Evergrande FALLS, Tetra Selling, Friend Tech & More

The Castle Chronicle: Volume 31

AuthorAuthorAuthorAuthorAuthor

unex, Francesco, han solar, Caroulemapoule & Amir Ormu
August 23, 2023 • Est. Reading Time: 19 minutes

 👀 What’s to Come in Volume 31

🔑 Key News: Evergrande FALLS, Mastercard CBDC Partner Program, $SEI Airdrop + Project Launches & more from CJ

⛓️ On-Chain Sleuthing: Tetranode Selling $DPX, Ethersole Selling $UNIBOT, and Full Smart Money Farms List feature along with Smart Money Moves from Cl & Amir Ormu

🔥 Hot Narratives CT Newest Toy Friend Tech and P2E Narrative? from unexployed

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

📉 HTF Price Action Scenarios from Vlad

🤿 Tech vs Business: The L2 Tradeoff by Francesco

⚔️ 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

  • Prime Trust, LLC Files Voluntary Chapter 11 Petitions

  • Machibigbrother withdrawing lawsuit against @zachxbt

  • Coinbase secures approval to bring crypto futures trading to eligible US customers while suspending USDT trading in Canada by the end of the month

  • Grayscale ETF team hiring

  • PayPal UK to Halt Bitcoin and Crypto Purchases

  • Genesis, FTX Strike Deal for $175M Bankruptcy Claim

  • Evergrande filed for bankruptcy

  • Mastercard forms CBDC partner program involving Ripple, Consensys, and Fireblocks

Exploits/Updates that Happened this Week

Useful Weekly DeFi Updates

Some Interesting Projects To Look Out For:

  • Dinari - Securities-backed tokens that recently raised $7.5M

  • AxeCap - Synthetic stocks trading platform

  • gBot - All-inclusive Telegram trading bot by the GMD team

  • Enso Finance- Defi-intent-focused API

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

⛓ On-Chain Sleuthing

Tetranode Selling $DPX

The infamous Tetranode has been selling some of his $DPX over the last few weeks to pay back a Vesta loan he had taken with $DPX as collateral. Tetra was one of the main backers of Dopex and was among the top whales of the project.

Tetra’s Main DeBank Page [for subs only]

To our knowledge, he is still having a large $700k position of staked $DPX on a different wallet.

Tetra’s Second DeBank Page [for subs only]

Ethersole Selling $UNIBOT

Ethersole has been selling his $UNIBOT bag and now holds 0 of his original migration bag. He rotated some of his gains into $RLB

Ethersole’s DeBank Pages [for subs only]

Midgetwhale DCA on $GMX

Another big crypto persona, Midgetwhale started DCA’ing into $GMX (as he announced on his Twitter the day after too).

Midgetwhale’s DeBank Page [for subs only]

Smart Money Farms & Activity

As expected Smart Money has been depositing ETH into Friend Tech and is actively flipping keys.

Popular Farms on Specific Chains:

Research and analysis by Cl & Amir Ormu

🔥 Hot Narratives

Friend Tech Taking Over

By now, everyone must have heard of the newest venture by 0xRacer - Friend Tech. This revolutionary SocialFi initiative allows individuals to acquire shares of Twitter users, enabling them to engage in private chats. The project is launched on Base and is backed by Paradigm.

To give you a better idea, on the left are the current highest-priced shares. We see a bunch of familiar names here: Ansem, Hsaka, Cobie, etc. People are eager to hold their shares because they hope for good alfa, early insights, or able to talk with them directly.

The platform was launched last week and the majority of CT is already on it.

We encourage anyone who isn’t on, to check it out and experiment a bit. The first few shares aren’t that pricey plus it seems that Friend Tech will use a similar airdrop model as to what Blur has done.

That implies you have to farm points by buying/selling and those will turn into tokens.

Currently, there are a bunch of devs building sniping bots and other products on top of Friend Tech. If you end up using the application, you will notice that it is still clunky and hard to use. But it is already way better than last week, so the devs are shipping. One highly anticipated feature is the ability to send pictures. This would change the game even more for larger users that want to share valuable information with their audiences.

Then there is the hopium that besides CT, the same celebs as during the NFT craze will onboard as stated by McKenna in this tweet and a tweet by Sisyphus.

For now, it is the newest toy of CT and allows anyone to spin up their own paid group.

Play-2-Earn Comeback?

Remember Parallel? That one project that kept releasing packs of cards throughout the bull of 2021 without a game?

The game is finally live to play after what felt ages. And turns out to be pretty decent. As a result, the native token of the project, $PRIME, has caught a good run (now in a good correction too).

It simply shows that blockchain gaming can work and can be pleasant to play. This particular sector, however, takes a very long time to build and is hard to pull off correctly.

But in the depths of the bear, it may be lucrative to keep your eyes on early-stage projects with realistic ambitions that already have some sort of working game.

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

  • Thurs: Durable Goods Orders MoM

  • Fri: Powell Speech

  • Thurs-Fri : Jackson Hole(2022 led to 1.5 months of bearishness)

BTC, ETH, and Macro

  • BTC and ETH are back in chop-ville after the brief volatility on Friday. The extremely low volatility environment with lots of long-bias traders expecting the spot ETF announcement led to the largest crash since the FTX collapse last November as contagion fears from China hit the news.

  • After the $1b liquidation event, open interest has reset back to more normal levels, but price action has still been subdued after the short liquidation cascade.

  • BTC Catalyst

    • Grayscale case verdict is anticipated every Tuesday and Friday at 1600 UTC

    • Blackrock’s ETF approval on Sept 1st

  • ETH Catalyst

    • 12 ETH Futures ETF approval on Oct 12th

    • Friendtech craze

  • Powell’s speech at Jackson Hole: Last year the speech was extremely short, blunt, and bearish leading to a one and a half months slide. Could be some volatility from this event as longer-term policies are usually covered.

Option Markets

  • Both BTC and ETH IVs have bounced 20% from their ATLs after the huge move on Friday. IVs are currently sustaining a higher-than-usual premium relative to realized volatility as more than 100 short-heavy accounts on Deribit got liquidated during the crash.

  • BTC IVs have risen to 42.4(35.2 last week) which implies the options markets expect a 2.21% daily price move.

  • Skews has shifted sharply positive which means the markets are heavily in favor of buying puts after the crash on Friday.

  • ETH IVs have risen to 39.74(31.8 last week) implying the options markets expect a 2.08% daily price move.

  • ETH skews are also positive implying option market participants are buying puts.

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

📈 HTF Price Action Scenarios

Gm frens!

Volatility has finally shown up this week. Unfortunately not in the direction we’d like to join. The plan however remains the same.

  • Lows being liquidated

  • Re-accumulation playing out

  • Looking to follow momentum to the upside

Yes, we have bearish signs happening right now, but they are happening in an overall bullish market condition. I am therefore still anticipating re-accumulation. I’d only look for longs after strong bullish impulses, otherwise, I’ll be sitting on my hands.

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

Courtesy of Vlad - trend-based trader and MentFX student

🤿 Tech vs Business: The L2 Tradeoff

As a new technological primitive, L2s come with their own trade-offs.

In the current conditions, all L2s have made some technical trade-off that in one way or another impacts their security.

Be it a centralized sequencer, the lack of fault proofs to determine valid transactions, or external state validation - each makes its own trade-offs according to its preferences.

During last week, there’s been a lot of debate among different L2 teams about each other’s strategy, particularly with many criticizing Optimism for their lack of fraud proofs, a fundamental component for rollups.

The lack of fraud proofs in OP effectively means that challenging transaction remains permissions - in the hands of the OP team.

The sequencer could unilaterally stop transactions or appropriate user funds.

Without fraud-proofs, this effectively means that the security model on OP currently relies on social pressure not to steal user funds.

The thesis from the OP team is that of “progressive decentralization”, and that OP is currently on “training wheels”.

Practically this means that if anything goes wrong, there are additional points of centralization that allow the protocol to respond quickly.

Their competitors, however, hold a different view, arguing that fraud-proofs are not just “about decentralization” but effectively represent a pre-requisite for a working optimistic rollup.

It’s important to mention that at the current state, no rollup is actually more secure than the others.

While OP is lacking fault proofs, Arbitrum contracts for instance can still be upgraded by the multi-sig controlled by Offchain Labs and they are still in the process of making fault proofs permissionless.

The main point of the criticism of OP can be summed up as: “Why are we strongly advocating for the adoption of technology that everyone acknowledges is nowhere near complete?”

Arguably, this approach has also put pressure on all other teams, especially those on ZK rollup to accelerate their business development and adoption plans even though they had other priorities.

Opinions

The OP strategy can be basically summed up as an “aggression in emphasizing growth”, while others might have preferred different tradeoffs.

We have seen this many times: the value of a network is tied to its users.

The ultimate goal for rollups is to manage to get as many users as possible.

While fine-tuning the technical aspects of a rollup is invaluable, end users rarely care about it. Probably 90% of OP users don’t even know what fraud-proofs are, and that’s how it should be if we ever hope to achieve mainstream traction for crypto.

One must be pragmatic in their approach and find the right balance between the two.

I can somewhat sympathize with the Arbitrum and Polygon team, as an approach focused on security is what we should all ideally aspire to.

Ultimately as the legendary Ethereum developer Sassal0x mentioned to me, the whole debate can be summed up as:

It all boils down to a trade-off between Business and Tech…

Courtesy of Francesco

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

Virtually yours,

The Castle

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