DeFi Market Overview
-Will Sheehan
The dream of stUSD
This week Ondo announced their tokenization of US Treasuries called OUSG. The offchain financial engineering involved here is complex and the token will be heavily KYC’ed and transfer limited. However, if OUSG were to accumulate size the risk free rate could find its way onchain. The key factor is if a liquid lending protocol will be accepted into OUSG’s whitelist, in which case stablecoin yields across the board will start to lift. Anyone with OUSG will take cheap stable borrows and lever up OUSG if possible, lifting stable rates inside that pool but also lifting secondary lending markets implicitly (borrow USDC at 1%, lend at 4% somewhere else for free yield on top of collateral). The effect here would be similar to staking derivatives effect on ETH yield. ETH yields get pushed up by looped stakers, OUSG will be levered to the hilt if possible, providing benefits to all DeFi users via increased rates.
The dollar rates inversion between DeFi & Treasuries remains a huge headwind for stablecoins over the next year at least, products like OUSG provide a way forward.
NFT Market Overview
-kezfourtwez
The week started off strong as the NFT market rallied, bluechips pushed higher and the direction took a weird turn as profits flowed into every half baked degen mint. Most half-decent looking jpegs lined with the current narrative will mint out and get a wee pump, but for the last few months that’s all they’ve been getting before late entrants are left holding the bag. The degen flavour of the week is feetpix.wtf, yes that’s right - 10k pictures of pixellated feet are currently up more than 7000%, running from a low of Ξ0.001 to Ξ0.14.
This week held the 1y anniversary of Azuki and the next big Yuga announcement - both part of the reason the that bluechips were still running, particularly doggo’s, zooks and beanz. Azuki released Hilumia to celebrate. A two-dimensional explorer map detailing the lore of the Azuki world and featuring community members, project initiatives and further teasers. Yuga announced ‘Sewer Passes’, on the 18th BAYC/MAYC holders will be able to mint a sewer pass which is a ticket to play ‘Dookey dash’ (lol), in a quest to pick up cosmic fragments, hold the highest score and obtain the key to unlock the chest and evolve your pass into ???.
Traders love gambling on the news and the news loves to humble traders. The NFT market is remarkably efficient at pricing in announcements. Both ecosystems swiftly dumped 10-20% post release - further exacerbated by the ETH rally.
The other big news this week was the Mutant Hound Collar burn. Mutant hounds is a project backed by the Mutant Cartel and headed up by lior.eth, holder of multiple mega mutants. It’s an extension of the Yuga lore, 10k hounds. They’ve had a super impressive run so far - multiple partnership teasers, and much speculation on whether they will eventually be officially adopted into the Yuga ecosystem, has fuelled their run from a low of Ξ0.25, to over Ξ2.
On Wednesday, holders were eligible to burn a collar to receive a hound. Despite their strength, they didn’t manage to escape the infamous post-reveal dump. Immediately post burn, some large sweeps took price to a high of Ξ2.1 before swiftly retracing to the Ξ1.4 region. Yet they still haven’t broken HTF support and just bounced off the 4h vwap. I wouldn’t be surprised to see them continue trending up over the next 6 weeks while the rest of the Yuga story plays out. The support they’ve received and backing from OG Yuga holders has all but cemented them within the ecosystem.
Thanks for reading and bye for now, stay on top of the markets with Parsec and we’ll see you next week
hmmm
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