Gryphsis Cryptocurrency Weekly Report: Bitcoin’s whirlwind week with fake ETF approvals and renewed optimism
Welcome, dear reader, to Gryphsis Academy’s weekly cryptocurrency digest. We bring you key market trends, in-depth insights on emerging protocols, and new industry dynamics, all designed to enhance your expertise on cryptocurrency and Web3. Follow ourTwitterandMediumGet deeper research and insights.
Market and Industry Snapshot:
Layer 2 Overview:
The total value locked (TVL) sector showed mixed results. While Arbitrum and Optimism showed positive trends, Base, zkSync and especially Starknet all faced declines. Protocols such as BoringDAO, Cian, Rehold, XY Finance, and Nostra are exhibiting TVL growth percentages worth watching.
LSD Sector Overview:
The LSD field remains stable. However, ETH staking rates have slowed significantly recently. From a market perspective, Lido’s share has remained stable, while frxETH and cbETH have both seen slight increases in market share.
RWA Sector Overview:
The real world assets (RWA) sector has observed an increase in market capitalization and trading volume, driven by optimism in the broader market. Tokenized U.S. Treasuries remain stable despite a surge in the value of outstanding private credit. Noteworthy gains included $DEXTF, $POLYX, and $SMT, but $INX, $KLIMA, and $CFG took a hit.
Main Topics
Macro overview:
US Stock V.S. Crypto
Big news this week:
BTC ETF
Weekly Agreement Recommendations:
Gravita Protocol
Gryphsis Research:
Primer on Frax Finance
Weekly VC Investment Focus
SynFutures ($ 22 M)
Forge ($ 11 M)
Twitter Alpha:
@0x Finish on LSD
@stacy_muur 50 accounts to follow
@Dynamo_Patrick Solana protocols
@TheDefiDog on Airdrop
Macro Overview
Bitcoin, in particular, allowed the crypto market to outperform the stock market last week. Anticipation surrounding the approval of a potential Bitcoin ETF has fueled optimism, pushing Bitcoin up 10%, taking its dominance to a new peak of 52%. Over the coming week, watch for developments like building permits, new home sales, GDP updates and Powells speech.
Big news this week
Bitcoin’s whirlwind week: Fake ETF approvals and renewed optimism
The cryptocurrency space has experienced a flurry of activity this week, starting with a brief but sharp rise in Bitcoin prices due to erroneous reports of the SEC approving an instant Bitcoin ETF. The markets rapid reaction highlights its volatility and the high risks associated with regulatory dynamics. While the initial concern was based on misinformation, it set the stage for a deepening narrative in the financial sector: growing anticipation for the SEC to approve a Bitcoin ETF.
Leading institutions including JPMorgan and Coinbase have expressed strong optimism about the SEC’s eventual nod. This confidence is based on recent judicial activity, such as the SECs decision not to challenge the court ruling in the Grayscale case. The dominant sentiment is that while the road has been fraught with legal scrutiny and high-profile litigation, especially for major players like Grayscales parent company Digital Currency Group, these developments are positive for future approvals.
But what does a potential green light for a Bitcoin ETF mean for the broader financial landscape? It represents a critical turning point - connecting the traditional financial world with the rapidly growing cryptocurrency space. An approved Bitcoin ETF would simplify investing in Bitcoin, providing mainstream and institutional investors with a more accessible pathway that bypasses the complexities and risks inherent in direct cryptocurrency trading. This iconic moment could trigger a flood of institutional money into the crypto space, potentially stabilizing the market and demonstrating the maturity of the industry.
As this week has shown, the course the cryptocurrency industry takes is completely unpredictable. The initial misleading rise in Bitcoin prices, followed by real growth prospects highlighted by industry giants, highlighted the dynamic nature of the space. Amid the wavering market sentiment, one consensus is clear: the approval of an instant Bitcoin ETF could signal the dawn of a new era. It’s not just about growth within the crypto space, it’s about aligning this revolutionary asset class with the established financial system, potentially spawning mainstream adoption and strengthening the industry’s emerging dominance.
Viewed in this light, even as the crypto community moves through phases of uncertainty and scrutiny, the optimism exuded by key market players demonstrates unwavering confidence in the future — one that is not just thriving on the fringes of the global financial scene. , but the future of the crypto industry that occupies a central position.
Weekly Agreement Recommendations
Gravita Protocol is a decentralized financial system that provides users with safe and efficient asset lending capabilities. At its core, Gravita uses a unique mechanism called Vessels to facilitate borrowing. Similar to Vaults or CDPs on other platforms, Vessel allows users to deposit collateral which can then be borrowed against GRAI, the protocol’s native token. Each Vessel is associated with an Ethereum address, and there can only be one Vessel per collateral type per address. These Vessels maintain two balances: one is the balance of the mortgage asset, and the other represents GRAIs debt. When users adjust these balances by adding collateral or paying down debt, Vessels loan-to-value (LTV) ratio changes accordingly.
The protocol emphasizes the importance of maintaining a healthy LTV to avoid liquidation. Gravita implements a dual ratio system: Collateral Ratio (CR) and Loan-to-Value (LTV) Ratio. CR represents the ratio of the total value of the collateral to the amount borrowed, while the LTV ratio represents the ratio of the amount borrowed to the total value of the collateral. Gravita encourages users to keep LTV low to ensure a smooth borrowing experience and reduce liquidation risk.
System dynamics and stability
Gravita’s stability pool plays a key role in maintaining system solvency. As a source of liquidity, the Stability Pool ensures that the total supply of GRAI remains backed by collateral. When a Vessel faces liquidation, the corresponding debt is offset by burning an equal amount of GRAI from the stability pool, and in return, the entire collateral of the liquidated Vessel is transferred to the stability pool. This dynamic allows stability providers to profit from liquidations because they can acquire collateral at a discount relative to the debt they offset.
To protect system integrity, Gravita displays system status based on the current system LTV. This status can vary from Normal to Warning and Recovery Mode, depending on the health of the system LTV. Recovery mode is particularly critical and is activated when the total LTV for a particular collateral type exceeds the maximum LTV. Under this mode, certain transactions that may increase LTV are restricted, and Vessels whose LTV exceeds a set threshold can be liquidated.
Fee model and price dynamics
Gravita Protocol is different from many borrowing platforms because it offers interest-free borrowing. Gravita does not charge a variable APR, but instead charges a one-time maximum fee of 0.5% on positions held for more than six months. Short-term borrowers benefit from a partial refund mechanism, in which a pro-rata portion of the borrowing fee is refunded if the debt is repaid six months ago.
GRAI, the price of the protocol’s native token is designed to fluctuate around its anchor, with corresponding mechanisms in place to ensure its stability. Gravita uses hard anchor mechanisms such as redeeming GRAI in exchange for collateral and minting GRAI at a specific LTV, as well as soft anchor mechanisms that leverage user behavior and protocol design to keep the value of GRAI close to $1.
Our Insight
Amid the craze for yield-generating asset applications, Gravita Protocol has quietly but steadily found its place. CDP applications have become extremely popular in recent months, with both Gravita’s TVL and $GRAI minting metrics rising significantly. Two factors are likely driving this upward trend: its user-friendly fee model and its high 90% LTV.
Unlike many platforms, Gravita offers interest-free borrowing. Users will be charged a one-time fee of up to 0.5% if a position is held for more than six months, a fee model that is particularly beneficial to short-term borrowers. They can use a partial refund mechanism, which ensures that a pro-rata portion of the borrowing fee is refunded if the debt is paid off before the six-month mark. This transparent and low-cost fee structure ensures users can predict their costs, making financial planning simpler.
Additionally, Gravita’s unique Vessel system allows users to utilize their assets efficiently. The protocol supports high LTV, enabling users to borrow a large portion of the value of their collateral. This high LTV is particularly beneficial for users looking to maximize the efficiency of their capital, allowing them to unlock more liquidity than many other platforms allow.
In short, Gravita Protocol might just be the choice for crypto users looking to maximize the value of their assets. And, with the recent launch of the “Gravita Ascend” rewards program, now is the perfect time for enthusiasts to delve into the protocol and earn some rewards along the way.
https://x.com/gravitaprotocol/status/1714005485475750024?s=20
Gryphsis Research Spotlight
Welcome to this week’s Gryphsis Research Spotlight, where we share our team’s latest insights with you. Our dedicated research team continuously explores cutting-edge trends, developments and breakthroughs in the crypto space. This week, we’re excited to share with you our research, titled Getting Started with Frax Finance: Innovations, Products, and Future Developments, designed to deepen your understanding of the ever-evolving crypto world and spark your curiosity.
Our report provides you with a comprehensive exploration of Frax Finance, detailing its development, innovation and future prospects in the DeFi space.
Background and Introduction: The article traces the origins of Frax Finance, starting with its founding in May 2019. Originally conceived as an algorithmic stablecoin protocol, Frax has since expanded its scope. The platform now covers a variety of DeFi services from stablecoins and decentralized exchanges to more advanced services like Liquid Staking. The quote highlights Frax’s adaptability and its commitment to remain at the forefront of DeFi innovation.
Performance Overview: This section takes a deep dive into the financial performance of Frax Shares ($FXS). The article provides a chronological analysis, pointing out major events such as Binance’s listing, halving emissions, and airdrop announcements that impacted its price movements. It also provides a comparative perspective, pitting $FXS’s performance against market giants like Bitcoin and other liquid-collateralized derivatives tokens.
Protocol Mechanism and Products: Here, the article explains Frax Finance’s polyhedral architecture in detail. It classifies and describes in detail Fraxs many products. Flagship products including Frax Stablecoin ($FRAX), Frax Price Index (FPI), and Frax Ether (frxETH) are discussed in detail. The article also touches on the core infrastructure supporting these products, such as Algorithmic Market Operations (AMOs), Fraxswap, Fraxlend, and Fraxferry. The role and importance of each component in the Frax ecosystem is explained in detail.
Tokenomics: This section delves into the complex world of $FXS tokenomics. The article discusses the versatility of $FXS, highlighting its role as a governance token. It also highlights the benefits and incentives of locking up $FXS tokens, as well as the protocol’s strategic approach to buying back $FXS under certain conditions.
Growth Drivers and Future Innovation: The article identifies and details the major upcoming developments that are expected to shape the future of Frax Finance. These include the introduction of FRAX V3, designed to enhance the stablecoin mechanism, the launch of frxETH V2, which focuses on decentralization and yield optimization, and the expected launch of FraxChain, a cutting-edge EVM-compatible layer 2 solution.
Growth Potential and Market Analysis: In this section, the article provides a detailed analysis of Frax’s potential growth trajectory in the Liquid Collateral Derivatives (LSD) market. By comparing Fraxs products to top LSD protocols, the article evaluates the platforms potential and identifies opportunities and areas for improvement.
Conclusion: The article summarizes the transformation journey of Frax Finance. From its inception as a simple stablecoin protocol to its current position as a multifaceted DeFi powerhouse platform, Frax’s growth story is due to the relentless innovation and dedication of its team. The conclusion also highlights the importance of the platforms upcoming developments, highlighting their potential impact on its future trajectory.
This article provides readers with a thorough guide to gain a comprehensive understanding of Frax Finance, its achievements, challenges and future vision in the dynamic world of DeFi.
This section provides a concise preview of our research on Frax Finance. We encourage readers to read furtherfull report, for complete understanding and expert analysis of this fascinating topic!
Weekly VC Investment Focus
Welcome to our weekly Investing Spotlight, where we reveal the biggest venture capital developments in the crypto space. Each week, we’ll spotlight the protocols that received the most funding.
SynFutures
SynFutures, a decentralized perpetual futures exchange, has raised $22 million in a Series B funding round led by Pantera Capital, with significant contributions from SIG DT Investments and HashKey Capital. The financing brings SynFutures’ total capitalization to $38 million and coincides with the launch of its innovative V3 platform. The platform’s standout feature, the Oyster Automated Market Maker (Oyster AMM), combines the advantages of the order book and AMM models to provide permissionless listings for a large number of trading pairs. Designed to increase trading efficiency and liquidity in the DeFi derivatives market, SynFutures’ V3 aims to set a new standard in the crypto-finance sector, especially as the sector is expected to experience significant growth by 2024.
https://x.com/SynFuturesDefi/status/1715974515467903089?s=20
Forge
Forge, a game by gaming celebrity Dennis"Thresh"The innovative video game platform co-founded by Fong, Kun Gao and George Ng has raised $11 million in seed funding from notable investors including Makers Fund, BITKRAFT Ventures and Animoca Brands. To celebrate and reward player achievements, Forge allows players to combine their game profiles from various platforms, embark on missions through seasonal Season Passes, and earn real rewards ranging from in-game content to exclusive prizes. Through strategic partnerships with games like Genopets and The Sandbox, and a commitment to growing its roster of games, Forge is on the verge of revolutionizing the way players treat and benefit from their gaming milestones.
https://x.com/Forge/status/1714700467807416679?s=20
Protocol update
Gnosis Chain's total value locked doubles to $ 150 million after MakerDAO's Spark Protocol expansion
Ripple celebrates dismissed charges, calling it a 'surrender by the SEC'
Base open-sources code to enhance transparency
Polygon proposes 13-member 'protocol council' to supervise smart contract upgrades
Aptos resolves network issues following five-hour outage
Sui trades near all-time low amid report of South Korean regulator probe
Helix unveils pre-launch futures for upcoming tokens, starting with Celestia
dYdX won't profit from v4 as it becomes public benefit corporation
Industry events
Vitalik Buterin says he hasn't sold ether for personal gain since 2018
Bitfinex's Ardoino expects 'quantum leap' in Bitcoin scaling solution adoption
Joseph Lubin faces lawsuit over Consensys stock value
JPMorgan expects spot bitcoin ETF approvals to come 'within months'
Jameson Lopp calls for more Bitcoin experimentation and sidechains
Circle launches gas abstraction and smart contract beta tools amid push into web3 services
Ava Labs bets on India for Avalanche growth, with new hires from Polygon and OKX
Reddit plans to sunset its blockchain-based reward service Community Points
Twitter Alpha
Theres a lot of alpha in crypto Twitter, but navigating thousands of Twitter threads can be difficult. Each week, we spend hours doing research, curating threads full of insight, and curating your weekly picks list. Let’s dive in!
https://x.com/0x Finish/status/1715817922231501025? s= 20
https://x.com/TheDefiDog/status/1715827840288276525?s=20
https://x.com/stacy_muur/status/1695733728121848168?s=20
https://x.com/Dynamo_Patrick/status/1715721094177476816?s=20
next week events
News sources/references:
https://www.coindesk.com/policy/2023/10/20/sec-likely-to-approve-spot-bitcoin-etf-in-next-few-months-jpmorgan/
https://www.cnbc.com/2023/10/20/coinbase-confident-a-us-bitcoin-etf-will-be-approved.html
https://www.coindesk.com/markets/2023/10/16/bitcoin-momentarily-hits-30k-on-false-spot-etf-approval-report-leads-to-100m-liquidations/
https://blockworks.co/news/btc-price-spot-bitcoin-etf
https://finance.yahoo.com/news/fake-blackrock-etf-news-prompts-080447862.html
https://www.coindesk.com/business/2023/10/19/pantera-susquehanna-and-hashkey-back-dex-synfutures-with-22m-funding/
https://blockworks.co/news/derivatives-trading-dex-funding
https://finance.yahoo.com/news/synfutures-announces-usd22m-series-b-130000098.html
https://finance.yahoo.com/news/forge-announces-11-million-seed-170500893.html
https://www.businesswire.com/news/home/20231017612476/en/Forge-Announces-11-Million-in-Seed-Funding-Led-By-Makers-Fund-BITKRAFT-Ventures-Animoca-Brands-to-Launch-the-First-Video-Game-Platform-that-Connects-and-Rewards-Gamers-for-their-Achievements
That’s all for this week. Thank you for reading this weeks newsletter. We hope you benefit from our insights and observations.
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This weekly report is provided for informational purposes only. It should not be relied upon as investment advice. You should conduct your own research and consult independent financial, tax or legal advisors before making any investment decisions. And the past performance of any asset is not indicative of future results.
