Exchange Exodus, Staking LUNA-cy, TikTok Trends

JUL 29, 2021 • 4 Min Read

Ashwath Balakrishnan + 2 others

Disclosure: Delphi Ventures and members of our team may own positions in assets mentioned in this report. This statement is intended to disclose any conflict of interest and should not be misconstrued as a recommendation to purchase any token. This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice.

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Market Update

Today has been a rather sleepy day in the market, with the majors starting to consolidate at resistance (not a good sign). Market momentum over the last week has been pretty crazy, so a pullback from here is on the cards.

Exchange Exodus; Bullish for DEXes?

  • Yesterday marked the single largest daily outflow of BTC from exchanges since mid 2016. This was presumably catalyzed by Binance’s announcement of dramatically lower withdrawal limits for non-KYC customers. Binance and Coinbase were the top two exchanges in terms of absolute outflow.
  • The million dollar question right now is whether this will benefit decentralized exchanges. Popular DEXes like Uniswap and Sushiswap cannot support BTC — only wrapped BTC — so them trying to capitalize on BTC leaving exchanges is out of the question. However, multi-chain DEXes like Chainflip and THORChain could benefit from this in the long-term.
  • But if the trend is a generalized shift away from centralized exchanges, then DEXes across the board will be able to capitalize on this.

 

Staking LUNAcy

  • Today LUNA saw an upward movement of approximately 15%, which was likely caused by the increase in LUNA staked and LUNA burned.
  • 1.14 million LUNA were burnt from the circulating supply today thanks to the burning/minting mechanism that arbitrages UST’s (Terra’s native stablecoin) peg. If UST is trading above $1, you can arbitrage by burning $1 of LUNA to mint 1 UST to be sold on the market for profit and if UST is trading below $1, you can buy the discounted UST from the market and redeem $1 worth of LUNA.
  • Additionally, we also saw an additional 3.59m of LUNA tokens being staked and removed from the liquid circulating supply. In total, 4.73m of LUNA, which represents around 4.5% of the liquid circulating supply, were removed from LUNA’s liquid supply.

CryptoBlades Propels BSC Usage

  • Binance Smart Chain just hit a new high in transactions per day. But interestingly BSC’s flagship product, PancakeSwap, hasn’t seen a meaningful increase in on-chain volumes.
  • A new game, CryptoBlades, is almost single-handedly pushing BSC usage to new highs. CryptoBlades is an NFT RPG where players team up to fight other players and conduct raids. In the last 24 hours, CryptoBlades is responsible for over 7.5 million transactions to BSC. This accounts for roughly 60% of BSC’s total transactions over the same 24 hours.

Axie Turns Heads on TikTok

  • On Crypto TikTok, videos tagged with #axie and #axieinfinity are dominating view and video count. Axie Infinity related videos have risen to to become the second most popular crypto hashtag on Tiktok in the month of July, beating out everything except #bitcoin and #btc. Surprisingly, Axie content has even beaten out #nft.
  • This trend isn’t too surprising given the fundamental growth Axie has seen, and AXS’ monster rally over July.

Notable Tweets

A new AMM primitive from the giga brain at Paradigm.

A last minute change in language creates broader tax reporting obligations for crypto companies.

A good thread on TradFi Bitcoin products.

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Ashwath Balakrishnan + 2 others