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Welcome back to 0xResearch. Here's what we’ve got for you today:
Mood shift
Curve and zkSync updates
RocketPool revamp
CT: the best celebrity memecoin thread
The market mood has soured, and major cryptos today are retesting Friday’s lows once again after a small weekend bounce.
Zooming out, not much has changed. Bitcoin is less than 10% off its recent May and June high mark. The larger April drawdown was still “only” 22% from the all-time high. Multiple 20-30% pullbacks, while scary, have been the norm in prior bull markets.
Market watchers are worried about equity markets topping out for a while, alongside a whiff of recession fears. Although if you want to see interest rates fall, then a cooling economy should be welcome.
Curve bounce
Following the CRVpitualation of last week which saw Curve’s governance token crash to $0.22, buyers have stepped in, running it back 45% off the lows.
Much of the newly distributed CRV from the forced sales of Curve founder Michael Egorov are being locked as veCRV.
Cousin Convex — a DeFi platform built on top of Curve that lets users earn higher yields on their deposits by aggregating liquidity and optimizing staking rewards — has nearly doubled since Thursday.
Convex has more than 40% of the locked CRV under its purview, benefiting its users with boosted rewards and efficient capital management.
ZK day
ZkSync’s token, which was announced last week, is now available to claim.
The one-time airdrop of 17.5% of the token’s supply has already been snagged by a majority of the nearly 700,000 eligible addresses.
The ZkSync team attempted a wide-ranging distribution using a concept they term “value scaling,” an effort to reward organic users and limit the allocation going to Sybil farmers and bots.
“Sophisticated industrial farms operate millions of bots often indistinguishable from real people in behavioral patterns,” a spokesperson told Blockworks, suspecting a lot of the criticism online is driven by sour grapes.
“By establishing criteria that align[s] with our values and applying a combination of value-scaling and multipliers for onchain behaviors that demonstrate more typically ‘human’ behavior (holding a portion vs. heavily transacting certain crypto assets, for example) we saw a force — primarily driven by bots — take aim at ZkSync for not following the typical path.”
A detailed token FAQ explains the rationale and responds to feedback that has come in since the eligibility checker went live.
Rocket Pool revamp
Rocket Pool is looking to revise its bonding and RPL tokenomics with the RPIP-49 proposal, now in the development and community feedback stage.
RPIP-49 details the 2024 tokenomics rework for Rocket Pool. It provides an overview of the proposed changes, their components, and the current status, and introduces several significant changes.
Megapools would improve gas efficiency and introduce ETH-only validators.
RPIP-42 focuses on bond curves, allowing node operators to use smaller ETH bonds while maintaining protocol security.
RPIP-46 introduces a Universal Adjustable Revenue Split (UARS) to distribute ETH revenue among various stakeholders and to reduce RPL issuance. The Rocket Pool community is debating other value capture mechanics, including an RPL burn, buy & LP, and offering increased shares to voting node operators.
RPL has jumped about 40% since Friday in response. One unintended side effect, however, is that some node operators who borrowed their RPL bond amount via lending protocols such as Aave were unable to react to the sharp rise and saw their collateral liquidated.
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Celestia rising:
Celestia DA usage is skyrocketing to unprecedented levels, primarily fueled by the Orderly Network and Lightlink chains. Despite this surge, utilization remains at a tiny fraction of its total capacity, indicating significant room for growth and expansion within the network.
This trend suggests increasing adoption but with plenty of room for cheap block space as scalability needs arise.
That has the debate over TIA as “modular money” once again bubbling up to the surface, as without some monetary premium, it’s going to be hard to justify the network’s $7.7 billion fully-diluted valuation (even after the recent drop) on the basis of value accrual alone.
Ethereum, long heralded as the undisputed leader in the blockchain space, is starting to show signs of vulnerability. Its once unshakeable position is now being challenged by a new wave of competitors, innovative technologies and evolving market trends. The landscape is shifting, and Ethereum's dominance is no longer a foregone conclusion.
Earlier this year, Sanctum launched Infinity - multi-LST pool on Solana that improves liquidity for a growing list of LSTs and makes it really easy for users to swap between them. Sanctum’s one-stop shop for LSTs is well-positioned to play a key role in fostering Solana’s LST market expansion, and the upcoming $CLOUD launch is designed to offer the community and investors an opportunity to purchase $CLOUD at a great price.
The Federal Reserve leaving interest rates unchanged likely prompted investors to scale back exposure to fixed-supply assets, says a CoinShares research head.
Plus, the Ripple vs. SEC case is arguably nearing its end.
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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.
