JZL Capital Weekly Report No. 41: The market is consolidating at a low level, outperforming US stocks
1. Last week's industry trends:
This week, the encryption market continued to outperform the U.S. stock market. Although the overall trend is similar, compared with the U.S. stock market that jumped on Wednesday and dived on Friday, the crypto market is more in a consolidation phase with lower volatility. As of writing, Bitcoin closed at 19500.5, up 1.86% for the week. Ethereum fared slightly better, closing at 1323.25, up 2.3% on the week. The biggest news in the crypto market this week is the major hacking incident that happened on BNB Chain. Hackers used the BNB Chain bridge vulnerability to obtain 2 million BNB in two times, with a total amount of nearly 600 million US dollars. Calling up the node operator one by one to temporarily stop the node from producing blocks. The hacker then lent 900,000 BNB of nearly 140 million stable currency assets on BSC’s lending agreement Venus and transferred it to other public chains. The remaining 1.02 million BNB in the current account is marked as a “hacker account”. This incident has dealt a certain blow to BNB, and there have been criticisms of the centralization of the BNB chain in the industry, but this time the BNB chain’s performance in processing event speed and the maintenance of token prices have also saved part of the BNB chain. Loss and face.
In addition, there is a faint sign of a favorable update for Ethereum in the near future, that is, EIP-4844 mentioned by Vitalik on twitter last week. EIP-4844 is an important upgrade that will introduce proto-danksharding, that is, before Preliminary version of the danksharding mentioned in the weekly report. It changes the data standard from calldata to blob, which can achieve a hundred-fold increase in capacity, greatly reduce the cost of storing call data on the chain, and improve the ability of Ethereum as a data availability layer.
The biggest beneficiary of this upgrade will be L2, as call data storage is undoubtedly the biggest contributor to its cost structure. By reducing the cost of storing data on-chain, EIP-4844, if successfully implemented, will reduce gas costs on these networks by orders of magnitude and increase the use of L2 and improve the ability to migrate liquidity to L2. The plan in June this year is that EIP-4844 will be launched at the end of 2022. With the recent discussion on this improvement intensified, we may hope to witness the real performance improvement after the merge of Ethereum at the end of the year.
2. Macro and technical analysis:
2. Macro and technical analysis:
The market experienced a small rebound under calls from all parties to ease the interest rate hike, but we judge that the downward trend will not change, and the downward trend will still be the main one.
Although BTC rebounded to nearly 20,000USDT, it is still weak.
ETH has the same trend as BTC, but it is likely to be weaker than BTC.
The two-year U.S. debt is still high and sideways, suggesting that interest rates still need to be raised by 125bp this year.
Nasdaq regained 11,000 points after rebounding, but it is still in a downward trend, and the market will fall below 10,000 points in a sideways and downward manner.
1. Arh999: 0.34, the cost performance is already in a relatively good position, and regular investment can be made.
2. MVRV: 0.92, relatively high cost performance
Number of BTC addresses: The number of addresses holding 100-1000 coins decreased, and the rest remained stable.
1. Review of investment and financing
3. Summary of investment and financing:
1. Review of investment and financing
During the reporting period, the number of financing and projects were relatively sluggish. There were 15 investment and financing events disclosed (down 51% month-on-month), and financing was about US$167 million (down 42.61% month-on-month);
In terms of specific tracks, Web 3.0 & NFTs ranked first in the number of financing projects and total scale with 10 projects totaling US$136 million, and far ahead of other tracks;
According to Crunchbase data, due to the continued fluctuations in the macro environment and the continued downturn in the encryption market, the financing scale of Web3 and blockchain companies has dropped by 50% from the previous quarter, that is, from US$6.6 billion in the second quarter of 2022 to US$3.3 billion Dollar;
The largest crypto project financing in the third quarter was Mysten Labs completed a $300 million Series B financing at a valuation of more than $2 billion at the end of September to build a Layer 1 public chain Sui that can challenge the POS mechanism of Ethereum and Solana;
1) Market overview
2. Current Situation of the Organization
4. Encrypted ecological tracking:
1.NFTs
1) Market overview
This week, the NFT blue chip index ushered in a rebound in the middle of the week. As of 14:00 on October 9, the blue chip index continued to climb from the downturn in the previous two weeks, but the overall market was still at a low point.
This week, the total market value of the NFT market increased by 3.39% year-on-year, and the total transaction volume decreased by 16.21% year-on-year. NFT transaction volume continued to remain sluggish, but the market showed an upward trend compared with last month.
Holders/traders in the NFT market were active this week, buyers increased by 6.57% compared to last week, and the overall number is gradually picking up.
The top three NFTs with the highest trading volume in the market this week are ENS, RENGA, and BAYC.
2) Dynamic focus
NFT project VeeFriends launches physical toys
VeeFriends, an NFT project created by well-known investor Gary Vaynerchuk, will launch physical plush and plastic toys on October 17 and put them on shelves at Macy's and toy retailer Toys R Us. The toys on the shelves are designed by the start-up company Toikido based on the 10 VeeFriends middle characters in the VeeFriends series, such as peacock, wizard, and panda.
Yuga Labs announces the establishment of the BAYC Community Council (BAYC Community Council)
Bored Ape Yacht Club (BAYC) forms its first community council and appoints seven council members based on merit. The seven new community council members are: Josh Ong, Sera, Laura Rod, 0xEthan, 0xWave, Negi and Peter Fang. The main responsibilities of the community council will be to collect information and feedback from the BAYC and MAYC communities, and to conduct business cooperation discussions with the BAYC team.
ASUS builds Metaverse Company and launches "Cross-Border Application NFT Platform"
The multinational technology company ASUS established "ASUS Metaverse Co., Ltd." to integrate the group's cloud computing, artificial intelligence, blockchain and other resources, and launched the "cross-border application NFT platform", through art, photography, fashion, audio-visual and games. Content and IP allow more people to create personalized characters and spaces through NFT in the metaverse, and to own fantasy collectibles.
Asustek entered the Metaverse platform this time to enter the Metaverse track and enter IP first. This time, the NFT platform mainly focuses on "Art Black Hole". universe.
3) Key projects
Street Machine NFT
Street Machine is a story-based NFT created by a team led by a former PUBG art designer. The project is mainly designed by SpenzerG601, who has participated in PUBG, King of Glory, Venom 2 and other projects.
Street Machine NFT takes animation as the theme, and strives to create a large-scale NFT world view that is rarely developed in NFT projects by building characters, stories, and other aspects. The project also received a lot of attention on Twitter
Street Machine starts on October 8, 2022 and ends with full mint. And its trading volume reached the top of the Open Sea platform within a few hours.
The NFT of Street Machine is an NFT blind box mint by the user on the project’s official website, and after its production team completes the post-production work, each user’s blind box will be revealed at a specific time.
overall review
2. GameFi blockchain games
overall review
This week, the mainstream tokens in the Gaming sector fluctuated less, and there is no big difference compared with the overall market.
According to Coingecko data, the market value of IMX has fluctuated greatly, mainly because Coingecko will soon unlock (November 5) about 250 million tokens (12.7% of the total, 6.7% are project parties, and 6% are private equity investors). Into circulation, leading to a huge increase in Market Cap. Co-founder Robbie Ferguson tweeted that the unlocked part of the project party will be re-locked for one year, and its private equity investors will hold it for a long time instead of short-term selling. Even so, the price of IMX was still affected by the potential selling pressure, and the decline exceeded the market average.
Item of the Week – Mythical Games
Web3 game developer Mythical Games announced the establishment of the Mythos Foundation to support its blockchain game ecology and development. Advisors to the foundation include Yat Siu, chairman of Animoca Brands, Pete Hawley, chief product officer of 100 Thieves, Jaci Hays, chief corporate alliance officer of FaZe Clan, Adam Bain, former chief operating officer of Twitter, and others.
The Mythos Foundation will also be responsible for the operation of the Mythos DAO. The initial members of the DAO are mainly game companies and teams, including Krafton, Ubisoft, Animoca Brands, FaZe Clan, Gen.G, etc. The organization will be committed to expanding the multi-chain game ecosystem, developing next-generation game NFTs, supporting game guilds and communities, and introducing more traditional game manufacturers and players into web3, etc.
Mythos DAO will issue the token $MYTH. In addition to being the governance token of DAO, it will also be used as the general token of its NFT marketplace, and will serve as the accounting unit and transaction support for future games and ecology.
1) Market overview
3. Infrastructure construction
1) Market overview
As of October 9, the overall lock-up volume (including staking) of each public chain has not changed significantly, and the ranking of the top five public chains has not changed
2) Cosmos ecology
After the release of the Cosmos 2.0 white paper, the Cosmos Hub community initiated Proposal 77, seeking financial support for 20,000 ATOMs (approximately $260,000) from the community for its Interchain Security (ICS) testnet, 50% of which will be used to motivate Cosmos Hub validators , 50% is used to reward developers who find bugs and develop new functions in the test network. The testnet is expected to be launched in November. Once the test is completed, the milestone function of ICS will be officially registered in the Cosmos ecosystem (expected in early 2023). At that time, it will be easier for developers to deploy application chains in the ecosystem, share the verification nodes and security guarantees of Cosmos Hub by paying, and reduce the cost of project startup.
Circle announced that it will launch a native USDC stablecoin in the Cosmos ecosystem. This move will improve the current lack of stablecoins in the ecosystem, help the development of DeFi applications in the ecosystem, and improve composability.
According to The Block, North Island Ventures, a cryptocurrency fund, announced that it has completed the second fundraising of US$125 million, focusing on investing in the Cosmos ecosystem. Travis Scher, co-founder of the fund, said that he is optimistic about the functions of IBC and ICS, and believes that the Cosmos ecology has a good momentum of development.
Although the Cosmos ecology has been positive recently, after the release of the Cosmos 2.0 white paper, the price of the token ATOM fell below the upward trend and fell into a sideways market. On the one hand, it is beneficial to the impact of exhaustion, and on the other hand, it is due to the short-term high inflation caused by the revision of the token economy (see the 40th weekly report for details). In the case of the Fed’s continued interest rate hikes and the market has not yet bottomed out, at this stage it may Not a good time to enter.
3) Key investment
Web3 hospitality platform Blackbird has completed an $11 million seed round led by Union Square Ventures, Shine Capital and Multicoin Capital.
Blackbird is a Web3 platform purpose-built for the tourism and hospitality industry, creating a direct connection between restaurants and guests through loyalty and membership services.
Blackbird founder Ben Leventhal previously co-founded food site Eater and restaurant reservation platform Resy. Eater was acquired by Vox Media in 2013 and Resy was acquired by American Express in 2019. Union Square Ventures co-founder Fred Wilson will join the board, Leventhal said. Blackbird's minimum viable product (MVP) could launch in the first half of 2023.
A comment from USV is very interesting, and also shows why Blackbird can raise more than the market average seed round in the bear market: "At USV, we are looking for applications that can bring hundreds of millions of users to web3.As great as web3's decentralized finance and digital art applications are, they're unlikely to bring my mom or your mom to web3. One area where we've been looking for mainstream adoption is web3's loyalty programs. Over the past fifty years, the use of "points" has made credit cards a source of great value for consumers. Web3 has the opportunity to make "points" more fluid, more interoperable, and more valuable to consumers. "
Golden completed a $40 million Series B round of financing, bringing its total funding to date to $60 million. This round of financing was led by a16z, with participation from Opensea, Solana co-founder Raj Gokal, Dropbox co-founder Arash Ferdowsi, Postmates founder Bastian Lehmann, and Muse lead singer Matt Bellamy. The new funds will be used to build a Web3 data platform, which is currently in the test network stage and is expected to be launched on the main network in the second quarter of 2023. After this investment, in addition to Marc Andreessen, another general partner of a16z, Ali Yahya, also became a member of the board of directors of Golden.
Jude Gomila is the CEO and founder of Golden. He graduated from Cambridge University with an engineering degree. He was the co-founder of Heyzap (a mobile network advertising service platform) from 2009 to 2016. This company was acquired by the listed company Fyber GmbH in 2016 for 4500 million dollar acquisition.
Simply put, the Golden Protocol is a Web3 dynamic Wiki consensus system that economically rewards participants who build a decentralized, permissionless authoritative knowledge graph. As a game-theoretic system, it is designed to provide incentives for agents (individual humans, artificial intelligence, or people utilizing artificial intelligence) to converge towards the truth. It provides economic rewards for correct data and disincentives for incorrect data. Institutions that use data and pay for it provide a direct feedback loop to converge on the right data, and dynamic market pricing.
Golden is building canonical public data nfts for every "real world" entity in the protocol (eg "Ali Yahya"). This allows for the construction of common canonical data sets, while also inhibiting the generation of duplicates (a common problem in knowledge graph construction). These canonical data NFTs have additional revenue sharing rights for the use of compiled and verified data. Data builders get most of the revenue when business users consume the data. This fractional revenue share incentivizes data producers to add the most commercially valuable data to the graph first.
4. DAO Decentralized Autonomous Organization
4. DAO Decentralized Autonomous Organization
1) Project introduction
History dao is a protocol that supports users to publish moments (news/opinions/events, etc.) by themselves and mint them into NFT. The original intention of the establishment of the project is to break the current situation of limited expression of the existing centralized news media, so that real information can be expressed, recorded and viewed.
2) Platform functions
1.mint
Two types of mint can be performed, single moments and series moments (not yet available).
At present, the mint of single moments on Ethereum exceeds 200+, and the mint on BSC exceeds 800+. The price of a single mint is 0.01ETH, and a total of more than 10ETH has been raised for the treasury so far.
series is the concept of "Initial NFT Offering" mentioned in the white paper. Any user can provide a theme for the NFT collection, and this NFT can be built with other community members. For example, the NBA officially created an NBA game ten For the Jiaqiu series, users can upload their own videos/pictures, etc., and then package them into an NFT.
2.market
Similar to other NFT exchanges, it can be bought and sold in the market, but currently there is almost no liquidity in the NFT market. Following the issuance of tokens on October 10, the white paper stated that the project party will provide certain tokens to motivate creators and maintain NFT prices, so you can continue to pay attention.
3) Team background
The team members have excellent backgrounds. CEO Skyler was once the marketing director of ByteDance North America, and Russ, the art director, was once the design director of 4A advertising company. He has more experience in building the brand volume of the project.
Kevin Kelly has been invited to participate in the project's publicity activities many times to conduct in-depth discussions on the themes of artificial intelligence, NFT and history. The project connected with Kevin Kelly again on October 6 as the last publicity before the project's IEO.
According to the public information on the Internet, HistoryDAO has completed several rounds of financing, and the investors behind it include Chain Capital, Consensus Lab and other large institutions in the encryption circle.
4) Economic model
1 billion HAO tokens, with a hard cap and no destruction mechanism;
Distribution:
15% allocated to the developer team
10% private sale
10% public sale ($0.01)
15% is used as a market liquidity reserve (actually also belongs to the national treasury)
20% goes to the national treasury (20 million will be unlocked on the same day, and the remaining 3 million will be unlocked every month)
10% Incentivize the community to verify the authenticity of the information
10% is market incentive budget
10% for airdrop (rewarding users who have interacted in the early stage, OAT has been issued to users who have met the requirements before, and then a news was released on October 7 that a snapshot will be taken, and the first wave of airdrops of 20 million tokens will be carried out)
The basis of governance (proposals, comments, and voting all need to hold tokens)
In the market, HAO can be used for NFT transactions, and the market only charges 1.5% of the handling fee (2% for other currencies)
Since 0.01ETH of an nft per mint will enter the treasury, there may also be token repurchases through eth
supply:
need:
5) Summary - I am not optimistic about the currency price in the short term, but I am optimistic about the project in the long term
The project itself: rare positioning (clear stream, decentralized record history), lack of content ecology at the current stage (less KOL users, and ordinary UGC content is uneven, it is difficult to form a flywheel effect of high-quality content), real-world content records are better than PFP Can reach a large number of users
Project endorsement: excellent team background and high investment + big capital background + Kevin Kelley big IP endorsement
NFT perspective: The quality of mint NFT uploaded by UGC is uneven, and it is difficult to attract liquidity, but in the future, if you find a free press KOL to settle in, it may make NFT prices and users enter a positive flywheel
Token perspective: on October 10, Huobi and Gate will be listed directly. There is a large initial selling pressure on the supply side, and there is no strong consumption scenario on the demand side. We are not optimistic about the short-term price.
5. JZL team news:
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about Us
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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