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- 🟣 Bitcoin's battle at $60k
🟣 Bitcoin's battle at $60k
Plus, Aave soars 45% in 30 days
Macauley Peterson & Donovan Choy
August 21, 2024
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Welcome back to 0xResearch. Here's what we’ve got for you today:
Bitcoin price
Aave fundamentals
Immutable activity
CT: Vitalik “Bullposting”
Bitcoin is bouncing around in a 2% range today, with sellers stepping in strongly at the $60k mark and buyers doing likewise at $59k.
Further evidence of Mt. Gox distributions — 13,000 BTC was transferred to an unknown address, plus 1,265 BTC transferred to crypto exchange Bitstamp, according to AMLBOT — hasn’t been enough to shake bitcoin out of this range.
Ruslan Lienkha, chief of markets at YouHodler, notes this is still part of “a consolidation phase” following the Aug. 5 meltdown and mean-reversion bounce.
“Fundamentally, bitcoin has strong medium- to long-term prospects [and] a potential Fed rate cut in September could accelerate capital inflows into the crypto market,” Lienkha told Blockworks. “However, the current mild backwardation in the futures market suggests a possible limited downturn in the short-term.”
Federal Reserve Chair Jerome Powell is scheduled to speak at the Jackson Hole Economic Symposium on Friday morning, so we’ll likely get some tea leaves to read then.
Aave is all the rage
In today’s edition of “price shaping the narrative,” AAVE is up 45% in the last 30 days. The move has ignited a flurry of speculation from investor types across the Twitter timeline who now tout it as a potential breakout token of this cycle.
To be fair, it is undeniable that Aave has several positive catalysts in its tailwinds. When the crypto market crashed some three weeks ago, cascading liquidations netted Aave $2.1 million in revenue. Based on Token Terminal data, Aave’s generating in the last 30 days at least 12.7x more revenue than its second-biggest competitor, the BNB chain dapp Venus.
Aave also has the “moat” narrative going for it. With the exception of BNB Chain, Aave enjoys a leading market position across every EVM-based L1/L2 chain based on TVL metrics. This makes its planned implementation of cross-chain liquidity in the upcoming v4 upgrade a fairly significant change.
To top it all off, Aave DAO is en route to flipping on its fee switch, set to be implemented before the end of 2024. Aave DAO passed its first vote on a governance proposal that would begin purchasing liquid AAVE on the open market from treasury revenue to be distributed back to staked AAVE users.
To further protect the value of AAVE, the proposal also plans to transfer the burden of debt relief from the status quo of slashing staked AAVE holders today to slashing the collateral of lenders on individual Aave pools that opt into the additional interest yield (and slashing risk).
In sum, Aave seems to have the picture-perfect setup for the “fundamentals”-driven investor. The business enjoys a somewhat robust market moat, it has its own GHO stablecoin, it’s about to drive value to its native token and the protocol’s code is fairly battle-tested.
Arguably, the biggest weakness of Aave is its concentration in the EVM ecosystem, considering Ethereum’s recent loss in mind share to Solana. Aave is planning a non-EVM migration to the MoveVM chain Aptos, and it will be interesting to see how the lending giant fares outside of its usual arena.
When asked about a future move to Solana, Aave Chan Initiative’s Marc Zeller recently told Mike Ippolito on the Bell Curve podcast to ask him again in six months.
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)
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Immutable boost:
The gaming-focused L2 chain Immutable X is seeing a burst in transaction count, topping up at nearly 4 million daily active transactions yesterday. This is largely coming from the AAA RPG game Illuvium, which went into open beta a few weeks ago. Contributing to Illuvium’s surge of users is, ironically, a critically negative review by anti-crypto gaming YouTuber Jauwn, whose latest video on Illuvium has racked up 408k views in two days.
The game announced last week its first revenue share, distributing 349 ETH worth of ILV to stakers. Illuvial — the game’s collectible monsters — forms the key component of the games play-to-earn mechanics.
Based on Illuvium’s DEX marketplace, the average Illuvial has sold for an average $5.79, with $347k in lifetime sales volume.
— Donovan Choy
Chainlink’s first-mover advantage, platform offering and key partnerships have positioned it as the undisputed leader in the RWA infrastructure space.
In the 2021 crypto market cycle, memecoins experienced unprecedented growth, with DOGE and SHIB reaching market capitalizations of over $80 billion and $40 billion, respectively. Further down the list, tokens like Safemoon and BabyDoge, among countless others, surged on Binance Smart Chain given its dominant use for memecoin launches in the latter half of 2021. Recently, a new wave of prominent memecoins, alongside a deluge of new memecoin creation and speculation platforms like pump.fun and Telegram trading bots, have put memes front and center again. Yet as memecoin activity has grown, critics of the category have only grown stronger, with proclamations that all memecoin activity is meaningless and ephemeral due to a lack of true fundamentals.
Blockworks Research is conducting a survey to gain insight into the institutional staking landscape. This data will help industry leaders adopt their strategies as the industry matures.
If you're an institutional staker, we want to hear from you (and if you’re new to Blockworks Research, get 20% off of our service while you’re at it!)
The SEC is still considered a major antagonist in the crypto space, with bigger targets increasingly common.
The Canadian company hopes to reach 950 megawatts of power capacity by the end of 2025 via its deal with New York-based Stronghold Digital Mining.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.