DeFi Market Overview
-Will Sheehan
With the merge ~2 weeks away we’ve seen an uptick in ETH borrowing, with rates on Aave’s ETH market wicking to >15% APR
Things have temporarily cooled here but expect lots of rate vol into the merge. Many have prognosticated that all latent ETH in lending pools will be borrowed into the merge to accumulate any forked coins. Aave in particular is the market to watch since compound bricked their ETH market for 7 days. ETH rates had been ticking up for a while on the back of stETH collateralized borrowing, and the merge brings us closer to a risk free rate on ETH that more closely reflects the staking rate (modulo unstaking duration). More on this from us leading into the merge.
$SUDO Plans
The sudo team posted the distro for SUDO. In a market bereft of narrative sudoswap remains an outlier, the launch is deliberately “slow” with a lockdrop. The chart on the announcement revealed that many were unaware of the official connection between XMON & SUDO and the post hardened the allo numbers giving a concrete valuation.
Arbitrum Nitro
Arbitrum’s vaunted release of a scaling update called nitro completed successfully, with swaps now costing on around ~$0.10. The upgrade took ~3hrs, opening up some first tick opportunities to arbitrageurs on reopening.
The upgrade paves the way for odyssey revamping and is one of the major ecosystems to be plugged into post launch.
NFT Market Overview
-kez4twez
Bluechips had a good start to the week with green across the board but most have since retraced below their weekly starting point, Otherdeed’s and BAYC the only one’s still climbing. Digi’s take the cake for volume and floor increase. Simeji’s affiliation with popular Japanese keyboard app has it following closely behind. Lasogette coming in third for weeks most popular new project.
Moonbirds + Oddities sharp rise and fall on Future PROOF announcement and market impatience
Otherside steadily rising after latest trailer + Eminem and Snoop VMA’s exposure
Free mint Digidaigaku atop the weekly vol leaderboard and up bigly after Gabriel Leydon becomes this weeks NFTwitter main character
Proof - Yesterday during their Future Proof stream, Kevin Rose and Justin Mezzel revealed a lot about their future plans surrounding the whole Proof ecosystem and including some new additions. The major headline was that they’ve just secured a $50m series A, led by a16z to help them with their ‘thoughtful expansion’. TLDR of all announcements:
Moonbirds Mythics
$PROOF token (No info other than confirmation it’s happening, and more to come Q1 2023)
Project Highrise
Moonbirds DAO
‘Curated’, ‘Genesis’ and ‘Collabs’ for Proof Collective holders
Moonbirds moving on-chain
Proof of Conference 2023
Here is an incredibly extensive thread by one of the Proof mods covering it all in detail so I don’t have to, but we will dig into a couple of things.
Mythics - A new 20k pfp collection with only two paths to ownership, both of which require already having Proof exposure. 25 nested Moonbirds per day will randomly yield a Mythic. 25 Oddities per day will be allowed to be burned for a Mythic, yet it is unclear how priority in burning will work other than this cryptic line in the docs:
“Deep in the depths of the burrows you will find a fire — the hearth of the Odd God. When an egg enters that hearth, it will hatch 24 hours later”
The Mythics project is set to launch early 2023 and it will likely take over 12 months for the full 20k to be hatched.
Project Highrise - Proof’s take on the Metaverse, where you can find everything built by or for PROOF. A hub for all things NFT’s, art, content, project research, social, galleries, proposals and eventually cross-chain.
I don’t currently have any exposure to the Proof ecosystem but will be looking for opportunities over the next few months. High calibre announcements and plans for the future but mostly slated for 2023 and we all know the attention span of NFT communities. Oddities ran from 1.7 to 2.5 ETH during the stream, but they quickly fell back to below where they were pre-announcement after it was revealed that none of this will take place until early next year.
Proof is building an empire, I’ve always held the ecosystem in high regard and viewed them as a professional and innovative team but this cements it for me, Yuga level ambition and plans with the resources to achieve them.
Lasogette - launched a few days ago, a humble collection of sock puppets by @mafcays with a larger than life manifesto.
“Lasogette represents nonconformity and abnormality. Set in the dystopian universe of the dreamscape and the karmic grid. Lasogette is an international non-profit organisation working towards the liberation of humanity from oppression by the capitalist system (and socks).”
The nft’s feature sock puppet characters with meme’d accessories and backgrounds made from analog video synthesisers. Hard to categorise this one but there are strong milady vibes here with callouts to that culture (e.g. urbit). These types of avant-garde, niche movements seem to garner a cult following and inspire a burning passion in their holder-base.
7777 supply, 0.02 ETH mint, zero royalties and the team launched with an in-house aggregator. All of this set the stage for a solid initial run up to the 0.18 area. Price retraced all the way down to lows of 0.04, another tap of ATH and the soggs are currently sitting around 0.1 ETH.
Definitely one to keep an eye on.
Cats -
“An experiment in DAO-owned IP”
Co-founder of the smols and TreasureDAO John Patten has released a new project, an interesting yet simple iteration that lays somewhere inbetween individual-owned IP and CC0. Holders of Cats can either choose to keep control of their IP or contribute it to the DAO in return for proportional ownership of the treasury in the form of 21 CatCoin’s. CatCoin entitles the holder to use any of the artwork held by the DAO however they please as if they were the sole owner of said artwork, allowing individual and collaborative ventures. When a holder deposits their Cat into the vault they receive a soul bound token in return, giving the ‘owner(donor)’ proof of donor-ship and the ability to continue using said cat as their web3 persona without question.
In the introductory Medium article, John goes on to say that 99% of NFT holders that own their own IP have no idea how to use it. Instead of 10k of your average joe’s trying to create their own global brands based around whatever unique trait their NFT possesses, they would be better off pooling their IQ’s and resources and contributing to community-led IP ventures.
I’m pretty uneducated when it comes to licensing but personally, I don’t see much benefit or reason in holders owning the IP to their jpegs currently other than maybe they should because well, they are led to believe they own the image? The market simply isn’t big enough for anything other than the most recognisable NFT brands to provide financial gain to its holders through licensing deals. How many successful deals have been signed and across how many collections so far? That being said, I think this sector will become more important and more valuable as the rate of NFT adoption increases over the years to come.
Cats is an intriguing iteration of community owned IP and I am excited to see this model applied to BAYC/Punks level collections over the coming years. Licensing and IP rights and how they can be of value has been something I know very little about so this has been super informative - Thanks John.
Make sure to use Parsec to stay on top of the markets and we’ll see you next week
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