NFT and Gaming. The road to freedom.
New technologies and future investments. The Summer of Truth.
Lost coins only make everyone else’s coins worth slightly more. Think of it as a donation to everyone
Satoshi Nakamoto
For the cryptocurrency sector, summer has always been an eventful period and often the beginning of a phase of changes. Last year was characterized, in these same days, as far as the DeFi sector is concerned, by an exponential growth recorded in the volumes locked on existing lending and financing projects. In just three months (from June to August), the volume increased eightfold from less than one to more than eight billion dollars, triggering a growth that last May was close to $90 billion, levels just above those of the previous few days. The development and use of the many DeFi projects are rapidly boosting the number of users who increasingly prefer to use DeFi services, migrating from centralized ones. That shows us how many people are becoming more and more aware and practical about a technological and financial system that until recently was thought to be destined for a select few, primarily technology-savvy people.
Popularity and use are increasing the number of users who take advantage of this new technology in good faith and those who find a reason to attack the inefficiencies of a technology that is still in its infancy and therefore still needs to be improved. During the week, two attacks have scored thefts of over 800 million dollars. A sum that exceeds the total of those launched so far in the first seven months of 2021 and the whole of last year. To learn more, you can read the insights in the news section by scrolling down this newsletter.
What is happening in these weeks also embraces another sector that had exploded in popularity at the beginning of the year and was defined as a mere speculative bubble: Non-Fungible-Tokens, or more commonly known as NFTs. These days the return of volumes in a sector with enormous potential for growth and development is gaining a significant and constant affirmation, consolidating the foundations for the growth of projects and structures that we will only be able to understand in the coming months. As happens in the explosion processes of a technological novelty, we know that the initial phases are always characterized by events that, even for experts, often become difficult to project with precision into the future. After the significant numbers for art-related NFTs last spring, today, the focus has shifted to gaming. It is the same technology, namely Non-Fungible Tokens, but used in different and often distant sectors. And if the comparison with the past is necessary to understand the most plausible implications, the attention and the multiple uses in gaming make us understand how the future evolution is projected towards very ambitious scenarios.
In this innovative and constantly changing dimension, the regulator is still watching with even more attention to the past. In fact, the debate continues on the bill under discussion in the American Senate, bogged down by the definition of the word 'broker' which, if not clarified, as the two senators Pat Toomey and Cynthia Lummis are trying to do, could create an announced fleeing of many mining companies and structures located in the United States.
When bureaucracy shows its limitations in finding the exact suitable form for the context, it is clear that something new is already there. You just need to take notice as soon as possible. Technological change almost always bursts into our lives quietly. And this time, too, it seems to be the case.
Decentralized Finance
The week characterized by the ù, the most important in the history of DeFi, has captured the attention of the international media, including the Italian Sole24ore, which dedicated an article on the newspaper's front pages.
There is much news that is returning interest in decentralized protocols at a distance of exactly one year after its explosion, and always remaining hooked to this news, we report with an exclusive preview of TheBlockCrypto.com, the first merger between two blockchains, that of Polygon (formerly Matic Network) and Hermez Network, which gave birth to the Polygon Hermez Blockchain.
Unlike other mergers that occurred in the past between two Blockchains where remained part of the teams' independence and native tokens, this time, the union has generated a new token: HEZ. The project will be based on the development of zkEVM technology to provide native smart contract scalability within ZK-Rollup. That is, in fact, a technology that allows transactions to be pooled on an external network, allowing for more speed and lower costs, and then publish proof of validity on Ethereum.
After three months, the Total Value Locked (TVL) is back above $83 billion, and one step away from the absolute record of $89 billion reached last May 12. Thanks to the price of the main assets, Ethereum and Bitcoin, back to run at the highest levels of the previous three months, but also thanks to the new strategy of users that unlike what could happen in the past pre-DeFi maintain their positions getting the same eventual liquidity by staking the asset. Observing the depth of data shows that the number of Ethereum locked (about 9.5 million) has remained unchanged in the past weeks. The same for those using the wrapped Bitcoin that in these hours rises over 195.7k BTC locked. Remaining in the Bitcoin sphere, also the Lightning Network, which allows faster transactions with a reduction of costs per commission directly on the Layer 2 developed on the Bitcoin Blockchain, for the first time rises over 2.2k BTC deposited, equal to a counter value of $108.8 million.
Despite the middle week of August, usually characterized by low volumes, trades on DEXs remain over $19 billion, a few thousand dollars below last week's record levels.
Undisputed leader is the Uniswap protocol, which traded $12.3 billion in counter value in seven days, accounting for 69% of total trades on DEXs, climbing again as market share.
It is followed by Sushswap with $1.8 billion and 10.5% dominance, and
Curve with $991 million traded, 5.5% of weekly trades.
Curve's project, a multichain that enables the decentralized exchange of major stablecoins, surpassed $10 billion in locked collateral for the first time (as per DeFiPulse table).
Non Fungible Token
These last seven days have also been full of content for the NFT industry. Gaming continues its ascent with growing volumes and new games launched with original modes. A little more than a week after the activation of EIP 1559, the implementation to Ethereum's protocol that reforms the fee distribution system for miners accompanies the transition period from PoW to PoS, as expected in the coming years, knowing that more than 40,000 ETH have been burned, thus making it a deflationary asset as hoped many times by investors. Many expected that the gas-burning process would be caused by the use of DeFi protocols, while so far, the main reason has been characterized by Non-Fungible Tokens. Statistics show that more than 5,000 ETH were burned due to buying and selling activities on the OpenSea MarketPlace, almost doubling those burned by Uniswap V2 (about 2,800 ETH).
After the monkeys of Bored Apes, the cats of Stoner Cats, the horses of Zed.run, this week it's the penguins that have taken the stage. The new project of PudGypenguins.io has seen an unusual launch involving the community via Twitter. A flock of animated Pudgy Penguins has invaded thousands of Twitter accounts, becoming one of the new status symbols of the moment.
Also, this week, Axie Infinity's project, with over $214 million traded and more than 413k transactions, outperforms all other NFT projects. Art Blocks climbs in the second position at a distance with $50 million of counter value traded. For the first time, three of the top five highest-paid auctions of the week are Art Blocks' NFTs. At over 750 ETH (equivalent to $2,115,480.00), 'Cromie Squiggle #3784' was the highest-paid artwork of the week. That is a monstrous revaluation of this NFT first adjudicated last November for 0.035 ETH, at the time equal to $19, surpassing the auction of CryptoPunks Alien #5822 at the first auction adjudicated for 700ETH equal to 1,973,233.00 USD. In total, with 210 total weekly transactions, the evergreen CryptoPunks traded over $45 million.
To close the roundup, Fan Tokens also continue to increase volumes with Paris Saint-Germain not only starring in the incredible buying campaign. With over $2.7 billion traded in just seven days, an increase of 494% weekly, the French club trails the two Spanish clubs of Atletico Madrid with $465k and FC Barcelona with $271k.
5 hottest DeFi news of the week
Explainer: How hackers stole and returned $600 mln in tokens from Poly Network
DAO Maker crowdfunding platform loses $7M in latest DeFi exploit
Uniswap has now generated more than $1B in fees for liquidity providers
Polygon Merges With Hermez Network in $250M Deal
3 reasons why Aavegotchi (GHST) price spiked to a new all-time high
Technical Analysis
Bitcoin (BTC)
The overcoming of the price above 46,000 USD (1) for three consecutive days begins to confirm the validity of the uptrend that started from the minimum of July 20 (2), marking a current performance that exceeds 60% in less than a month. The arrival in the 48,000 USD (3) area on Saturday, August 14, indicates that this rise has recovered 50% of the entire bearish movement that began in mid-April (4) and ended, precisely, with the minimum of July (2), calculated by taking the extremes of the maximum and minimum of the entire movement. This movement, therefore, is contextualized as a technical rebound in the medium term.
As already indicated in previous updates, this period becomes increasingly essential to understand if the price is inside a new bullish phase or in the middle of a movement that still remains bearish in the long run.
Statistics and seasonality favor the first hypothesis, but to have more confirmations, it will be necessary to exceed 50,000 USD as soon as possible.
BTC levels to monitor for the week:
° To The Upside: The price is in the monthly cycle closing area. That could happen already in the following days of the week, without excluding the possibility that we are already in the closing phase, therefore characterized by weakness. If this is the case, it is necessary to wait for the evolution in the coming days before evaluating new upward positions. Only an overcoming of 48,000 USD with the support of volumes will indicate the beginning of a new monthly cycle and the possibility of important and easy extensions above 50,000 USD.
° To The Downside: For the reasons written above, monitoring the range between 42,800 and 43,800 USD is necessary. Descent of the price below this area indicates that the current monthly cycle has not yet ended. For a medium to long-term strategy, it is important not to return below 36,000 USD.
BTC Options
The strategies of the options operators are beginning to reshape with the first attempts to cover the risk of new rises, even if the ratio between Put and Call options still remains in favor of the Put at 1:5.5. An indication that continues to confirm the presence of Put options to protect the area between 38,000 and 41,000 USD. That is, in all likelihood, the barrier of protection for professional operators in order not to allow the technical area of 36,000 USD to be broken above.
Ethereum (ETH)
It's a crucial phase for Ethereum. The record-breaking bullish movement commented in the previous update (Per Anel: inserire hyperlink al numero di domenica scorsa) that in 17 days recorded, only one negative close has continued to give signs of consolidation in the previous week. Although characterized by an alternation of positive and negative signs (in 25 days, only six days with red closings), the confirmation of the holding of support levels indicates the excellent health of a trend that began on July 21 (1) and that in less than a month has seen the price almost double, going from 1,680 USD (1) to 3,332 USD (2) conquered on August 14. However, now we enter the most delicate phase. In fact, if correct, the cyclicality setting indicates that the price will enter the closing stage of the monthly cycle in the second part of August.
ETH levels to monitor for the week:
° To the Upside: If the next few days also confirm the holding of 3,600 USD, it is very likely that the bullish phase still has the strength to record new period highs. The arrival at 3,700 USD within the end of the month has little probability in its favor (15%), but in such a particular phase, the possibility should not be excluded.
° To The Downside: With price drops below 3,000 USD, it will be better to postpone any bullish operation until the conclusion of the bearish movement at the end of the monthly cycle. On the contrary, this will be an opportunity to start taking profits.
ETH Options
The possibility of new upward stretches seems to have been rejected by professional operators that in recent days have increased the coverage with Call Options placing protections between 3,400 and 3,550 USD. That is the area to monitor to evaluate possible new positions on the upside. On the downside instead, 2,700 USD is the area to defend in case of descent.
DonKey Finance: A New Dynamic Farming
One of the projects catching the most attention among the DeFi community in this period, both for the level of development, the community, and the number of investments obtained, is don-key.finance.
This project offers users yield farming, copy farming, and drag and drop farming services with a simple and intuitive interface.
Approaching the staking on Don-key finance is very simple, and on the platform, you can follow the Don-key farmers to search and get the best investments according to the strategy.
It is a project where influencers and well-known personalities in the cryptocurrency world can create portfolios with different tokens and be followed and researched by the community using the function of copy farming and yield farming.
DON tokens are passed on to all farmers based on monthly trading results and consider ROI, risk level, resource exposure, and more. The better you are, the more you get.
DON tokens represent farmers' returns based on their strategies, plus a monthly dividend prorated by Don-key's total monthly return. You can redeem DON tokens at any time or keep them and accumulate higher future coupons. The project is growing very quickly and has already been listed on large decentralized exchanges such as Uniswap and Pankakeswap.
A few days ago, Don-key's team finalized crucial product improvements to allow the platform to offer a more user-friendly and market-adaptive yield farming product.
Don-key officially launched its official DAPP a few days ago for 600 hodlers of Don-key users. Through the intuitive user interface, they are now able to copy some of DeFi's most talented farmers, gaining access to their strategies as well as substantial APY in the token of their choice.
As users explore and test DAPP, the developers are iterating towards the public launch of Don-key early in Q3.
An exciting project that connects to all the social media and biggest cryptocurrency influencers related to a DeFi token definitely will be one to watch out for in the coming period.
Meanwhile, the official team makes it known that they will put the finishing touches and start the public release of the official platform by the end of August.
Don-key has been improved thanks to community feedback, and all users have contributed suggestions on the product and services, bringing new ideas and deepening innovative concepts; the involvement from the community has been invaluable and will continue to be something the team uses to obtain the most intuitive, profitable and retail-ready product to market. As the project continues to grow organically and hopefully deliver the expected results, it is currently unabated in increasing its value and getting people talking about it.