$ARB STIP Monitor, $BITCOIN (real), Smurf Cat, $OTSEA Deep Dive & More

The Castle Chronicle: Volume 42

For those who follow us on a weekly basis, you know we talked about the Arbitrum STIP extensively. Congrats to those of you who have acted on the anticipation and the incoming money flows. Many of the projects are deep in the green.

To further facilitate staying up to date with everything Arbitrum STIP, our very own SniperMonke has built a great tool that monitors the redemptions of all the protocols.

It is a very simple Telegram chat that sends messages based on redemption with links to the proposal, project, multisig, and so forth.

Join the chat HERE.


 👀 What’s to Come in Volume 42

🔑 Key News: $OX, FED Leaves Rates, Frax Domain Hacked, DuneAI, New Projects & more from CJ

On-Chain Sleuthing: $BITCOIN, Smurf Cat, $OTSEA feature along with Smart Money Moves from Cl

🔥 Hot Narratives NFTs Trending? & Next Gen Trading Terminals from unexployed

📈 Macro Outlook: Simplified Round-up and Implications from Hansolar

📉 HTF Price Action Scenarios: from Vlad

🍕 Francesco’s Feature: OTC Trading for Low Caps

⚔️ A Call to Arms

Think you have what it takes to enter the Castle and contribute to funding and advising projects across the space?

🔑 Key News

Major Headlines

  • OPNX announces migration for CoinFlex creditors

  • FED leaves rates unchanged

  • Coinbase crypto futures for retail US traders goes live, includes 'nano' bitcoin trading

  • Circle will no longer support stablecoin minting for consumer accounts

  • SEC Charges Crypto Company SafeMoon

  • MicroStrategy bought more bitcoin in October

  • PayPal faces SEC action related to PYUSD stablecoin

  • SBF guilty of all 7 counts

Exploits/Updates that Happened this Week

  • Zachxbt warns about participating in deDotFi token sale

  • Unibot exploited and updated their remediation plans

  • Onyx Protocol hacked for $2.1M and posted their reimbursement plans

  • Frax Finance domain hijacked

  • Multichain mysterious restart

  • Bitfinex suffered a 'minor' phishing attack, will notify affected users

  • Monero's community wallet loses $460,000 due to privacy model loophole

  • Fake Ledger app on app store stole $588k worth

  • Aave v2 on Eth paused, certain assets paused on other affected chains

Useful Weekly DeFi Updates

  • ImgnAI accepted into Nvidia's Inception Program

  • Backpack launching cryptocurrency exchange with Dubai license

  • Pyth Network announces retroactive airdrop while Jupiter Exchange confirms token plans

  • IBC is coming to AVAX

  • Dune Analytics launching DuneAI

  • Arbitrum grants being sent to teams

  • Cancun/Deneb upgrade delayed to Q1 2024

  • Cow Protocol proposal to test fee models

  • Arbitrum community approves initial vote on proposal to activate token staking

  • Celestia airdrop + token listing live

  • Elixir Protocol’s orderbook module went live

  • Prisma Finance launched its token

Interesting Projects

  • Milky Way Zone: Liquid Staking protocol tailored for Celestia’s modular blockchain ecosystem

  • Nock Chain: Nock-native ZK L1

  • Night Protocol: Stealth addresses on Ethereum

  • LuxHaus: Real-world assets on the chain

  • Rug AI: AI Security Tooling, Built for On-Chain

  • STIX: Secondary markets OTC platform

  • Alfred: Trading bot built by ex-flashbot devs

Courtesy of CJ - check out his telegram channel for daily news, projects updates and new releases

⛓ On-Chain Sleuthing

$BITCOIN Whale diversifies to Smurf Cat

The biggest $BITCOIN whale has been adding Smurf Cat to his holdings quite aggressively over the last 2 days. Quite interesting to see this wallet go hard into another memecoin.

$BITCOIN Whale Address [only visible for free subs]

Degen Harambe Buying Smurf Cat

The $BITCOIN whale is not the only one interested in Smurf Cat. Degen Harambe, the guy who made millions off his 0.125 ETH $PEPE investment, has been building a position in Smurf Cat too.

Degen Harambe Address [only visible for free subs]

The price of Smurf Cat has been correcting hard and currently heading towards its first ATH. Let’s see how it behaves over the next few days.

Source: Dexscreener

Smurf Cat Token Address: 0xfF836A5821E69066c87E268bC51b849FaB94240C

OTSea Update

Small update on OTSea from CL’s side. He has covered the project in the Chronicle before and since has performed really well. Their marketing wallet now holds over 86k in ETH and almost 400k in OTSEA.

Lots of nice things can be bought (or burned) with that money..

For a detailed deep-dive into OTSea, read on, as Francesco covers the project in length at the end of this edition.

Research and analysis by Cl

🔥 Hot Narratives

NFT Volume Trending Up Again

Finally, after what seems years, the NFT seems to be slightly recovering. As you can see from the visual above NFT volumes seem to be trending up again, especially the market share of Blur is increasing significantly.

The token itself increased by two-fold over the past 14 days and signals that there seem to be resurfaced interest in NFTs again.

The NFT hype from 2021 and 2022 might mark some of the craziest times in crypto as thousands were flocking in to mint the newest collection. Millions were made, but there were a ton of grifty, cash-grabby collections.

We are either interested in the new, shiny things or invest in existing cults.

With NFTs, it is all about community building and appearance. New NFT collections have a ton of froth to battle and it is hard to establish a diehard community in the current market. Keep that in mind when contemplating paying a certain price for a new collection.

Another way to potentially play into the NFT trend is to buy existing cults that have hard track records, a la Milady.

The Next Generation of Trading Tools

$UNIBOT and $BANANA truly pioneered a new way of on-chain trading and a way to conduct activities on the blockchain.

However, Telegram-based trading bots have their limitations in UX, UI, but more importantly security.

A new wave of on-chain tooling is upon us. Powerful, browser-based trading terminals mimicking CEX-like experiences abstracting away all the painpoints in traditional wallet activity and solidifying it in one central place.

One such tool is Thunder Terminal which features this real-time trading terminal feel of CEXs, but also offers to ability to set up tasks, like sniping, presale buys, and more!

It even has a mobile version for those interested in fast trading on the go.

Thunder has an ongoing point system that rewards users based on their swap volume and activity on their platform. We highly advise anyone to conduct their swaps through Terminal instead of Uniswap or an aggregator to rank up their volume and be eligible for the airdrop.

It’s so easy to use and really a brain-dead airdrop to farm if you are active on-chain!

Here’s a great thread on the potential of Trading Terminals and PWAs made by ChillTRD.

Another interesting new player is Alfred Trades built by part of the Flashbots team. Proven chads that align with crypto ethics and value security and integrity above everything.

Also worth trying out, as they too, have a points system based on usage qualifying for any potential airdrop.

Courtesy of unexployed

Use our referral system to spread the word about the Chronicle!

💹 Macro Outlook

Please note that if certain technical jargon or concepts mentioned in this text are unclear, you can refer to investopedia.com for detailed explanations and definitions. Additionally, for a comprehensive overview of macroeconomic events, you can explore the event calendar on investing.com/economic-calendar/.

Upcoming Events

  • Lower than expected job creation 👉 higher expectation of cuts. Unemployment comes in near expectations. ISM Services PMI comes in lower than expectations at 51.8

  • Wed, Nov 8th : Fed Powell Speech

  • Thurs, Nov 9th : Fed Powell Speech, Initial Jobs

  • Fri, Nov 10th : Michigan Consumer Sentiment

BTC, ETH, and Macro

  • Both the FOMC and the QRA(how debt is issued over the next 3 months) were interpreted as being dovish by the market which in turn resulted in lower bond yields(good for risk) and a strong 3.45% rally in the SPX. Bullishness returning to the market bode well to support Bitcoins found yearly highs and also led to a fury of altcoins breaking out of long consolidation ranges.

  • Funding rates have been fairly erratic as futures traders long tops and close out positions when price meets resistance. Although ETH did find some strength over the weekend, price action still feels sluggish compared to its uber-bullish competitor Solana.

  • It has also been reported that over the past weeks, roughly half of the massive short volatility position on ETH held by the notorious OWE (overwriting entity) has been closed. This position has the effect of dampening volatility and as it has been lifted can give ETH more wiggle room in the coming weeks.

  • Both BTC and ETH broke the strong up-trend in IVs after failing to break out upwards past 36k for BTC and 1910 for ETH. Currently, IVs are seeing massive volatility(vol of vol) as we seem to be in a transition phase of higher volatility after more than a year of record lows vols.

Courtesy of Hansolar - check out his telegram chat for all things options, crypto and DeFi

📈 HTF Price Action Scenarios

Gm frens!

Last week I was looking for a continuation of this bullish push but wanted to see some kind of re-accumulation first (some lows liquidated) to fuel continuation. Looking at the 4h chart here we had some really nice opportunities on the lower timeframes to take the price higher.

  • Accumulation inside daily demand zone

  • Expansion out of consolidation

  • Bullish momentum

  • Lows liquidated

  • New highs breached

Overall I am very bullish here as big money is supporting this move and re-accumulations are happening before expansions. The plan here is to look for bullish continuation, until eventually price breaks down and start consolidating/re-accumulating again, at which point it makes sense to wait for some low being liquidated again before continuations long. Exciting times!

Trade responsibly and I’ll see y’all next week!

Courtesy of Vlad - trend-based trader and MentFX student

🍕 Francesco’s Feature: OTC Trading for Low Caps

There’s a new narrative in crypto these days and is about OTC Trading.

While OTC trading is an extensively established practice within traditional finance, it’s only starting to pick up pace within crypto.

Why do we need OTC Trading?

One of the first innovations in DeFi was Uniswap, kickstarting the use of liquidity pools to facilitate decentralized cryptocurrency trading.

Nonetheless, liquidity pools have their own limits, especially for coins with lower capitalization and liquidity:

  1. High volatility

  2. High Slippage

  3. Low Liquidity

  4. Token Taxes

  5. MEV

Solving Market Inefficiencies

Protocols like OT Sea can provide traders with an alternative venue for selling and buying tokens (only limited to ERC20 currently).

They allow peer-to-peer (P2P) and trustless OTC trading.

In this way, traders can bypass liquidity pools, slippage, and price impact by simply trading P2P.

What are the Main Use Cases for OTSea?

  1. Avoid Token Taxes

    Many ERC20 tokens introduce a buy/sell tax to discourage extensive trading.

  2. Safeguarding Whales

    Nowadays, whales have a hard time selling their low caps tokens, as they are often tracked and front-run and their holding size can depress the price.

    One possible solution to this is to resort to P2P trading.

    On OT Sea, whales can simply leverage the OT Sea smart contract as a P2P intermediary to create an order displaying their intentions to sell those tokens.

    Furthermore, the OT Sea “Crowd fill” feature also allows whales to sell their holdings to several small holders.

Any user will be able to fill the order according to the quantity desired.

  1. Low Liquidity Tokens

    If you have ever traded low caps you are familiar with the small size of liquidity pools for these tokens: a large sell order in such liquidity pools translates into a huge price drop.

    As such, any holder would take it for granted that they will lose a portion of their funds due to the high price impact of their order.

    This doesn’t happen in OT Sea, where they can freely find a buyer, create an order, and get their whole sum, without price slippage or any token tax.

Food For Thought

OT Sea is leading the creation of a new primitive.

OTC trading for low caps can improve market efficiency and price action, and OT Sea can help users to maximize their returns when selling tokens.

In some ways, it can be conceptualized as a step back, to a mechanism similar to a “barter”, where users can match their needs.

Furthermore, this can spur a new best practice behavior for large holders, which will be able to trade without affecting the price or being hunted by bots.

However, as a new primitive OT Sea has to establish itself and make sure there’s enough demand and supply to ensure sustainable trading volumes.

Currently, it seems that their volumes are picking up, with over $56k in volume since launch, with more than 185 orders filled.

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Virtually yours,

The Castle

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In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.


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