🟣 New Token = Better Tech?

Most new shiny tokens seeing positive price action.

GMs in the chat!

A “new shiny token” season is upon us once again. Tokens such as JTO, DYM, MANTA, and PIXEL recently began trading on the liquid market. All of the aforementioned tokens have seen similar price action, where the price almost immediately appreciates notably after the listing, staying on an elevated level compared to the opening price. Out of these four tokens, PIXEL is the latest to become liquid. It’s an in-game utility token for Pixels, a free-to-play farming MMO with a play-to-earn model. Although Pixels is one of the largest crypto games with ~180K daily active wallets, the project's valuation is quite mindboggling at an FDV of ~$2.9B.

We seem to have reached that stage of the cycle where FDV really is a meme, but for my long-term holders, it’s good to remember that this is one of those metrics that doesn’t matter until it does. Talking about projects with ridiculous FDVs, Sam Altman’s Worldcoin has soared within the past few days following the launch of OpenAI’s text-to-video AI tool, Sora. WLD is up ~148% in the past seven days, currently trading at an FDV of ~$68B. However, WLD’s float is minimal at only ~1.3% and has a market cap of ~$900M, which explains the token’s recent volatility relative to its valuation.

The next highly-anticipated token to launch is the native token, STRK, of Starknet, a zk-rollup. The airdrop claim opened today at 12 PM (UTC), and the token reached a high of ~$7 immediately after it began trading but has since stabilized around ~$3, implying a market cap of ~$2.2B and an FDV of ~$30B.

Starknet has recently received a lot of heat for its token release schedule as ~13% of the total supply, or ~1.3B tokens, allocated to investors and early contributors will become liquid in the middle of April 2024. It’ll be interesting to see if this unlock discourages market participants from buying into the token going forward, which would make STRK one of the first newly launched tokens in a long time where the price didn’t stay on an appreciated level from where it launched.

Have a good one chiefs and chieftesses!

— Brick (X: @0x___Brick | Farcaster: @brrrick)

Ethena, a stablecoin provider, announced its public mainnet yesterday. The supply of USDe has increased drastically as market participants can earn differing amounts of Shards (akin to points) by acquiring USDe and holding, staking, locking, or providing USDe liquidity and locking LP tokens. USDe is backed by ETH and staked ETH, combined with short ETH hedges on CEXs to achieve a delta-neutral position. The yield from staked ETH and the funding rate from the delta hedging derivatives are earned by staked USDe, which has a withdrawal time of 7 days. Currently, this results in an APY of ~28%.

Ethena has split opinions among crypto thought leaders as there is a risk that the funding rate of ETH turns more negative than ETH staking yields for an extended period of time, which means that the protocol begins losing money. For such a scenario, Ethena has an insurance fund initially capitalized with funds raised from investors, and a take rate will be applied to the yield generated by the protocol such that the insurance fund grows alongside the outstanding balance of USDe.

ETH funding rates have historically been mostly positive, but the problem here is that historical data naturally doesn’t capture Ethena’s effect on the funding rate. As the sUSDe yield is highly correlated with market conditions, many have called the structure more akin to a yield vault than a stablecoin.

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community and more, with 2023 being the fourth-largest year for crypto venture capital.

Ethereum’s Dencun upgrade is scheduled for March 13. It will introduce several high impact changes, with the most notable being EIP-4844. As a result, gas costs on layer-2s will drastically decrease, and the Ethereum network will be one step closer to its end state of danksharding. Dencun should serve as a fundamental catalyst for ETH and layer-2 assets.

Crypto markets overall haven’t yet tested all-time highs, but MetaMask is well on its way to record numbers of active users

Solana’s token extensions enables developers to build complex token interactions

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.