Bitcoin Strengthens
Throughout the laterality phase the number of tokenized bitcoins has grown. In the last few hours, the breaking of the resistance of 11,000 BTCUSD can contribute to making the DeFi tokens run again
There was a slight slowdown in the growth of TVL (Total Value Locked) calculated in US dollars, going from USD 11.1 billion to USD 10.7 billion in a week. This is partly due to the decrease in the number of ETH locked in the various Decentralized Finance projects, which fell from 8.4 to 8.2 million in the last week.
On the other hand, the interest from Bitcoin owners who decide to tokenize on the Ethereum network continues to grow. With more than 141,150 BTC, in the last few hours a new record has been set for collateralized Bitcoins on the various Decentralized Finance projects.
The total number of locked tokens remains above $10 billion, well beyond the rosiest expectations developed only a few months ago. Since January 1st of this year, the total locked value has increased from $680 million to over $10 billion.
Total Value Locked in DeFi
In just four months, since the end of May when TVL exceeded one billion dollars, the total locked value has multiplied tenfold. This growth is in part reminiscent of the second half of 2017, although the amount of capital raised in the ICOs was much larger.
This time investors, except in rare cases, are participating in a project that has already been initiated and controlled by a Decentralised Autonomous Organisation (DAO) that controls governance through a policy of choices based on voting and not delegated to a single actor, as was often the case for many ICO projects.
It slows down the volume of trading on Decentralised Exchanges (DEX). With just over $3.330 million, transactions fell by 7% since the previous week.
Uniswap strengthens its leadership in the sector with over 1.100 trades per week, accounting for 75% of total trade.
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Analysis and Operation
by Federico Izzi
Bitcoin (BTC)
After a month of ups and downs in the last few hours comes the breaking of the area resistance of $10.900 USD. This level coincided with the upper neckline of the triangle which contained the upper minimums and the decreasing maximums of the last month. The breaking of the resistance arrives at the third attempt, in fact the two previous attempts had not found the right support for the volumes that, instead, do not seem to be missing. Since yesterday, trading volumes on the main centralised exchanges have exceeded $2 billion, the highest level since September 24th. If the weekly closing candlestick (Sunday 24:00 UTC) will be above $10.800 USD, technically there will be confirmation of the break with an increased probability of seeing the $12.000 USD again by the end of the month. Otherwise, with return under area $10.800 first and $10.200 USD then, there is a risk of revising the lows at the beginning of September (area $9.800 USD).
In the last 2 days the coverage of Call options has decreased, to the advantage of Put options. A clear sign that something was moving. A few hours later, the double overshooting of $10.800 and $11.000 USD accompanies the prices one step away from testing the crucial strike of the $11.300, a true bulwark of the bearers. An eventual break upward of this last level, confirmed at the end of the day, would open wide spaces of ascent and the repositioning of strategies to cover the rises. On the contrary, a lack of price confirmation stability above USD $10.800 would increase in favour of the bearers and the possibility of witnessing a dangerous slide.
Ethereum (ETH)
The rise triggered by Bitcoin is also reflected in the prices of Ethereum which, after days of boring fluctuations in a space of $10 dollars, are brought back above $375 USD, awakening the possibility of revising the resistance of area $390 USD which after the fall at the beginning of September proved to be an unbreakable barrier rejecting the repeated attempts to break upwards.
It is precisely the strike at $390 USD that is the level to be brought down before the $415 USD is exceeded. Levels protected by the operators in options derivatives that for several weeks have seen this resistance as the real area to overcome to resume the uptrend started in mid-March, still remained valid despite the weakness of prices present for four weeks. The fear of a possible return of weakness continues to prevail over Ethereum. Unlike Bitcoin, the strength of upward hedges (Call options) clearly prevails over downward hedges (Put options), a clear sign that professional operators are not yet convinced of a turning point in the monthly trend.
Zilliqa’s Zilswap increases the DeFi Competition with Ethereum and Uniswap
The beginning of a very valuable DeFi competition for the greatest share of decentralized finance’s new gems is now underway with the launch of Zilswap. This should excite the most passionate fans of DeFi because things may accelerate even quicker than the pace of the last few months and also become more efficient.
For a longtime the blockchain space longed for dApps that provided more utility than just tokenization and this year some of the best have gone mainstream, namely, Uniswap. Uniswap is the world’s most prominent DeFi experiment yet and at times this year has outperformed all of the space’s legacy titans – such as, Binance and Coinbase.
The Uniswap protocol currently runs atop the Ethereum blockchain and can be viewed as the next progression towards truly decentralized finance. Uniswap is absent from KYC and has gained momentum much like bitcoin as a p2p revolutionary experience.
You can see here how Uniswap is stacking up in daily volume compared to Binance, the world’s most profitable centralized exchange.
With Uniswap’s success as a leading metric, Zilliqa’s team found it important enough to roll out Zilswap and utilized Switcheo to do so.
Ethereum vs Zilliqa and Uniswap vs Zilswap
With obvious hopes that network volume could potentially sky rocket over the coming months, Zilswap places Zilliqa at the center of the DeFi competition. Ethereum’s median gas fee has exceeded $10 at times this year and Zilliqa hopes to show a more efficient way forward on their platform.
With sharding already taking place on Zilliqa and yielding cheaper transaction fees through increased throughput, some could be enticed to jump ship to Zilswap and the Zilliqa blockchain.
Transactions Per Second
ETH TPS: 16
ZIL TPS: 300-2,000+ [Dependent on how many shards are being utilized]
Despite the fact that Zilswap and Uniswap are now in competition, there’s also a bridge already built in the form of $BUSD. This bridge should help get the most utility out of the Uniswap and Zilswap combination. $BSUD tokens will operate bi-directionally, meaning, they’ll take the form of whichever chain the tokens are being sent to.
The ability for users to be able to bounce from one protocol to the other is potentially another major value added to the blockchain space.
Governance Tokens / Stable Coin Ecosystem
$UNI – Governance, ERC-20 Fungible Token
$gZIL – Governance ZILS, a ZRC-2 Compliant Fungible Token
$BUSD – Binance USD Stable Coin, a bridge between Ethereum’s chain and Zilliqa’s chain
With Zilliqa now rolling out working DeFi products that could potentially devastate Ethereum’s primary use case as the leading smart contract platform, Vitalik Butterin’s hands may finally be forced in collaboration with Ethereum’s core developers to move faster and finally rollout ETH’s long overdue scaling solutions.
Recently, Ethereum creator, Vitalik Butterin, took to Twitter in what may have been a public relations move. His 6 tweet thread reads like encouragement to Ethereum users and reaffirmation that scaling is a primary concern and right around the corner.
Despite many years of waiting and much speculation on whether Ethereum can successfully scale, much of the blockchain space’s most influential dApps still launch on ETH. First mover advantages for Ethereum and Uniswap are quite large, there is no doubt. The Ethereum and Vitalik combo is one of the blockchain space’s oldest guards and will not be dethroned absent a lengthy tech battle.
Luckily for the customers of Zilliqa and Ethereum, the battle will likely yield even more innovative and revolutionary decentralized financial products. These products may help take web 3.0 to the next level and may potentially unlock even greater value and freedom this decade.
This battle could be great for traders and investors that want to achieve maximum utility from the decentralized financial space but also is forcing centralized exchanges to make alterations and generate more utility for customers or be left behind. Either way, the winner of this battle will not only be the world's freest decentralized market for digital assets but also the free market’s customers and investors in these emerging financial products.