JZL Capital Industry Weekly Report No. 43: The volatility of the market continues to converge, and Aptos sets off a wave of new public chains

1. Summary of Industry Dynamics

The volatility of the crypto market continued to converge this week. The volatility of Bitcoin did not exceed 3% throughout the week except for Monday, and occasionally there will be a downward pin phenomenon. Moreover, the encryption market did not follow up with the sharp rise in U.S. stocks on Friday, but continued to fluctuate within a narrow range from Friday to the weekend. As of writing, Bitcoin closed at $19,195.6, up 0.20% during the week, with a swing of 5.53%; Ethereum closed at $1,314.73, up 2.22% during the week, with a swing of 7%. However, the performance of most Altcoins is not as strong as that of Bitcoin and Ethereum. Under the current market weakness, mainstream public chains such as ADA, SOL, and DOT all have a decline of about 5%, and the possibility of a downward trend in the future is still relatively large. However, the decline of Polkadot this week may be more related to its founder and one of the founders of Ethereum, Gavin Wood, who announced his resignation as CEO of Parity Technologies, the development team behind Polkadot. Parity Technology was established by Gavin in 2015. A company that develops open source software for the blockchain network was established in the early days to build the Ethereum ecosystem. Later, its core responsibility was to serve as the core technical support for Polkadot. The Substrate language used by the Polkadot mainnet was also created by Parity. Gavin said that the role of CEO has never been what he wanted, and he will still maintain the role of chief architect and major shareholder. The new CEO will be held by another Lianchuang Wagner, but it is expected that it will not affect Polkadot's overall strategy. big impact.

Another big news this week is that Aptos Network, a star public chain project that has raised $350 million in financing, announced on twitter the launch of the mainnet and the release of the first version of the token economy. APT. Aptos was founded by Avery Ching, the main person in charge of the Diem Project, a former Facebook blockchain project. It focuses on Layer 1 public chain projects that use the Move language as the foundation and expand through multi-threading. In the early stage, there are only about 20 TPS. The Move project with a similar background includes Sui, Linera and OL. The Move language with multi-threaded expansion method may also become the narrative method of the next-generation layer 1 public chain. More information about Aptos will be introduced in the fourth part of the encryption ecological tracking.

On the other hand, the U.S. stock market performed mediocre from Monday to Thursday this week, and it actually ushered in a big rise on Friday. Is this rise another one-day trip, or is a big counterattack imminent? At present, the Nasdaq is still struggling at the support level of 10565 points. After hitting a new annual low last week, it turned up again on Friday. From the chart, the Nasdaq is close to the 250-week moving average and the 10,000-point integer. The last time the Nasdaq fell below the 250-week moving average was in 2008, and Friday's rebound should be just a technical rebound.

The November interest rate meeting has already given expectations in the market, and the probability of 75 basis points is as high as 95%. However, the probability of raising interest rates by 75 basis points in December has dropped slightly from 69% to 45.6%. Discussions have also gradually surfaced. Some Fed officials said they hope to slow down the pace of interest rate hikes as soon as possible. San Francisco Fed President Daly spoke publicly on Friday. During this period, it is basically in line with the 4.6% interest rate peak framed by the last interest rate meeting. Daly said that the rate hike can be reduced. Another point of concern is the exchange rate of the US dollar. The tone of the current interest rate hike has been relaxed. The strength of the US dollar may come to an end after the expectation of interest rate hikes fades. After all, the US dollar has reached a historical high against other non-US currencies. Once the US dollar falls, The inflationary advantage brought by the current exchange rate to imported goods no longer exists, and the discount of import discounts becomes smaller, so the price of imported goods in the United States will rise again. If inflation has not been completely eradicated and the dollar weakens, the Fed will easily resume Facing out-of-control inflation, Powell's attitude after the November interest rate meeting has a strong guiding effect on the dollar exchange rate, US treasury bonds and the stock market, and may become the biggest variable at the end of the year.

2. Macro and technical analysis

The market is still in a sideways state, and the overall direction still has not been chosen. The high probability of choosing the direction is the time when the Fed raises interest rates.

BTC has been oscillating sideways for 4 months, and it is in a state of convergence as a whole. There is a high probability that the direction will be determined in the future. If the market chooses to fall, you can take advantage of the trend to go short, and if the market chooses to go up, you can go long. At present, it is more likely to go down.

The two-year U.S. bond hit as high as 4.65%, suggesting that interest rates still need to be raised by 150bp this year.

After the Nasdaq rebounded, it immediately fell back to the original point the next day.

1. Arh999: 0.68, average cost performance.

2. MVRV: 0.90, cost performance is the same as Arh999

Number of BTC addresses: The number of addresses holding more than 100 coins began to decline, and the rest remained stable.

The number of ETH holding addresses: After a wave of selling pressure, it has returned to stability

3. Summary of investment and financing

1) Investment and financing review

• During the reporting period, the number of financing and projects were relatively sluggish. There were 17 investment and financing events disclosed (down 43% month-on-month), and financing was about 127 million US dollars (down 73.64% month-on-month);

• In terms of the specific track, Web 3.0 & NFTs are leading in the number of financing projects and financing scale. Since Blockchain.com did not disclose the strategic financing scale of this round, the figure below does not reflect the financing scale of the Cefi track;

  

• During the reporting period, there was no project with a financing scale of more than US$100 million, and Blockchain.com was the most exposed institution during the reporting period. Whether it completed the investment led by Kingsway Capital, the existing investor Lightspeed Venture Partners participated in the investment The undisclosed scale of strategic financing; or in-principle approval in Singapore (Digital payment token service provider), recognized in capital guarantee and business compliance. If approved, Blockchain.com will become the 18th approved institution (more than 180 institutions have applied for it), and can provide payment digital currency trading business and set up digital currency trading platforms in Singapore in compliance with regulations;

• In the PSA (Payment Service Act) issued by MAS, a total of 7 types of payment services and 3 types of licenses are listed, and the corresponding business of digital currency exchange is F business Digital payment token service (payment digital currency service).

2) Current situation of the organization

4. Encrypted ecological tracking

1. NFTs

(1) Market overview:

This week's NFT blue-chip index is still dull. As of October 23, the blue-chip index was slightly stable compared with last week, and there were no major changes, and the market sentiment was still low. Among them, there was a wave of rare fluctuations on October 21, which may be caused by excessive transaction quotas.

This week, the total market value of the NFT market decreased by 0.14% year-on-year, and the total transaction volume decreased by 1.07% year-on-year. This week, the transactions on the NFT platform are quite stable and there is not much change. The reason may be that there are no major projects launched recently and most holders will not sell their NFT.

This week, the activity of holders/traders in the NFT market increased slightly. Buyers increased by 3.32% compared to last week, and sellers increased by 3.71% year-on-year. This verifies the conservative attitude of firm holders and does not do large-scale transactions idea.

The top three NFTs in terms of market trading volume this week are BAYC, Azuki, and Cryptopunks.

(2) Dynamic focus:

• Lamborghini and NFT PRO released a new series of NFT

  Lamborghini's "World Tour" theme event has now released two NFT series, and this NFT project is cast around Lamborghini's "Epic World Tour" event. The price of the NFT released this time is 196.3 US dollars, and the number of releases is 1963, to commemorate the establishment of the Lamborghini Automobile Foundation in 1963.

• Roofstock Announces Sale of First Real Estate NFT

  Roofstock announced this week that they have successfully sold an NFT with actual real estate as the actual equity on the NFT market. The NFT is managed by Origin Protocol and sold on the Roofstock NFT market. The sale price is reported to be 175,000 US dollars , This NFT transaction means that real estate can also be sold and traded in the form of NFT in the future.

  This real estate project is mainly to reduce the intermediate delivery process and transfer the ownership of the house in the form of Home OnChain. Its core logic is to transfer identities on the chain through Ethereum technology, and complete transactions simply and quickly. I think the responsibilities of the Housing Management Bureau may have been supervised and audited before the real estate ownership of the house was chained in the early stage.

• STRMNFT Platform Announces Creator Program

  The NFT platform STRMNFT recently announced the platform creator plan, which is open to creators all over the world. STRMNFT will provide a large amount of publicity exposure in the community and platform for the creators who settle in. STRMNFT will send and cultivate more high-quality creators to the community through publicity and distribution channels within the plan to enrich the community and platform content.

(3) Key projects:

• Nyolings

Nyolings is an NFT project initiated by MOXXY as the main creator. The project was launched in October and has gained high market recognition because of its cute shape.

The sale of Nyolings was very successful this time. The project party sold 7,777 NFTs, and the public sale price of mint was 0.03 ETH, which was released in the form of Dutch auction. At present, all 7,777 NFTs have been sold to the public.

At present, Nyolings' project has no idea of ​​further expanding into a huge world view, and there is no plan to land in the metaverse. The project is still in the basic PFP avatar stage, and no future plans have been publicly disclosed.

The current floor price of the Nyolings project is 0.153 ETH, and its trading volume ranks sixth among all projects within a week, which is one of the projects that the market has recently recognized very much.

2. GameFi blockchain games

overall review

• This week, mainstream tokens in the Gaming sector have fallen sharply, significantly more than BTC, ETH and mainstream tokens, and the market value ranking of tokens has dropped significantly. Among them, affected by the upcoming large amount of unlocking, AXS and IMX fell the most.

Item of the Week –Stardust

• Stardust, a blockchain game infrastructure and developer tools project, completed a $30 million Series A round this week, led by Framework Ventures, with participation from Acrew Capital, Blockchain Capital, and Distributed Global.

• Stardust mainly provides related tools such as blockchain and NFT for game developers, so that developers can focus on the development of the game itself. Developers can use Stardust API to integrate into their games through very simple code NFT, wallet. Many blockchain game developers usually need to spend a lot of time on building blockchain technology, and Stardust can help save these development time.

• The Founder & CEO of Stardust is Canaan Linder, who graduated from CMU and worked as a software development engineer at Bloomberg. He founded Stardust in 2018.

• Framework Ventures, the leading investment agency, believes that Stardust will become the core infrastructure of the chain game track, and its status will be similar to Chainlink in the DeFi field. They believe that in the Crypto industry, whenever a new track emerges, it is a wise choice to invest in the infrastructure of that track. It is expected that large-scale Web2 game talent will shift to Web3 in the future, and Stardust can help this transition.

1) Market overview

1) Market overview

• As of October 23, the overall lock-up volume (including staking) of all public chains denominated in US dollars was basically the same as that of the same period last week, and fluctuated within a narrow range during the week. The ranking of the top five public chains has not changed.

2）Aptos

• Review of the entire process of $APT listing

On October 19, the mainnet of the new public chain Aptos, which has received much attention, was launched, and it was launched on major exchanges at the same time.

Before listing:

On the morning of October 18th, Aptos officially announced that major exchanges will launch $APT at 9:00 the next day, but at this time Aptos has not yet announced the token model, which caused controversy in the community, and officially closed the comment functions of Discord and Telegram. Conspiracy theories ferment on Twitter.

At 3:37 pm on October 18th, Aptos released the first version of the token model, which did not announce the airdrop, which led to complaints from KOL groups who interacted with domestic and foreign encryption circles, and further triggered a collective reaction to the token listing the next day. Bearish.

At 7:00 on October 19th, 2 hours before the official listing, Aptos announced that it will distribute about 20 million APT token airdrops to users who have completed the Aptos incentive testnet application or minted APTOS:ZERO testnet NFT. The overall airdrop threshold is low, the amount of airdrops is large, and the tone of the KOL group has changed drastically. They have praised Aptos for being friendly to the community, which has brought the topic volume of Aptos to a higher level, and led to a large number of fomos of users who have not interacted with the Aptos ecosystem, and indirectly a large number of Aptos Ecological applications have been drained.

After listing:

When $APT was launched on Binance, the price once soared to $100, and then quickly fell back to around $7. It is reported that Aptos Labs asked the exchange not to list the APT perpetual contract within two weeks after the launch of the token, but Binance quickly launched the perpetual contract on the day when the spot trading pair was launched, and major exchanges followed suit.

In terms of price trend, similar to ETHW, which has attracted much attention in the early stage, after the initial airdrop selling pressure, hype funds began to enter the market with hot spots, bringing a wave of gains. After getting out of the converging state, $APT rose by more than 30% at one time, reaching a maximum of about $10.

In the current bear market stage, there is a serious lack of hotspots. Even though the project continues to be controversial, $APT still has a sharp increase. At this stage, $APT is less in circulation. According to the official token economy, there will be no large amount of unlocking within one year, and the additional issuance is mainly for node pledge rewards (annual inflation is about 7%). In this case, expect secondary hype.

• Aptos Fundamental Analysis

Technical realization:

As the Move language public chain that has attracted much attention, Aptos has chosen 16 threads for parallel processing, which has a high number of transactions per second, but the overall requirements for node hardware are also high, and the number of nodes that meet the requirements has decreased, sacrificing Partial decentralization and security. The indicators comparing Solana, ETH, and Sui are as follows:

Token economy:

The initial total supply of APT is 1 billion pieces, of which 51.02% is allocated to the community, 19.00% to core contributors, 16.50% to the foundation, and 13.48% to investors.

From the launch of the mainnet, all investors and core contributors have a 4-year lock-up period, fully locked in the first year, and unlocked month by month in the second year. Over 82% of tokens on the network are currently staked. The estimated token supply schedule is as follows:

Application ecology:

The Aptos ecosystem has more than 160 projects in development and testing in just 8 months. Among them, the categories of DeFi projects range from DEX, lending, stable currency, to liquidity pledge and aggregate income, and the number is close to 40. As of October 22, according to Okey Cloud Chain data, a total of 106 projects have been deployed on the Aptos main network, including DeFi, NFT, Meme, Launchpad, oracle machines, cross-chain bridges and other infrastructure.

Team background:

Aptos is a Layer1 public chain project initiated by the former team members of the Facebook stablecoin project Diem (formerly Libra). After the Diem project was aborted due to policy supervision, some of the original developers established three projects respectively, namely Aptos, Sui and Linera.

Co-founder and CEO of Mo Shaikh. He has worked in KPMG, Blackstone, Boston Consulting Group, Meta (Facebook) and other companies. He has rich work experience on the whole, mainly focusing on market, investment, strategic planning, etc. He has worked in many companies so far. Served as advisor and board member. Avery Ching CTO and co-founder, has served as the chief software engineer of Yahoo, Facebook, and Novi successively. He has rich technical work experience and outstanding technical capabilities in the world's top Internet companies.

Aptos has completed two rounds of financing this year, totaling $350 million in financing, led by FTX Ventures and Jump Crypto, and other investors include Griffin Gaming Partners, Franklin Templeton, Circle Ventures, Superscrypt, a16z crypto, and Multicoin Capital. The luxurious investment team and sky-high valuation have sparked heated discussions in the market.

On the whole, Aptos is positioned between Solana and ETH, and highly overlaps with Solana’s investors. Some Solana executives and on-chain project parties plan to switch to the Aptos camp. Aptos may be the best replacement for frequent downtime. Solana starts a new round of public chain narrative projects.

However, compared to ETH, the ecology of Aptos is still weak. The previously launched move language public chain project also faces ecological incompatibility. Therefore, in the case of choosing EVM, whether the ecology can prosper in the future depends on the operational capabilities of the project party.

At present, Aptos still needs to face tests such as liquidity fragmentation and security improvement.

4. Web3 Social & DAO & DID

Web3 content social platform - Showme:https://showme.fan/

Features:

Create a club: Everyone can create their own club. Similar to Twitter, the club can be used to publish content. Anyone who wants to follow the content blogger needs to apply for the corresponding club membership card

Provide membership card: Every user who wants to join the corresponding club needs to apply for a community membership card; the conditions for application are free/paid/holding a certain token or NFT; after successful application, you can enter the community to watch corresponding content

Badge Mechanism-PONA

NFT achievement proof, an NFT badge system based on the chain that can be automatically upgraded

Creators can publish various types of NFTs such as levels, tasks, and activities. Club members can obtain corresponding NFTs according to the completion status. Through the level and quantity of NFTs, the value of each user to the creator can be accurately measured, thereby facilitating subsequent operations for users

Project status:

Officially disclosed that ShowMe has 30,000+ users and 2900+ clubs

More than 50,000 fans on Twitter and DC

In October 2021, complete the seed round of financing Mask Network, Incuba Alpha, SevenX Ventures, Hash Global Capital, Metaverse Capital, Zonff Partners, NGC Ventures, Puzzle Ventures, etc. participated in the investment

The project has not announced the currency issuance plan, and member NFTs lack transaction value, but each NFT contains metadata, which can better create a Web3 social network

We are always looking for creative ideas, business and cooperation opportunities, and we also look forward to your reading feedback, welcome to contact hello@jzlcapital.xyz.

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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We are always looking for creative ideas, business and cooperation opportunities, and we also look forward to your reading feedback, welcome to contact hello@jzlcapital.xyz.

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