🟣 Can Drift’s BET Compete with Polymarket?

Plus, Spot ETH ETFs are showing signs of life

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Welcome back to 0xResearch. Here's what we’ve got for you today:

  • US Spot ETH ETFs end nine-day outflow streak

  • Amidst another TON outage, Line and Kakao announced mainnet launch of competitor L1 Kaia

  • Binance and Bybit launch SOL LSTs via Sanctum

  • Drift’s BET volume skyrockets to $20M

Bitcoin and Ethereum are positive on the day, with the former back above $60k and the latter paring some of its weekly losses. The U.S. ETF market is showing healthy signs of resurgence as spot ETH ETFs ended a nine-day outflow streak, with $5.9M in net inflows yesterday. From Aug 15 to Aug 27, ETH ETFs registered $115M in net outflows as Grayscale’s ETHE led the decline with over $200M in outflows.

The good news is that Grayscale’s outflows seem to be slowing down – on Wednesday, ETHE registered its second-lowest outflow since the U.S. spot ETH ETFs began trading on July 23. Meanwhile, Blackrock and Fidelity saw strong inflows of $8.4M and $1.3M, respectively. If this trend holds, we could finally see some tailwinds for ETH after its languishing price action. 

On another note, Telegram-linked TON experienced a second outage yesterday. The TON team attributed the outage to a heavy load related to DOGS token minting, a meme coin airdropped to the TON community on Monday. Regardless of the cause, the outage comes at an unfortunate time as Telegram CEO, Pavel Durov faced scrutiny in France. After being detained at a French airport on Saturday, Durov was indicted and put under formal investigation yesterday in a probe into organized crime in the messaging app. 

As the TON network gets battlested, Asian messaging app giants Kakao and LINE announced the mainnet launch of competitor network, Kaia, an EVM-based L1. In addition, the Kaia DLT Foundation announced Kaia Web, a major initiative for projects building with the LINE Mini Dapp SDK. Although the total funding amount of the program was not announced, teams can receive up to $1.2M in grants. Kaia is reflective of a broader trend involving Web 2 teams taking advantage of their current user base to bootstrap a new network. LINE is Japan’s most popular messaging app, with some estimates showing over 80 million monthly active users, and Kakao is one of South Korea’s most popular messaging apps, boasting around 50 million active users. 

In final news, centralized exchanges Binance and Bybit teased the launch of SOL LSTs BNSOL and bbSOL, respectively, via Sanctum’s Validator LST program. In June, researcher magicdhz published a flashnote highlighting Solana’s blossoming LST ecosystem and the key role Sanctum will play in it.

– Carlos Gonzalez Campo (@0xcarlosg)

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Drift’s BET Volumes surge:

Source: bigz @ Dune Analytics

Drift Protocol, an onchain derivatives protocol, recently expanded its product offerings to prediction markets with BET in order to compete with the momentous activity on Polymarket. Today they saw a significant rise in activity, with over $20M in volume, mainly concentrated on Kamala Harris’ popular vote bet. As the US election becomes closer, it will be interesting to see if BET can rival Polymarket’s volume. A key differentiating factor about BET is that it’s integrated with Drift’s cross-margin system, enabling users to earn yield while they are in a position.

This month's PPGC mainly focused on two subjects: discussing the Ahmedabad Hard For and the PIPs included with it (PIP-30, PIP-36, and PIP-45). Secondly discussing the MATIC-POL transition and the stakeholders it primarily impacts.

Recent discussions within the Ethereum community highlight this broader trend in crypto: L1s are converging on leaderless consensus designs to deliver higher performance and hardened censorship-resistance. magicdhz illustrates the L1 convergence, discusses the two prevailing leaderless consensus designs (multiple concurrent proposers and directed acyclic graph based protocols), and argues refreshing one's perspective on the L1 landscape is an advantageous position for evaluating adoption and the potential investment value of L1s and their applications.

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!)

After missing its chance to ‘protect investors’ from Terra, FTX and Celsius, the SEC is readying to go after NFTs.

Plus, if the SEC really does sue OpenSea, then it would be over two years too late.

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.