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DeFi Roaring, Axie Soaring, and NFTs No Longer Boring

Jul 6, 2021 · 3 min read

By Ashwath Balakrishnan, and Jeremy Ong

Market Update

The crypto market opened the day strong with a rare bullish session coming out of Asia. But that momentum was nipped in the bud during the London session. BTC is currently in the process of printing a bearish looking pinbar candle on the daily, and things aren’t looking too hot on lower time frame charts.

DeFi’s Overdue Bounce

  • Since hitting their lows on June 24, DeFi tokens are enjoying a strong bounce. COMP, ALPHA, SNX, and AAVE lead the way. Assets colored in the gray in the chart below under-performed FTX’s DeFi index, which is one of many benchmarks for evaluating DeFi token performance.
  • The run up was long overdue after relentless selling through May and June. But it’s important to note that this may just be relief rally as selling exhausted. The next couple of weeks will be telling for DeFi, and the crypto market in general.

Breakout June, Explosive July

  • Axie Infinity had a breakout month in June, earning a record $12.2 million in revenue. If you thought it ends there, July is set to trounce June’s number by several orders of magnitude.
  • In the first five days of the month, Axie earned $9.2 million, or 75% of June’s entire revenue . Per this growth trajectory, Axie’s expected revenue in July is a whopping $55 million.
  • PS: if you really want to read Delphi’s latest deep dive into Axie, you can DM our COO, Anil, for a copy if you’re twitter profile picture is an Axie.

 

Co-opted Narrative = NFT Gold

  • Some NFT projects succeed, most fail. The biggest differentiator between success and failure is having a community that co-opts the project’s narrative.
  • Take for example, Bored Apes Yacht Club and Hashmasks. While the hype for Hashmasks was strong into its launch, it’s narrative and use as an avatar has been underwhelming. The average sale price fell from over 5 ETH in Feb. 2021 to less than 0.8 ETH today.
  • On the other hand, Bored Ape’s have been very popular amongst the crypto community, and the average sale price rocketed from under 1 ETH to 5 ETH.
  • NFT projects, at least avatar-centric ones, live and die by their prevailing narrative. This is why CryptoPunks in particular remain resilient, as the narrative is much older and has held up over time.

 

Stablecoins Dominate Maker’s Vault Mix

  • MakerDAO’s collateral breakdown shows us that stablecoins have become the majority asset type in Maker’s vaults. Stablecoins overtook ETH with 63% and 31% vault share respectively, compared to 77% ETH and 12% stablecoins exactly a year ago.
  • Stablecoins in Maker’s vault are centralized stablecoins like USDC, USDT, PAX, and others. Community members have voice concern over Maker and DAI’s growing reliance on centralized stablecoins.

Notable Tweets

An update from Alpha Finance.

More news out of China.

Delphi is hiring a PM for a project on Solana. Reach out if you think you’re a good fit!

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