Parsec Weekly #79
Market round up and the Hyperliquid spot eco
Good morning onchain enthusiasts, I’m going to skip the small talk today and dive straight into some happenings.
Very little has changed in the wider market since last weeks newsletter, BTC is at almost the exact same price. $57k is the line in the sand at the moment, multiple big wicks on both sides and sitting just under the 200d EMA. Not bad considering the German government continues to sell down their stack of BTC, and we’ve had multiple other large entities offloading. Something something bad news begins to have less and less effect over time.
This week we’ve had an ICO era whale start selling some of their huge stack of ETH en masse. Golem raised 820,000 ETH back in 2016 and in the last 10 days they’ve sent 71,000 ETH ($260m) to exchanges. This equates to nearly half of what remained prior, eight years on and they are now left with 77,000 ETH.
The second large seller is Genesis, a subsidiary of DCG (Barry sends his regards). Genesis was one of the largest lenders during the 2021 cycle, they’ve been quietly transferring large (but much smaller than the German govt) amounts of BTC to Coinbase. Since mid June they’ve sent out 12,000 BTC.
Hyperliquid
Whilst the rest of the market goes sideways and begins to try and find its footing after a pretty brutal sell off last week, pockets of outperformance are occurring.
The pocket in question is Hyperliquid spot tokens. I think I’ve written about HL 3-4 times already, but whenever the pool of other interesting topics to write about gets this small it’s an obvious choice.
Hyperliquid has been getting more attention on the timeline recently, for a few reasons:
The HL bull thesis is that this is the cycle that onchain takes a significant marketshare away from centralised exchanges, and that HL is the perfect candidate to spearhead it. Not only are they a well equipped perp and spot dex with the volume, users and TVL to show for it, but they are also building towards a whole chain that challenges the likes of the parallelised EVM narrative. That means the sheer speed that the HL perp and spot order books run on except permissionless. Anyone will be able to deploy anything they want, laying the foundations for a flourishing ecosystem. That EVM is already live as a testnet.
Before we go any further I’d also like to mention that currently Hyperliquid remains ‘just a perp dex’ in the eyes of many. You bridge USDC from Arbitrum so it feels just like a Vertex or GMX.
But it’s not, Hyperliquid is already its own chain, it’s just not permissionless yet. In my opinion people are starting to realise the potential though.
While onchain volume and usershare of perpdex’s and the likes remains far below CEX’s, the pieces of the puzzle are falling into place. First they were just a perp dex, then they deployed spot tokens, then they made spot deployments permissionless using a novel auction mechanism, and now we have just had the first established DeFi app announce that they are building on Hyperliquid - Rage trade recently purchased the ticker $RAGE and announced they will be launching their token on HL on August 7th.
Alright enough yapping. The whole reason I’m writing about HL again is because many of their spot tokens are outperforming whilst the rest of the market trades sideways and down, so let’s get to it. When the HL team deployed PURR as a proof of concept for their spot trading it was an instant success with some volatility in between.
PURR has now been trading in the same range for 85d whilst permissionless spot deploys went live and the beginnings of the HL spot ecosystem were born.
At first, volume and attention were low. The ending price of the auction’s and the amount of users in the ecosystem were also low. New coins would get sniped by a few, without the buyers on the other side to back it up, so you had a lot of charts that looked like this:
Believe it or not, this chart is the first four days of the crown jewel of the permissionless spot tokens, $HFUN.
As more people cottoned on to what Hyperliquid is as a whole, and what they aspire to be, demand went up.
Now we have a whole lot of charts that looks like this:
Go and have a look at any of the spot tokens, 70% of the charts look like this. Almost as if everyone suddenly realised all at once that these tokens are the only current way to get exposure to the eventual HL token.
As it stands, Hyperliquid generally do between $500m and $2b in volume per day, the bridge is incredibly active as you can see from the activity map below, it currently holds just under $400m in USDC and they have 150k users since inception.
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!