1. Industry overview
I. Overall Market Trends
Last week, BTC showed a rapid rebound after a period of volatility, bouncing back from around $21,350 to a high of around $25,250, which was one of our medium-term target levels mentioned over a month ago. In the short term, it is currently fluctuating around $24,400. The magnitude of this rally has reached a new high since mid-June last year. Even more notably, the US dollar index and the cryptocurrency market have risen in tandem, with the US dollar index hitting a new high since the beginning of January. The reasons behind this are mainly due to the mild impact of interest rate hikes, which will be discussed in more detail later on.This round of correction did not touch the lower support level. It rebounded from around $20,410, largely due to negative news about BUSD, which triggered some risk aversion and boosted the prices of coins led by BTC. Currently, the short-term support level is around $23,340 and $21,350, and the short-term resistance level is around $25,200-$25,250, which, according to my previous analysis, is the level that needs to be broken through to return to strength and test the medium-term resistance level of around $32,400. Before that, the market will continue to maintain a medium-term volatility pattern.In terms of trading strategies, it is recommended to consider buying long when the support level stabilizes. It is not recommended to go against the trend by shorting when encountering strong resistance, unless there are short-term topping signals. If there is a trend reversal, it may be possible to capitalize on the rebound.
Looking at the daily closing price of ETH on Wednesday last week, the combination of the lower shadow line and the middle positive line indicated that the downward momentum since $1714 has slowed down. The probability of short-term volatility and correction is higher, with support levels around $1500 and the recent low of around $1462. As expected, the market rebounded overall. Currently, the support levels are around $1630 and $1505, and the resistance levels are around $1790 and $2030, which can also be considered as target positions to hold.The total circulating supply of Ethereum is currently 120 million, and it has already undergone deflation of 21,000 tokens through consolidation. This is positive news for the price trend of ETH, and the future supply is expected to further decrease, which will solve the problem of unlimited inflation in the past.
This week, the major stock indices experienced volatility and adjustment, and the US dollar index rebounded and closed up for three consecutive weeks after significant fluctuations. From a technical perspective, BTC completed a trendline retracement this week and rose significantly, hitting a new high. Currently, there is a chip vacuum zone between 25,000 and 28,000, which theoretically makes it easier to pull up with low selling pressure. However, despite breaking the August 2020 high of 25,200 this week, there was no major breakthrough, which may be due to the lack of confidence among the bullish leaders. There is still a need for repeated volatility to consolidate chips, so caution is necessary. The support levels are 23,900 and 22,850.
On the fundamental side, although Tuesday's inflation data showed a slight decline from last month, the decline was less than expected, and there was no improvement in housing or service industry inflation. Wednesday's retail sales data was higher than expected, showing that the US economy is still too hot. Thursday's PPI was also higher than expected, once again highlighting the stubbornness of inflation. Combined with last week's non-farm payroll data, the market expects the Federal Reserve to hold tight in the short term and raise interest rates three times by 25 basis points. However, even so, the space for interest rate hikes is limited, and the interest rate hike cycle is coming to an end. Therefore, the market did not react much to this data. In addition, this week, there are increasingly bullish views in the market. Even though BTC has not yet broken through the 25,000 level, the long-short ratio has returned to the level of the bull market, and market volatility and washing are necessary to watch out for.
Regarding market data, a large holder of Binance BTC perpetual contract placed a buy order of over 20 million US dollars in the price range of 24,350-24,400 yesterday. After briefly rising, BTC fell back, and the price entered our warning range and temporarily fell to $23,827. During the price drop, the main operation's highest profit was 5.45%. In addition, there is a dense order wall worth over 7.5 million US dollars about 3% below the current price position of Bitfinex BTC/USD.
The BTC reserves in exchange wallet addresses over the past 24 hours have changed as follows: Binance's reserves decreased by 2194.9 BTC, with a current holding of approximately 493,000 BTC, a decline of 0.44%; Bitfinex's reserves increased by 126.9 BTC, with a current holding of approximately 192,000 BTC, an increase of 0.07%; OKX's reserves decreased by 6.6 BTC, with a current holding of approximately 113,000 BTC, a decline of 0.01%.
According to data from multi-chain browsers, the current total holding volume of Grayscale is 21.2 billion US dollars, and the negative premium of Grayscale Bitcoin Trust (GBTC) is 46.02%, which has expanded by about 15% compared to last month. The negative premium of ETH Trust is 52.69%, which has expanded by about 13% compared to last month. In addition, the negative premium of ETC Trust is 65.37%, and that of LTC Trust is 54.41%.
Glassnode data shows that the number of addresses holding at least 32 ETH has reached a one-month low of 129,565.
In terms of stablecoin data, 28.61 BUSD left the market in the past six days, a decrease of 17.77% in supply during this period. In the past 30 days, the supply of BUSD has decreased by 19.2%. When Paxos, the issuer of stablecoins, announced that it would no longer mint new BUSD stablecoins, the circulating BUSD was worth 16.1 billion US dollars. According to Nansen's exchange portfolio tool, Binance currently holds 10.9 billion BUSD as of February 19th. The indicator shows that BUSD still accounts for 10.7% of the total global crypto economy transaction volume of 67.71 billion US dollars on that day
In stablecoin data, within the past 6 days, 28.61 BUSD were withdrawn from the market, causing a decrease of 17.77% in its supply during this period. Over the past 30 days, BUSD's supply has shrunk by 19.2%. With Paxos, the stablecoin issuer, announcing that it will no longer mint new BUSD stablecoins, the circulating BUSD as of the announcement was $16.1 billion. According to Nansen's exchange portfolio tool, as of February 19th, Binance currently holds 10.9 billion BUSD out of the total 72.4 billion BUSD, which accounts for 10.7% of the global cryptocurrency trading volume of $67.71 billion on that day. Binance dominates most of the BUSD trading volume, with USDT being the most popular trading pair for BUSD. According to Cryptocompare.com's statistics, 5.52% of BUSD trading volume on Sunday was also linked to the Turkish lira. Despite BUSD having the most redemptions in the past 30 days, USDC's supply decreased by 2.9% during this period. It is worth noting that Paxos' other stablecoins, Pax Dollar (USDP), experienced a 19.3% decrease in supply, and PAX Gold (PAXG) experienced an 11.3% decrease in supply over the past 30 days. In comparison, USDT's supply has grown by 5.8%, with a market capitalization of over $70 billion.
Last week, stablecoins caused a stir in the market, and we will discuss the distribution of USDC, BUSD, and USDT on different chains. BUSD issuer Paxos has been caught in a tug-of-war with the US SEC, which questions its lack of sufficient asset reserves. As a stablecoin endorsed by the world's largest trading platform, Binance, BUSD is also seen by many as a part of Binance's commercial territory. This event has also sparked a trust crisis in BUSD. As one of the core assets of the entire crypto market, stablecoins have experienced significant growth in recent years, with the total market value of stablecoins increasing by over 5,500 times compared to the same period in 2017. According to recent statistics from Coinmarketcap, the current total market value of stablecoins is approximately $136.9 billion, with Tether's USDT having the highest market share at 50.3%, approximately $68.5 billion; Circle's USDC accounts for 29.9%, about $41.5 billion; BUSD, issued by Paxos with the support of the Binance brand, accounts for 11.5%, or about $15.7 billion.
Over the past week, the growth rate of Shanzhai coins has been as follows: CFX, which belongs to the Hong Kong sector, has surged by a substantial 3.3 times, while STX has also gained a growth rate of 1.6 times. ACH/FIL/KLAY/DREP, among others, have also risen significantly. The Matthew Effect states that the strong get stronger, so this week, we will continue to prioritize the opportunity to buy back coins with larger growth rates, and are expected to see a secondary increase again. Additionally, considering the rotational effect of coins, mainstream coins with smaller growth rates from last week may experience a rally this week, and a small allocation may be considered for short-term speculative trading. Profits should be taken in a timely manner, as weaker coins have poor sustainability, and priority should still be given to strong trending coins.
In the past week, the NFT market's Blur transaction volume market share exceeded 77%, with a total transaction volume of approximately $390 million and a market share of over 50% in the number of transactions, with a total of 275,479 transactions. In comparison, OpenSea's market share was 16.7% and 40.8% for the same metrics. However, in terms of the number of transaction addresses, OpenSea's figures are much higher than Blur's.
So let's talk about what makes Blur so magical that it is being listed on various platforms. Blur is an NFT trading market and aggregation platform. It is reported that the Blur market has become one of the fastest-growing NFT markets, with a trading volume of $187 million, accounting for 20% of the market, despite being a new platform in the field.
At the end of March 2022, Blur raised $1.1 billion, led by cryptocurrency investment company Paradigm (which has invested in FTX, Coinbase, BlockFi, Uniswap, and other institutions), and other angel investors include a number of NFT KOLs, including Deeze, Zeneca, and 6529. The NFT market, Blur, will be valued at $1 billion in financing.
Blur firmly grasps the demands of its broad user base. Compared with other platforms, Blur has a relatively quick purchase and refresh speed, making it easier for users to grab NFTs at floor prices. One reason for this is that seven of the ten people on Blur's development team are software engineers, all of whom come from other top global projects and have excellent software teams to provide technical support.
Second, from a user's perspective, the cost of buying an NFT may include the price of the NFT itself, as well as gas fees, platform fees, and royalties. If you buy an NFT, the NFT itself needs to rise by about 8-10% before you can break even. This may discourage many users, but Blur is fundamentally making costs more controllable, and Blur is currently in a phase of promoting to professional NFT traders, with no transaction fees in the early stages. This will make users get NFTs at cheaper prices on Blur than on other platforms.
The project standards for listing on Blur are the entire community, and projects that are not listed on Blur may not have the demand from the community to be listed, but if you want to get a project listed on Blur, you can propose the listing requirement on Discord.
Currently, Blur only supports the web version and not the mobile version, but from the transaction data, Blur has already surpassed many NFT trading platforms. There are plans to increase the number of applications in the future, but there is currently no clear timeline.
We are currently developing an API for Blur which will be released in the future, allowing anyone to access Blur directly without the need for application or similar processes. The bottleneck at the moment is our engineering team, as we are still in the early stages of project development. Once the project is matured, we plan to open an Open API for more developers to use, or to build other tools and projects within the Blur ecosystem.
The Blur team has conducted a lot of data analysis on the transaction volume of Blur, and stopped incentives for NFT listing two months ago on December 6, 2022. However, the transaction volume is still growing, and it was found that the vast majority of the transactions are free, meaning that transaction volume does not require incentives. Pacman, the founder of Blur, stated that airdrops are not the decisive or only indicator for Blur transaction volume.
According to the data, 93.82% (approximately 337 million) of the 360 million BLUR airdropped tokens have been claimed, and there are still 54 days and 8 hours left until the end of the airdrop. The current number of airdrop claimants is 111,511 people. Among them, 40.5% of the airdrop amounts are between 100 and 1000, 29.6% of the airdrop amounts are below 100, and 24.7% of the airdrop amounts are between 1000 and 10,000. In addition, the Blur Bidding Pools TVL has exceeded $100 million, currently at approximately $126 million, reaching a new historical high.
Market data shows that WAVES has increased by 28.21% in the past 24 hours and is currently trading at $3.358. Sasha Ivanov, the founder of Waves, stated on social media that users need to have WAVES on the Waves blockchain to receive the Power airdrop, and they have about two weeks to withdraw them from centralized exchanges. Previously, on January 12th, Sasha Ivanov announced that Waves would release the Waves 2.0 Litepaper between January and February, airdrop Power DAO's Power Token, and create a new token cross-chain bridge.
On the list of major holders, except for stablecoins, AIOZ, FTM, KEEP, and AGLD are among the top few, involving main force absorption and large holder buying and holding. As individual investors, one can follow the trend of the main force and buy before the rise, and take the opportunity to profit by closing the position before the main force sells off.
There have been significant changes in the holding addresses for STMX/HFT/MASK/ROSE/LDO, which are among the long-term coins on the list. These coins are not easy to attract new registered users during the bear market and may also be subject to data brushing by the project parties. Hence, investors should be cautious.
During the recent ETH rally, whales bought a total of 47,729 ETH (worth about $79.2 million) from Coinbase and Gemini. Even after today's drop in ETH price, they still purchased 6,108 ETH (worth about $10.1 million).
The current resistance level for Sushi is around $1.638, with the medium-term resistance around $2.
This week's unlocking data: over 18 million IMX will be unlocked on the 25th. Generally speaking, unlocking is considered bearish news.
According to Token Unlocks data, the following tokens will be unlocked this week (February 20th to February 26th):
At 20:00 on February 22nd, 274,286 INCH tokens (approximately $160,000) will be unlocked, accounting for 0.018% of the total supply.
At 20:00 on February 23rd, 192,307.69 GAL tokens (approximately $440,000) will be unlocked, accounting for 0.096% of the total supply.
At 8:00 on February 25th, 4,657,534 ACA tokens (approximately $650,000) will be unlocked, accounting for 0.466% of the total supply.
At 18:00 on February 25th, 18,075,990.62 IMX tokens (approximately $19.54 million) will be unlocked, accounting for 0.904% of the total supply.
II. Concept ups and downs
The performance of the conceptual sectors is as follows: based on the rise and fall ratio, the Hong Kong sector, domestic public chains, and AlamedaResearch (SBF) investments are leading the way in gains.
Specifically, KEY has nearly an 85% increase, which belongs to the Hong Kong, anti-counterfeiting, and Polkadot ecology concepts. QUICK/CHE have doubled by around 50% and belong to the DEX and OK ecology concept currencies, respectively. Pay attention to the rotational speculative market of the sectors to which the above major gain currency belongs.
III. Overview of macro analysis
Last Friday, the three major US stock indexes were mixed, with popular Chinese concept stocks falling across the board. As of the close, the Dow Jones rose 0.39%, the Nasdaq fell 0.58%, and the S&P fell 0.28%. The yield on the 10-year US Treasury bond fell by 1.138%, closing at 3.821%, with a difference of -80 basis points compared to the yield on the 2-year Treasury bond. The VIX fear index fell 0.74%, Brent crude oil fell 1.91%, and spot gold continued to rise from November 2022, with yesterday's close up 0.33% at $1,842.57 per ounce. The US dollar index continued to fall from its high, closing at 103.88.
Fed Governor Bowman stated: Recent data indicate that our actions have not yet had a significant impact, and we need to raise interest rates to a sufficiently strict level. The current interest rate level is not high enough. The Fed swap market is fully pricing in expectations of a 25 basis point rate hike in March and May. According to the Fed's Barkin: controlling inflation will require more rate hikes, and as for how much, we will need to assess it in the future, supporting the decision to raise rates by 25 basis points last time. Goldman Sachs predicts that the Fed will raise rates by 25 basis points three more times in March, May, and June 2023, and the peak of the federal funds rate will reach 5.25-5.5%.
ECB Executive Board member Villeroy: The ECB will reach the terminal rate before September, and the terminal rate may be above 3%. The ECB's actions after the March meeting will not be so urgent. Traders fully digested the ECB's peak rate of 3.75% for the first time. The eurozone's seasonally adjusted current account recorded a surplus of 15.896 billion euros in December, the largest surplus since September 2021. European natural gas prices fell below 50 euros/megawatt-hour for the first time in 17 months.
Last week, the US stock market reached a turning point. Many important economic data in January exceeded market expectations, showing the strength of the US economy, while also exacerbating market concerns about the Fed. In particular, the frequent statements by multiple Fed officials have made investors worried about whether the Fed will continue to tighten monetary policy to control high inflation.
Goldman Sachs and Bank of America have also stated that they expect the Fed to raise interest rates three times this year, and have raised their expectations for rate hikes after data showed that inflation is still ongoing and the labor market is resilient. A Goldman Sachs report stated that due to stronger growth and more solid inflation news, we have increased our forecast for a 25 basis point rate hike in June, and we expect the terminal fund rate to be 5.25%-5.5%.
Bank of America also predicts that the Fed will raise interest rates by 25 basis points at the June meeting, pushing the terminal rate to the target range of 5.25%-5.5%. Previously, the bank predicted that the Fed would raise interest rates twice, by 25 basis points each time, at the March and May meetings.
The resumption of inflation growth and steady employment growth means that the risks of this (only two rate hikes) outlook are too one-sided for us. This week, the Federal Reserve will release the minutes of the January meeting, and the January manufacturing and service PMIs for the United States and Europe, as well as the January consumer expenditure price index (PCE), existing home sales, and the University of Michigan's consumer confidence index are also worth paying attention to.
In terms of earnings reports, retail giant Walmart and chip giant Nvidia will release their results before the bell on Tuesday and after the bell on Wednesday, respectively. Important tech stocks such as Baidu, Alibaba, Nvidia, and iQiyi will also release their quarterly earnings reports.
The Federal Reserve meeting minutes and PCE data will be bombarded in turn. On Thursday, the Federal Reserve will release the minutes of its February monetary policy meeting. According to CME's "FedWatch": the probability of the Federal Reserve raising interest rates by 25 basis points to a range of 4.75% to 5.00% in March is 81.9%, while the probability of raising interest rates by 50 basis points to a range of 5.00% to 5.25% is 18.1%; the probability of cumulative interest rate increases of 25 basis points by May is 6.7%, the probability of cumulative interest rate increases of 50 basis points is 76.7%, and the probability of cumulative interest rate increases of 75 basis points to a range of 5.25% to 5.50% is 16.6%.
In addition, the PCE price index, which is favored by the Federal Reserve, will also trigger internal debates about whether to adjust the pace of rate hikes.
Analysts predict that the US January PCE price index will increase by 0.5% month-on-month, the largest increase since mid-2022, and the core PCE price index will increase by 0.4%. The core price index does not include food and fuel and can better reflect underlying inflation. The increase in the inflation rate is expected to slow down the rate of moderation in the annual inflation rate, which is still well above the Federal Reserve's target.
the major financial data and events for this week:
Tuesday, February 21: Japan's February Markit Services PMI; France, Germany, Eurozone, and UK's February Services and Manufacturing PMI; US's February Markit Manufacturing and Services PMI; Canada's January CPI; US's January Existing Home Sales.
Wednesday, February 22: Germany's January CPI; US's Mortgage Application Index for last week.
Thursday, February 23: Eurozone's January CPI; US's Initial Jobless Claims for last week; Revised Annualized Q4 Real GDP and GDP Price Index for the US;
Friday, February 24: Japan's January CPI; US's January Core PCE Price Index; US's January Personal Income and Spending; US's Final Michigan Consumer Sentiment Index for February; US's January New Home Sales.
Central bank events:
Monday, February 20: The People's Bank of China announces the one-year and five-year Loan Prime Rates.
Tuesday, February 21: The Reserve Bank of Australia releases the minutes from its February Monetary Policy Meeting.
Thursday, February 23: The Federal Reserve releases the minutes from its February Monetary Policy Meeting; FOMC Permanent Voting Member and New York Fed President Williams gives a speech on inflation control.
Friday, February 24: Japan's House of Representatives holds a hearing on nominees for Bank of Japan Governor and Deputy Governor; 2025 FOMC Voting Member and Cleveland Fed President Mester gives a speech.
Crypto Market Update:
Key events to watch for:
• On February 23 at 3:00, the Federal Reserve will release the minutes of its February monetary policy meeting.
• On February 23 at 06:30, the Federal Reserve's Williams will give a speech on the issue of inflation containment.
February 20 (Monday):
• President's Day (Washington's Birthday), US stock market closed for the day.
• Lamborghini releases Huracán STO car NFT on the VeVe NFT marketplace.
February 21 (Tuesday):
• The Radiant Capital V2, a full-chain lending agreement, is officially launched and migrated to Arbitrum, and will also be deployed on BNB Chain.
• Paxos will stop issuing new BUSD tokens under the guidance of the New York Department of Financial Services (NYDFS).
February 22 (Wednesday):
• BAYC launches Dookey Dash game event "Lick the Toad". Players will play as "Toad Catchers" in the mini-game of the metaverse to catch toads and earn points based on the duration of the game, collected fragments, and objects hit. This event will also give players who have not had a chance to participate in the game or have had their scores reset a chance to reclaim their scores.
February 24-25 (Thursday-Friday):
• The NFT Paris Conference will be held from February 24-25.
• At 20:00, Binance.US announced that it will delist Kilo Shiba Inu (KSHIB) and list the SHIB/USDT trading pair. The KSHIB/USD trading pair will be removed, and all pending KSHIB spot trading orders will be cancelled on February 21 at 11:00 Hong Kong time. Customers currently holding KSHIB will receive converted SHIB allocations before February 24 at a ratio of 1K SHIB:1,000 SHIB. During this transition period, the SHIB/USDT trading pair will remain available. Binance.US also launched KSHIB and added the KSHIB/USD trading pair, joining the existing SHIB/USDT and SHIB/BUSD trading pairs.
February 26 (Sunday):
• Peer-to-peer Bitcoin trading platform LocalBitcoins suspends trading and wallet use (except withdrawals).
2.Market News and Industry News:
This week's focus news:
<![if !supportLists]>1. <![endif]>Regulatory authorities ordered Paxos to stop issuing new BUSD tokens, and Binance may no longer use BUSD as the main stablecoin.
On Monday, February 13th, the New York State Department of Financial Services ordered Paxos Trust Co. to stop issuing more BUSD tokens. CZ said that they did anticipate users migrating to other stablecoins over time, and they will adjust their products accordingly, such as no longer using BUSD as the main currency pair for trading. Due to continued regulatory uncertainty in certain markets, Binance will review other projects in these jurisdictions to ensure that users are not harmed inappropriately.
BUSD is issued by Paxos, and Binance-peg USD is Binance's anchored token, which is not regulated by NYDFS, according to the Binance official website. This may be an operation that Binance carried out in response to regulation and compliance. For example, USDC is also issued by Circle, but Coinbase can share some of the revenue. Although there have been cases in history of issuing tokens without strict reserve backing, the possibility of Binance arbitrarily increasing BUSD is relatively small. However, since BUSD is directly declared to use the Binance brand, the relationship is naturally inseparable, which may give regulators more room to play.
Rich Teo, the founder of Paxos, once implicated CZ in a scandal. Stablecoins are an industry that requires close cooperation with regulation and compliance. Currently, BUSD seems to be a bit makeshift, which may be one of the reasons why it is treated worse than USDC despite looking no worse than USDC on the surface. Additionally, since Binance recently integrated BUSD/USDC, and most of its spot assets are in BUSD, it will inevitably face liquidity issues if customers withdraw a large amount of USDC.
<![if !supportLists]>2. <![endif]>The "Final Fantasy" manufacturer Square Enix will launch an NFT game on Polygon.
According to Decrypt, Square Enix, the Japanese gaming giant with well-known game IPs such as "Final Fantasy" and "Dragon Quest," announced on the 15th that it will launch an NFT-based game, Symbiogensis, on Polygon. The game will use turn-based gameplay related to the storyline, including game elements such as dragon tarot and monster storybooks. When users complete tasks and hold or trade NFTs, the storyline will take different paths.
Polygon's daily active users have exceeded Ethereum's mainnet. Due to its ease of use, Polygon is currently the most popular on-chain deployment solution for traditional brands. In terms of application layer, as I mentioned in the previous issue (Issue 2.6), Polygon's collaboration with the Web3+ brand on the business application layer is very good, including traditional Web2 brands such as Starbucks, Coca-Cola, Disney, and Adidas.
Polygon's current product advantages, coupled with the continuous improvement of its ecosystem, are pushing up its competitive barriers. Square Enix, the well-known traditional game developer entering Polygon, will further promote the growth of the Polygon game ecology. After all, for traditional game developers, their accumulated game advantages entering the Web3 world will definitely take GameFi to a new level.
Many people are pessimistic about Web3 games, believing that they cannot escape the gravity of secondary economic mechanisms. However, from the recent explosion of games in the MAGIC ecosystem, it can be seen that Web3 games are gradually moving away from the secondary gold rush of the previous cycle and focusing more on exploring the core of the game and improving its playability. By combining these playable features with optimized economic mechanisms, native Web3 blockbuster games may eventually emerge. Perhaps Square Enix's foray into Web3 games will lead to deeper expansion in terms of playability.
<![if !supportLists]>3. <![endif]>The Hong Kong government announced on Thursday, February 16, that it has successfully issued HKD 800 million worth of tokenized green bonds under its government green bond program.
Despite the lack of clear regulations in Hong Kong's virtual asset industry, the government is actively embracing the crypto industry and sees it as a vital development opportunity, which could prove to be a significant consideration for global crypto investors and participants evaluating Hong Kong's regulatory capacity and policy inclusivity.
<![if !supportLists]>4. <![endif]>The zkSync Era mainnet has officially launched and is now open to all developers. The zkSync Era is based on ZK Rollup and offers an Ethereum layer 2 solution.
It underwent four months of testing, during which there were about 9 million transactions on the test network, 30,000 contract deployments, and 497,000 active addresses. The next target is to fully launch Alpha, and its strong technology and compatibility with zkEVM could potentially give zkSync Era a competitive edge in the market. The adoption of zkSync's ecosystem will also be crucial for its survival as it faces competition from other players in the industry.
<![if !supportLists]>5. <![endif]>On February 18th, the NFT market saw a resurgence in competition as OpenSea responded to significant changes caused by Blur.
Blur has become the largest NFT market, surpassing OpenSea, based on NFT trading volume through its no-fee and airdrop strategies. Additionally, Blur has been pursuing OpenSea through its royalty program.
Due to its attractive features, Blur has gained a lot of popularity and traffic. In response to the fierce competition from Blur, OpenSea has made changes, including launching a limited-time zero-fee trading event, allowing for optional royalties (minimum 0.5%) for all NFT transactions without enforced on-chain royalties, and updating the operator filter to allow sales on NFT markets with the same policies (including Blur).
OpenSea's counterattack policy seems to have reached a compromise and cooperation with Blur in some areas. However, in the long run, with the expected impact of Blur's second round of airdrops, liquidity on Blur will be far superior to that of OpenSea. These challenges are a significant test for OpenSea because its fundamental model is still a Web2 model. If OpenSea cannot provide users with more support and airdrop expectations at the token incentive level, it will be difficult to reverse the current situation with only a few changes at this stage. After all, using a fee-cutting strategy to fight against competition is not a sustainable long-term solution.
Key financing events:
1. Web3-friendly entertainment company Superplastic completed $20 million in financing, led by Amazon’s venture capital arm Alexa Fund:
Superplastic recently received a new round of financing of 20 million US dollars, which was led by Amazon with a high profile. The investor lineup is full of old acquaintances in the Web 3.0 field such as Galaxy Digital and Animoca Brands, as well as Google Ventures, Sony Japan and other giants. figure. To date, the company has received $58 million in investment.
The current main characters in the Superplastic universe include DAYZEE, a female doctor of double engineering, and the trendy fashion group Janky and Guggimon, etc. Relying on the 3D trend elements and high-quality character management that accurately fit the preferences of Generation Z, the popularity of the three characters on the TikTok platform has exploded, with a total of over 18 million followers, and is growing rapidly at a rate of 1 million new fans per month. This not only made Superplastic popular among the public, but also made it a darling with unlimited potential in the eyes of the investment circle.
According to Superplastic, in addition to leading the US$20 million investment, the company has reached an IP cooperation agreement with Amazon, and the authorized TV series featuring Janky and Guggimon are currently being produced by Amazon's Amazon Studios. The company also stated that it has signed relevant priority licensing terms with Amazon, and will use Superplastic's characters to continue to produce more episodes and licensed works in the future.
Today, talk shows generated in real time using AI-generated animation technology, and AI virtual anchor Neuro-sama, which uses ChatGPT for live broadcasting, have all appeared in the public eye. I believe that virtual anchors will rise to a new height with the development of AI in the future .
2. Web3 security company Stelo Labs completed a $6 million seed round led by a16z:
Web3 security company Stelo Labs completed a $6 million seed round of financing led by a16z, First Round Capital, Opensea Ventures, Chainforest, BoxGroup, Pear, Homebrew, Louis Beryl, Sabrina Hahn, Dylan Field, Dan Romero, Gokul Rajaram, Lenny Rachitsky, etc. Participate in voting.
Stelo Labs is focused on helping prevent malicious transactions, phishing, and social engineering for Ethereum-based users. Stelo Labs also launched three new products today, Stelo v2, Stelo for developers and Approvals.xyz. Stelo Labs launched the Stelo extension last September to help users protect their wallets from scams and phishing attacks. Stelo currently supports Ethereum and hopes to expand to other EVM compatible chains in the future.
We know that malicious transactions, phishing and other security issues have always been the haze of Web3. Even in the recent Blur airdrop, some users suffered losses due to many maliciously pretending to be cheated by official links, and ensuring the overall security environment on the chain can actually be improved. It is good to drive Web2 users into the Web3 world. At present, as far as the demands of many project parties are concerned, the Web3 world still lacks users and traffic. From this point of view, the significance of what the Stelo Labs team has done is very significant .
3. The game guild YGG raised USD 13.8 million through the sale of tokens. DWF Labs and a16z Crypto participated in the investment:
Blockchain game association YGG announced on Friday that it has raised $13.8 million through the sale of tokens. DWF Labs and a16z Crypto, a well-known venture capital a16z's Web3 fund, participated in the investment. According to YGG co-founder Gabby Dizon, YGG will use the new funds to further develop its soulbound reputation token.
Then on February 18, YGG raised another $75 million for its first fund. According to YGG co-founder Beryl Li, the fund’s mission is to invest in early-stage token and equity transactions for web3, game studios, and infrastructure supporting industry development. Li will also sit on the fund's investment committee, along with YGG's other co-founder, Gabby Dizon, and YGG's head of asset acquisitions, Jeff Holmberg, who will transition to partner at YGG Ventures. In his new role, Holmberg will oversee the fund's strategy and day-to-day operations, as well as manage a team of gaming analysts, according to reports.
4. Prevu3D, an industrial metaverse company, completed its A-round financing of US$10 million, led by Cycle Capital:
Prevu3D, an industrial metaverse company, announced the completion of a $10 million Series A round of financing, led by Cycle Capital, with participation from Brightspark Ventures and Desjardins Capital, which previously invested in the company. Prevu3D bridges the gap between the real and digital worlds. The industrial metaverse built with gaming technology, 3D scanning and cloud computing can help companies with digital transformation. The new funds will be used to expand and accelerate the deployment of its 3D digital twin platform for industrial environments .
Detailed investment and financing events:
Last week (2.13-2.19) there were 29 investment and financing events in the global blockchain, a slight decrease compared with the previous week. In addition, this week’s DeFi sector did not announce the occurrence of financing. The specific overview is as follows:
1. Chain games announced 5 incidents, namely:
The gaming guild YGG raised USD 13.8 million through the sale of tokens, with participation from DWF Labs and a16z Crypto;
Unagi, a chain game developer, completed a seed round of financing of US$5 million;
Blockchain game Million on Mars raises $3.5M for blockchain-based space simulation;
Web3 game BornToDie completes $1.5 million Pre-Seed round of financing;
The game studio Empires Not Vampires completed a financing of US$1 million, and Shima Capital and others participated in the investment.
2. The performance of NFT and metaverse fields is stable, and 5 financings have been announced, which are:
Web3-friendly entertainment company Superplastic closes $20M Series A-4 round led by Amazon Ventures Alexa Fund;
Prevu3D, an industrial metaverse company, completed a US$10 million Series A financing led by Cycle Capital;
Cosmos ecological NFT blockchain Aura Network completes $4 million in financing;
NFT derivatives DEX NFEX completed a $3 million seed round of financing, led by ABCDE Capital;
Virtual Arts completed a new round of financing, Animoca Brands Japan participated in the investment.
3. The track of infrastructure and tools continued to heat up, and 11 incidents were announced, namely:
EVM-compatible blockchain project Monad Labs completed a $19 million seed round of financing, led by Dragonfly Capital;
Web3 infrastructure provider Caldera completed $9 million in financing;
Ironblocks, a blockchain network security platform, completed a $7 million seed round of financing;
Zero-knowledge (ZK) hardware startup Cysic closes $6 million seed round led by Polychain Capital;
Web3 security company Stelo Labs completed a $6 million seed round led by a16z;
Web3 infrastructure Nefta completed a $5 million seed round, led by Play Ventures;
Orb Labs, a developer of cross-chain interoperability protocols, completed a $4.5 million seed round;
Web3 infrastructure startup Kolibrio completed a $2 million seed round led by Jump Crypto;
Modular Cloud completed a $1.7 million Pre-Seed round of financing, led by Maven 11 and Blockchain Capital;
Creditcoin, a multi-chain credit reporting protocol, completed a new round of financing, and DWF Labs participated in the investment;
Digital identity verification platform Dentity has completed a seed round led by Blockchange Ventures and AARP.
4. The popularity in the field of centralized finance has dropped sharply, and 2 financings have been announced, namely:
Digital asset company Taurus SA completed a financing of US$65 million, led by Credit Suisse Group;
Crypto index platform Alongside raised $11 million, led by a16z.
5. Other Web3/encryption-related projects announced 6 incidents, namely:
GrainChain, an agricultural blockchain technology company, completed a financing of US$29 million;
Sending Labs, a Web3 communication project, completed a $12.5 million seed round of financing;
Decentralized social platform Zion completed $6 million in financing;
Jewelry brand Chupi completed 3.75 million euros in financing and will invest in blockchain technology to track diamonds;
Web3 messaging platform Salsa completes $2 million Pre-Seed round of financing;
Phi, an ENS-based social platform, completed a $2 million seed round led by Chapter One and Delphi Digital.
Industry Overview Author: Lao Li(Analyst)
Market News Author: Leon (Analyst)
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