Grayscale Staking Fund, $BTRFLY, Airdrops, Merlin Guide & More

The Castle Chronicle: Volume 60

AuthorAuthorAuthorAuthorAuthor

unex, DeFi Man, C-L.eth, CJ CJ & 0x_Vlad
March 13, 2024

 👀 What’s to Come in Volume 60

🔑 Key News: Headlines, Exploits, Continued Adoption, DeFi Updates, New Projects & more from CJ

⛓ On-Chain Sleuthing: $BTRFLY & Eigenlayer $ Speculation feature along with Smart Money Moves from Cl

🔥 Hot Narratives & Airdrops Dencun, Arbitrum & Actionable Airdrops from unexployed

📉 HTF Price Action Scenarios from Vlad

👁️ Early opportunities: Merlin Chain (Bitcoin L2) from DeFiMan

⚔️ 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

Project Updates

Interesting Projects

  • Sahara Labs: Decentralized AI network for fair and universal access to global knowledge capital

  • Zama: Fully Homomorphic Encryption (FHE) solutions for blockchain and AI

  • Stable Jack: LSTfi | yield-bearing stablecoin on Avax by BenQi & Yieldyak team

  • Synnax: AI based credit ratings

  • Tableland: Decentralized cloud database

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

⛓ On-Chain Sleuthing

Digits Dao Accumulating $BTRFLY

The DAO has been buying big bagz of Redacted Cartel tokens ($BTRFLY) since the beginning of March. Currently, they hold close to $700k worth.

$BTRFLY is commonly considered to be a good beta play to ETH and DeFi, because of its diverse product suite and ties with the broader DeFi ecosystem (Curve and Convex mostly).

One of the main guys behind Redacted, 0xSami, is also closely involved with bera chain and there is a lot of speculation that Redacted will be part of that ecosystem too.



A lot of catalysts are coming for Redacted this year.

Digits DAO Wallet [only visible for free subs]

How Much Will Eigenlayer Points Be Worth?

The Eigenlayer (EL) airdrop will possibly go down in crypto history as the BIGGEST dollar value drop. The project was raised and is valued at multi-billion value.

Recently, one of the restaking projects building on top of EL, Kelp DAO, created ERC-20 tokens around their points programs: $KEP (announcement here). This means that points are able to be redeemed for tradable $KEP.

Using Dexscreener, you can easily find the biggest holders of these points and gauge how they value these points. One of them displayed some interesting behaviour:

$KEP Whale Wallet [only visible for free subs]

This whale, very active in restaking and Pendly, has been selling good portions of his $KEP token and seems to be taking profit early.

The value of $KEP has been down only since the launch and is now trading at around $0.118.

The question remains: are $KEP tokens a good indicator for Eigenlayer?

Is the market right or wrong?

Research and analysis by Cl

IPOR’s stETH Pool and Stake Rate Swaps on Arbitrum

Castle is proud to have IPOR on as a sponsor for this weeks’ edition. IPOR is a truly robust and unique DeFi platform bringing a cutting-edge product to the table. Since launch over $4.3bln in interest rate swaps have been carried out on IPOR. This reflects the significance of such a product within DeFi.

Arbitrum is by far the most composable and active DeFi Layer 2 ecosystem, with over 500 protocols built on it.

While the ecosystem has a strong presence of DeFi native primitives, including Perpetual, DEXs, and Option Protocols, it lacks one key primitive with significant success in TradFi: Interest Rate Swaps.

With the boundaries between TradFi and DeFi being increasingly blurred, IPOR is bringing Interest Rate Swaps on Arbitrum.

Using IPOR, users can trade the interest rate received on their assets (in this case, wstETH), opening the door to leverage, hedging, and speculation on the rate of staked assets. 

In celebration of the launch, IPOR will be hosting the Arbitrum Portal Mission dedicated to educating new users on the protocol and interest rate swaps with engaging quizzes and other on-chain campaigns. 

A competition with a prize pool of 50,000 IPOR is still ongoing details here.

🔥 Hot Narratives

Dencun Upgrade & Arbitrum Unlock

The Dencun upgrade to Ethereum is launching today! Perhaps it is already live as you read this. The Dencun upgrade is all about the implementation of EIP-4844. The upgrade introduces a new way of transactions: blobs. These transactions enable Layer 2s to drastically reduce their transaction fees and this effect will hopefully trickle down to Mainnet too!

This is bullish for L2s and Ethereum-oriented projects. We want to remind you that the Arbitrum unlock is on March 16th. Around 87% of the current circulating supply is set to be released to the market. So far, the $ARB price is unfazed and has not shown signs of a major correction 👀 

Hot Airdrops

points points points points points points

  • One of the newest “Deposit-and-Chill”-farms is Karak Network. They are valued at $1bln and use novel tech such as Celestia to scale their chain. Earning XP is easy. You just deposit and leave it till the token drops. Good chance this prints in the bull. Go to https://karak.network/ and use one of the access codes below:

  • s1mbX

  • Ek5mV

  • 7acip

  • sXE2U

  • 6mRWr

  • Wormhole updated its eligibility criteria. Your wallet may be eligible now, go check https://airdrop.wormhole.com/

  • Polyhedra announced their token and eligibility criteria. Most important Galxe points are rewarded (big for other current Galxe quests).

  • Last Aptos Galxe quest dropped. Aptos has a huge portion reserved for the community and will likely carry out a stimmy airdrop for participants.

  • Grass announced their Solana Layer 2 Data rollup that sits on the intersection of crypto, AI, and DePin. You can get exposure by running the extension in your browser (link here).

  • Elixir is a novel network powering order book liquidity. They recently raised an $800mln valuation and launched a semi-point program. You can deposit some USDC in Vertex pools on Arbitrum: https://agg.elixir.xyz/. Highly recommended.

Courtesy of unexployed

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

📈 HTF Price Action Scenarios

Gm frens!

Last week price kept on giving and rising higher but was imho quite overextended and required a flushout/re-acc before considering new long positions. We saw a very nice flush-out just before this marked liquidity point providing some nice opportunities.

  • Clear uptrend with multiple re-accumulations

  • Overextended

  • Waiting for bigger re-acc on HTF

During mark-ups such as this one what we will often see is a big flush-out that liquidates all the late longs to reset the market (along with funding rates). This serves as a re-accumulation to fuel continuation. These moments provide beautiful opportunities for LTF longs, especially if they happen just below old resistance.

If you managed to get into a position during this flush-out you’re just managing it and scaling out (partials, trails) and you’re golden. However, just like last week, I believe this market is really overextended right now and I’d be super cautious about new longs. Ideally, I’d like to see the market go sideways for a bit before entering looking for new trades.

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

Courtesy of Vlad - trend-based trader and MentFX student

👁️ Early opportunities

Merlin Chain: The next billion airdrop

Merlin Chain is an EVM-compatible Bitcoin L2 created by the Bitmap team (Bitcoin OGs) that offers low-fee transactions while using the main BTC chain to settle transactions in batches, very similar to Arbitrum or Optimism in Ethereum.

Usage is very intuitive as it resembles a lot of EVM chains (you can even use Metamask!) and with swaps costing 50 cents, this will surely be one of the main competitors in the segment, which could be one of the big narratives of 2024.

Merlin has been live just for a few weeks, but they plan to airdrop 20% of their total native coin supply in the next few weeks to asset stakers in Merlin Seal (a and first movers to their chain (holders of some coins, liquidity providers, etc)

Considering Stacks (their main competitor) is currently valued at $5.5B makes it feasible this is the next billion-dollar airdrop opportunity. The lion's share of it (95%) will accrue to Merlin Seal asset stakers, while the rest will be assigned to the first movers in Merlin Chain.

Still unclear what the criteria will be to make eligible to be a “first mover” but the safer plays are $VOYA and $HUHU, related to MerlinSwap and the biggest coins in the eco. Holding some of those or LPing in MerlinSwap could be the way to make the cut. Additionally, those holding BTC in the Merlin Chain could also be rewarded.

Our recommendation to gain exposure to this incoming airdrop is to bridge some funds to Merlin Chain (the easiest way is to bridge using MesonFi from USDT/USDC Mainnet to BTC Merlin from your Metamask wallet) instead of locking assets in Merlin Seal.

Meson - Safe, Costless & Instant Cross-chain for Stablecoins

Meson provides minute-fast swaps with almost-zero fee & slippage across all major blockchains. Get started and upgrade your cross-chain experience now.

meson.fi

This might seem a bit counterintuitive considering 95% of the airdrop will go to Merlin Seal, but digging a bit deeper you realize there is only $18M currently in Merlin Chain while $3.8B in Merlin Seal, so in proportion Merlin Chain will receive 10x rewards per dollar in TVL compared to Merlin Seal.

All in all, Merlin Chain is a very interesting playground for the coming months, and bridging early could make you eligible for the incoming airdrop so we believe it’s worth the shot to bridge some funds and try luck. Always exercise good risk management, especially being Merlin so nascent. There will be some rugs and the biggest coins are still small, so probably the best option is to bid leaders instead of very small coins, but that’s your choice anon. DYOR.

For the sake of clarity, we include here a small guide on how to bridge and ape in Merlin Chain:

  1. Bridge funds from ETH Mainnet in USDT/USDC to Merlin Chain in BTC through MesonFi

  2. BTC is the gas token in Merlin Chain, so you won’t need to bridge any other coin/faucet for that matter

  3. Dexscreener offers a good overview of coins deployed in the chain

  4. Buy your desired coins or add liquidity through MerlinSwap (native AMM of MerlinChain)

  5. You can check everything through their block explorer

Stay safe and see you in the trenches.

Courtesy of DeFiMan

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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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