DeFi Market Overview
-Will Sheehan
Flight to Safety
Market goes risk off with every piece of centralized infra being interrogated. GUSD activity picked up onchain when Gemini Earn halted withdrawals as a cascade from Genesis. GUSD has historically had low adoption but recent events pushed rates higher as a large Aave user borrowed most of the liquidity, only to close out quickly as it became clear that GUSD was segregated from earn. Regardless the amount fiat coins redeemed for cold hard cash spiked this week, with USDC/USDT/GUSD all seeing redemptions outweighing mints into the end of the week (BUSD notable is flat)
Net dollar outflows have already been a trend stablecoin issuers due to the rate environment, this is expected and it’s clear that issuers need to provide as much clarity around reserves as possible, particularly around corporate relationships/entities and how that can effect claims.
Broadly speeking the last two weeks have felt like a “reset”. Much like in the June fallout, the market is positioning around assets that don’t have overhangs, L1s are being shunned in favor of narrative opportunities showing some strength (world cup - CHZ, DEX - GMX, DYDX).
NFT Market Overview
-kezfourtwez
gm parsec enjoyers and jpeg enthusiasts, it has been one of the most tumultuous couple of weeks that crypto has ever experienced. NFT’s being basically leveraged ETH, they have suffered over this time. Most bluechips are down 10-20% in the last 30 days and punks are one of the only collections above water on that timeframe (provenance + crypto art really is the bear market hedge). Newer collections have largely suffered more severe drawdowns as a result of not having that bedrock of community confidence, based on performance in prior times of market instability. As fear spreads and investments crumble, NFT’s are usually one of the first to go, and we can see the panic on the bid/offer ratio - that downward spike to almost 50% means that almost half of all volume at that time were offers being accepted.
Despite the fear in the market many charts including volume have found a bottom and begun to bounce. The Yuga ecosystem is generally a good sign of market strength as its combined market cap makes up a solid share of the whole market, and Yuga assets are on the rise. This week has also seen a lot of project news, announcements and collaborations, CT/NFTwitter has the memory of a goldfish and it seems as though it’s back to business as usual for now.
My personal bias is still quite bearish jpegs for now though. Pre FTX crash and burn, the market was already having trouble finding enough liquidity to sustain the onslaught of constant new releases, many of whom’s chart’s are often a single fragile peak followed by a slow grind to consistently new lows. Now that the market is even more shaken up and more $$ have been wiped from the ecosystem, short term I’m even more bearish. If you are going to trade this market you have to be a ninja about it, get in and get out fast. Sad to see as I’m long term an NFT bull not just re speculation but re utility as well. Half the fun is finding communities you gel with, making new friends, bonding over common interests, the very essence of belonging. In my final year high school exams we had to write an essay on the topic of belonging, I would have gone to town writing about why NFT’s are so sticky and why many traditional companies should and will pivot to a digital asset model, but unfortunately that whole side of it is put on hold now as economic ‘risk off’ takes priority.
Performance highlights:
It’s definitely bluechip rotation week. Whenever there is significant market uncertainty and some fear fuelled overselling, money generally piles back into the majors
CloneX is up 18% off the bottom on speculation that the project Animus airdrop is soon
Yuga assets have all risen 10-20% off the lows
Azuki is up 15% on the week
SuperRare’s RarePasses
Crypto art is an area that I admittedly don’t know a whole lot about. Outside of the well known artists and collections it’s not my area of expertise, so it’s been interesting digging into this. One thing I do know is that in times of uncertainty and downtrends in the pfp markets, art/provenance based nft’s like punks and squiggles generally outperform.
SuperRare is the go to NFT platform for high profile crypto art, it’s a great honour to get your work on there and it’s where a lot of famous crypto artists initially sold many works and made their (gradual) rise to fame. It’s where the famous ‘Right-click and Save As guy’ sold for Ξ1600 ($2m at the time), and ‘Perspective’ of the Ross Ulbricht Genesis collection sold for Ξ1446 ($1.75m at the time). It’s also the home of many prominent collectors such as Cozomo Medici (who won ‘Right-click and Save As guy’), yfimaxi (who won ‘Perspective’) and punk6529, who have spent a metric tonne of ETH supporting, collecting and curating crypto art. Overall, SuperRare is a vibrant ecosystem where artist and collector are due equal credit for their roles. Here’s a throwback of the SuperRare leaderboard from a time when XCOPY had done a total of Ξ56.3 in primary sales and had 26 originals up for grabs. It’s mind blowing how far the sector has come.
A couple of days ago SuperRare released 250 RarePasses using a dutch auction beginning at Ξ138, the auction sold out at a hefty Ξ17.25. The pass is a high end crypto art subscription, each month holders will get airdropped a 1/250 edition from a renowned crypto artist. There are 24 artists in the program, most notably including XCOPY, Hackatao and Killeracid. Each month, one of the artist’s will create three 1/1’s to be randomly distributed to three lucky holders. Other perks are yet to be announced.
There has been a bit of controversy surrounding the passes as some are saying that it’s bordering on blurring the line between what is a collectible and what is considered art. I’m all for innovation as that’s what this industry is built on, we are all still just throwing stuff at the wall and seeing what sticks.
Since hitting secondary, the RarePass has done Ξ1.1k in volume and sits at a Ξ23 floor price. The price tag is a bit rich for your average crypto art enjoyer, but I have no doubt that the airdrops could pay for the entry price over time if you chose to sell them, and if you hit a lucky 1/1 on one of the top artists, well that’s your entry paid for 3 times over. A drifter shoots 1/1 currently sits at a floor of Ξ45 and many of the other artists sit around the same price.
Web2 x Web3
Despite what has felt like a brief pause in the heartbeat of our industry, we’ve made strides in stitching together the proverbial web2 x web3 peace quilt this week. The willingness for traditional companies to associate their name with crypto hasn’t slowed down, onboarding is full steam ahead.
Azuki x Redbull - have made history with the first ever NFT being displayed on an F1 racing car. Lei the lightning Azuki (#8494) is already printed on the F1 speed machine and ready for his inaugural lap at the Abu Dhabi GP
Apple pay now supports USDC - this means that crypto native businesses just got access to one of the most commonly used worldwide payment rails. Another win for crypto adoption.
Goblintown x AtariX - Atari has been slowly making it’s way into the web3 world, a cryptic tweet and video trailer seem to hint that its 3rd foray will be a Goblintown themed racing game.
Pudgy Penguins x Kellogs - A pudgy will be debuted on a box of frosty flakes for a partnership with aspiring web3 streetwear brand @thebr3akfastclb ..who’s account is currently suspended, so unfortunately I don’t have more information.
Cristiano Ronaldo - has partnered with Binance to release the ‘CR7’ NFT collection. I am unfamiliar with the Binance NFT marketplace, but it seems as though everything is an auction. Items are currently priced (with bids), in a wide range between $3 and $14,000 depending on rarity, denominated in BUSD.
Thanks for reading and bye for now, stay on top of the markets with Parsec and we’ll see you next week.
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