M6 Labs: Calm Before The Storm

GM, Anon! Market uncertainty continues to cast a shadow over the near term, despite the overall positive long-term trend. Now, let's delve into today's report!

Alpha Take Of The Week

L1s, L2s & DeFi 

State Of The Market

TLDR

• BTC prices have fallen below 40K, and analysts expect further declines into the lower 30s before a potential rebound to new all-time highs.
• Global liquidity stimulus, exemplified by China injecting funds into banks, supports crypto in the medium and long term.
• Grayscale is selling Bitcoin as GBTC ETF investors exit, while BlackRock and Fidelity ETFs perform well.
• Starknet protocol faces controversy after a change in leadership and downplaying the importance of airdrop hunters and users.
• Terraform Labs filed for bankruptcy, Alameda dropped a lawsuit against Grayscale, and Trump opposed Central Bank Digital Currencies.
• Stablecoin market capitalization increased slightly
• Altlayer, Rabby, the Cosmos ecosystem and many others are planning airdrops.
• Staking remains strong, and the long-term impact on Ethereum's deflationary nature is being watched.

The crypto market has witnessed a significant drop in BTC prices, falling below the 40K mark. Many analysts anticipate further declines into the lower 30s before witnessing a price reversal and achieving new all-time highs. 

• It's important to consider the global liquidity landscape, as the world is currently in a cycle of liquidity stimulus which is a positive for crypto in the medium and long term. One example is how China has injected substantial funds into commercial banks to bolster medium-term liquidity, surpassing market expectations as a measure to support its struggling economy. 
• Meanwhile, Grayscale continues to sell Bitcoin as investors exit the GBTC ETF, with FTX making a notable sale of approximately 22 million shares valued at nearly $1B. 
• In contrast, ETFs offered by BlackRock and Fidelity are attracting users and performing well, despite fluctuations in the BTC market.
•  Additionally, Hong Kong is planning to introduce its spot ETF by mid-year.

In other developments, there have been concerning events within the Starknet protocol, one of the most highly anticipated protocols in recent years, especially for its airdrop program that rewards loyal users. 

• Starknet recently experienced a change in leadership, with Uri Kolodny stepping down and Eli Ben-Sasson assuming leadership. 
• Subsequently, the Stark team faced criticism for downplaying the importance of airdrop hunters, users, and the community, emphasizing their focus on developers as the primary contributors of value to the blockchain. 
• This stance triggered a widespread reaction in the crypto space and beyond, with various opinions emerging. 
• While some agreed with the utility of airdrops, others emphasized the significance of the community. 
• Some members of the Stark team later reconsidered their statements. Currently, the situation has calmed down, but the fate of the Stark airdrop remains uncertain, awaiting further developments.

Additionally, there were some notable major developments in the crypto space. Terraform Labs officially filed for bankruptcy, marking a significant event in the industry. Surprisingly, Alameda decided to drop its lawsuit against Grayscale, which caught the attention of many market participants.

In a more positive turn of events, former U.S. President Trump has expressed his opposition to Central Bank Digital Currencies. However, it's worth noting that given the global trajectory of CBDC development, such opposition seems unlikely to halt their progress. Nevertheless, it is encouraging to see political discussions and resistance against this emerging trend in the crypto world.

Metrics

Examining key on-chain metrics indicates that the market has remained relatively stable with no significant downward fluctuations. The total market capitalization of stablecoins has seen a slight increase, with USDT maintaining its dominance in the stablecoin supply.

When reviewing the state of staking, there are some noteworthy observations. While many protocols have experienced decreases, Lido has shown positive developments. It's important for users to be aware of the yields offered by the leading protocols in the industry, which are outlined below.

On-chain metrics indicate that the user appetite for staking their significant spot holdings remains strong. The long-term impact of staking, especially with Ethereum's deflationary nature, raises intriguing questions. If a substantial portion of the supply gets locked up through staking, and institutions increasingly recognize the advantages of ETH staking in the future, it will be fascinating to observe how this will influence the price of ETH and supply dynamics. 

Additionally, among the two largest and most developed Layer 2 solutions, Optimism and Arbitrum, Arbitrum has been consistently generating substantially higher fees. This trend can be attributed to the flourishing DeFi ecosystem and the various incentives and rewards offered to protocols and users on the Arbitrum network.

Finally, it's worth noting that daily DEX volume has been fluctuating from day to day, with January experiencing some recent low points, although nothing of significant concern. The overall market remains resilient despite the prevailing uncertainty in the near term.

Airdrops

Airdrops remain a consistent way to reward loyal users in the crypto space. 

• Altlayer has recently announced its plans to airdrop tokens to TIA stakers and Eigenlayer users. Interestingly, the DYM airdrop allocation is being doubled following the fact that nearly half of the users failed to claim their tokens. 
• Additionally, Rabby is gearing up for its airdrop in the near future. Not to be forgotten, the Cosmos ecosystem is also actively rewarding users who have staked TIA, OSMO, ATOM, and other significant coins associated with the Cosmos network. 
• It's worth mentioning that Zetachain has unveiled its airdrop plans, although some members of the community have raised questions about the protocol's methodology. 
• Looking ahead, the crypto community is eagerly anticipating upcoming airdrops from projects like Aleo,  different Ordinals collections, and Eigenlayer, among others. These are just a few examples of the potential airdrops on the horizon in the near future.

Blue Chip and Major Overview

Bitcoin

The hype around the spot Bitcoin ETF approval saw Bitcoin cross the $48K mark following the approval. However, since then, its price has been on a steady downward trajectory and is currently around the $40K mark. 

• This price drop has been attributed to Grayscale’s GBTC, which saw considerable outflows, selling its Bitcoin. Others have attributed the drop to selling by Bitcoin holders (short-term and whales) who took profits from BTC’s surge.

Ethereum

Ethereum, the world’s second-largest crypto after Bitcoin, has faced considerable selling pressure over the past few days and experienced a considerable decline during the trading day, dropping to a low of $2186. 

• The price has staged a minor recovery and is currently trading at $2232. The price drop could be attributed to divergent views on the approval of a spot Ethereum ETF. Some believe approval is a matter of time, while some state that the current sentiment within the SEC is a “hard no.” As of writing, the SEC has delayed decision on BlackRock’s Spot ETH ETF.

Noticeable Moves

• SOL - Over the past week, SOL has seen a drop of over 15%, dropping below $80 on the 23rd of January. However, the price has since recovered, rising by 7.5% and moving to $87.94 before dropping to $85. Despite the recovery, analysts have predicted that SOL could see a further decline and drop to $70, suggesting SOL’s price may have charted a “B wave triangle.”
• MULTI - Multichain has registered an increase of nearly 80% over the past two weeks. The price surged from $1.52 on the 23rd of January, rising to $3.36. Currently, MULTI is trading at $2.77, a drop of 16% over the past 24 hours.
• SYNAPSE - Synapse is down 84% since it hit its all-time high of $4.92 in 2021. However, the past month has seen the token surge by over 70% over the past month. Currently, the token is trading at $0.77, an increase of 31% over the past 24 hours.
• SIDE SHIFT- The SideShift token (XAI) is the native token of the no-sign-up exchange SideShift.ai. Users can stake XAI and receive 25% of the exchange’s revenue. The token is currently trading at $0.162702. The token has seen a staggering increase of 216 % over the past year and has jumped from $0.137 to $0.420 over the past hour.
• PICASSO - Picasso (PICA) recently hit its all-time high, reaching $0.028 on the 6th of January. However, the token has tanked 44% since then, falling to $0.012. The token has slightly recovered over the past 24 hours, rising by just over 1%, and is currently trading at $0.105.
• METIS - The METIS price recently saw an unprecedented surge of 350% over the past month. The surge in value comes against the backdrop of the MetisDAO Foundation launching the Ecosystem Development Fund (EDF). The rise in the value of the METIS token can be attributed to the growing confidence in MetisDAO’s potential after its recent integration with the Bitget wallet.
• Arb - The Arbitrum token (ARB) recently reached its all-time high, surging to $2.39 as the network’s total value locked crossed $2.5B. The surge saw the token’s value rise by 10% in 24 hours. However, since then, the token’s value has taken a tumble, dropping 30% from its all-time high. The price has slightly recovered and is currently up by just over 5%, trading at $1.71.
• OP - In December 2023, it was predicted that the Optimism (OP) price could crash as $81.9M worth of tokens were due to hit the market on the 30th of December. Despite these predictions, OP hit its all-time high, surging to $4.23. However, the price has dropped, falling by 20% over the past week. Currently, the token is trading at $2.83, up by nearly 5% over the past 24 hours.
• Tia - Celestia (TIA) has seen its price face considerable volatility over the past few days. The token hit Its all-time high of $20.16 just 9 days ago. However, the price has dropped considerably since, dropping to $14.12 before recovering and rising to $16. Currently, the token is down 20% from its all-time high. The recovery can be attributed to developers adopting Celestia’s modular network and leveraging its technology to build and scale apps.
• Ondo - Ondo Finance recently launched its ONDO token on the 18th of January. The token has since registered a considerable increase, rising to $0.30. However, the ONDO token’s price has dropped, currently trading at $0.23 since then.
• TAO - Bittensor’s TAO has seen impressive growth over the past month. The token has registered an increase of 44% over the past two weeks and has surged by 19.9% in the past 24 hours. This increase comes despite the broader crypto markets facing a considerable decline of over 8%. This momentum is primarily driven by growing sentiment around decentralized AI and the crucial role played by Bittensor in advancing the technology.
• dYdX - dYdX’s climb to the pinnacle of the decentralized exchange ecosystem has been nothing short of spectacular. The cosmos-based decentralized exchange accounted for 12% of the market share, topping Uniswap’s 9.7% share. Currently, the dYdX token is trading at $2.60 and is down by just over 30% on its all-time high of $3.73.
• LINK - Chainlink’s (LINK) on-chart data and other indicators have been displaying bullish signals, with many expecting its price to register a significant increase in upcoming trading sessions. The token has reported a 100% increase over the past 1 year.
• OKB - OKB is OKX’s native token with a market capitalization of $2.8B, making it the 4th largest exchange token in the market. On the 23rd of January, the token slumped by over 50% in three minutes after a series of liquidations that were triggered due to an abnormal price fluctuation. The token has since recovered, rising from a low of $25 and rising to its current level of $47.11.
• ICP - The Internet Computer (ICP) token has been trading in the red for the past couple of weeks. However, the token has recovered over the past 24 hours, registering an increase of 8.6%. Currently, the token is trading at $11.26.
• Rune - ThorChain (RUNE) has spent the past month stranded in the red as the tokens bear market goes from bad to worse. On the 3rd of January, the token hit a price of $6.09 before going on a downward trajectory. Since then, the price has dropped by 28%. However, the price has been positive during the past 24 hours, rising by 5.5%.
• INJ - Injective (INJ) hit its all-time high on the 9th of January, 2024, when it peaked at $45.01. Since then, the price has experienced considerable volatility and has remained in the red. However, blockchain data suggests that the price could rebound in 2024. Currently, the token is trading at $33.30, an increase of 4.4% over the past 24 hours.
• MNT - The Mantle (MNT) price registered a spectacular surge two weeks ago when it surged to its all-time high of $0.84. However, the token could not hold on to its gains and was down to $0.70 by the 15th of January. Currently, MNT is trading at $0.61, having lost over 13% during the past week.
• Manta Network - The Manta Network token has been on an absolute tear since its launch in January. The native token was surging from one all-time high to another and reached another peak hours ago, rising to $3.16 and gaining over 30% over the past 24 hours, with its trading volume jumping over $500M across platforms such as Binance.
• SEI - The new year has brought plenty of cheer to SEI holders, as the token set an all-time high barely two days into 2024. The token was launched in August 2023 and has registered considerable gains since. The token has registered an increase of almost 55% over the past 30 days. The token is currently trading at $0.63.
• SATS - SATS has been on a steady downward trajectory since it hit its all-time high in December 2023. The token has dropped nearly 50% over the past 30 days and could drop even lower.
• ORDI - Another token that has spent 2024 in the red is ORDI. The token has been on a downward trajectory since it hit its all-time high of $89. Since then, ORDI has lost over 40% of its value and is currently trading at $53.27.
• UMA - The UMA token has been on an upward trajectory in 2024 and is currently trading at $5.29. While this represents a drop of over 8% in 24 hours, the overall sentiment around the token is bullish. UMA has registered a 160% increase over the past seven days.

Smart Money Movements

• Smart Money is detected in wBAI, a new AI Agents project. The recent popularity of it is because of the main competitor's bad team actions, such as selling the tokens. OLAS team has been selling some tokens, which resulted in people looking for other AI Agents projects and trying to get exposure to the OLAS betas because of it.

Balance AI caught the attention of smart money right after their LBP launch, and also after the LBP.

• $CAD was another project that was favored by the smart money in the last week, a new project that held an LBP recently similar to $wBAI. It's a perps aggregator with a solid team, including Ex MetaMask and Kraken members. It utilises AA (Account Abstraction) and Autonomous Agents to provide an enhanced service.
   
• Smart money has been still accumulating PT-eETH, looking to make ~10% on their ETH until June 2024.
   
• $RSTK has been among the smart money's accumulations too, apparently, they're frontrunning the next cap raise of EigenLayer.
   
• Smart Money has been buying $ALT as well, which just launched and had an airdrop. A restaked rollup that caught the eyes of market participants. They're leveraging EigenLayer for their rollup, so that's the main reason they absorbed a good amount of attention.

Yield-Farm

Smart farmers have been bridging into Mantle recently, taking advantage of the newly launched DeFi protocols in the early stages.

• Velocimeter on Mantle has caught the attention of smart farmers.
• Aerodrome's WETH/USDC pool is still popular among smart farmers.
   
• Farming USDC/NOTE on Ambient has been a popular strategy among smart farmers as well.
   
• Cleopatra has been favored by the smart Mantle yield farmers.
   
• Merchant Moe is still shining on Mantle and has been a popular choice among smart farmers.
   

This is just a preview of our L1, L2 and DeFi Weekly report, be sure to check out the full version of this report here. 

NFTs & Gaming

While the market has been ranging and experienced some concerning lows, dipping below $40K, it appears that this has had no significant impact on the NFT market in terms of activity. Developments continue to progress, and the statistics for gaming across various blockchain networks are quite impressive. Let's dive in!

Project Updates

• China forms a metaverse working group with Huawei, Tencent, Ant Group, and Baidu.
• Ronin introduced the latest Ronin Wallet update.
• CryptoPunks start relaunch of CryptoPunks721 system.
• Nakamigos introduced the Crypto Trading Cards collection.
• Blast launch official testnet. 
• Arcade2Earn raised $4.8M in a private token round ahead of a public ARC sale.
• 'Treeverse' studio Endless Clouds picked Immutable zkEVM for its NFT games.
• Cool Cats is gearing up to launch its new Match Quest game on Immutable.
• Bitcoin Pizza Ninjas raise 45 BTC through their recent collection drop.
• CryptoUndeads concluded art reveal.
• Nifty Island initiated its open beta and Play-to-Airdrop campaign.
• Former US President Donald Trump unveiled a new Bitcoin NFT trading card collection.
• LooksRare witnessed its onchain games surpass +10k ETH in volume.

Blue Chip and Market Overview

Traditional NFTs have experienced a recent decline in value, though Pudgy Penguins did briefly surpass 20 ETH in value. 

• Surprisingly, the volume of transactions for the once-dominant NFT collection from the previous bull cycle, Bored Ape Yacht Club, has fallen to tenth place. 
• Interest in BAYC appears to be momentarily waning, although the MAYC derivative collection witnessed impressive trading volumes this week, securing the second position.

Despite a decrease in the number of active traders on most major NFT marketplaces, Blur remains a leader in the space, as volumes have experienced a slight increase. The OKX NFT Marketplace, in particular, has witnessed a significant rise in trading volume.

Despite the recent decrease in user numbers within the crypto gaming sector, games like motoDEX, Sweat Economy, Pixels, and others have still managed to maintain impressive player counts. 

• Considering the current early stage of the market cycle, it is evident that crypto games continue to attract substantial user engagement.

Crypto gambling platforms have seen a substantial increase in user volume over the last 7 days. Wax Casino, Doge Casino and Trade Signal are standouts.

Recently NFT Price Floor released their latest report recapping 2023. Let’s take a look at the main takeaways. 

• Focus on Floor Prices: The report emphasizes the importance of floor prices as a key indicator of a collection's market value, offering insights into the minimum ask price for items from specific NFT collections.
• Market Capitalization Trends: The report explores the evolution of the total market cap of the top 250 NFT collections, providing year-over-year comparisons.
• Top Collections' Performance: The report provides an in-depth look at the top 30 NFT collections, including their floor price performance, top gainers and losers, and year-over-year variations.
• Sales Analysis: Significant sales of top collections are highlighted, showcasing the highest-selling NFTs and their impact on the overall market.
• Market Share and Trends: It discusses the market share of top NFT collections and analyses general market trends, including shifts in popularity and value.

Degen Corner

• Ronin - (RON) has continued its recent upward trend, thanks to the hype surrounding the Pixels game and other gaming tokens. The token has registered an increase of 28.7% over the past two weeks and is currently trading at $2.28.  
• IMX - The Immutable (IMX) token had done quite well in December 2023, reaching a peak price of $2.57. However, the price has continued to drop since. With the linear unlock of IMX tokens set to begin from the 25th of January, we could see the price drop further. The unlock event will continue for 28 days, and 1.22M IMX tokens worth $2.19 million will be unlocked daily.
• Mocaverse has introduced Anichess, a chess-based puzzle game with magic elements, allowing players to earn game NFTs for Anichess and Realm Points for the Mocaverse. Moca ID holders can complete quests in Anichess, while the game offers daily puzzles and bonus challenges. 
• Apeiron, a god-simulation game on the Ronin network, offers players a chance to play and earn ANIMA tokens through a battle demo. Players can earn airdrop points in various ways, including social interactions and owning NFTs. ANIMA token allocations will be vested over time, and players must complete tasks to unlock them. 

Oasys Gaming Blockchain: Oasys is a gaming-focused crypto network that aims to attract both game developers and players.

• Oasys consists of two layers: the "Hub layer" (layer-1 blockchain) and the "Verse layer" (Ethereum-compatible layer-2 scaling solution).
• It is EVM compatible, allowing assets like crypto tokens from other EVM chains to be transferred into its ecosystem.
• The Hub layer uses proof-of-stake but does not accept new smart contracts without approval from the Oasys development team.
• The Verse layer employs a modified version of Optimistic rollups to enable instant transaction approval.
• Oasys plans to support zero-knowledge rollups in the future.
• Transaction fees on the Verse layer are borne by developers, not users.
• The Oasys Passport is a beginner-friendly crypto wallet for the Oasys blockchains.
• Games like Ubisoft's Champions Tactics, My Crypto Heroes, Ryuzo, Battle of Three Kingdoms, and Summoners War: Chronicles are using Oasys for blockchain integration.
• Oasys competes with other gaming-focused blockchains like Immutable and Sui, with notable publishers already adopting it.
• Follow developments and play games on Oasys here.

In recent developments, there has been an interesting airdrop event orchestrated by @rune_coin. This airdrop introduced the RSIC Metaprotocol. 

• Those who were fortunate enough to receive this airdrop have found themselves rewarded handsomely
• Remarkably, this event might signify the start of a new trend, with the potential for fresh protocols and innovative distribution methods to emerge in the aftermath of this successful airdrop. 
• The beneficiaries of the RSIC Metaprotocol airdrop mainly consisted of holders of Bitcoin Puppets, Bitcoin Frogs, Node Monkes, or OMB. 
• These fortunate recipients now possess RSIC inscriptions, each currently valued at a floor price of nearly 0.06 BTC. 
• However, there is still some ambiguity and uncertainty regarding the precise purpose of these inscriptions.
• Recipients must transfer the RSIC inscriptions to activate them for mining rune coins. This activation is tied to the recipient's wallet, offering flexibility in terms of when and how they opt to utilize their inscriptions.
• Additionally, the community is eagerly anticipating the announcement of an upcoming boost feature, which is expected to be shared through this inscription.
• Checkout the collection here on Magic Eden: https://magiceden.io/ordinals/marketplace/rsic

This is just a preview of our NFT Weekly report, be sure to check out the full version of this report here.

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