DeFi Market Overview
-Will Sheehan
Chicken Bonds
Liquity launched the first implementation of chicken bonds for LUSD liquidity inside the stability pool. So far the bonds have drawn in almost 7m LUSD, and net 2.4m LUSD in the pool counteracting some withdrawls. My mental model for chicken bonds is that they are an alternative to olympus style bonding. OHM grew out of control due to the rebasing but the bonding is the enduring concept for bootstrapping protocol owned liquidity. Olympus bonds are basically discounted risk tokens in exchange for hard assets. Chicken bonds provide boosted yield in a more complex process with the important guarantee of principal protection. Chicken bonds are unlikely to spark reflexive loops the way olympus bonding (sometimes) does, but could provide a slower more organic PCV growth strategy.
Sushi Take 2 (3?) ((4?))
A new head chef was elected for the beaten down protocol. Goldentree announced a position and an ambition to take an active role in a rebuilding process. The question here is why revive vs build anew, the answer appears to be the brand legacy of the infamous DeFi summer top-tick. Structurally Sushi has typically acted as high beta DeFi, their main volume drives have historically been assets like OHM, SPELL, MIM (& SUSHI) - the assets way out on the DeFi risk curve. The multichain strategy has been a talking point for sushi but has faced headwinds everywhere since on every chain a team would spin up a clone an brr tokens (in true sushi fashion) and outcompete sushi (trader-joe, spookyswap, quickswap among others). The road ahead is unclear and outlook is bleak making this another case of distressed DeFi.
NFT Market Overview
-kezfourtwez
The beginning of Uptober has felt pretty lively so far as a few new and old collections see an influx of attention and volume, it feels like there is more liquidity floating around. Some lower than expected macro numbers that released this Tuesday were seen as bullish enough for most markets to ever so slightly turn the risk tap on, this was felt within the NFT market also. But as usual the volume charts haven’t given any real sign of renewed and sustained liquidity entering the market just yet, just good old rotations. I can’t help but think that some of this is due to Renga’s success over the last few weeks, holders dispersing their profits into new bets.
Renga and Kitaro World get this weeks gold stars
Renga went on another massive tear this week topping out around Ξ3.4 and Blackboxes around Ξ5.4, with an impressive combined volume of almost 10k ETH
Kitaro World rose a full 3000% in one week upon reveal, from the lows of Ξ0.014 to a rough peak of Ξ0.45 with almost 3k ETH in volume
Gangster Allstar Evolution is up around a 2x on the week from Ξ0.2 to Ξ0.4
Genuine Undead has been absolutely ripping and I have to say it’s one of the best looking NFT charts out there atm, almost a 3x up on the week from Ξ0.16 to Ξ0.4
CloneX has just had its bluechip rotation sparked by a teaser for an airdrop, from Ξ6 to Ξ9 with 3.3k ETH in volume
delegate.cash - I don’t know if anyone else remembers how the first bored ape hacks got meme’d into existence, but basically people we’re creating fake ‘animate your bored ape’ sites. They’d make the website look nice enough with a few examples of before afters and a decent looking front end. They’d ask you to connect to your wallet that holds your ape and sign a transaction for a low amount of Ether as payment for the animation. But really, the transaction you were signing was giving them approval to ‘withdraw’ all of your apes.
Crypto dev @0xfoobar has headed up the creation of a solution. Want to animate your bored ape through a (lol) sketchy website? Want to claim the latest ponzi airdrop? Well now you can without worry of consequence, the solution is called delegate.cash and it lets you prove wallet ownership without interacting with said wallet.
Let’s reel it back to before the Otherside dropped. Yuga ecosystem holders were eligible to claim 1 Otherdeed per ape or mutant held, but to do so they needed to connect their wallet to an external site and sign a transaction. Now in this case, mostttt likely it was safe (well it was), but you can never be too careful when you’re putting hundreds of thousands of dollars worth of jpegs on the line. Most sane people will keep these jpegs in cold wallets and won’t interact with anything outside of sending back and forth between hot and cold. So instead of connecting the wallet that holds a 100k digital picture and signing something, they could delegate that power to their hot wallet.
As foobar said in his delegate substack article, “crypto UX is in its 1980’s Unix stage of life” and delegate.cash is a much needed innovation. Well done ser.
Kitaro World - is this weeks heftiest out of the box send. A web2 meets web3 brand, toys, merch, digital content and an emphasis on making it easy to onboard new users into web3. Not a very unique playbook but the art is eye-catching and well executed. It’s super clean, the traits are appealing and not over the top and the rares and 1/1’s are honestly really cool. Another anime style studio ghibli-esqe venture. The art is very similar to the catbus from ‘My neighbour Totoro’.
The project minted out on the 27th of September but hung around the 0.02 area until a full art reveal brought in more buyers. From there it accumulated for a couple of days before turning parabolic. From the pre-reveal lows to peak, Kitaro World pulled a 30x in just 3 days. With 25,000 trades and almost 3k ETH in volume, it’s one of the most volumous NFT charts I’ve seen in a while.
Kitaro has since retraced to the 0.2 ETH area but is still showing plenty of demand.
On a side note, this is one of the few collections that reveal turned out to be bullish, Renga was another one recently and a few days ago we had Toonies. I don’t pretend to keep a mental note of every collection I’ve ever seen, but I’ve witnessed hundreds of reveals and if I had to guess I’d say under 1% continue upwards immediately post reveal.
In my opinion something has to really stand out, maybe the art is amazing, but we see amazing art reveal all the time. Maybe the project has some innovative feature that keeps people entertained. I’d say more likely though, it’s to do with expectations and overall market conditions. I think part of the reason it hasn’t been a common occurrence is because generally the pre-reveal period leads to a speculation pump. Traders either gamble in the hopes of getting a rare or their love for the project renders them temporarily naive to general post reveal price movement, “This time is different”. Usually the price goes higher than what the art or project warrants because of this speculation. When reveal comes, the project doesn’t live up to the collective expectation and people begin to pull their capital.
Maybeee the current market conditions are more efficient at pricing speculative assets like NFT’s, due to lack of general market liquidity and traders willingness to part with their capital, or maybe just quicker to bow out of trades to conserve funds. Renga had a solid continuation and has still been rising week after week. Not sure what point I’m trying to get across here, I’m just a little baffled as 3 in such a short timeframe seems incredibly rare ¯\_(ツ)_/¯
Parsec layout previews - You may have noticed that I’ve started including Parsec links to the collections that I’m writing about. Regardless of whether you are a subscriber to Parsec you can view and interact with these dashboards and all of the data they include, the catch is no new sales or data will be streamed in. These are layout ‘previews’ and it’s our way of getting Parsec out there to as many users as possible. We want everyone be able to take advantage of the valuable data and visualisations that Parsec produces, regardless of whether they pay or not. These charts are too good not to share.
Starry Night NFT liquidations - During the 2021 NFT froth, 3AC spent a tonne of ETH on NFT’s under the name Starry Night Capital. It’s almost impossible to say exactly how much was spent, but to give you a rough idea:
3 XCOPY 1/1’s - Ξ1350
Genesis Pepe comic by Matt Furie - Ξ1000
Ghost bones Cryptoad - Ξ135
Nakamoto Rare Pepe - Ξ1000
2 grail Ringers - Ξ3900
Zombie Punk - Ξ910
Hyper rainbow Chromie Squiggle - Ξ945
A single Fidenza - Ξ950
3 more Ringers totalling Ξ1450
And the list goes on.. keep in mind that those were just some of the most expensive purchases. Across the three wallets they hold another 33 Fidenza’s, 34 Ringers, 39 Squiggles, 6 Autoglyphs and a whole lot more.
A company called DeepNFTValue that specialises in using deep learning and neural nets to value punks has conservatively estimated the wallets hold Ξ19.4k or $26.4m worth of NFT’s.
The three wallets are 0xbe, 0x55 and 0x2e, I highly recommend having a little peruse and letting your jaw drop at the sheer amount of ETH spent on these jpegs. Recently one of the three wallets began emptying it’s pockets into the hands of 3AC’s liquidators, likely we will see some of these grails hit the market in some form of an auction soon. Here’s a great TLDR thread from Nikolai of DeepNFTValue.
Linagee Registrar - There are some people in the space who call themselves ‘NFT archeologists’, you may remember Cryptoskulls and Etheria. Both are old contracts predating the ERC721 standard and both were ‘dug up’ by LeonidasNFT and @adamamcbride, marketed as ‘old gems’ and had subsequently huge but temporary pumps. These people search for old contract deployments, buy up bigly and then shill and dump on their followers. The latest one is Linagee, a name registrar from 2015, semi similar to ENS domains. These old NFT’s have become a trend and now all that is needed to market them is a few thousand followers and a deployment date of 2017 or earlier. Linagee was deployed in 2015 and they marketed it as the “oldest NFT on Ethereum”, here is the original tweet.
Since rediscovery Linagee’s trade count sits at 13k trades and almost 900 ETH in volume. Punters went for all the popular ENS categories because that’s what is going to be easiest to sell. 3 digits, 4 digits, emoji’s etc. At the peak the 1k club was selling for 1.5 ETH, the 10k club for 0.18 and single emoji’s between 0.05 and 0.2 depending on aesthetics and rarity, honestly pretty impressive.
Having already had bad run in’s with these NFT historians from his own 2017 project, the founder of Etheria knew all was not what it seemed and decided to do some digging. It turned out that Linagee was one of 18 identical contracts deployed around the same time, it was originally written by Gavin Wood one of the co founders of Ethereum, and was not even the first of these contracts to be deployed. Yet speculators gon’ speculate and sales are still abundant. You can read more on that here.
In other news:
SEC charges Kim Kardashian with undisclosed promotion of a security
Japan announces its plans to support and subsidize the growth of its web3 and metaverse ventures
Bye for now, make sure to use Parsec to stay on top of the market and we’ll see you next week
good
nice