🟣 Chopping Block

Bitcoin is going down (again), despite surpassing silver to become the second largest ETF commodity in the United States (hooray!).

January 19, 2024

Gm gm gm!

Bitcoin is going down (again), despite surpassing silver to become the second largest ETF commodity in the United States (hooray!). BTC is down 2.4% over the past day, while ETH is down only 0.64%. We might be seeing some front-running from ETH ETF anticipators, given that the SEC delayed Fidelity’s proposed spot Ethereum ETF yesterday, pushing the new resolution deadline to March 5th. According to Seyffart, the delay is in line with expectation, and estimated approval for a spot Ethereum ETF could be late May. 

Despite the ongoing sideways chop, we’ve had some strong performers over the past day. UMA is up nearly 77%, following their announcement teasing a potential solution to protect lending protocols from MEV. Apart from UMA, with the RWA and tokenization narrative in full swing, we’ve seen both PENDLE (which also benefits from restaking narrative, given their recent push towards liquid restaking yields) and ONDO show strength. ONDO went live just yesterday (which was mentioned in yesterday’s NL). As a reminder, Ondo Finance, offers USDY, a yield-bearing stablecoin, OUSG, tokenized exposure to short-term Treasuries; and Flux Finance, a lending protocol. Liquidity onchain is low, and most of the supply is currently on Bybit, Kucoin, Gate.io and more. Additionally, Coinbase announced yesterday that ONDO is on their listing roadmap.

Speaking of launches, there were lots of rumors surrounding Manta’s launch yesterday. There are claims that suspect the Manta team has been laundering money and dumping the MANTA token at launch. Apparently, Manta Korea BD Sumeley has sold 2M MANTA for ETH in the first 5 minutes following listing, and transferred them to his personal wallet. The team over at Manta has claimed that this will be allocated to the ecosystem and community funds.

Over in the DeFi world, EigenLayer total value locked has reached $1.77B, as we see more liquid restaking protocols come live. Frax announced their Layer 2, Fractal, which is expected to launch in the first week of February.

Spark Lend has undergone substantial growth, witnessing a surge in borrowing activity from approximately $25 million at the start of August 2023 to around 1.192 billion as of January 19, 2024. This significant increase has been primarily fueled by the expansion in DAI and wETH, constituting approximately 65% and 34% of the total borrowed capital, respectively.

As a result, the D3M's maximum debt ceiling has undergone four governance-driven increments in the past six months, escalating from 20 million DAI in August 2023 to 1.2 billion DAI by January 15, 2024. Presently, about 66% of the current D3M maximum debt ceiling and 63% of wETH are in use, while the overall capital utilization stands at approximately 37%.

Our very own, Brick, believes that the capital borrowed on Spark Lend will grow from the current ~$1B by 3x by the end of 2024.

You can read our 2024 these where Brick discusses Spark at length here:

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