🟣 Spot ETH ETFs go live

Continued regulatory acceptance and the trading of events in markets

Author

Danny K
July 23, 2024

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

  • ETH ETFs begin trading

  • Polymarket and memecoin clash

  • Total stablecoin market cap breaks upward

  • Optimism Superfest and Aerodrome

At the immediate open of the spot ETH ETF, ETH and the general markets dumped a few percentage points. Being only the first day of trading, time will tell if the spot ETF provides a similar catalyst to ETH as it clearly did for BTC earlier this year.

ETH ETFs and Industry Optimism

It’s been over 6 months since the launch of spot Bitcoin ETFs in January. Today, finally, spot Ethereum ETFs have begun trading as well. Looking back over the past two years, it’s fair to say that acceptance of this industry has improved dramatically since the collapse of FTX and other prominent funds and figures. At the moment there is an air of optimism surrounding the crypto space with regard to further regulatory acceptance. What used to be a bold question mark has now begun to feel more like a matter of time.

Prediction Markets or Memes?

Polymarket has recently become a hot topic as US Presidential Election outcomes have been in the spotlight. The recent announcement that President Biden will not seek re-election has ignited similar interest in Democratic candidate odds. Many have begun proclaiming Polymarket as the first crypto app with sustainable product market fit. This feels like a jump of the gun - as much of the activity is centered around the election it is natural to wonder if their upward trajectory can continue post-election. Not to mention, retail participants also have the option to trade events via memecoins with theoretically unlimited upside rather than the capped upside of prediction markets. The growth of applications like pump.fun and DEX trading bots showcase the clear demand signal for memecoins from retail. With both memes and prediction markets growing in interest, longer-term it will be interesting to see where retail decides to spend more of their time (and capital).

— Danny K (X: @defi_kay_)

Thank you to our sponsor:

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Total stablecoin market cap:

After several months of stagnation in total stablecoin market cap, it has finally begun to tick upwards beyond $160B.

The rally in Bitcoin and the broader crypto markets from Oct ‘23 to Mar ‘24 coincided with a near 33% increase in stablecoin market cap.

This fresh uptick in stablecoins could be a sign of more good times to come.

— Danny K (X: @defi_kay_)

The Optimism Collective has allocated 1.5M OP rewards to incentivize activity across OP-stack chain applications with Optimism Superfest. The event has been ongoing for the past few weeks and includes rewards on OP mainnet, Base, Mode, and Fraxtal.

AAVE, Balancer, Compound, and another 30+ protocols across the four chains are included in this rewards event. Users that are already interacting on these chains may find it worth their time to review the specific quests available and their associated rewards.

Notably, users of Aerodrome on Base that accrue veAERO voting power are being incentivized with a pool of 70k OP. Blockworks Research analyst Daniel Shapiro’s (X: @_dshap) recent report on Aerodrome highlighted the value of the DEX and its AERO token as a potential proxy bet on the growth of the Base ecosystem. The additional OP rewards for acquiring veAERO offers another small short-term benefit to the broader AERO token thesis, in addition to the yield earned for vote-locking veAERO in the first place.

— Danny K (X: @defi_kay_)

Metaplex, the leading NFT protocol on Solana, has established a dominant position due to its comprehensive suite of tools. It has a functioning economic model with a buyback program that enhances its value through revenue generated from SOL-denominated fees. While initially focused on NFTs, Metaplex is diversifying its offerings to include non-NFT services, indicating a promising future as a comprehensive token creation suite on Solana.

ZKPs enable efficient offchain transaction processing and validation, resulting in increased throughput and reduced fees. Solana's ZK Compression leverages ZKPs to minimize onchain storage costs, while Sui's zkLogin streamlines user onboarding by replacing complex key management with familiar OAuth credentials.

Products holding the second-largest crypto asset by market capitalization hit the Cboe, NYSE Arca and Nasdaq exchanges Tuesday.

Plus, are people still excited about the ETH ETFs?

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.