 million pounds in 2019, the Trader & IT ratio reached 1: 6.5;
portfolio
2) Sales & Op and Traders gradually expand with business expansion, including 11 Sales & Op teams and 8 Traders teams;
portfolio
2) LGO Exchange: LGO and Voyager will merge their services and products under the Voyager brand, bringing Voyager's brokerage services to Europe. At the same time, European customers will be able to use the European LGO regulatory settings to access Voyage to achieve full coverage of the United States and Europe. Retail cryptocurrency investors, providing them with a premium experience. Update: Voyager Digital has applied to the U.S. Bankruptcy Court for the Southern District of New York in early July to initiate bankruptcy protection procedures due to its involvement in the 3AC thunderstorm incident (involving USD 500 million in stablecoin USDC and 15,250 Bitcoin, accumulatively exceeding USD 650 million). .
4. Encrypted ecological tracking
1.NFTs
1) Market overview
1) Market overview
2) Dynamic focus
Last week, the NFT market as a whole showed a downward trend in terms of market value, trading volume and blue chip index. As the benefits of ETH gradually exhausted and the downward channel opened again, the NFT market may also face the liquidation problem of loans.
2) Dynamic focus
On August 16, the floor price of Tiffany's NFT "NFTiff" has risen sharply recently and hit a record high of 60 ETH on August 13, a 100% increase from the issue price. It reached 28.13 million US dollars, with a total transaction value of 3.56 million US dollars.
3) Key investment
On August 16, Tencent Magic Core issued an official announcement, saying that it will make business adjustments based on the company's focus on core strategy considerations. From August 16, 2022, Magic Core will stop issuing digital collections. At the same time, all users who have purchased digital collections through its platform can choose to continue to hold or initiate a refund application. It is understood that the platform has sold a total of 80 million yuan of digital collections.
3) Key investment
Fractional, an NFT fragmentation protocol, announced that it has changed its name to Tessera and completed a $20 million Series A round of financing led by Paradigm, with participation from Uniswap Labs Ventures, Focus Labs, eGirl Capital, and Yunt Capital. With the imminent launch of the V2 protocol, the newly rebranded Tessera will provide users with an NFT representing their ownership share of the more valuable NFT they purchased.
In a decentralized way, users can create Vaults and release corresponding tokens to create liquidity for the NFTs they put in, but once released, they can only redeem them after they have all the tokens.
The introduction of Simeji App is the most popular smartphone keyboard in Japan, the largest emoji community in the world, and the most popular app among Japanese Generation Z. Most of the users of Simeji are post-95s and post-00s. They have a keen sense of fashion and are leading the popularity of the Internet in Japan. wind vane.
2. GameFi blockchain games
1) Overall review
https://www.coingecko.com/en/categories/gaming
2. GameFi blockchain games
1) Overall review
This week, the mainstream tokens in the Gaming sector, led by ETH, followed the overall market decline. However, the decline was relatively average compared with the public chain, DeFi and other sectors. Except for fan tokens, which bucked the trend and rose against the trend, the rest of the sectors all fell by about 20%.
2) Project of the week - Spire Animation Studios
Game and film studio Spire Animation Studios announced the completion of a new round of financing, invested by Temasek and Ericsenz Capital, with an undisclosed amount of financing. Previously, Spire Animation Studios had completed $20 million in financing from Epic Games and Connect Ventures. The company is also one of the first projects in Unreal Shorts, an Epic Games funding program.
It is reported that in addition to expanding the team and infrastructure, this round of financing will be used to develop high-quality animated feature films with metaverse potential. Spire will create an immersive world built on an interactive platform that will allow fans and viewers to engage with it personally. The feature films will feature both linear and non-linear narratives, allowing audiences to interact with the characters and stories in the films before, during and after release. The film will be created using Epic's Unreal Engine, an interactive technology in which projects in development include the animated feature films "Trouble" and "Century Goddess."
Spire Animation Studios is likely to issue NFTs in the future.
3. Infrastructure infrastructure:
1) Market overview
3. Infrastructure infrastructure:
1) Market overview
Last week, the TVL of various public chains rose and fell, and the overall lock-up volume (including staking) was 70.5 billion US dollars, which was 11% lower than last week.
On August 19, Helium developer Nova Labs announced the acquisition of open source 5G company FreedomFi. Nova Chief Executive Amir Haleem declined to disclose the purchase price. It is reported that FreedomFi is the sole manufacturer and long-term partner of the decentralized wireless communication network Helium 5G gateway. The gateway host can conduct HNT mining by providing 5G cellular coverage. As previously reported, FreedomFi raised $9.5 million from Qualcomm and Samsung in March.
4. DAO Decentralized Autonomous Organization
MatchboxDAO
On August 18, Love Health, a Web3 digital medical start-up company, announced that it has completed a financing of US$7.5 million at a valuation of US$180 million. The investors are Human Capital and MaC Venture Capital. According to the company's disclosure on LinkedIn, the team will launch the decentralized organization Love DAO and issue Love Token in December 2022, aiming to empower the community, fund medical trials to develop voting-based treatment solutions, and aim to integrate traditional medical Healthcare and Web3 innovation come together. It is reported that the company has already purchased some "brand protection" domain names, such as Love.xyz and Love.co.
https://twitter.com/matchbox_dao/status/1559981618881646592
4. DAO Decentralized Autonomous Organization
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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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