UST Enters Top 3, Moonbirds Take Flight, & SOL Staking

Chart of The Day: UST is Now a Top 3 Stablecoin

• UST’s growth has been remarkable in 2022, expanding by $7.6B in around five months. Its YTD growth is trailing behind USDC by only $78.3M and will likely soon be 2022’s top growing stablecoin in absolute terms.
• UST demand mainly stems from Anchor’s attractive 20% deposit rate for UST. However, with the “Dynamic Anchor Earn Rate” proposal passed, the rate for UST will likely be reduced in the near future. The dynamic earn rate will be based on the change in Anchor’s yield reserve over time. If the yield reserve grows, the earn rate will be higher. And if the yield reserve falls, the earn rate will be lower. Will this affect users’ decision to continue saving UST on Anchor? It seems like Twitter is split between staying and leaving if the rates are dropped to 10%.
• However, as Anchor’s yields decrease, other sources of demand will be needed for UST to continue growing. As covered in our previous daily, one of the key initiatives here is through LP-ing into the new 4pool on Curve which strengthens UST’s peg and provides alternative demand outside of Anchor.
• USDC has been taking a hit recently as supply growth has diminished. USDC’s peak growth this year was at $11.2B, but has since dropped to $7.7B as users redeem their USDC back into cash USD. This isn’t to say there has been any bad news regarding Circle / USDC. Some potential explanations are that users are cashing out their crypto-gains into cash ahead of tax day on April 18th, or that market uncertainty is causing crypto users to risk-off high-risk crypto assets.
• Circle, the issuer behind USDC, has recently raised $400M from BlackRock and other financial institutions and is planning to list publically through a SPAC deal by Dec 22th, 2022.

Moonbirds Go Crazy, NFT Raffle Season, PREMINT Benefits

[Excerpt from Apr. 20th NFT Insights]

Top NFT Collections This Week

It’s been an owl-ful week with the Moonbirds launch. Here’s how wild it was:

• In less than a week, Moonbirds has done more in sales volume (~$230M) than all of OpenSea during any single month between Jan – Jun 2021.
• It now has an estimated market cap of >$600M, almost similar to Azuki which launched 3 months ago.
• Floor price started around 10E when trading began, fell to ~7E at one point and subsequently has been on a tear; the floor is currently trading at approximately 20E.
• My take is that the market is fatigued with run-of-the-mill NFT projects, so when a team of experienced Silicon Valley operators with proven track records and connections come in, they shine like a beacon of light in the darkness. After the success of Moonbirds, I believe there will be more experienced Web2 people and capital (who have been sceptics but now see a big opportunity) who will come and do something in the NFT space.
• MoonPay and even Jimmy Fallon bought a Moonbird. Could this signal other celebrity buys in the near future? Congrats to everyone who won the public raffle and minted!
• For more, Delphi members can see the latest NFT Insights here.

The Race To Become Solana’s Liquid Staking Winner

[Excerpt from a Delphi Pro Report]

• Staking is one of the largest and fastest-growing industries in crypto, but most staking solutions today have a glaring problem: they’re not built for DeFi.
• As a refresher, for a Proof-of Stake blockchain like Solana, consensus is achieved by validators running hardware and locking up SOL collateral to secure the network. In return for securing the network, validators earn ~6.5% inflationary rewards (started at 8% last year) which will be decreased at a rate of 15% YoY until a terminal rate of ~1.5%. Validators also earn transaction fees, which for now are low, but can potentially be lucrative as Solana continues to grow and the new priority-fee model is implemented. At a core protocol level, users can either stake themselves or delegate their tokens to a validator of their choice. Due to the costs & effort of running a validator (~50,000 SOL/$5M delegated stake to break-even), many users choose to delegate their SOL. While delegating SOL to a validator allows users to avoid getting diluted through inflation, it has some drawbacks, namely:

1. 1. SOL is locked and requires a cooldown period of 2-3 days
   2. User overhead of researching/choosing validator(s)
   3. Cannot use staked SOL as collateral throughout DeFi

• At a $32B market cap and 6.5% inflation rate, there are ~ $2.1B in rewards/year going to validators for Solana. Liquid staking protocols could extract 2-5% on those rewards through manager fees, a $40-100M revenue opportunity today.
• At first glance of the landscape, it may look like Marinade has run away with the ecosystem. Part of this is true! Marinade is roughly double the size of Lido, by far the most decentralized with over 400 validators, and has become a staple in Solana DeFi since its launch last summer. However…

• Stake pools make up a very small amount of the total stake on Solana today! For all the benefits that stake pools have, they have still not been adopted at a fast rate on Solana. As a comparison, Lido with ~$10B on ETH 2.0 is already 3% of Ethereum’s total market cap and 28% of the total stake on ETH 2.0. Liquid staking on ETH 2.0 makes up ~32% of stake, a much higher ratio than we see on Solana.
• There are a few reasons for this dynamic.

1. 1. ETH 2.0 deposits opened at the end of 2020, Liquid staking on Solana launched in Summer 2021
   2. Staking on ETH 2.0 requires technical knowledge vs delegating on Solana. If an Ethereum user wants to earn ETH 2.0 yields they will need to run a node themselves or use a pool. On Solana it is a simple process to delegate to a validator. Ethereum does not have delegated proof of stake, but you can think of stake pools as similar to delegating stake (if the market demands something it will find a way to create it)
   3. ETH 2.0 staking is locked, Lido unlocks it

• In addition to the above, there are some other reasons that are not specific to Solana.

1. 1. Smart contract risk
   2. Potential tax liabilities

• For more, Delphi members can see the full Pro Report here.

Notable Tweets

EVM Wallet Tracker by UniWhales DAO

📣Introducing the EVM Wallet Tracker

-NFT Alerts
-DeFi Alerts

⛓️ 10 different EVM chains (so far):
Ethereum, Polygon, Avalanche, BNB, Optimism, Arbitrum, Fantom, Aurora, Metis, Boba

What are the best features of this free and powerful tool?

A🧵

—UniWhales DAO (@uniwhalesio) April 21, 2022

ApeCoin & The Death of Staking

ApeCoin & The Death of Staking –

https://t.co/9dvuWpMkE7

—Cobie (@cobie) April 21, 2022

TRON’s USDD @ 30% APY

Justin Sun will imitate Terra to launch an algorithmic stable currency USDD and raise a reserve of $10 billion, the TRON DAO Reserve will set its basic risk-free interest rate to 30% per annum.

https://t.co/WhfZXcBumZ

— Wu Blockchain (@WuBlockchain) April 21, 2022