Crypto Turmoil Cooling Off, the race to find Metamask’s

The dollar’s weakness gave a glimmer of hope for a comfortable rally, which conservatively lifted both stocks and cryptocurrencies. Within the cryptocurrency, the big hats remained more stable than in the previous weeks as Bitcoin was seen ranging between $28.5K and $31,000, meanwhile Ethereum retreated to the major yearly low support at $1700 only to bounce back, clear the $2100 resistance and continue to trade. oscillation within this range. The total volume of the cryptocurrency market increased by nearly 6% after a turbulent week that saw the collapse of the Luna token and its corresponding stablecoin, UST.

Now, even though valuations of some of the market’s leading stocks have returned to levels not seen since late 2020, it still looks like further declines could be on the table. The reason is that entities with less than 10 BTC in their wallet were able to add the second largest amount to their total on May 20, as shown below. A sign that we may not be out of danger yet as retail hasn’t been able to time local or aggregate lows on a historical basis.

Source: Glassnode

However, as the dust began to settle due to this implosion, the industry began to understand what had happened during this troubling period. The crash was initially initiated by a massive sale of $UST on both centralized and decentralized exchanges, causing the peg to deviate from the $1 mark. While the original mint-burning mechanism (see our statement for details) between $LUNA and $UST could help $UST regain the peg a little bit at first, the consequences are shattering the LUNA dollar price by minting a massive amount of LUNA dollars in the market. Accordingly, the circulating supply of the token rose to 6 tons from 340 million, which caused the value of Luna to deteriorate and to reduce the peg of terrestrial reservoirs along with it.

The deteriorating conditions led to what is known as the death spiral. It became apparent that despite the Luna Foundation Guard’s attempts to use its 80,000 BTC reserve to maintain the peg of the terrestrial treasuries, the liquidity was not sufficient to serve as exit liquidity for holders of terrestrial treasuries. Not only did the peg fail to recover, but the bitcoin sell-off also caused the bitcoin price to drop and the broader market to plummet afterwards. In light of the collapse of the blockchain and stable algorithms, Terra founder Do Kwon has announced a revival plan that includes the launch of a new Terra blockchain. The new Terra blockchain will be launched on May 27 if the proposal is successfully passed. The current network will be renamed to Terra Classic, while its token will be renamed to $ your color.

Regulations and Accreditation

The main giveaway on the regulatory side this week has been the Biden administration’s plans to require crypto exchanges to separate the funds of retail and corporate clients. The main impetus behind the proposal may be Coinbase’s recent alert that customers will lose money if they go bankrupt.

Within the vertical exchanges, Binance was found to have obtained regulatory approval in Germany, in an attempt to obtain a license to operate. The Bitmex founder was recently sentenced to 6 months in jail instead of jail for violating the US Banking Secrecy Act (BSA). However, the event did not stop Bitmex’s expansion efforts. They have launched a spot trading service that goes beyond just focusing on derivatives. As traditional players try to gain exposure in cryptocurrencies, FTX US has expanded its offering to traditional finance by offering commission-free stock trading. There will be no minimum balances, no fee brokerage account, no commission trading and free market data.

Speaking of cryptocurrency adoption, the trend has been maintained as we have seen many traditional players tip their fingers or expand their exposure in the industry. For example, one of the 4 largest accounting firms, EY, has launched a new supply chain service, OpsChain, in Polygon Nightfall. This service was developed jointly with Polygon and will allow organizations to create tokens or NFTs as a representation of assets and inventory within companies that can be traced on the blockchain. Nomura is gearing up to launch a cryptocurrency subsidiary on the traditional banking side, and Julius Baer also plans to offer its high net worth clients exposure to cryptocurrencies.

The race to build an EVM portfolio is heating up as we’ve seen several companies gear up for their efforts to launch a Metamask competitor. Revolut’s plans to launch an unsecured crypto wallet on Ethereum were first reported. The functionality will be similar to Metamask, which is one of the most popular non-custodial wallets. GameStop has also released a self-guarded Ethereum wallet instead of a non-custodial one for users to store, send and receive crypto and NFTs. Robinhood also indicated its plans to launch a custodian wallet for users to trade cryptocurrency and NFT. In other news, e-commerce giant eBay will be launching its first range of NFTs, with 13 limited edition NFTs in partnership with Web3 platform OneOf. Spotify and Instagram are beta testing the features of NFT on their platform via select producers/artists.

DeFi and NFTs

Vitalik Buterin, co-founder of Ethereum ($ETH) said: “merging” The upgrade will happen in August. This upgrade will convert Ethereum from a Proof-of-Work to a Proof-of-Stake blockchain. Layer 1 alternative blockchain Fantom ($FTM) has seen a price hike this week. The FTM token fell to $0.25 on May 11 and rose to $0.51 on May 24. The price action is likely driven by speculation that Andre Cronje, founder of Yearn Finance, will return to Fantom since he committed to Fantom’s Stablecoin’s GitHub project. Ethereum’s expansion solution, Optimism, will launch a new upgrade called Bedrock. Upgrading will bring higher speed, lower cost, and compatibility with the Ethereum Virtual Machine (EVM).

In the DeFi market, Near’s ($NEAR) Layer 2 solution, Aurora ($AURORA) launched Aurora+, which provides users with 50 free transactions per month and airdrops for early users. In light of the USDT brief event, Tether announced that it has reduced its holdings of commercial paper to improve the quality of the reserves. Meanwhile, Tether has also asked the New York State Supreme Court to refrain from public examination of documents relating to Tether’s reserves over the past several years. However, the request was refused.

In the NFT market, Aave ($AAVE), a premium money market protocol, has launched a decentralized social scheme called Lens Protocol on ribbed. Developers can build social media platforms on top of the Lens protocol and users can mint social profiles, follow others, and create and collect posts in an on-chain fashion. Finally, in terms of raising capital, venture capital giant A16Z has launched a $600 million gaming fund to be used to invest in game studios, apps, and infrastructure. Although it may not be an original cryptocurrency fund, gameFi crypto startups could also benefit from funding due to A16Z’s rapid investment in crypto. Aside from the good news, Axie Infinity’s Discord bot has been hacked. Hackers released fake messages to users, but the team deleted the statement shortly after.

weekly returns

The returns of the five largest cryptocurrency groups over the past week were as follows – BTC (-4.38%), ETH (-5.77%), BNB (3.65%), ADA (-11.28%), XRP (-7.65%).

Net Flows Per 21 Shares of ETP

Our ETPs netted $4.65 million last week. Find below the details of the inflows and outflows for each ETP.

Media coverage

This week, we are excited to announce the launch of two US-based funds; The 21Shares Crypto Basket 10 Index Fund, which tracks the performance of the top 10 cryptocurrencies in relation to market capitalization, and the 21Shares Crypto Mid-Cap Index Fund, providing diversified exposure to the next level of emerging cryptocurrency groups, those rated 3-10 in market capitalization .

“Historically, the cumulative rate of return for the largest dozen cryptocurrencies has significantly outperformed traditional indices such as the S&P 500, the Dow Jones Industrial Average, or the Nasdaq Composite,” said Arthur Krause, Product Manager at 21Shares. “The two new index funds enable accredited investors to participate in cryptocurrencies without the responsibility of managing custodial arrangements, tracking private keys and passwords, or being exposed to hacking or security breaches.”

On this occasion, Ophelia Snyder, President and Founder 21Sharesappeared on Coindesk to discuss the launch of the first two crypto ETPs in the US for accredited investors. Ophelia also discussed the impact of the Terra crash and the broader cryptocurrency market on investor demand. On Bloomberg Technology, Hani Rashwan, CEO and co-founder of 21Shares, appeared to also talk about the company’s first ETPs in the US market.

News

Opensea introduces Seaport, a protocol for creating custom-designed NFT markets

What happened?

Opensea has revealed the launch of its latest NFT platform – built on the new market protocol of the central company. Dubbed Seaport, the new protocol is expected to give users the flexibility to exchange NFT blocks as other tokens ERC20 (ETH-based tokens), as well as ERC 721/1151 (Basic Standards for NFT Blocks), are considered an acceptable payment method. This is rather than relying exclusively on the native tokens of many of the blockchains that Opensea supports for their hosted pools.

Furthermore, the completely new protocol will have an improved message signing capability that will help reduce massive gas fees while making it clear what item to get for which set of tokens(s). In addition, protocol improvements should introduce a more refined trading system as offers will no longer be limited to groups, but will instead go to themes.

why does it matter?

Several reasons contribute to the excitement behind this major development. First, buyers of this new model will have the opportunity to cash in on their existing holdings of assets instantly without jumping through multiple hoops to get ETH or any of the other coins denominated in their favorite combinations. The convenience offered by the design of this system is reminiscent of the early days of vertical decentralized exchanges, especially around the birth of Uniswap.

Developing an easy-to-use front-end experience encourages broader market participation while allowing for sophisticated trading strategies. Given how DeFi is being pushed forward with the introduction of new complex protocols that leveraged infrastructure DEXs, the NFT industry should expect to see an unprecedented level of innovation over the next couple of months on the back of this refinement.

The open source protocol is another advantage that will allow for healthy competition to support the breeding of new and exciting products. Indeed, the evolution will help better serve end users, while paving the way for further decentralization of the NFT market landscape by enabling increased protocols to target a portion of the lion’s share that openea controls.

Research Bulletin

Each week, the 21Shares Research team will publish our data-driven insight into the world of crypto assets through this newsletter. Please direct any comments, questions and words of feedback to [email protected]

Not giving an opinion

The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or the solicitation of any offer to purchase securities in any jurisdiction. Certain information published here may contain forward-looking statements. Readers are cautioned that any forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those expressed in the forward-looking statements due to various factors. The information contained herein may not be construed as economic, legal, tax or other advice, and users are cautioned to base investment or other decisions solely on the content contained herein.

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