Market insights: 2022/07/14

2023-03-03 by


[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” constrain_group_2=”yes” constrain_group_4=”yes” constrain_group_6=”yes” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overflow=”visible” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none” gradient_type=”default” shape_type=””][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_direction_desktop=”default” column_element_spacing=”default” desktop_text_alignment=”default” tablet_text_alignment=”default” phone_text_alignment=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_backdrop_filter=”none” column_shadow=”none” column_border_radius=”none” column_link_target=”_self” column_position=”default” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” animation_type=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]What happened recently in the industry:

  • Jon Cunliffe, Bank of England deputy governor for financial stability, says that Cryptocurrencies need regulation to mitigate risks. One question that arises is how these regulations could help the blockchain industry, when they didn’t prevent crises in the past in the very much regulated sector of traditional centralized finance.
  • In Certik’s quarterly report we can read that phishing attacks increased by 170% in the second quarter of 2022 (from 106 to 290). The preferred way for phishing is via social media (Discord or Telegram are used a lot by blockchain enthusiasts, and logically by phishers as well). As usual, those attacks are mostly the product of social engineering: people make mistakes and these human errors can be used by malevolent persons as a way around even the most complex safety protocol. These human errors even touched the British Army (more info here) and will not stop unless people become more educated about social engineering. In the meantime, hackers from all around the world can post scams with fake air-drops and other potentially cool offers that lead users to losing their assets.
  • Multicoin Capital raised $430M for a new crypto startup fund. Despite the current bear-ish market, venture funding for the blockchain industry is still thriving, and according to a Coin Telegraph market report, 2022 outpaces 2021. The company announced that their Venture Fund III would invest between $500K and $100M in early- and late-stage companies (for the latter, their resources are combined with another fund).
  • The US trademark and copyright offices are currently studying the impact of NFTs on intellectual property, as lawsuits begin to stack up. This topic has been hot for a few months, and a request from US senators Patrick Leahy and Thom Tillis last month is now pushing the debate further. Rappers, brands, production companies: every sector has to handle copyright claims, which is ironic considering the rest of the blockchain industry is widely operating under open-source licenses (more info here).
  • For those of you who didn’t know, Sri Lanka is currently in a political turmoil. Protestors have stormed President Gotabaya Rajapaksa’s residence and set the prime minister’s house on fire. President Gotabaya Rajapaksa agreed to step down. Still, despite the upcoming economic and political change, the Central Bank of Sri Lanka issued a warning about crypto-currencies: exchanges and coin offerings, but also payments are still not officially authorized in the country (crypto-currencies are commonly used during political crises as a means of payment to avoid limitations imposed by governments during hard times). Sri Lanka’s government change might have an impact on the local take on the blockchain sector. (Also, it is worth noting that in 2021, the Central Bank of Sri Lanka completed a proof of concept for a KYC platform).

  • After the digital USD and digital CNY, the European Union announced the Phase 2 of the digital Euro project. The announcement has been made by the French presidency and the French central bank. (The EU’s presidency periodically rotates from one member state to another and France is presiding at the moment.) Similarly to most state-issued crypto-currencies, this blockchain will probably not use the properties of the blockchain that make the likes of Bitcoin and Ethereum so popular (e.g. immutability, open-source code and so on…). Government control of assets is a heated debate that will probably keep fueling arguments over the upcoming decades, as the Financial Action Task Force urged countries to implement a travel rule praised by the French central bank. Still, in the announcement made, we can read that decentralization and automated market makers (AMMs) influenced the design of the digital Euro. Promising ? Wait and see…
  • Good news for the Nervos Network (CKB): their token price became 35% higher after the release of the new Oblivion NFT marketplace, and a Layer 2 solution named Godwoken. Godwoken is an EVM-compatible rollup that allows DApps to port to the Nervos Network. Celer Network’s cBridge now also integrates with Godwoken, which explains Nervos’ current success. Cross-chain interactions are obviously very trendy these days. And so, we wish Nervos even more progress and success, as MuKn has had the pleasure of porting its AVOUM technology onto the Nervos network.
  • After the release of a framework for the use of digital assets, the United States Department of the Treasury has requested comments from the public on the potential opportunities and risks of the possible mass adoption of crypto-currencies by the public. The public has until August 8th to submit comments to the Treasury. The US Department of the Treasury seems to promote financial literacy for people who want to use DeFi and cryptocurrencies.

Notable projects trending:

  • The Rubic cross-chain swap aggregator (huge potential: 15K+ tokens and 12 blockchains) keeps adding new networks. On July 19th, they will add Optimism, Cronos, Gnosis (xDAI), Fuse, Celo, Moonbeam and OKExChain. Among these networks, Rubic will also support bridges with Avalanche, Polygon, Arbitrum and many others. Their GameFi and NFT applications are also getting more solid. Users will soon be able to purchase NFTs from whichever blockchain they want. Their $RBC token is also now listed on the RadioShack DEX. Their list of use cases also became bigger, since they are now proudly announcing that their SDK has been used by Hector Finance to build a cross-chain DEX.
  • ThorSwap is a cross-chain decentralized exchange aggregator built on the THORChain network that doesn’t rely on bridging or wrapped assets. Two tokens are tied to the DEX: THOR which incentivizes trading (classic yield, fee sharing, trading discounts…); and, RUNE, which incentivizes liquidity. One of their features is the low slippage (= low discrepancy between the price at which the user issues the buying/selling order and the price when the order is executed), which is very useful in a volatile market. This is notably achieved by using CLPs (Continuous Liquidity Pools) that do not require the pairing of a buyer and a seller.THORChain uses many of the regular AMM mechanisms, but also works across chains using nodes specific to the supported asset (for example: a Bitcoin nod e, or an Ethereum node). When an exchange happens, the validating nodes detect and agree that the sold asset has been received, while another node will approve an outbound transaction for the purchased asset.  Currently, THORSwap natively supports BTC, ETH, BNB, LTC, DAI, BCH and a few ERC20 and BEP2 Tokens, and also Terra Luna. But, due to the Terra Luna scandal, the Terra Luna support has been stopped for now.
  • Metaplex: Solana’s decentralized NFT infrastructure. Currently, Metaplex is fueled by free tools and NFT standards, but also by a creator-to-consumer approach that incentivizes creativity in the little world of NFTs. One of Metaplex’s features is its self-hosted front-end Web application that lowers the entry barrier to the NFT market. This kind of tool is exactly what the blockchain industry needs to become mainstream – something that allows people with good business ideas and limited technical skills to be part of the game. More info about Metaplex can be found here. On top of its huge increase in NFT mintings over the past year, Metaplex now integrates with Strata Protocol’s Dynamic Princing Mint tool. Metaplex is funded by the Eponymous Foundation, which raised around $46M at the beginning of 2022. However, currently Metaplex doesn’t have a reliable source of revenue. This is a challenge that they will need to overcome soon. In the meantime, Metaplex seems oriented towards multi-chain interactions, as their docs state that they wish to build their future “beyond Solana”.
  • Session is a decentralized messaging app, powered by the Oxen blockchain. Oxen is known for its emphasis on privacy DApps. On top of being free and encrypted, this messenger doesn’t require a phone number to login and has a great UI. It’ll be easy for a user to use Session since it’s very close to Signal and Telegram. Technically, the Oxen Service Node network holds more than 1,600 decentralized nodes. These are used to “onion route” the messages you send (just like Tor).
  • Router Protocol: another messaging protocol in its alpha mainnet. Founded in 2020, Router is cross-chain, and already offers a widget and an SDK. The project raised $485K in October 2021 and received $4.1M from a few investors (notably Polygon and Coinbase Ventures). One of Router’s main features is that the nodes have bridge contracts deployed on each of the chains connected to the Router network. Those bridge contracts can check the state of transactions and even perform them to transfer value from one chain to another. (Technically, the way the transfer happens depends on the emitting and receiving chains.) The protocol can also be used to perform cross-chain actions without the need to bridge assets, which makes it useful for messaging DApps. Currently, Router connects ETH, Polygon, BNB, Avalanche, Cronos, Harmony and a few others already integrated or soon-to-be integrated. Unlike other bridges that are tied to an asset or a chain (or an application, like THORChain as mentioned above), Router wants to be a generalized bridge: One protocol to bridge chains, assets, and applications. This could also lead to cross-chain lending or DAOs in the future. Currently, Router has a ROUTE token that allows holders to vote on proposals related to the protocol’s amendments and upgrades (liquidity mining duration, grants, and so on…)

Comment of the week:

Cross-chain protocols and bridges are trendy: they will probably change the way we design DApps, as the future will likely be multi-chain so as to absorb so many new users. There are many more cross-chain protocols on the market: Axelar, Nomad, Chainlink CCIP… each of them with their own way of managing trust between untrusting parties. More than ever, trust assumptions are the crucial concept that define the design choices of cross-chain protocols.

Upcoming events:

  • Next week is ETHCC 2022 in Paris. Do reach out to us if you want to meet us there 🙂

That’s all for today, folks! You can subscribe to our newsletter below:[/vc_column_text][/vc_column][/vc_row]

Leave a Reply

Your email address will not be published. Required fields are marked *