DeFi Market Overview
-Will Sheehan
December has been a bit of a tired shrug, volatility at yearly lows with narrative momentum nonexistent, Squeeth price exhibit A.
The major bright spot in onchain markets of late has been L2s, with both optimism and arbitrum remaining active with some of the only net new projects/narratives being launched on both platforms. This is probably the first time in my memory that L2s have been buzzing more than mainnet. Most mainnet protocols are a bit anemic in these conditions with ETH/USDC trading and lending humming along but other activity quite low.
Both chains have grinded for a while in a turbulent environment and found some durable success, particularly Arbitrum. With majors low volatility set to continue, L2s have an opportunity to suck up some attention with increasingly robust ecosystems. Furthermore, zkr’s have a tall order catching up to these ecosystems that have been built over the last year+, delays only.
NFT Market Overview
-kezfourtwez
Quite a lot of releases and news this week. Volume is steady at double the average for the preceding few months. The market seems to be enjoying the relief that the proposition of a continued Christmas rally brings. Many bluechips are still pushing higher and managing to retain most of their gains. Blur is accounting for close to 70% marketshare due to bids and the airdrop incentive.
Yuga dominance has reached its highest point at 53% since the peak of the Otherside hysteria back at the end of April. Doggo’s lead the Yuga pack on floor price with apes and mutants at relatively the same level and otherdeeds lagging behind.
Despite the continued growth and volume of the NFT market, sentiment and engagement seems lacking across crypto/NFT twitter and discord servers. Maybe it’s just the holiday season, or maybe sentiment is front running the end of this rally. I expect most Yuga assets to at least hold where they are heading into January and beyond, as the majority of other NFT’s cool off. Yuga just released the prologue video for the Trial of Jimmy the Monkey and they have 5 more video’s and events leading into early February. At 53% total volume share of the NFT market, Yuga really are propping up the entire thing at this point.
Things that happened this week:
A whirlwind of Yuga announcements this week. BAKC surge on Yuga teaser for trial of Jimmy the Monkey. The first full length video in a series of 6 also dropped. Yuga announces they’ve hired @dalegre as their new CEO (prev. Activision Blizzard). The next Otherside teaser trailer was also released along with details about the next ‘trip’, playable NFT avatars, building and more
Doodles break silence and give update regarding Doodles 2, the genesis box and dooplicator. Dooplicator will become a Doodles 2, genesis box will outfit them
Wolfgame sees influx of volume off the back of the Woolpaper and full game release
Mutant Hound Collars partial reveal, 9975 regular collars which will be exchanged for a hound at some point, and 25 lucky holders revealed a mega collar. So far the highest sale for a mega collar is Ξ64
Blur has been a force to reckon with since they introduced bidding. On one hand they’ve brought incredible liquidity into the NFT market that prior has never existed. Read this tweet about Spencer. He made a play on Otherdeeds leading into the Yuga announcement. He bought 42 in anticipation of a mention of the Otherside, his thesis was wrong so he immediately disposed of them all in one transaction into bids for a Ξ0.2 profit. A bet he wouldn’t have been able to confidently take had Blur’s bid side liquidity not been on the table. If he had tried to do this without, he would have eaten a massive loss as he demolished the floor whilst trying to offload them all.
That’s the positive side. The negative side for price speculators is that the newly found tight spreads and huge volume of bids waiting to be accepted has stunted price discovery for a lot of collections.
Last week I posted this mutant chart and it’s probably still the clearest example. Tight spreads don’t completely inhibit rallies, but I do think that they limit upside on most lower volume collections. If a project is experiencing negative sentiment, it can go the other way. Bids being constantly accepted and left over bidders lowering their new bids to match the new floor price, causing a downtrend - CloneX is a good example of this after their botched Monolith debacle.
Thanks for reading and bye for now, we hope you all have a festive holiday season! Stay on top of the markets with Parsec and we’ll see you in a couple of weeks.
good
great project