Weekly Market Insight: February week 5

English

Market Updates

26 Feb 2024

Headline News

- ETH price increased 8.06% last week crossed above $3,000, demonstrated strong momentum compared to BTC, which decreased 0.77% last week. The last time ETH priced above $3,000 was in April 2022, right before the LUNA collapse incident.
- The demand fueled by the speculation of Dencun upgrade on March 13th, which boosted Layer-2 activities to the highest level since December 2023, and optimism of ETH spot ETF.

Macro-Outlook

- Nvidia Q4 revenue reported $22.1 billion, beat market estimation of $20.62 billion. Potentially keep the AI bubble in cryptocurrencies for longer periods.
- FOMC minutes released last week were aligned with the market expectation. Most of the FOMC participants need more evidence that 12-month inflation is moving on a sustainable path towards 2% before rate cuts. February inflation data, which will be released on March 12th, will be an important indicator for the following guidance for Federal Reserve as January inflation data was not up to expectation.

Upcoming Economic Calendar including,

- Tuesday, February 27th 9:30pm: US January Durable Goods Orders
- Wednesday, February 28th 9:30pm: US Q4 GDP 2nd Estimate
- Thursday, February 29th 9:30pm: US January Core PCE Price Index
- Friday, March 1st 11:00pm: US February ISM Manufacturing PMI

Cryptos-Outlook

Layer 1 and Layer 2

- Avalanche experienced near 6-hours outage after massive excess messaging introduced by inscription minting triggered code bug.
- Optimism announced to distribute over 10 million OP tokens in airdrop#4.
- EigenLayer raised $100 million from a16z. EigenLayer's TVL increased from $2 billion to over $8 billion since beginning of February.
- AltLayer secured a $14.4 million funding round led by Polychain and Hack VC.
- Starknet opened for trading at $5 per STRK on Kucoin and went as high as $7.71 on Binance, becoming one of the largest airdrop in history with an airdrop amount of $5.612 billion in the first trading day. STRK token is trading below $2 currently, while its TVL crossed $1.33 billion (the fourth Layer-2 that has TVL over a billion after Arbitrum, Optimism and Manta Pacific). Starknet delayed its first token unlock to 15th April, which amount representing 8.79% of the token supply.

Dapps

- Pandora conducted Palette airdrop to Pandora's holder.
- Ethena has launched its public mainnet, offering 24% yield for its sUSDe stablecoin. USDe supply has crossed 437 million.
- Chiliz announced the Dragon 8 upgrade, which introduces new adjusted inflation and burn tokenomics, JalaSwap, non-custodial wallet, a new community PEPPER token launch.
- Merchant Moe proposed rewarding MOE stakers with a mETH reward instead of USDC.

Upcoming Alpha: Token Unlock, Governance

- Uniswap proposed to upgrade the protocol such that its fee mechanism rewards UNI token holders that have delegated and staked their tokens. Snapshot vote will be posted on 1st March and on-chain vote will be posted on March 8th.
- Blast will be launched this week.
- Heroes of Mavia will announce its Layer 2 chain choice on February 27th.
- Xai Gaming's staking v1 will be launched this week and v2 in March. Xai also partnered with LayerZero for a cross chain solution.
- Frax Finance's Fraxtal is expected to launch soon. Frax also proposed to distribute revenue to stakers instead of treasury, which amounts potentially close to $80 million annually according to its founder.
- Lido has approved the deployment of the Simple DVT module utilizing Obol Network and SSV Network. Testnet #4 is expected in March. The mainnet is expected in coming months. Currently, about 120,480 ETH staked using SSV Network or 0.38% of total ETH staked.
- Curve founder hinted at the launch of an isolated soft liquidation lending market, Llamalend soon.
- Friend.tech hinted at potential airdrop in spring.
- PRIME token unlocked on 29th February, amount representing 4.9% of the token supply.
- OP token unlocked on 29th February, amount representing 2.52% of the token supply.
- DYDX token unlocked on 1st March, amount representing 11.09% of the token supply.
- ZETA token unlocked on 1st March, amount representing 2.24% of the token supply.

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