DZ Notes

All content is for personal research and reflection. NFA.DYOR.

Reflection/Learning of the Week#

• 2023 Cryptocurrency Status Report (Summary)

  • Blockchain has more active users and more ways to participate. The number of active addresses reached a new historical high of 15 million last month, doubling in the past two years, thanks to the increasing number of applications and services such as blockchain games that provide new ways for people to participate.

  • DeFi and NFT activities seem to be on the rise again with the emergence of promising new use cases and applications. After a speculative period and subsequent cooldown, more people seem to be buying NFTs in recent months. Meanwhile, decentralized exchanges saw trading volume surpassing $100 billion last month, marking the third consecutive month of positive growth in trading volume.

  • In the past two years, the NFT market has paid nearly $2 billion in royalties to creators. In comparison, Meta allocated $1 billion to creators in 2022 alone. Considering that Meta's platforms (Facebook, Instagram, WhatsApp, etc.) have a monthly user base of approximately 3.74 billion, while there are currently estimated tens of millions of web3 users, this comparison is even more astonishing.

  • The number of active developers in the crypto industry remains stable. The builders attracted during the bull market of 2020 have persevered. Last month, nearly 30,000 developers contributed to or built on crypto projects, representing a steady growth of over 60% in the past three years.

  • Blockchain is expanding through promising new avenues. The proliferation of protocols and projects is working to expand blockchain, facilitating more transactions using various methods and technologies. Last year, Layer 2 (L2) scaling solutions accounted for 1.5% of Ethereum's total fees. Today: 7%.

  • Once almost impossible new technologies are becoming very real. We are seeing remarkable progress in the work on "zero-knowledge" systems, which will unlock further blockchain scalability and new categories of privacy-preserving applications (not to mention applications in artificial intelligence). Data shows positive trends in ZK-related research, developer activity, and usage.

  • The United States is losing its leading position in web3. The proportion of US crypto developers compared to other regions of the world has decreased by 26% from 2018 to 2022. Thoughtful regulation can encourage crypto builders to innovate and develop these technologies safely in the United States.

  • Progress in displaying key metrics is narrowing. Market capitalization, developer activity, and funding activity have all been steadily growing over the past decade. Stepping back from short-term volatility reveals a more predictable pattern: price fluctuations drive cycles of innovation. When crypto prices rise, more people become interested and join in. In turn, this attention sparks (and funds) new ideas, startups, and projects, some of which lead to long-term adoption.

Weekly News#

• Weekly Data

  • BTC price: 30,400 yuan, ETH price: 2,098 yuan
  • Cryptocurrency total market value: 1.36 trillion (trillion) yuan; BTC total market value: 587.8 billion yuan, accounting for 43.19%; ETH total market value: 252.4 billion yuan; NFTs total market value: approximately 22.6 billion yuan;
    [MVRV Z-Score]: {0.73}; [MVRV]: {1.52};
    [2-Year MA Multiplier]: {34,463-172,313};
    [200-week moving average]: {25,700}

• General News

  • The US March CPI increased by 5%, slightly better than expected, confirming the market expectation of a 25 basis point rate hike by the Federal Reserve in May. [However, in the three months following the end of each rate hike cycle in the past 20 years, the US stock market has experienced a significant decline due to economic recession. So this rebound may end when the rate hike takes place in May, starting a few months of adjustment.]
  • The "Hong Kong Web3 Festival 2023" was held from April 12th to 15th in Hong Kong. The Hong Kong Web3.0 Association was established, and the Chief Executive attended and gave a speech.
  • Zhongan Bank in Hong Kong will provide exchange services for converting encrypted tokens into fiat currency through a licensed trading platform.
  • The Shanghai upgrade of Ethereum has been completed, adding withdrawal functionality for users to withdraw staked ETH and related earnings.
  • Cai Wensheng stated that the technological breakthroughs in AI bring tremendous value to the crypto world, and the combination of AI and blockchain will develop Crypto 2.0. The next three years will witness the first technological explosion of Web3 in infrastructure and application layers, driving the development of the economy in the next decade.
  • HashKey Group will launch wealth management services through its new wealth management division, HashKey Wealth, targeting institutional investors and family offices with a demand for digital assets.

• Capital and Financing News

  • According to the latest data from Galaxy Digital, the cryptocurrency industry had a total of 439 investment and financing transactions in the first quarter of 2023, an increase of about 20% compared to the fourth quarter of 2022. Seed stage financing transactions accounted for a higher proportion, but the investment and financing scale of the cryptocurrency industry in the first quarter was only $2.4 billion, the lowest level since the fourth quarter of 2020. In terms of verticals, Web3, NFT, DAO, metaverse, and gaming sub-industries received the most financing transactions, while crypto trading, lending, wallets, and other sub-industries received higher financing scales.
  • Metalpha plans to establish a $100 million fund for investing in Bitcoin and other Grayscale Investments LLC crypto products, providing a regulated channel for Chinese investors interested in crypto.
  • Sei Network announced the completion of a $30 million financing round with a valuation of $800 million, with participation from Jump Capital, Multicoin Capital, and others. OKX Ventures announced a strategic investment in Layer1 public chain Sei Network. Sei Network is the first parallelized Cosmos chain that allows simultaneous processing of independent transactions, increasing overall throughput and latency, designed for trading. Sei Labs announced the completion of a $50 million financing round for its ecosystem fund, following a recently completed financing round with a valuation of $800 million. This round was participated by Bitget and Foresight Ventures, bringing the company's total funding to $120 million.
  • Mysten Labs (Sui development team) has spent $96 million to repurchase shares from FTX, including the repurchase of all warrants previously purchased by FTX for Sui Tokens.
  • Absolute Labs, a web3 CRM solution developer, has completed an $8 million seed round financing. The new funds will be used to expand the business and accelerate the way brands acquire, engage, convert, and retain customers in web3. The web3 CRM solution enables marketers to gain valuable insights into prospects and customers, unify web2 and web3 on-chain data, identify actionable segments, and automate cross-channel campaigns, including NFT airdrops across the entire marketing funnel.
  • Zero-knowledge proof Layer 2 CryptoGPT raised $10 million in financing with a valuation of $250 million, led by DWF Labs. CryptoGPT aims to allow users to earn money by monetizing data in areas such as fitness, dating, gaming, and education, and plans to launch NFTs that store owner activity data. (CryptoGPT's chatbot product Alex is suspected to be a derivative of OpenAI's ChatGPT.)
  • EOS Network received a $60 million investment from DWF Labs. The two parties have signed a $45 million EOS Token purchase agreement and a $15 million investment commitment.
  • DWF announced another $10 million investment, this time for the acquisition of RSS3 tokens worth $10 million. Previously, RSS3 announced the launch of the AI open platform AIOP, which provides Web3 information sources for AI models such as GPT, aiming to be an innovative protocol that combines Web3 with AI, search engines, and social media. Currently, RSS3's total funding has exceeded $30 million, with investment from institutions and individuals including Balaji Srinivasan, Coinbase, Dragonfly, and GGV Capital.
  • Decentralized camera network Natix Network, based in Hamburg, Germany, announced the completion of a $3.5 million seed round financing, led by Blockchange Ventures. Natix Network creates real-time city maps using AI technology for decentralized cameras.

• NFT

  • HashKey's NFT team, HashKeyNFT, plans to hold the Asia NFT Summit NFTasia in 2024, with the main venue in Hong Kong. The event is supported by HashKeyNFT, EtherPOAP, IPrinter, and WXblockchain. NFTasia will collaborate with top crypto artists, traditional artists, NFT Degen, Native OG, and top NFT DAOs, providing ample exhibition space and speaking opportunities at an art venue in Hong Kong.
  • NFTfi has taken a snapshot of all historical activities on its platform, covering all historical lending activities on the platform. The snapshot was taken around 11:52 am Eastern Time on April 13th (Block 17039465), providing a comprehensive view of lending transactions that have occurred on the NFTfi platform since its inception. The data shows that the platform has approximately 3,247 borrowers and 1,603 lenders. Details of this snapshot have not been disclosed by NFTfi.
  • Chiru Labs, the parent company of Azuki, has announced a collaboration with LINE FRIENDS (IPX), a trendy studio. Azuki stated that the partnership with IPX opens the door to collaborative content between their IPs, retail distribution in LINE FRIENDS stores, and immersive IRL experiences that combine the two worlds. Their partnership with IPX began with BEANZ and LINE FRIENDS IPs and may expand to other IPs in their portfolio.
  • Moonbirds announced that "Mythic Eggs" claim will start on May 17th.
  • Christian2022.eth, co-founder of "Lil Ghost," sold 27 Lil Ghosts for 54 to 59 ETH each, causing the floor price to briefly rise to 0.99 ETH.
  • Music NFT platform Sound.xyz announced that it will open to all users within the next three months. During the preparation for full release, Sound.xyz will deploy artist onboarding processes (including email registration, credit card payments, and mobile apps), verify audio ownership (ensuring users do not upload copyrighted music), and conduct testing and verification.
  • NBA Top Shot announced on Twitter the launch of "Redemptions," exclusive digital collectibles for the 2023 playoffs. Users will have the opportunity to own and redeem Moment NFTs of players from the first round, semifinals, division finals, and NBA Finals. The better the team's performance, the scarcer the "Redemptions" NFTs held.
  • BAYC | YUGA LABS | ApeCoin DAO
    • BAYC's trading volume on OpenSea has exceeded 1 million ETH.
    • The main address of Franklin, franklinisbored.eth, sold 27 BAYC for prices ranging from 54 to 59 ETH.
    • According to NFT Whale Alert, an address starting with 0x4C9f sold 76 MAYC NFTs, exchanged for 981.49 ETH.

• Exchanges and Traders

  • Justin Sun stated that Huobi achieved $150 million in revenue and $120 million in expenses in the first quarter, resulting in a profit of $30 million. It is predicted that Huobi's revenue in the second quarter will be $187 million, expenses will be $76 million, and a quarterly profit of $111 million will be achieved.

• L1/L2/Sidechains/Cross-Chain and Infrastructure Tools, Stablecoins, etc.

  • According to data from the Flipside data panel, Ethereum NFT users have paid over $3.8 billion in royalties, platform fees, and transaction gas fees in the past two years. Royalty fees accounted for $1.878 billion, platform fees were approximately $865 million, and transaction gas fees amounted to $1.082 billion.

• DeFi/GameFi/SocialFi/Innovation/Blockchain Games

  • According to a joint study by DappRadar and Japanese cryptocurrency company Pacific Meta, Asian gamers are expected to dominate the Web3 gaming market. The study found that Asia already has 1.7 billion gamers, accounting for 55% of the global gaming population, and may represent 80% of all Web3 gamers.

• Metaverse

  • The newly established UK Department for Science, Innovation, and Technology will drive the national metaverse and Web3 strategy. Sources indicate that the department will not focus on specific technologies such as blockchain and virtual reality, but rather on potential economic growth opportunities, investments, and business models related to concepts like the metaverse and Web3, as well as their impact on regulation.

• DAO and Other Web3

  • Solana Web3 flagship smartphone Saga announced that it will be publicly available on May 8th, with each Saga priced at $1,000.