LD Capital: Track Weekly Report [2023/10/16]
[Abstract]
DeFi: Liquity protocol sees a revenue surge of nearly 90%, while borrowing rates for GHO stablecoin may face further increases.
LSD: Last week, the ETH staking rate rose to 23.10%, a sequential increase of 1.23%. This week, the yield on ETH staking hit a new low at 3.34%, with annual inflation rising to 0.46%.
Ethereum L2: Layer2’s TVL (Total Value Locked) stands at 10.6 billion USD, with an overall 0.92% decrease in TVL over the past seven days. Mantle experienced the fastest growth in the past week, with its TVL soaring by 43.44%.
DEX: DEXs’ combined TVL reached 10.71 billion USD, experiencing a reduction of approximately 800 million USD from the previous week. DEXs saw 24-hour trading volumes hit 1 billion USD and 7-day volumes reach 10.45 billion USD, marking a 2.5 billion USD decrease week-over-week.
Derivatives: Following a decline that started on August 18, the cryptocurrency derivatives market has seen some recovery in trading volumes and open interest with the rebound in BTC prices, although levels are still below those prior to the decline.
[DeFi]
Liquity
In the past week, Liquity’s governance token, LQTY, has exhibited a robust price trend, soaring close to 40%. Over the past month, the price of LQTY tokens has been on an upward trajectory. This is partly due to Liquity’s protocol revenues in September, growing by nearly 90%, and potentially due to market manipulation efforts by substantial financial backers.
In the last week, three addresses have made significant withdrawals from the Binance exchange, cumulatively extracting approximately 2.3 million tokens.
Aave
The Aave community initiated a proposal to hike the GHO borrowing rates by an additional 50 basis points (bps), from 2.5% to 3%. The aim is to strengthen GHO’s peg and boost GHO revenue. The discount for StkAave holders remains unchanged at 30%. The proposal has gained community support and will move to on-chain execution voting. Previously on September 19, the Aave community had voted to increase GHO borrowing rates to 2.5%.
[LSD]
Last week saw the ETH staking rate climb to 23.10%, a week-over-week increase of 1.23%. A total of 27.78 million ETH was locked in the Beacon Chain, corresponding to a staking rate of 23.10% and a sequential rise of 1.23%. This included 862,100 active validator nodes, up 1.44% from the week before, with the queue for pending active validator nodes being completely cleared. This week, the yield on ETH staking continues to touch new lows, falling to 3.34%, with annual inflation climbing to 0.46%.
This week witnessed a 1.23% sequential increase in ETH staking.
The yield on ETH staking continues to record new lows, reaching 3.34% this week.
This week, the annualized inflation rate of ETH is 0.46%.
Among the three major LSD protocols, in terms of price performance, LDO increased by 1.1% this week, RPL fell by 1.9%, and FXS rose by 6.5%. From the perspective of ETH staking volumes, Lido decreased by 0.07% this week, Rocket Pool increased by 1.47%, and Frax rose by 2.01%. Last week, sFRAX was officially launched, with a current scale of 39.34 million and a yield of 6.85%. The current Rocket Pool deposit pool has a balance of 18,031 ETH, with an RPL staking rate of 50.51% and an effective staking ratio of 90.02%. The ETH staked in SSV has increased to 11,104, and its price fell by 10% briefly last week due to its founder Alon Muroch being conscripted into the Israeli military, ending the week 13% lower. Additionally, the Lido governance forum discussed adding a new DVT staking module, with voting set to begin on October 26.
[Ethereum L2]
TVL
The total Layer2 TVL is 10.6 billion US dollars. The TVL has fallen by 0.92% in the last seven days, with Mantle having the fastest rise, its TVL increasing by 43.44%.
OP
Ethereum’s technical development team, Test in Prod, officially joined the Optimism Collective’s core development team on October 12. As the third core team, Test in Prod will collaborate with OP Labs and Base to build the OP Stack.
Optimism will provide 5 million OP tokens to Test in Prod over four years, with a cliff of one year for 30% and the remainder released monthly.
ARB
The first round of voting for Arbitrum’s short-term incentive program has concluded, with 29 of the 95 projects that participated in the voting being selected. These include Camelot, Jones, Dopex, GMX, Galxe, LODESTAR, Socket, Timeswap, RADIANT, Pendle, MUX, Frax, Tally, Rysk, Silo, Stella, Good, Gamma, Umami, Abracadabra, KyberSwap, OpenOcean, Angle, Trader, Dolomite, Premia, Vertex, Perennial, and Balancer.
In the future, Arbitrum will allocate up to 50 million ARB in incentive funds to all eligible projects, stimulating ecosystem activity and attracting more users and liquidity.
Scroll
On October 10, the Ethereum second-layer network Scroll, based on ZK-Rollup, generated its genesis block.
Opside
The decentralized ZK-RaaS platform Opside announced on October 10 a brand upgrade, rebranded as Lumoz. Established in 2022, Lumoz launched its testnet in May 2023, offering users services such as ZK-Rollup and zkEVM without the need for programming. Currently, supported zkEVM types include Polygon zkEVM and zkSync. By Q4, it is expected to support others like Scroll, StarkNet, etc.
On Chain Activity
[DEX]
The combined TVL (Total Value Locked) in Dex is 10.71 billion, essentially a decrease of 800 million from the previous week. The 24-hour trading volume for Dex stands at 1 billion, with a 7-day trading volume of 10.45 billion, marking a reduction of 2.5 billion compared to the previous week.
Ethereum
ETH L2/sidechain Ecosystem
BTC L2/Sidechain
Alt L1
Sui’s individual DEX TVL performance has been impressive, coinciding with the announcement last week of 117 million SUI, plus an additional 40 million SUI transferred from external market makers to ecosystem and community development — culminating in a total of 157 million SUI, earmarked for fostering the burgeoning Sui ecosystem.
[Derivatives]
Since the downturn on August 18, alongside BTC’s rebound, there has been a partial recovery in trading volume and open interest in the cryptocurrency derivatives market. However, levels still remain below those seen before the decline.
The chart below illustrates the changes in contract open interest and trading volume over the past year. Open interest peaked in October 2022, reaching its highest level in nearly a year at approximately $33 billion. After the FTX incident, open interest plummeted to $18.4 billion. In the first half of 2023, open interest gradually recovered, hitting $28.1 billion by August 2023. Following the downturn on August 18, open interest fell to around $22 billion, subsequently experiencing a modest increase to $24 billion.
As for the daily trading volume, the first half of the year generally maintained levels above $50 billion, with several days at the end of February and the beginning of March seeing trading volumes exceeding $100 billion. From August to September, most days were below $50 billion, with only two days surpassing the $100 billion mark.
In the last two weeks, the trading volumes of major derivative DEXs were $6.9 billion and $5.4 billion, respectively, indicating that trading volumes continue to be at a generally low level.
Specifically, regarding tokens, since the end of August, low market cap, high-circulation contract tokens have performed well in terms of price. The primary reasons are, firstly, after the decline on August 18, most tokens were trading within their lowest price range of the year or even the current bear market. Secondly, low market valuation and high circulation allow for easier market control by major capital, combined with high liquidity brought by contracts, making these primary targets for major funds. Thirdly, the market lacks a narrative hotspot; contract tokens that are pulled up easily gain attention and are followed by retail capital.
LD Capital
As a global blockchain investment firm, we have built a portfolio of over 250 investments since 2016, spanning across various sectors, including infrastructure, DeFi, GameFi, AI, and the Ethereum ecosystem. We focus on investing in projects with disruptive innovations, actively taking on the role of primary investors, and providing comprehensive post-investment services to these projects. We employ a combination of direct investment from our own funds and a distributed fund model to cover all-stages of investment.
Trend Research
Trend Research division specializes in crypto hedge funds focusing on secondary areas within the crypto market. Our team members come from platforms and institutions like Binance and CITIC. We excel in macroeconomics, industry trends, and project data analysis. With funds dedicated to trend funds, index funds, hedge funds, and liquidity funds, we manage assets totaling over $400 million, including proprietary assets.
Cycle Ventures
We are a specialized early-stage investment firm in Web3, focusing on investment and service, with a strong emphasis on three major areas: Infra, AI, and Dapp. We have a team of nearly 20 senior engineers and dozens of crypto experts as advisors, deeply assisting projects in strategic design, technical development, and liquidity enhancement. We are deeply involved with asset management agency Cycle Digital and liquidity service provider Cycle Trading. Also, the team is actively involved with X Labs, a compliance service institution in Hong Kong, to help global projects establish a presence in Hong Kong and ensure compliance.
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