Issue 44 of JZL Capital Digital Weekly Report: Ethereum's first deflation, the market rebounded strongly
1. Summary of Industry Dynamics
1. Summary of Industry Dynamics
This week, the crypto market finally chose to rebound after the volatility that lasted for several weeks. On Wednesday, ETH experienced deflation for the first time, causing ETH to rise above the weekly level, leading a strong rebound of the ETH ecology, and finally activating the entire crypto market. Judging from the inflow of stablecoins, there was also a small inflow of new funds this week, which injected vitality into the market. As of writing, Bitcoin closed at 20681.8, an increase of 7.76% during the week, with an amplitude of 10%; while Ethereum, which took advantage of the benefits of deflation to absorb money violently, closed at 1590.94, an increase of more than 20% within the week, with an amplitude of 26.91%. Not only mainstream coins, individual projects and many MEME Coins also joined the ranks of skyrocketing from Friday to weekend this week. Among them, OP took advantage of the news of the release of OP Stack, soaring 33% within the week. The blueprint of OP Stack is to build a Custom generation of modular components of the blockchain is similar to Cosmos in providing developers with better solutions in terms of scalability. A more detailed explanation will be introduced in the fourth part of the encryption ecological track. In addition, tokens such as MASK, DOGE, and SHIB, which are strongly related to Elon Mask’s acquisition of Twitter, also joined the ranks. Among them, MASK rose by a terrifying 107% within a week, DOGE rose by 90%, and SHIB also rose by nearly 20%, with an amplitude of 55%. %. Musk's successful acquisition of twitter has a stimulating effect on the currency market. And as twitter begins to test new NFT functions, develop encrypted wallets and other actions, and with the news of CZ's participation in twitter investment, twitter may really transform into a real web3 platform.
Ethereum’s deflation last week was the first monthly deflation in history, and the total supply has been reduced by 11,523 coins in the past 15 days. In fact, since The Merge happened, there has been no particularly active network behavior in the Ethereum ecosystem, and the Gas Fee has always remained at a low level. However, in the past few weeks, the popularity of the meme coin XEN once raised the gas level of Ethereum. 10 times to 200gwei, frequent on-chain behaviors intensified the burning of ETH, and in the absence of more nodes joining, ETH has experienced deflation this month, which is enough to show that there will be abundant activities on the chain in the future Under such circumstances, the deflation of ETH may become the norm. According to the data of ultra sound money, the advantage brought by the merge to the circulation of ETH is more obvious than expected, which also consolidates the status of Ethereum as the king in the public chain.
The FOMC will hold a meeting on interest rates on Wednesday, and at the same time, important news will be released. The 75 basis point interest rate hike in November is basically confirmed, and the important thing is that at 2:30 pm US time, Powell will come forward to clarify the interest rate hike after December The range and pace of the current CME’s prediction of a rate hike in December of 50 basis points and 75 basis points is half and half. As long as Powell has the intention of braking on Wednesday, the US stocks will easily follow the trend. No matter whether Powell’s attitude is clear or not , the U.S. stock market will cause large fluctuations, along with the talk of slowing down interest rate hikes spread last week, perhaps Monday and Tuesday will continue to add fuel to the flames.
2. Macro and technical analysis
2. Macro and technical analysis
The market is currently showing signs of getting rid of the previous weakness and starting to rebound.
BTC is still not out of the sideways range, but there are signs of an upward breakthrough. We recommend paying attention to whether it can break through the 22,000 usdt position. If it breaks through the 22,000 usdt in the short term, an upward breakthrough is expected. We suggest that you can cautiously participate in the rebound in the short term.
The Nasdaq also started to rebound, but it was not as strong as the Dow.
1. Arh999: 0.43, average cost performance.
1. Arh999: 0.43, average cost performance.
2. MVRV: 0.98, cost performance is the same as Arh999
3. Summary 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 13 investment and financing events disclosed (a month-on-month decrease of 52%), and the financing amount was about US$58.8 million (a month-on-month decrease of 52.19%). continued to decline significantly.
During the reporting period, there were no large-amount financing projects. In terms of specific tracks, Web 3.0 & NFTs took the lead in terms of the number of financing projects and financing scale;
During the reporting period, there were no large-amount financing projects. In terms of specific tracks, Web 3.0 & NFTs took the lead in terms of the number of financing projects and financing scale;
Projects on the Aptos chain are relatively active, including the Defi stablecoin protocol Thala Labs, and the wallet project Martian all completed financing during the reporting period. Participating investors include FTX, Jump Crypto, Parafi Capital and other institutions. Other deployed projects include:
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
Except for Jump Crypto's participation in the Aptos on-chain wallet project Martian this week, there are no more news or investment projects from leading quantitative institutions.
1.NFTs
4. Encrypted ecological tracking
1) Market overview
The NFT blue-chip index is still dull this week. As of October 28, the blue-chip index is basically the same as last week, with no major changes, and the market sentiment is still low.
This week, the total market value of the NFT market decreased by 0.98% year-on-year, and the total transaction volume decreased by 19.31% year-on-year. This week, the trading volume of the NFT platform ushered in a sharp drop, and the daily trading volume has gradually declined this week. It can be clearly seen that after the NFT market fell into a bear market, a large number of traders chose to hold rather than sell.
This week, the activity of holders/traders in the NFT market has dropped significantly. Buyers have decreased by 14.97% compared to last week, and sellers have decreased by 25.5% year-on-year. This continues to verify the conservative attitude of firm holders, only holding and not selling Neither buy nor sell.
The top three NFTs with the highest trading volume in the market this week are CrytoPunks, BAYC, and Otherdeed.
2) Dynamic focus
Twitter will support users to conduct NFT transactions on the platform
This week, Musk’s Twitter acquisition has ended. Musk, Sequoia Capital, Qatar Consortium and other investors have acquired Twitter. Twitter immediately completed its privatization and delisted from the US stock market. After completing the privatization, Twitter has disclosed many measures, many of which are good for the cryptocurrency market. Among them, Twitter announced an agreement with four NFT trading platforms to support Twitter users to display, sell and buy NFT on the platform.
The Premier League and the Sorare platform reached an NFT cooperation
The world's top league Premier League recently announced a series of cooperation with the Sorare NFT platform. In the future, Sorare will provide digital tokens to fans with an agreement of 30 million US dollars per year, and fans can purchase tokens made from game pictures and player avatars. The NFT. Sorare is a French NFT platform, the main investors of which are French star Mbappe and Japan's Softbank, and its recent valuation reached 4 billion US dollars.
The NFT platform LooksRare announced that it will not force users to pay creator royalties when purchasing NFT. The measure is gradually circulating on the NFT platform. Among them, the NFT platform X2Y2 supported the measure of not forcing royalties earlier, and users can vote to determine the amount of royalties charged by the NFT project within each 24-hour timeline. LooksRare's measures this time convert the royalties paid by users into transaction agreement fees. This measure will increase the liquidity of the platform and greatly enhance the competitiveness of LooksRare in similar markets.
3) Key projects
Ecosapiens
3) Key projects
Ecosapiens is a Web3/NFT project created with the goal of protecting ecology and the environment. Ecosapiens is committed to creating the first NFT project that can permanently capture carbon. This project has also been invested by VC investors such as Slow Ventures, Menlo Ventures, CRV, Alumni Ventures Blockchain Fund, and Climate Capital. It has currently received an investment of 1.5 million US dollars.
The purpose of the Ecosapiens project is to reduce carbon emissions in the air, and it is also aimed at solving ecological problems such as drought, food crisis, ecosystem destruction, and sea level rise.
At present, the NFT of Ecosapiens is under planning and design, and there is no plan for listing or public sale. Ecosapiens will launch derivative projects such as Climate Metaverse and Climate Investment DAO in the future. The design concept of Climate Investment DAO provides a certain capital pool for the Ecosapiens community, and then invests in various projects through DAO to increase the ecological help to the world. However, Ecosapiens has not yet started investing in this area.
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.
2. GameFi blockchain games
2. GameFi blockchain games
overall review
This week, mainstream tokens in the Gaming sector rebounded following the market, and the overall market capitalization ranking has rebounded. However, in the case of oversold in the early stage, only SAND and GALA rose more than ETH and mainstream currencies. Castaways
Item of the Week –
The NFT game Castaways has opened the second round of airdrops to the top 10,000 active players, and points will be calculated based on the playing time and the number of resources collected in the game. Since the current floor price of the airdrop island in the last round of activities is as high as 4ETH, this event has attracted a large number of users to participate. Currently, there are 22,000 Twitter fans and 26,000 discord members.
Castaways is a desert island survival construction game with a pixel-style gameplay similar to "Minecraft". Players will initially have a raft as a means of transportation. They need to collect materials at sea to synthesize tools, carry out fishing and logging and other related activities, and make food to supplement their physical strength. The game currently uses the web page to play, and you need to link the wallet to log in through the email.
The game has a certain degree of difficulty and takes a lot of time to collect. However, in the current alpha stage, the gameplay is single, the operation is rigid, and the map to be explored is limited. Users are basically driven by FOMO and airdrop expectations. Whether the popularity can be maintained in the future depends on the follow-up gameplay and social interaction sex.
The development company of Castaways is Branch, which completed a $12.5 million seed round of financing in May this year. Investors include Mechanism Play, TCG Crypto, Dragonfly Capital, Polychain, Coinbase Ventures, Three Arrows Capital and Polygon Studios CEO Ryan Wyatt.
3. Infrastructure construction
1) Market overview
As of October 30, the overall lock-up volume (including staking) of all public chains denominated in US dollars has increased by 7.7% compared with the same period last week, and the strong momentum is expected to continue to climb.
Among the major public chains, ETH, BSC and Tron have remained stable, while Solana and Avalanche have seen a significant decline in TVL recently, and their shares have been eroded by OP and Arbitrum in the L2 sector. Although the OP technical team has made many low-level mistakes after the coin was issued, the decline in the early stage was sufficient to add to the impact of good news, and it still led the market this week; while Arbitrum was mainly affected by the expected coin issuance.
2）OP Stack
As of October 29, the total supply of the top four stablecoins (USDT, USDC, BUSD, DAI) was about 140.509 billion, an increase of about 314 million (0.22%) from 140.195 billion a week ago. With the improvement of interest rate hike expectations, the decreasing trend of stable currency supply has begun to improve since May this year, and the phased bottom has been confirmed.
Optimism published an article introducing the next evolution of its scalability architecture - OP Stack. OP Stack is an open source modular component suitable for various highly scalable blockchains.
As far as the development path of the public chain is concerned, there are mainly two, one is the general chain represented by Ethereum, and the other chain can support all activities on the chain. The other is a customized chain, represented by the Cosmos ecology, which can support developers to quickly start the chain for their own applications.
The two have their own advantages and disadvantages. The universal chain has congestion problems caused by many applications, while the customized chain of the Cosmos ecology has high efficiency but has a large security problem.
The OP Stack proposes a third path, which divides Layer 2 into three layers—consensus layer, execution layer, and settlement layer, and standardizes the three layers, which is convenient for developers to assemble. Assuming that if all APIs are supported, OP can be used as the consensus layer, AptosVM as the execution layer, and ZK as the settlement layer, so as to gain the strengths of all families. (From Twitter user @0xtodd)
Among them, the security depends on the settlement layer. Regardless of OP or ZK, the security is about equal to that of Ethereum, far exceeding that of Cosmos. For example, if it is attacked, the number of OPs still exists on Layer1 and can be rolled back, while Cosmos can only let users bear the loss.
It is conceivable that if a large number of Layer 2 are produced through OP's modules in the future, they can also share Sequencer to some extent, which may also give them the ability to cross each other.
The current progress is still in the early stages of turning into a standalone product. The main goal for the next few months is still to release the Bedrock upgrade on the Optimism mainnet. Eventually, the Bedrock codebase will be improved into an OP Stack version. This also marks that OP is not limited to Layer 2 roll-up solutions, but is moving further towards the customized design and release of on-chain applications for developers, which significantly expands the ecological breadth of Optimism.
4. Web3 Social & DAO & DID
4. Web3 Social & DAO & DID
WEB3 visualization DID project - Lifeform
product description:image solution
: 1. Front-end, 3D avatar creation tool on the 2C side, everyone can create an avatar (pinching face) similar to the real world as the avatar/image 2. Back-end, the avatar is essentially an NFT, which can be connected to the Web3 wallet and allows Avatars become decentralized identities that represent users entering the metaverse of various Web3 applications.: Generating images—Live to earn in the Lifeform ecosystem, increasing behavior data on the chain—generate more relevant SBTs for images based on behaviors on the chain, forming richer decentralized identities.
Team background:
Team background:
The founder Brian Hirsh is a multi-time entrepreneur who once created a Saas company; it is also worth mentioning that the 3D modeler has participated in the modeling of multiple characters in Marvel movies;
Capital background:
Recently completed a multi-million dollar seed round led by Binance Labs, the funds raised will be used to accelerate product development and technological innovation, and the team plans to connect 3D avatars to the virtual world through SDK integration. The last funding round was led by Geekcartel.
Economic Model:
The product has not yet been officially launched, but the economic model is disclosed in the white paper. The token hard cap is 1 billion, which is mainly divided into two parts: points and tokens. Tokens can be used to generate avatars, stake liquidity, and more. Points are mainly used for sub-projects within the ecosystem, and can be obtained through token pledges to participate in the use of products within the ecosystem. On the whole, the value capture ability of tokens is strong.
At present, the project has airdropped 1,000 LAP NFTs. The benefits are that after the project goes online, Avatar can be made for free and mint into NFTs with one click.
progress:
The Lifeform incubation team has successfully launched the virtual artist HALO NFT in May, and the response has been excellent once it was launched; the value capture of this NFT in the future Lifeform ecosystem is mainly the attribute addition in future games.
Distribution of access qualifications was completed on October 27.
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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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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.
