Ordinals
-kez
gm onchain enthusiasts
A few weeks ago I said we’d have some ordinals data to share with you soon, that time is now! NFT analytics became popularised as interest in the asset class went (temporarily) mainstream back in 2021/22. The swath of terminals and analytics suites to help traders find edge grew over time as new tech was created, popularised, cloned and iterated on; and thus Ethereum gained a rich ecosystem of illiquid jpeg tooling.
The analytics landscape for Bitcoin on the other hand is near non-existent. I only know of a few places to chart or see holder data for ordinals, and none of them have a wide range of functionality yet. As onchain voyagers we love building out analytics for new ecosystems that we see potential in, and you can now use Parsec to chart Bitcoin jpegs!.
So today I’m going to write about the ordinals ecosystem and my experience with it so far.
First off I want to lay out three reasons that I am bullish on ordinals, they’re personally all I need within my thesis.
Bitcoin is the oldest and richest chain with the most amount of dormant money on it, and up until now there was nothing to do with your BTC except for transact with it
Friction; The friction and long block times means a) Less people are likely to try out ordinals until it’s too late, ie. if you bother to bridge and buy a few corn jpegs you are ahead of the curve, and b) A slower moving chain means more inefficiency in price action (it feels like the early days of trading NFT’s on Opensea)
Unit bias; the unit bias means people are more likely to spend more of their precious corns with less thought
Ordinals came into being early last year when Ordinal theory was created by Casey Rodarmor. It’s the process of assigning a sequential number to every individual satoshi and then inscribing metadata onto them to essentially create a Bitcoin NFT.
One interesting thing about them is that they have inscription numbers, early ones have provenance unlike NFT’s on any other chains. Sub 10k inscriptions already command a premium but I imagine that in time the pool of ‘early’ inscriptions will become much larger.
In the beginning they were being traded OTC via spreadsheets before anybody had created a marketplace. The popular collections back then were most unoriginal and fleeting like bitcoin punks (a 10k carbon copy of punks with orange backgrounds). Once the trend started to catch the race was on to be first to market and there ended up being a lot of random small collections or completely random inscriptions not part of any collection at all. This leads me to Nodemonkes.
Nodemonkes
Nodemonkes are one of the first proper 10k collections with structure and unique art. Their inscriptions range from 83k - 111k so provably early, yet the collection wasn’t ‘minted’ and distributed to holders via a dutch auction until late December last year.
The DA finished at 0.03 BTC and price swiftly went from a low of 0.05 to 0.3 over the next 10 days. They stagnated and fell back to 0.14 after the initial mania before entering a 6 week consolidation period. Over the last few days they have been picking up steam and currently sit at 0.27 BTC.
Something I really love about Nodemonkes is the art. In a world full of derivatives of derivatives of derivatives they stand out. They still took some of classic punk tropes like hoodies and aliens, but overall the style of the art is quite unique. They are pixel art yet there are very few square shapes, more rectangles which gives them an abstract feel. They also opted for no outlines which I’ve never seen before. Sighduck wrote a good thread breaking down what makes the style unique.
Bitcoin Puppets
Puppets minted for free (or very cheap) not long after Nodemonkes in early January. They gained a supportive community of autists quickly that feels super organic - the pups are always chattering away in the discord and the community made memes are impressive and always flowing.
Unlike Nodemonkes which felt destined for greatness well before mint due to their early inscription numbers and long incubation period, Puppets came from nothing, adopted purely due to the vigor of their community and impressive penetration into daily crypto discourse. To me they feel like a Milady style come up without all the negative aspects.
The puppets art style is also quite unique and doesn’t follow the standard NFT playbook. It’s coarse and pixelated, but it’s recognisable and silly as hell.
There are many other popular and already quite valuable collections aside from these two, but I chose to talk about them as they both feel like the ‘chosen ones’ and are consistently at the top of the volume leaderboard. In no particular order here are some other interesting projects to check out:
PFP’s
Ordinal Maxi Business
2.1k supply
Inscription range 89945 to 11523702
0.78 BTCBitcoin Frogs
10k supply
Inscription range 381224 to 412389
0.17 BTCOrdinal Punks
100 supply
Inscription range 407 to 642
4.25 BTCQuantum Cats
3.3k supply
Inscription range 53785860 to 53790617
0.23 BTC
Generative Art
On the Edge of Oblivion by Nullish
554 supply
Inscription range 9978 to 21627
0.15 BTCSATS
100 supply
Inscription range 8815 to 49891
0.38 BTC
It’s still a young ecosystem yet this article only just scratches the surface of it all. I could go into plenty more detail about the nuances and lore but I’ll save that for another day, hope you learned something!
The public launch of USDe
If you somehow haven’t already heard of Ethena, they are building USDe which is a novel form of stablecoin, or as they refer to it, “an internet bond” which harvests both the staked ETH yield and the perpetual futures funding rate for ETH on centralised exchanges. By taking 1 unit of staked ETH, using it as collateral and shorting 1 unit of ETH perpetual futures contracts against it, they are able to create synthetic dollar exposure which they tokenise as USDe:
In its staked form (sUSDe), the internet bond earns both the staked ETH APR and the perpetual funding rate which has historically been positive, these rates combined yield a 15.16% APR on sUSDe at the time of writing - the highest organic yield in DeFi (to my knowledge). According to financial theory, by the no arbitrage principle this opportunity would be non-existent as the ETH perpetual futures funding rate would converge to the ETH staking rate (perhaps with a few additional basis points of counterparty risk baked in) but as we know, Crypto markets are far from efficient! Ethena are poised to capture this historically large and ongoing inefficiency.
While USDe was in a private launch phase for some time, this Monday marked USDe’s official launch to the public. Along with the public launch of USDe, the Ethena team launched their Shard Campaign which is a points program under a different moniker. The Shard Campaign will run either for 3 months or until USDe hits $1bn in supply, currently the latter looks like the most likely outcome as USDe supply is up only since public launch:
Different activities are incentivised differently in the Shard Campaign with providing liquidity being valued most highly as the team look to bootstrap liquidity for USDe on the secondary market:
While there has been some FUD spread on CT this week about the USDe design, from our perspective the team have always publicly stated the risks and have provided significantly more statistical research than other stablecoin designs which we have seen emerge over the past few years. We are looking forward to following along with their Shard Campaign and watching as USDe gets integrated across DeFi. We are particularly interested to see any impact on stablecoin interest rates, in a similar fashion to how sDAI increased borrow rates across the board, sUSDe could have a similar impact.
USDe can be tracked on the Parsec Explorer, Matt Casto also put together a brilliant layout for monitoring Ethena which can be found here: https://parsec.fi/layout/mc_8_94/rtHOYLw7
As always we appreciate your readership, if you enjoyed this article please leave a like and share it around. Have a good weekend and we’ll see you next week!
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