👀 What’s to Come in Volume 36

🔑 Key News: Citi And Google Adoption, $LUSD Exploit, StarryNightDAO Presale & more from CJ

⛓ On-Chain Sleuthing: Sifu Slurping Yield, $GMX Whale in Trouble feature along with Smart Money Moves from Cl

🔥 Hot Narratives Celestia Airdrop Dust?, Frax V3, and $ARB Incentives from unexployed

📈 Macro Outlook: Michael Saylor Buying More $BTC & Crypto Options Moving Into Bearish Territory from Hansolar

📉 HTF Price Action Scenarios ChopChopChop from Vlad

⚔️ A Call to Arms

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🔑 Key News

Major Headlines

• Citigroup debuts a permissioned, private blockchain

• FTX founder’s parents sued

• Drama between Wintermute and DWFLabs

• 7 protocols join Mastercard's global startup engagement program

• Grayscale Investments files for new ether futures ETF

• Fed leaves rates unchanged

• Mt. Gox Pushes Repayment Deadline by a Year

• Google Cloud adds 11 new blockchains to BigQuery data analytics service

• Saylor bought more Bitcoin

• Zachxbt warns about projects working with @gotbit_io

• SEC denies ARKInvest/21Shares ETF Filing

Exploits That Happened This Week

• Goledo Finance GOL token suspiciously sells

• Balancer frontend compromised, hacker stole $240k

• LinearFinance LUSD exploited

• Nansen third-party security breach exposes 6.8% of user emails and some blockchain addresses

• Opensea 3rd party data breach

• MixinKernel hacked for $200M

Project Updates

• Canto migrating to ZK L2 built on Polygon's CDK

• EclipseFND announces their mainnet: ETH SVM L2

• Framework on governance for Infinex released

• Injective starts testing their inEVM Layer 2

• Metis Dao $5M Defi incentive program live

• Mantle Q4 updates by @Defi_Maestro

• OptimismFND announced a private token sale of 116M OP

• BotanixLabs reveals Spiderchains while Protectorate introduces ZAAR

• Coinbase teases BASE token possibility

• First proposal on Wagmi by @danielesesta

• StarryNightDAO announces presale for FT holders

Interesting Projects

• Around: Web3 travel dapp for crypto-friendly nomads

• Bastion: Combining the best of web2 experiences with web3 infrastructure to expand possibilities for businesses and their customers

• Thunder Terminal: New trading terminal

• Orb: Social app that raised $2.3M

• Proof of Play: Onchain game studio & technology company

• FanTech: FT fork on Mantle

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

⛓ On-Chain Sleuthing

17,5% in $CRV on Silo

Silo Finance has been offering a good yield of 17,5% in $CRV for users depositing $crvUSD on their platform. And guess who is among the biggest depositors? 0xSifu, of course.

He deposited close to $5 million in $crvUSD t Silo.

Whale with Risk Position on $GMX

Our sleuth team has identified a perp trader on GMX Avalanche that is in troubled waters and risking liquidation. This could cause a massive bump in fees distributed to $GLP holders on AVAX.

He has a massive $5 million $BTC long. Funding fees have been eating his collateral. As of 26 September, he is down $2.8 million.

This could potentially create some issues for the platform if this trader is liquidated, creating a rush for farmers to mint $GLP, get the yield, and redeem $GLP back for underlying at the end of the distribution period.

Research and analysis by Cl

🔥 Hot Narratives

Celestia Announces Airdrop

Today Celestia (formerly LazyLedger) announced their ‘Genesis Drop’ aka the official airdrop of their $TIA token.

HINT: if you contributed to their Github you made it. L2 users received a much smaller amount.

The project is one of the most anticipated modular blockchains of the past year or so and back in October 2022, they raised $55mln in a combined Series A and B round led by Bain Capital and Polychain Capital.

At $10 per $TIA Celestia will have a FDV of $1bln.

Celestia has the ambition to become a pluggable consensus and data availability layer that enables anyone to deploy a blockchain without much overhead.

With the launch of their token, the modular blockchain market is truly heating up with now the OP stack, ARB L3s, Celestia, and many more actively competing over market share.

To learn more about Celestia, we recommend reading the thread written by our good friend Francesco:

Now the largest airdrop receivers are those who contributed to the Celestia Github in any shape or form. They are estimated to receive over $20k worth of tokens whereas normal on-chain users receive somewhere three figures.

This has led to a bunch of people starting to look at other projects’ GitHub and contributing by leaving comments and adding readability. If you want to increase your chances for future airdrops, you might want to add this tactic to your arsenal.

Frax V3 Incoming Soon?

This message has been spread for quite some time. But we think that this is about to launch somewhere in early October. The original proposal dates back to August 4th in which Sam Kazemian, founder of Frax, proposes a partnership with FinresPBC as their official RWA partner.

The audits have been done and it is just a matter of the Sam squad finalising everything and pushing it to the main chain.

Frax V3 fits perfectly into the Real World Assets (RWA) narrative that has been brewing during this bear market. As you can see from the screenshot below, RWA (loans in particular) has been growing steadily during the past year.

According to Sam, founder of Frax, V3 introduces a unique system of managing off-chain risk and brings an innovative, liquid, tokenized form of real-world fiat/treasuries

The introduction of RWA to Frax enables the protocol to tap into the yield of treasury bills and others. Additionally, V3 introduces FraxBonds, tokenized tokens that represent debt. These can be purchased at a discount and redeemed in the future for initial plus interest. A whole new way for on-chain users to earn a yield on stablecoins.

Pretty cutting-edge stuff again from Frax.

Arbitrum Incentives Update

Last week we mentioned the incentives program that is launching on Arbitrum. Over the course of last week, 55 proposals have been made on the forum.

View them for yourselves here: https://forum.arbitrum.foundation/c/grants-discussions/11.

The incentives have the ability to greatly boost the Arbitrum ecosystem and draw in more users and capital.

Furthermore, all the unclaimed airdrops went back to the DAO treasury. In total, over $56 million has been sent back. That’s more dollar value than the whole incentives program approved by the DAO.

Courtesy of unexployed

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💹 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

• Wed, Sept 27th : Durable Goods Orders MoM

• Thurs, Sept 28th : GDP Growth QoQ Final

• Fri, Sept 29th : Core PCE, Personal Income/Spending

BTC, ETH, and Macro

• In the previous week, we theorized that Saylor was behind the strong twap-like bids and it looks like we were correct! Despite unloading roughly $150m into the markets, we were met with endless amounts of selling supply. It looks like the soaring 10-year bond yields have killed the risk appetite of both tradfi and crypto investors resulting in some lackluster price action despite Saylor’s undying appetite for more bitcoins.

• However, as we come to the end of sad-September we can always look forward to October(aka Uptober), which has historically been the strongest month and also has multiple ETF waiting for approvals.

Option Markets

• BTC IV and Skews: IV dropped roughly 10% after expiries last Frida, but has since recovered to the 39-40 handle. Skews are now moving into bearish territory as almost all expiry skews move up towards favoring puts after the bearish past week.

• ETH IV and Skews: Similar to BTC, IVs also dropped over the weekend and recovered as the week started and all but the 6-month skews are still in bearish territory.

• Flow: Following the massive ETH call seller, it seems they have unwound their short call position consisting of 60k ETH yesterday, perhaps in anticipation of some upside with the ETH futures ETF passing in October.

• @CL207 brought up the ETH term structure slope chart today commenting on how it is at it’s lowest point since January this year. Those who know their history will remember that there was a 40% squeeze where BTC shot up from 16k to 22k in a matter of days. The large discrepancy between short-term and long-term IVs can be explained by traders selling short-term volatility to buy long-term volatility. A common strategy for crypto vol-traders. Just keep in mind that continuously putting pressure on a particular tenor could also lead to extreme expansions.

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

📈 HTF Price Action Scenarios

Gm frens!

Another week of sitting on the sidelines spectating price chop around. Absolutely no directional clues presented, no momentum to follow, and minimal volatility. I’m looking forward to the day I’ll proudly announce that I’m bullish again, but it’s just not happening yet.

• Daily demand tapped

• Re-accumulation playing out

• Looking to follow bullish momentum

Once again I’ll repeat myself by saying - this is where you outperform the market by staying out. Let the big players show their hands first before you decide to play the game.

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

Courtesy of Vlad - trend-based trader and MentFX student

Thanks for reading, please follow us on Twitter at @Castle__Cap and visit our website to learn more about our services.

Virtually yours,

The Castle

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