Mars Finance Crypto Daily | Celsius will unstake a large amount of ETH and distribute it to creditors, and TIA hits an all-time high

Mars Crypto Daily January 5, 2024

1. Today's news

Bitfinex analysts said derivatives traders expect "unprecedented" volatility in the Bitcoin market. While the industry awaits news of the approval of more than a dozen spot Bitcoin ETFs, signals from the options market suggest that derivatives traders are currently expecting more volatility than observed across the market in 2023. Implied volatility has reached recent highs above the all-time average volatility of 41.1%, and Bitcoin is currently surging to a multi-month high of 70.1%, according to The Block's Data Dashboard. "Based on signals from the options market, traders are bracing for unprecedented price volatility in Bitcoin," the analysts said. ”

According to Dune Analytics data, the total amount of ETH pledged on the Ethereum Beacon Chain reached 29,136,108 ETH, accounting for 24.28% of the total ETH supply. Among them, the staking share of the liquid staking protocol Lido reached 31.73%. In addition, there was a net inflow of 10,962,105 ETH since the Shanghai upgrade.

The Fantom Foundation said on social media that the validator self-staking requirement has been reduced from 500,000 FTM to 50,000 FTM, effective immediately. In addition, FTM lost due to early unlocking will now be sent to the SFC vault for ecosystem funding.

According to CertiK officials, the CertiK X account has now returned to normal, and all the previous fake news has been deleted. Previously, the Certi X account was briefly compromised, and the hackers posted fake messages with phishing links attached.

Cryptoslam data shows that NFT sales on the Bitcoin chain increased by 10.47% in the past seven days to $144,581,502, ranking first. NFT sales on the Ethereum chain decreased by 3.12% in the past 7 days to $69,083,366, ranking second; NFT sales on the Solana chain decreased by 33.62% in the past 7 days to $49,950,821, ranking third; In the past 7 days, Polygon on-chain NFT sales increased by 142.06% to $19,381,654, ranking fourth; Avalanche on-chain NFT sales increased by 97.80% in the past seven days to $7,877,699, ranking fifth.

Eric Balchunas, senior ETF analyst at Bloomberg, said the SEC is giving a final opinion on spot Bitcoin ETFs and issuers will file final 19b-4 and S-1 filings soon. "It's definitely the closest we've ever come to 'done', but as far as I know, it's not officially approved," he said.

Orbit Chain, a cross-chain protocol, tweeted that it is still tracking and recovering assets stolen by attackers. At the same time, Orbit Chain is also working with the Klaytn Foundation, among others, to develop a viable recovery plan. Orbit Chain said it is making every effort to recover the stolen assets, which may still take some time.

According to the market, TIA broke through 17 USDT, rose as high as 17.30 USDT, and temporarily traded at 16.94 USDT, hitting a record high, up more than 22% in 24 hours.

Arthur Hayes, founder of crypto trading platform BitMEX, has published a lengthy post on his blog that provides insight into the current trend of the crypto market and its potential risks. Hayes noted that while the crypto market is in the early stages of a bull market, investors need to be wary of upcoming market volatility. He paid particular attention to three key variables that will converge in March of this year: changes in the balance of the US reverse repo procedure (RRP), the likelihood of a renewal of the Bank Financing Program (BTFP), and the Fed's interest rate decision.

Hayes predicts that liquidity will be affected as RRP balances fall, and the market could be volatile. In addition, he believes that the Fed may decide to cut interest rates at its March meeting and that some non-large banks may face financial stress if the BTFP program is not renewed, which will also have a significant impact on the market. He expects that these factors will combine to lead to a sharp correction in the cryptocurrency market in the short term.

Hayes expects a healthy 20% to 30% correction for Bitcoin in early March, which could be even larger if US-listed Bitcoin spot ETFs have already started trading. If hundreds of billions of fiat dollars are expected to flow into these ETFs in the future, Bitcoin has the potential to climb to $60,000 or even close to its all-time high of $70,000 in 2021, Hayes said. However, having reached this high, he foresees a significant pullback of 30% to 40% for Bitcoin due to the shortage of USD liquidity.

Hayes intends to capture the market high at the end of February to sell and buy a large put option in early March, choosing the option expiring on June 28 instead of the March 29 option to reduce the impact of time value on profits. He will set a maximum loss that is large relative to a standard trading position and buy these options. He will choose a strike price that is 20% to 25% lower than the current quarterly futures contract price. Hayes also noted that many traders do a good job of identifying entry points, but often make mistakes when exiting. He plans to try to catch the bottom of the market during the significant correction that begins around March 12 and close positions when it is profitable. If he is correct in his judgment on the policy, but the price of Bitcoin holds or rises, he will immediately close the put position.

Hayes expects the market to return to normal by the end of March. He expects U.S. Treasury Secretary Janet Yellen and Fed Chair Jerome Powell to reaffirm that they will do whatever it takes to maintain fiat currency stability in the Pax Americana financial system. With the brief market turmoil over, cryptocurrencies could soar again amid speculation about the impact of the upcoming Bitcoin block reward halving. As a result, he plans to restart selling US Treasuries for Bitcoin and other cryptocurrencies after a brief period of market volatility.

LINE NFT, an NFT marketplace under Japanese social giant LINE, announced on the X platform that LINE NFT will be temporarily suspended from now on, and the DOSI provided by LINE NEXT Inc. will be updated, and the service is expected to be available on January 10.

In April 2022, LINE NFT was announced, and in December 2023, Line Next announced a $140 million investment from private equity fund operator Crescendo Equity Partners and its consortium, making it the largest investment in the blockchain and Web3 space in Asia this year.

Line Next plans to use the funding to drive Web3 adoption, expand its global platform business, and develop new services, including DOSI, a global NFT platform that will launch in January next year, as well as social applications and Web3 games based on AI technology.

Celsius Network said in a post on the X platform that in the process of preparing for asset allocation, Celsius has begun the process of asset recovery and rebalancing to ensure sufficient liquidity.

Celsius will unstake existing ETH holdings to offset certain costs incurred throughout the restructuring process. Large-scale unlocking staking activity in the coming days will release ETH to ensure timely distribution to creditors.

"We strongly believe that AI is now undervalued, and we will certainly provide long-term value to all stakeholders," Sleepless AI said in a post on the X platform. We are announcing the AI Together program, into which Sleepless AI Lab will invest all proceeds from NFT auctions (approximately $2.5 million), with the primary aim of guaranteeing the long-term cost-effectiveness of AI. ”

Several Bitcoin spot ETF issuer executives revealed that they have been monitoring the SEC's feedback and expressed concern about companies such as Grayscale adopting SEC-approved creation and redemption models. This led to the issuer agreeing to disclose the authorized participants, which was considered an unusual move.

In some ETF structures, the fund uses a physical redemption model, allowing investors to exchange shares for underlying securities or commodities to avoid tax penalties. In its meeting with the SEC, Grayscale had advocated for the provision of in-kind and cash creation and redemption models, but ultimately accepted the SEC's cash model requirements. Other companies, such as BlackRock, have also expressed a preference for a cash model.

According to sources, Grayscale pushed for a physical redemption at the pre-Christmas meeting, but eventually compromised with the SEC's demands. Recently, companies looking to list Bitcoin ETFs have announced authorized participants, including major banks such as Jane Street Capital, JP Morgan Securities LLC, Valkyrie, and others. This is considered a matter that the SEC is pushing for, and it is related to the focus of its ongoing conversations. In addition, progress has been made in dealing with issues such as hard forks and airdrops.

Gamma posted on platform X that it had initially found the cause of the attack on the vault and closed the vault for the public out of an abundance of caution. Gamma said that Gamma's vault has 4 main sources of deposit protection to prevent flash loans, one of which is "set a price change threshold that will not allow deposits when the price changes exceed a certain amount", and the main problem is that this price change threshold is set too high, resulting in price changes of up to 50-200% in some LST and stablecoin vaults. This allows the attacker to manipulate the price up to the price change threshold and mint a large number of LP tokens. Gamma further stated: "In the coming days, we will release a detailed post-mortem analysis and proposed remediation plan. We will make every effort to recover funds and mitigate future risks. ”

2. Selected Articles

The Fed is likely to start printing money on March 12 to fill the liquidity gap, Bitcoin could experience a healthy 20%-30% correction, Yellen is likely to print more money, the Bank of Japan is allowing Japanese government bond yields to rise, and adopting a non-consensus view could improve risk-reward.

The SEC is likely to approve Bitcoin spot ETFs on or before January 10, ETF analyst Seyffart James said it is likely to be approved, and there is growing interest in Bitcoin spot ETFs from mature financial institutions, the approval of Bitcoin ETFs could lead to billions of dollars in assets flowing into the cryptocurrency market, and the addition of trading platforms such as Coinbase could also drive the development of the RWA tokenization space.

Alex Xu observed the new trends in the Rollup market and deduced the development of Rollup Summer and the possible opportunities. ZKFair and Manta are examples to analyze the operation mode and characteristics of the new rollup, and the incentive challenge is more complex. The development of rollups may drive the expansion of the user base and the formation of Xi, but also consider the risk of narrative failure. L1 has a similar attempt, and the development of a new type of rollup remains to be seen.

David Hoffman predicts that there will be five major developments in cryptocurrencies in 2024: EigenLayer's TVL exceeds $10 billion, Ethereum burns 1 million ETH, airdrops covering all ecosystems, puts $5 billion in tokens to early participants, pays attention to the progress of EVM chain optimization, and Solana attracts users too quickly and may lead to downtime.

3. Project Interpretation

Metis' DeFi ecosystem has exploded in the past week, with TVL growing from $100 million to $700 million, outpacing its competitors. This is due to the planned injection of 4.6 million Metis tokens in the Grants released by Metis, as well as the increase in the price of Metis tokens. Despite the amazing TVL, the number of people actually using the Metis blockchain is small, and the Manta network's TVL grew by 1,250% in December.

ACDE #178于线上举行, confirmed the Dencun upgrade timeline and discussed Pectra upgrade priorities. The Dencun upgrade will be activated on January 17 on the Goerli testnet, with the Sepolia testnet and the Holesky testnet scheduled for January 30 and February 7, respectively, with ACDE #179将于1月18日召开 to discuss the priority of the Pectra upgrade.

In 2024, Ethereum will still be the most developed and innovative crypto platform, with Restaking being the rising star and EigenLayer providing low-cost, hyperscale data services, Kelp Dao is an LRT solution built on rsETH based on EigenLayer, Renzo is EigenLayer's LRT and strategy management platform, and there are also multiple projects in the Restaking track, the market is releasing its enthusiasm for EigenLayer and looking forward to the development of EigenLayer in 2024.

In October, Arbitrum Orbit completed the preparation of the mainnet, in December, the RARI Foundation released the testnet, XAI officially entered the Layer3 market, the DEX trading volume on the Arbitrum chain reached a new high, and Binance was launched, with a market value of $2.4 billion, ranking 39th.

4. Investment and financing

Bracket Labs closed a $2 million seed round and announced the official listing of its volatility market product, Passages, on Arbitrum. Passages provides users with a volatility betting platform capable of making 2-day prediction markets with a clean design.

Web3 metagame matrix Abyss World announced that it has received a strategic round of additional funding from 2Moon Capital, a move that will help the game officially launch in the market this year. Previously, Abyss World developer Metagame Industries completed a strategic round of financing, investors include Sui developer Mysten Labs, Swiss game platform Xterio, game publisher Funplus, investment company 2moon Capital, Big Brain Holdings, DWeb3 Capital, ZeroX Fund and MH Ventures, GMA, etc.

Copycat Finance today announced that it has secured a strategic investment from Openpad at a valuation of $60 million to explore the BRC20 world. Openpad is an innovative AI decentralized Launchpad, and Copycat, a DEX incubated by Binance Labs, previously launched Bitcat, an inscription DEX based on BRC20, and listed as an IDO on Bakeswap on January 2.

AI startup Perplexity announced a series of milestones and updates on January 4. The company's successful Series B funding round, raising $73.6 million, is the key news. The round was led by IVP, whose portfolio includes a number of crypto and fintech companies, such as Coinbase and Robinhood. In addition, Series A investors NEA, Elad Gil, Nat Friedman and Databricks participated, and new investors included NVIDIA and Jeff Bezos (through the Bezos Expeditions Fund). TechCrunch's Kyle Wiggers reported that the Series B funding was valued at $520 million. According to Perplexity, the company has raised $100 million so far.