Overview
TVL overview: Solana/Avalanche lose ground to Ethereum, L2s
Markets: Quiet week for BTC while some altcoins find reasons to pump.
News: Google Cloud to introduce Solana validator support in 2023.
Solana smartphone to utilize Helium Mobile.
Elrond rebrands to MultversX
Good morning Fam,
The newsletter was planning to cover the Alameda Research balance sheet/Binance debacle but Ran beat us to the punch with excellent coverage of the developing situation on Sunday.
So instead, we’ll move our focus to the Total Value Locked (TVL) charts in hopes of finding evolving trends in crypto’s backdrop.
While markets remain in winter, TVL across the board remained muted, with small amounts of outside cash flow entering the TVL sphere. TVL across all crypto currently sits at $54.81 billion.
Despite the lack of external inflow, a significant amount of TVL has been migrating chains.
TVL Chains
The monthly changes show investors continue leaving alternative Layer-Ones (L1s) such as Solana, Tron, and Avalanche for Ethereum's ecosystem and scaling solutions (Polygon and Arbitrum). Binance and Algorand also saw significant increases in TVL.
Solana and Avalanche have seen an outflow of $355 million and $150 million, respectively, while the chains below saw significant inflows:
Ethereum +$1.33b,
BSC +$430m,
Polygon +$110m,
Algorand +101m
Arbitrium +$115m
Source: DeFi Llama
TVL Protocols
On the protocol level, a few Dapps continue to outperform competitors significantly. For example, on the Ethereum network, Lido (LDO) continues to grow, seeing a $1.65b increase the previous month, a gain of 28%.
On Polygon
Balancer on Polygon grew +84%
Tetu on Polygon grew +549% (Tetu token climbed 381% in 30d)
On Arbitrum
GMX grew +14%
Sushi grew +32%
On BSC
Venus Lending grew +27%
Conclusion
Investors leaving Avalanche, Tron, and Solana in favor of Ethereum, Arbitrum, and Polygon continues to be a secular trend. Low gas fees have aided Ethereum in outperforming the market in terms of TVL and the trend will likely continue unless the gas fee increases start forcing users to other chains.
In 2021, when gas fees on Ethereum became exuberant, the capital fled to BSC, Solana, Terra, and Avalanche. Now that the L2s (Arbitrum, Polygon, and Optimism) have developed, capital would likely take the path of least resistance to L2s if the same instance were to transpire.
Market update 🌍
BTC/USDT 1W
While various altcoins, supported by significant catalysts, rallied strongly this week, Bitcoin displayed mild strength by reaching a high of $21,480 before settling at $20,905. After BTC straddled the $19k support for a month and a half, BTC climbed 12% in the last three weeks and looks prepared for a retest of the $21k resistance sometime in the next few days. BTC completed the weekly candle up +1.35%.
High-resolution chart.
USDT.D 1W (USDT Dominance)
Stablecoin dominance (USDT.D) continues to reign dominant over crypto while the investors hole up in stables to overcome crypto winter. Nevertheless, stablecoin dominance appears to be weakening on the weekly chart with the formation of a lower high (yellow arrow) in early October. Furthermore, the ratio is testing the uptrend resistance (red) that began in Nov 2021. A week or two of climbing prices could ultimately break the resistance and showcase investors' willingness to abandon the safety of stables in search of riskier assets.
High-resolution chart.
MATIC/BTC Ratio 1W
Polygon's native asset MATIC has been one of the best-performing assets since June, highlighted by its astonishing 222% gain on BTC. While BTC remained tied to the $19k support, MATIC began an aggressive climb fueled by various partnerships, such as the one with Disney. As a result, MATIC/BTC has broken a long-standing resistance level at 0.000054 (red) and looks primed to enter price discovery mode against BTC.
High-resolution chart.
Newswatch 📰
Google helps Solana. Google Cloud services are running a Solana validator to help support the network. In addition, the firm looks to add node services for the blockchain next year, allowing anyone to launch a Solana validator through the cloud service.
Elrond is now MultiversX. Layer-one blockchain Elrond has rebranded to MultiversX to signal its focus on Web3 technology through metaverse products. The team announced the name change during Elrond's Paris X Day conference.
SEC comes after Trade Coin Club. The Securities and Exchange Commission has charged Trade Coin Club with being a $295 million bitcoin Ponzi scheme. The club netted 82,000 BTC from 2016 - 2018 while promising daily returns of 0.35% to investors through bot trading.
News tidbits:
Loopring services were down for 11 hours after DDoS attack.
Web3 foundation to SEC: DOT is software, not a security.
Helium Mobile to power Solana’s Saga Smartphone.
Solana Breakpoint day one sessions are available for viewing.
UK lawmakers open NFT inquiry.
SEC issues subpoena to HEX, Pulsechain, and PulseX influencers.
Arthur Hayes: Banks will ally with Bitcoin when CBDCs are implemented.
NFT & metaverse update 🐵
Opensea to enforce creator fees for new NFT projects
Avalanche NFTs are now available through Shopify via Venly.
Banter’s take
The week ahead in macro
The week ahead could be wild, with the midterm elections on Tuesday, Nov 8. Then the Core Inflation Rate YoY is set to release on Thursday at 0830 EST. Pundits forecast an 8.1% print with a 0.1% reduction from last month.
Additional impactful events:
Fed Mester Speech, Monday 3:40 PM EST
Fed Collins Speech, Monday 3:40 PM EST
Fed Barking Speech, Monday 6:00 PM EST
Initial Jobless Claims, Thursday 8:30 AM EST
Fed Harker, Logan Speech Thursday 9:00 AM EST
GBP’s GDP MoM, Friday 2:00 AM EST
Gabriel
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For entertainment purposes, NOT financial advice.