Parsec Weekly September 17th
DeFi and NFT's
DeFi Overview
-Will Sheehan
ETH liquidity was drained, primarily from lending pools as ETH rates spiked to the max on aave. Liquidity was immediately re-injected upon the successful merge. Primarily from large ETH borrows promptly repaying.
stETH was crutched into the merge since it carried both the execution risk of the upgrade but also an embedded discount relating to the ETH pow fork value. A switch has clearly been flipped for this asset moving forward (it is yield bearing after all) and no longer tracks ETH beta. The pressure release on this asset avoids a potentially calamitous leverage unwind on aave.
Leveraged staking will return in a new flavor and higher leverage, but tools like aave-v3 are more up to the task of handling such markets.
With the merge complete, theories around staking rates will start proving out (or not). MEV boost quickly shipped and already has decent traction, with flashbots leading the way in terms of relayers (dashboards on this from us to come very soon).
Internally our eyes are on arbitrum and cosmos as leading hubs of activity in the coming months now that the hulking merge narrative is behind us. Ironically the narrative vacuum will provide some interesting opportunities now that attention flows are less “obvious”.
NFT Market Overview
The overall market hasn’t changed much since last issue, volume still low, rotations, rotations, rotations. This week it’s Renga’s turn and I have to say congrats to them! Dirty Robot’s been creating in the space for a long time and it’s nice to see Renga’s continuing to do well upon the black box openings - a clear winner on the volume monitors below.
Solana has received a lot of attention and activity over the last couple of weeks because of y00ts and ABC, which managed to pull many ETH natives over to the ecosystem. You can now chart Solana NFT’s, watch the firehose and compare projects in the collections table with Parsec, more features to come.
TLDR:
Blackboxes and Renga’s both sit around a 4x post reveal and since last week
New project Anomura Mystery Bowls tied to Atari - up 8x since mint
ENS doing numbers
y00ts
Roiland and Paradigm’s Art Gobblers
ENS - ENS has been doing monster volume in the last couple of weeks, they’ve stayed consistently among the top performers in the parsec volume monitors. Floor price on the 10k club recently rose by 253% from the lows to an ath of 3.3 ETH - currently sitting just above 2. The 1k club though much lower volume sits at an impressive floor of 32 ETH, and even the 100k club is currently trading for 0.06. That puts the estimated market cap of all three at 70k ETH or $113m. It’s pretty insane to see, especially seeing as back in the Jan NFT lull there were still 3 digits left to register.
I can’t say exactly why it’s been pumping so hard. ENS is one of those collections I don’t see much chatter about on the timeline, which I suppose means you could instead attribute the volume to organic growth and demand instead of ‘pump it’ mechanics. The value proposition of buying ENS now can be likened to buying up .com’s in the early 2000’s, but why are people buying up numbers? The answer is provenance, owning 420.eth or 069.eth is a flex, it says you were here and you took part in early crypto culture. Similar to the off shoots that arise when a pfp collection becomes popular, digit derivatives have started being popularised - addresses with all sorts of prefixes and suffixes, 999 clubs in other languages, 0x this, $ that. Ens.vision is probably the best site for exploring the world of Ethereum addresses, you can also register names through them.
Do you think we will see major adoption of .eth domains in the next 20 years? google.eth, apple.eth, amazon.eth being used as infrastructure? Currently not a whole lot of web2 giants own their domain though Nike, Budweiser, and Coca-cola all do. On the other hand a huge amount of crypto infrastructure, data platforms, funds, NFT marketplaces and projects all own theirs. Here is a comprehensive list compiled by @etheraltog.
y00ts - Even if you are not involved in the Solana ecosystem, by now you’ve probably heard about y00ts - The second project by the DeGods team and their famed leader Frank. To give a little bit of backstory, DeGods minted exactly a year ago today and here is a visual overview of how it went at the time.
Despite the fud, the project has been wildly successful since. They’ve built up an incredibly solid community, bought a basketball team, implemented some fun mechanics, had celebrity’s rocking their art on twitter, numerous IRL events and not surprisingly - DeGod holders are notorious for being diamond handed, they currently sit at a floor price of 369 SOL with only 1% listed. They are widely regarded as the #1 pfp project on Solana.
Frank has spoken DeGods into existence and success. Despite being undoxxed he is an incredibly public figure. Always attending interviews, podcasts, twitter spaces, parties, NFT centric irl events and the list goes on. It’s been a masterclass in marketing for anybody watching. He is constantly putting himself and DeGods into the limelight, and whether it’s good or bad attention it’s worked wonders for their fame and notoriety - I admire his work ethic and ability to put himself out there. To get an idea of what I mean, I’d suggest watching the quick promo video on the DeGods website. Featuring Gary Vee and IceCube it should give you a bit of an idea of what I’m talking about and their rise to stardom over the last year.
The y00t(s) didn’t fall far from the tree, they came up with an ingenious whitelisting mechanic that harnessed the power of fomo and twitter reach. People had to apply with a written application on what they do, why they would be of value to the community and why they deserve a spot. The ingenious part is that successful applicants were broadcasted over twitter on a dedicated y00tlist account and their reach was boosted by giving y00tlist to influencers and large accounts. Lately there’s been a whole lot of chatter surrounding the project and leading up to mint, from salt to gratuity, it was all just a promotional campaign for them.
Beyond getting successfully y00tlisted, applicants needed 375 DUST to mint, which is either yielded from staked DeGods or bought on secondary markets - at the time of mint that was about 30 SOL or $1000. y00ts opened on secondary at a whopping 200 SOL but quickly fell back to 110 before finding buy pressure and momentum that took them back up to around 150. They currently sit at 130 SOL or $4000, a quick 4x for successful applicants.
One more interesting mechanic - y00ts currently aren’t y00ts, they are t00bs, a small transparent sphere with their trademarked primary colours rolling around into each other inside. These t00bs can be burnt 1:1 for a y00t at an undisclosed point in time. A little bit of game theory similar to CloneX and their mintvials or Mutants and their serums which both currently hold at least a 2x premium to their revealed counter parts. In a similar fashion I don’t expect y00ts to hold this premium after reveal, but Frank may surprise us, we will see.
Art Gobblers - “An experimental decentralised art factory by Justin Roiland and Paradigm”. Lately the NFT market has been a vapid game of liquidity hot potato, few projects are bringing anything new or exciting to the table - but Gobblers are. In the most basic explanation I can give, Gobblers are creatures that love eating art, they eat art that is drawn by the community on pages that you can only acquire with a utility token that is only produced by Gobblers. The art that they eat is then displayed forever in their stomach gallery. If it works, it’s an ingenious positive flywheel;
“As artists create cool art, the cultural relevance of Art Gobblers will grow. As cultural relevance grows, Gobbler art will be in higher demand from collectors. As artists see higher collector demand, they will create cooler art.”
Gobblers love the smell of their own goo so the more goo they have in their tanks, the more they will produce. If you’ve ever watched Rick and Morty, the lore is all on point with Justin Roiland’s usual lateral style. An initial 2k gobblers will be minted to a hand picked whitelist, who nominated others, who then nominated others (great for curating who will be championing these the gobblers in the beginning and the calibre of art that will be on display in the stomach galleries). Over the next 10 years another 8k will be minted with goo using a VRGDA mechanism (variable rate gradual dutch auction), which you can read more about here.
Traditionally we’ve seen utility tokens slowly misalign the incentives between jpeg holder and token holder. Gobblers fix this - goo is hyper-inflationary, because gobblers with more goo in their tanks produce goo faster, the supply will exponentially increase which is also why a VRGDA is being used to mint the rest of the collection. Here’s why this mechanism is smart though:
Accumulating goo without any gobblers will get your supply diluted away to nothing very quickly
Owning gobblers but spending all of your goo too quickly will exponentially slow your production down and you’ll fall behind
The goonomics level the playing field between whales and single gobbler holders in terms of production
The gamification means that to be successful and keep up with the pack you will need to be buying pages, eating art and spending goo at the perfect rate.
There’s no mint date set yet, but when they do it will be free for the lucky WL’ers. Another interesting note - all gobbler mechanics and tokenomics will be set in stone upon release, if it works it works and if it doesn’t there is nothing they can do. They are intending it as a self-sustaining art experiment. Imo V cool, I haven’t read an nft whitepaper that excited me that much in a while, I don’t have WL but I’m super excited to follow along. I love innovation in the space and lately, the space has been lacking.
Bye for now, use Parsec to stay on top of the markets - we’ll see you next week
Great write up. Convinced me to renew my subscription that expired last week because I had not yet discovered these volume monitor charts - will certainly be using them in Page One 🫡 thanks mate
good