JZL Capital Blockchain Industry Weekly Report No. 26: V God SBT breaks through excessive financialization
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summary of the week
- dYdX chooses to escape Ethereum and use Cosmos to launch an independent blockchain.
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1. This week's industry trends
Last week, the currency market stabilized after the sharp drop in the previous week, and it rebounded slightly following the U.S. stocks. During the week, Bitcoin basically rebounded and stabilized around $21,000. As of the writing date, Bitcoin closed at 21390.1, an increase of 7.61%, which is equivalent to the increase of the Nasdaq this week. During the same period, Ethereum rose by 14.19%, ending nearly 11 consecutive weeks of decline.
GBTC has recently been an important topic in the encryption market. Whether it is 3AC thunderstorms or BlockFi’s insolvency, it is inextricably linked to GBTC. The full name of GBTC is Grayscale Bitcoin Trust, which is the largest alternative asset trust fund under DCG subsidiary Grayscale (Grayscale). The launch of GBTC aims to help qualified individual investors and institutional investors in the United States more legally participate in BTC price fluctuation exposure . However, GBTC is a "castrated" ETF fund because it cannot be redeemed, and it needs a 6-month lock-up period after it is issued in the primary market before it can be traded in the secondary market.
In the bull market cycle, the birth of GBTC has helped many investors who want to legally participate in BTC exposure, which has increased market liquidity and created a huge premium. arbitrage behavior. However, in the bear market cycle, due to the shrinking liquidity and the redemption pressure of currency holding institutions such as BlockFi, GBTC began to have a negative premium in March 2022, and it will intensify as the bear market cycle continues. The lowest negative premium reached 34.09% during the 3AC thunderstorm in mid-June.
Coming to the U.S. stock market, last week, the U.S. stock market showed an obvious rebound trend. On Friday, the Nasdaq closed at around 11,700 points and once stood above 12,000 points, up 7.6% within the week. With the further decline of crude oil prices to 107.8 US dollars / barrel, the global inflationary pressure is expected to be eased, and there may be a slight respite for US stock investors. However, one thing to be aware of in the third quarter is that there may be more thunderstorms in the financial reports of listed companies in the second quarter. The pressure on the supply chain in the second quarter is very likely to be catastrophic. But the stock market is a game about the future. The current difficult earnings season will come in July and August. It is possible that the market will price in earlier. Whether this will hit or support US stocks may soon be decided. In addition, Germany plans to propose the Marshall Plan outline for Ukraine at the ongoing G7 summit. Whether this will alleviate the current geopolitical situation also has guiding significance for the US stock market.
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2. Macro and technical analysis
BTC has fallen below the previous low point, currently there is no support, and there is no risk to defend. The short-term rebound follows the US stock market. We judge that Nasdaq will rebound in the short term.
The rebound of ETH is slightly stronger than that of BTC, and the short-term rebound is stronger.
After the Nasdaq index reached 10565, the rebound was close to 12,000, and the short-term rebound will still have a certain height.
U.S. bond rate: The 2-year U.S. bond fell back to around 3. In the short term, with the unexpected release of sentiment, we judge that 3.5% is basically the high point of the year, and the possibility of a new high in the future is small.
U.S. bond rate: The 2-year U.S. bond fell back to around 3. In the short term, with the unexpected release of sentiment, we judge that 3.5% is basically the high point of the year, and the possibility of a new high in the future is small.
Ahr999: 0.30, we still recommend starting to increase the regular investment in this position.
MVRV: 1.267, the cost performance is the same as Ahr999.
Number of BTC addresses: The number of addresses holding less than 100 coins is still entering the market quickly, and the number of addresses holding more than 100 coins is basically sideways.
Number of ETH holding addresses: The overall number of addresses is stable overall.
3. Summary of Investment and Financing
3. Summary of Investment and Financing
1. Investment and financing review
1. Investment and financing review
• During the reporting period, 31 investment and financing events were disclosed (same as last week), with financing of approximately US$753 million. In terms of specific tracks, 12 projects on the Web 3.0 track accounted for nearly 40%, 9 projects on the Defi track, 4 projects on the Cefi track, 2 projects on the Infrastructure track, and 4 projects on the NFT track;
• During the reporting period, there were 4 projects with a financing scale of over 100 million, namely: 1) digital asset trading platform FalconX’s USD 150 million Series D financing; 2) infrastructure service provider PrimeTrust (tokenand FIAT custody, anti-moneylaundering and know your customer compliance, and transaction technology services) $105 million Series B financing; 3) Encrypted lending platform BlockFi $250 million debt financing; 4) Solana ecological NFT platform Magic Eden $130 million Series B financing.
2. Institution of the Week - SBF: Helping Voyager Digital and Blockfi get rid of the influence of Three Arrows•Alameda Research holding company (leading Voyager Digital's $60 million private equity round of financing on May 16) VoyagerDigital received AlamedaResearch's $200 million cash/USDC line of credit and a 15,000 Bitcoin revolving line of credit, which will open in December 2024 Due on the 31st, the annual interest rate paid on maturity is 5%. Voyager Digital is a victim of the 3AC incident, which admitted in a statement on June 22 that "”；
Exposure to Three Arrows Capital includes 15,250 BTC and 350 million USDC, and it is currently impossible to assess the amount that can be recovered from Three Arrows Capital
• Crypto lending platform BlockFi secured a $250 million revolving credit facility from FTX Exchange to increase its liquidity and ensure users can withdraw funds from their accounts at any time. In addition, FTX is in communication with BlockFi regarding the stake. In addition to relying on the support of external investors, Blockfi announced that starting from July 1, it will increase the deposit rate of its BTC, ETH and USD stablecoin products to supplement asset liquidity;
• FTX also announced on June 17 that it has signed an acquisition agreement on the acquisition of Canadian compliant encrypted asset exchange Bitvo (regulated by Canada's "Securities and Exchange Act") to expand its business to Canada. After the acquisition, Bitvo may be incorporated into the FTX global team and serve users in the Canadian market. In addition, Bitvo is registered as a currency provider in FINTRA, Canada;
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4. Encrypted ecological tracking
1.NFTs
4. Encrypted ecological tracking
1) Dynamic summary: market recovery
• In the past 7 days, the market value of the NFT market has risen steadily, reaching about 23 billion US dollars at this stage; the trading volume has also rebounded compared with last week, and the sentiment has gradually recovered.
2) Key news: traditional entry
• The 2022 NFT NYC event has come to an end. As an annual NFT feast, BAYC's event is still lamented by community users as "the most popular". At ApeFest2022, well-known rappers Eminem and Snoop Dogg released their latest single "From the D 2 the LBC".
• On June 26, two joint NFTs jointly launched by BAYC and the popular music magazine "Rolling Stone" have been auctioned on OpenSea. According to OpenSea information, the BAYC series joint NFT was auctioned by the user "E5782F" at a price of 40,101 APEs (approximately US$180,000); the MAYC series joint NFT was auctioned by the user "brandonkangfilms" at a price of 19,696.969 APEs (approximately US$86,000). There are 10 BAYC and 10 MAYC under the address.
• It is worth noting that this auction includes "Unlockable content", which cannot be obtained except for the owner of the corresponding NFT.
• The blue-chip NFT project Doodles announced at the NFT.NYC conference the appointment of musician Pharrell Williams as chief brand officer, who will help shape the series' initiatives in music, artwork, consumer products, animation and events. Additionally, he will serve as an executive producer on Doodles Records: Volume 1, which will be released in partnership with Columbia Records. In addition, the founder of Doodles also announced that Reddit co-founder Alexis Ohanian's venture capital firm Seven Seven Six (776 Management) led the project's first round of financing. The financing amount has not been disclosed.
3) Key investment: efforts and mergers
• UniswapLabs announced that it has acquired Genie, an NFT aggregation market, to expand its products to ERC-20 and NFT. The specific terms of the transaction have not yet been disclosed. It is expected that users will be able to trade NFT through the Uniswap web app this fall, and UniswapLabs will also integrate NFT into developer APIs and widgets, making Uniswap a comprehensive platform for Web3 users and builders. The acquisition was made by UniswapLabs and has no impact on the Uniswap protocol, Uniswap governance or the UNI token.
• Magic Eden, the Solana ecological NFT market, completed a $130 million Series B round of financing at a valuation of $1.6 billion, led by Electric Capital and Greylock. The funds were used to expand its primary and secondary markets and explore multi-chain opportunities.
4) Project of the week: It's nothing.
•Features: no products, ultimate blind box effect, lack of capital and last struggle in bear market.
•Means: The user's need for surprises and wealth appreciation has been utilized to the greatest extent, and the most incredible marketing method at the present stage has been adopted. Even the host of the twitter space event has been silent.
• At this stage, the official content is still not disclosed, but it can be seen that the creator's secondary share ratio is 7.5%. According to the current transaction volume of 515 ETH, the author has obtained 45,000 US dollars through "zero" cost The above is divided into.
•Although it is still impossible to judge the success of the project in the later stage, more and more similar projects appear in such a severe market decline, we can draw the following conclusions:
2. GameFi blockchain games:
2. GameFi blockchain games:
1) Data review
1) Data review
• During the reporting period, the Gamefi concept tokens showed a strong rebound trend, and the mainstream tokens all rose by more than 20%. Among them, tokens such as YGG, CHR, ALICE, and SAND increased by more than 40%, significantly outperforming the 10% increase of BTC and the 19% increase of ETH, sweeping away the impact of the heavy setback some time ago.
2) This week’s project – Cryptoys: a16z participated in two consecutive rounds of leading NFT projects
• During the reporting period, NFT start-up company OnchainStudio completed a US$23 million Series A financing led by a16z, DapperLabs, AnimocaBrands and other institutions participated in the investment. The financing will be used for the launch of its digital toy NFT platform Cryptoys. Previously, a16z also led its seed round investment of US$7.5 million;
3. Infrastructure
3. Infrastructure
Cosmos ecology
Cosmos ecology
On June 22, dYdX announced that it will transfer to the Cosmos ecosystem, develop a custom application chain based on the Cosmos SDK, and implement the migration in the upcoming dYdX V4 version.
dYdX is a decentralized perpetual contract exchange built on Layer 2 StarkWare of Ethereum. It adopts the mode of off-chain centralized server order book + Layer 2 settlement matching transactions, so its trading experience is almost the same as that of centralized exchanges. dYdX is one of the leading projects in decentralized derivatives trading, with a single-day trading volume of US$1.5 billion. Investors include top institutions such as A16Z and Paradigm.
As a well-known DeFi application native to Ethereum, dYdX chose to escape from Ethereum and build a new application chain in the Cosmos ecosystem. On the one hand, it reflects the project’s efforts to achieve the goal of complete decentralization. On the other hand, it also reflects the development of the project. Investors are pessimistic about rollup technology.
In addition, creating a new chain also has more sovereignty and flexibility (forking) for dYdX, which also helps to improve user experience.
The open ecology of Cosmos and the easy-to-deploy application chain make it one of the best options for migration. Before the merger of Ethereum, dYdX may not be the last "job-hopping" project, and we may see Ethereum in the future" Great Wars" universe scene. Apps and ecology complement each other, users choose apps with better experience, and developers choose ecology with better experience.
Paper background
Paper background
"Soulbound" was proposed by Vitalik in his column in January this year, exploring the possibility of non-transferable NFTs on the chain mapping people's non-transferable relationship networks and personal reputations in social activities. Because of their non-transferable nature, they are called "soul-bound tokens".
"Soulbound" was proposed by Vitalik in his column in January this year, exploring the possibility of non-transferable NFTs on the chain mapping people's non-transferable relationship networks and personal reputations in social activities. Because of their non-transferable nature, they are called "soul-bound tokens".
Starting from this concept, Vitalik believes that NFTs (including governance rights, proof of attendance protocol, etc.) can also achieve "soul binding" in a non-transferable manner. Through on-chain tracking to check whether the current owner is the same address as the original owner, proof-of-humanity can achieve non-transferability in practice, and add privacy to soul-bound items through ZK-SNARK.
Current issues with Web3
Current issues with Web3
1. The current web3 is mainly developed around financialization and transferable assets, and lacks a kind of coding of social trust relationship. But much mainstream economic activity depends on non-transferable, trust-based social relationships. For example: NFT artists need to establish trust through the certification of a centralized platform, DeFi applications lack credit loans, etc.
concept explanation
concept explanation
In order to solve the above problems, Vitalik proposed the concept of soul-bound tokens in his thesis, hoping to build a decentralized society (DeSoc) on this basis.
In order to solve the above problems, Vitalik proposed the concept of soul-bound tokens in his thesis, hoping to build a decentralized society (DeSoc) on this basis.A synonym for accounts, wallets, etc., representing different identities on the chain of a person/company/institution. A subject can have multiple souls (which can be pseudonyms), such as family souls, professional souls, political souls, etc. Its characteristics are that the information on the chain is publicly visible, non-transferable, and revocable under certain circumstances (but possibly revocable-by-the-issuer).
Soul Bound Tokens (SBT):Soul Bound Tokens (SBT):
A programmable, non-transferable but revocable and retrievable token (NFTs) with verifiable information held by the soul, similar to an ever-expanding personal resume, through the soul associated with its social relationship (wallet) for verification. SBTs may be self-issued by Souls, attested to by other Souls who are "counterparties to these relationships". In essence, SBT is a non-transferable identity and reputation token, like the "achievement badge" in real life, using blockchain technology to verify the authenticity of all information. Among other things, it can be linked to other characteristics and personal information, including education, work history, credit scores, professional certifications, and more. This information can be combined or disassembled into individual NFTs.Artists can use their "soul" to issue NFTs, betting their reputation on their works, artists can also create their own SBTs for different purposes, such as linking their NFTs to on-chain collections to deepen provenance, Prevent plagiarism. Taking Azuki as an example, through SBT, the community can check the past project experience of the founder, check whether a person/project can be trusted, and avoid participating in projects with a history of "rug pull".
possible use cases
1. Artists and NFT projects
Artists can use their "soul" to issue NFTs, betting their reputation on their works, artists can also create their own SBTs for different purposes, such as linking their NFTs to on-chain collections to deepen provenance, Prevent plagiarism. Taking Azuki as an example, through SBT, the community can check the past project experience of the founder, check whether a person/project can be trusted, and avoid participating in projects with a history of "rug pull".
2. Unsecured credit loan
In addition, in most cases, the current NFT grants its owner the right to use, destroy or profit from the asset once, while SBT can create the ability to split property rights.
3. Social relationship recovery mechanism
Losing the keys to the wallet will result in the lost user permanently losing access to the wallet (losing the "soul"). In the DeSoc environment, users can retrieve their "souls" by transferring control of lost accounts to new keys through social connections such as friends, family, and other contacts.
4. Soul airdrop
Web3 projects can accurately airdrop contributors (such as holding a specific POAP) by detecting SBT and "gathering the community at the unique intersection of souls", avoiding the "Juno giant whale controlling multiple false wallet addresses to receive airdrops" "Wool" event.
5. DAO governance and evaluation
By checking the relationship between the SBTs held by the "souls", it is possible to prevent one entity from manipulating multiple false "souls". In the governance of DAO, it can be used to prevent Sybil attacks (that is, a single user has multiple wallets to increase voting rights). In addition, by giving different weights or restrictions to SBT, giant whales can be prevented from monopolizing governance rights by pooling capital.
At this stage, there is a lack of standards for evaluating the degree of decentralization. When evaluating a DAO, it can be evaluated by the diversity and importance of the SBT held by its members to establish a sound reputation mechanism for the Web3 community.
6. Flexibility of virtual property rights
Using SBT, functions such as authorized access and rental can be added to the web3 world. For example, users who hold a certain SBT are allowed to access metaverse properties. Since the current NFT PASS is usually transferable and circulated, the visitor may be a user who purchased later than was initially trusted to enter.
In addition, in most cases, the current NFT grants its owner the right to use, destroy or profit from the asset once, while SBT can create the ability to split property rights.
7. Evidence of negative reputation
"Evil souls" need to pay reputational costs for their actions, such as loan default records, academic misconduct records, etc. A proof can be revoked by adding another proof of negative reputation.
Developmental Disabilities
Developmental Disabilities
1. Privacy Protection
The blockchain system is open by default and immediately visible to anyone in the world, simply putting SBTs on the chain will result in a large amount of personal information being made public. SBT can be used to store data off-chain, leaving only the hash value of on-chain data to solve. Zero Knowledge Proofs can also be one of the solutions.
If there are obvious facts, understandings or data errors in the above content, welcome to give us feedback, and we will correct the report.
Summarize
Web3 is not only an innovation of the financial system, but an innovation of social structure and production relations. The absence of persistent identities, models of trust and cooperation, and composable rights and permissions will lead to problems such as Sybil attacks, collusion, and over-financialization.
SBT is an innovation that augments and connects our sociality in virtual and physical reality, empowering souls and communities to encode rich social and economic relationships.
In addition to opposing excessive financialization, V God also hopes to move the off-chain scenarios to the chain, trying to solve the pain points of some projects that can only reach consensus under the chain through the application of the chain. This vision has a huge imagination space and narrative ability.
In the future, projects with concepts such as "soul-bound tokens", "reputation systems" and "social relationships on the chain" may emerge in an endless stream, but it is expected that most of the projects have no actual needs and application scenarios. In addition to such projects, more attention should be paid to infrastructure projects such as data capture and analysis on the chain. Such technologies are the cornerstone of a decentralized society.
about Us
JZL Capital is a professional organization registered overseas, focusing on blockchain ecological research and investment. The founder has rich experience in the industry. He has served as the CEO and executive director of many overseas listed companies, and has led and participated in eToro's global investment.
The team members are from top universities such as University of Chicago, Columbia University, University of Washington, Carnegie Mellon University, University of Illinois at Urbana-Champaign and Nanyang Technological University, and have served Morgan Stanley, Barclays Bank, Ernst & Young, KPMG, HNA Group , Bank of America and other well-known international companies.
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If there are obvious facts, understandings or data errors in the above content, welcome to give us feedback, and we will correct the report.
Note: JZL Capital currently has a Cosmos ecological theme fund. The opinions in this article may have a high degree of interest correlation with the company. This report should not be used as investment advice.
