OpenSea Competition, NEAR Outperformance, & Short-Term Capitulation

OpenSea Faces Competition from LooksRare

• LooksRare launched yesterday with a surprise airdrop to users who traded at least 3 ETH in volume on OpenSea. Day 1 of LooksRare’s activity shows that its volume was comparable to OpenSea during certain hours of the day, with two peaks of $4.5M hourly volume. That may be attributed to trading reward incentives given to collections that hit >1000 ETH in volume. Wash trading to earn trading rewards seems to be rampant on the platform now, as evidenced by the unusually high sales and prices on NFTs eligible for reward incentives.
• Only time will tell if the rewards can keep users coming back. Otherwise, it’s only a matter of time until LooksRare suffers a similar fate as Rarible, where volume slowly faded (volume in the last 24 hours was a measly $220k) after trading rewards became insignificant versus fees paid.

NEAR and ATOM Leads January Performance

• NEAR and ATOM have been the top performers in the past month amidst a gloomy market. Other L1 projects either stayed flat or had a -20% to -40% drawdown since the 1st of December 2021.
• ATOM users have been anticipating the launch of EVMOS (previously Ethermint) via a rektdrop, which promises EVM interoperability within the IBC ecosystem. As EVMOS gear up for its launch, we will likely see the IBC ecosystem pick up.
• NEAR price has benefited from the launch of Aurora, which allowed EVM-compatible dApps on their network. One notable innovation was the use of ETH to pay for gas on Aurora, which makes for a seamless transition for Ethereum users who do not have to purchase the platform layer token just to pay for gas. For now, the gas fees are 100% subsidized.

Short Term Holders Realize Losses as Bitcoin Price Dips

• Short Term Holders SOPR (Spent Output Profit Ratio) is an indicator of assessing the behavior and profitability of short-term investors, taking into account spent outputs less than 155 days old. It evaluates the profit ratio of investors by comparing the value of outputs at the spent time to created time.
• A SOPR of >1 implies that tokens are on average selling at a profit, while a SOPR of <1 implies that tokens are being sold at a loss.
• Data from the last few weeks shows that SOPR has consistently dipped below 1, suggesting that short-term holders are realizing significant losses, signaling capitulation. The last time SOPR remained below 1 for a sustained period was in May and July last year when Bitcoin traded around $30k.
• The STH SOPR indicator falling below 1 has marked local bottoms in the past, and some traders use it to time good entry points into the market.

 Total Value Locked on Metis Grows

• Total Value Locked on the Metis Andromeda network more than doubled yesterday after Netswap launched its liquidity mining program. Netswap is the first AMM DEX in the Metis ecosystem, and now stakers of LP tokens can earn $NETT rewards.
• Metis is an EVM compatible optimistic rollup, forked from Optimism’s Virtual Machine with a few tweaks. One key differentiator of Metis against Arbitrum and Optimism is that they have IPFS integrated and aim to deploy a system to shorten transaction finality from the typical 7 days down to just a few hours. Transaction fees can be expected to fall from a few dollars to cents once Metis launches their storage layer estimated by the end of Q1.

Notable Tweets

Sequoia and Paradigm Invests in Citadel Securities

Sequoia, Paradigm to invest $1.15bn in market maker

https://t.co/dhRgTlzHyW

— unfolded. (@cryptounfolded) January 11, 2022

Anchor Will Soon Support bSOL and bATOM

4/ bSOL and bATOM entered the auditing phase and will be added as collateral assets on Anchor Borrow in the coming weeks.

— Anchor Protocol (@anchor_protocol) January 11, 2022

Opyn Launches Squeeth

So hyped to announce that Squeeth is live on Ethereum mainnet!! Check out the dApp https://squeeth.opyn.co

— opyn² just launched squeeth (@opyn_) January 11, 2022