👀 What’s to Come in Volume 33

🔑 Key News: Stake Hacked, ETF Delays AGAIN, Uniswap V4 Update & more from CJ

⛓ On-Chain Sleuthing: $RLB, Pintswap, $METAL feature along with Smart Money Moves from Cl & Amir Ormu

🔥 Hot Narratives: Trading Bot Wars and $ARB Incentives from unexployed

📈 Macro Outlook: Explaining the Grayscale Retracement Implications & Options Market Analysis from Hansolar

📉 HTF Price Action Scenarios from Vlad

⚔️ A Call to Arms

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🔑 Key News

Major Headlines

• Grayscale wins court battle against SEC

• X/Twitter acquires license to add (crypto) payments

• SEC Delays Spot Bitcoin ETF Decision for All Applicants Including BlackRock, Fidelity

• China court declares virtual assets legal properties protected by law

• GoGalaGames CEO and co-founder filed lawsuits against each other

• South Korea looks to track and freeze crypto used by North Korea in new bill

Exploits that happened this week

• StarkWare reenabled upgrades to save user funds

• PepesGame admin wallet drained

• SharedStakeOrg sgETH exploited for 102 ETH

• Symbiosis PSA to revoke approvals if you used them from August 30th to September 1st

• GBOT issues in-depth clarification of GBOT OTC incident

• Possible grief action on AjnaFi, recommended to remove funds

• Stake hacked for $41M

• FloorDAO exploited for $65k

• NimaCapital broke their agreed terms with Synapse Protocol and dumped their tokens

Useful Weekly DeFi Updates

• PolygonLabs introduces Polygon Chain Development Kit, Avalanche introduces Teleporter and Offchain Labs introduces Arbitrum Stylus

• Ethereum Execution Layer Specification (EELS) reveal

• Curve Finance launches on Base

• Paraspace and Parallel Fi merging to become ParaX

• Lido Finance proposal to bring wstETH to Cosmos and another one to fund $1.5M for the development of Lido on Solana

• OthersideMeta announces LoTM open beta next month

• RuneKek announces last phase of EndGame is to launch an EndChain on Solana codebase

• Uniswap announces v4 launch after Dencun upgrade

• Zksync co-founder @gluk64 pitches "L1 Fork as the Court of Final Appeal”

• V4 Adoption & DYDX Token Migration to dYdX Chain proposal passed

• Raft announces Raft v2

• Aave resumes $GHO minting

• Developer of PUBG launching Settlus, a Cosmos-based chain

• Governance proposal to introduce staked Frax (sFRAX)

• Caldera unveils first 3 Arbitrum orbit chains

• Ethena launches pre-registration for guarded mainnet launch

Some Interesting Projects to Look Out For

• Tipcoin: Some Social-Fi protocol

• Wandbot: Bot created by 0z DAO

• Project Flyhweel: Powered by Aura Finance

• Wallet TG: Telegram wallet created by TON Foundation

• Gaslite: Gas-optimized smart contract gas audits

• Normal Fi: Smart wallet that bundles transactions

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

⛓ On-Chain Sleuthing

Digits and Ethersole Increasing $RLB Holdings

Some major addresses that we have covered in the past have been increasing their $RLB exposure.

Digits DAO now holds a $950k position in $RLB:

Ethersole now holds $460k in $RLB:

Pintswap Trending Upwards

We covered Pintswap a while ago when it just launched its NFT collection for its upcoming OTC order book DEX.

We wanted to congratulate anyone who managed to get in and give an update on the collection. As you can see, the collection is trending upward quite nicely.

An interesting address that we have dubbed the “TRIS Biddooorrr” has buying a lot of the supply. The address acquired 5% over the course of 3-4 days. Clearly, this owner expects something big.

$METAL Holders

Another interesting token that we have been monitoring is $METAL. The project provides interesting tools around on-chain data and trading.

Looking on-chain we have found some bullish indications.

We basically noticed that most of the big holders are extremely bullish and have been adding to their bags.

Kwenta Wash Trading

We have noticed an address that has been wash trading with massive size on Kwenta. The goal of this user has been farming as much of the $OP rewards as possible as it is rewarded based on volume.

It’s an interesting topic. Will this way of incentivization lead to organic users or not? Is the use of grants a sustainable way of building a perp protocol on Layer 2s?

Smart Money Farms

Smart Farmers have favored BASE chain recently, but Prisma Finance still caught their attention.

1. Based Farm

2. Aerodrome

3. Tarot on BASE

4. BaseSwap

5. SwapBased

6. Velocimeter on BASE

7. Prisma Finance

Popular stablecoin farms of the week:

1. USD+/DAI on Aerodrome with 13.8% APR and 22m TVL!

2. USDbC single sided staking on Based Farm with 178% APR and 1.9m TVL.

• Popular Volatile LPs of the week:

1. WETH/USDbC on Aerodrome with 11.76% APR and 52.5m TVL.

2. TAROT/WETH on Aerodrome with 295% APR and 5.8m TVL.

3. UNIDX/WETH on Aerodrome with 88% APR and 1.35m TVL.

Research and analysis by Cl & Amir Ormu

🔥 Hot Narratives

$BANANA vs $UNIBOT

In the case that Maestro never launches a token (which is highly likely), then it could be that we are approaching the endgame of bot tokens now that Banana Gun has announced its token (see Tweet).

Over the summer, the Banana Gun bot has gained significant traction and taken a significant % of the overall market. A huge feud sparked between the communities of Unibot and Banana as both were shitting heavily on each other.

The team announced a presale of 800E for different groups of users (see Tweet). Full details down below:

This token distribution led to some criticism on Twitter. People are saying that the team is being greedy by raising so much AND keeping a large percentage of the supply reserved for the treasury. That being said, the presale is valued at $1.5 million, which, in our eyes, is extremely cheap for a project of this size.

The launch of $BANANA is highly hyped. We expect that many on-chain traders will be bribing and sniping the token, making it extremely hard to get a good entry.

If you like a good dose of PVP, playing the $BANANA launch might be something you want to put on your agenda.

New $ARB Incentive Proposal

A new proposal has been made on the Arbitrum governance forum regarding on-chain $ARB incentives. This time it is done on behalf of the Arbitrum Incentives Working Group which has been hosting community calls and workshops over the past few months.

The initiative proposes to inject up to 75 million $ARB into the network and distribute them across active Arbitrum protocols. Underpinning the proposal are clear eligibility requirements for grantees and a meticulously designed two-cycle voting process, market by community engagement.

The program offers a spark of hope for the Arbitrum community which has been a bit in the gutter lately despite the announcement of Stylus Testnet. One could expect that network metrics such as TVL, trading volumes, and user engagement would be driven up by a grant program of this size.

So far, the community is very open and welcomes this proposal. We are excited to see this go into a voting process.

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: ISM Services PMI (Aug)

• Thurs: US Jobless Claims and Unit Labor Costs (Q2), 6 FEDs speak

• Fri: US Consumer Credit (Jul)

• Next Wed: CPI

BTC, ETH, and Macro

• Euphoria from Grayscale’s win against the SEC was short-lived to the disappointment of the crypto space. It looks like the low liquidity is leading to wide swings by a few players in the markets. Coupled with macro headwinds, crypto sentiment is as pessimistic as it was during the FTX blow-up according to options skews.

• Also disappointing to those expecting a liquidity injection from the BoC to revamp their economy, Xi released a statement on how he believes austerity is the solution and that “Western-style social support would only encourage laziness”. Quite an ironic statement considering each country’s political history.

• With still a month to go until the Bitcoin ETF approval date, it looks like more chop(or drop) for the time being.

Option Markets

• IVs staying elevated as we saw some major swings with the Grayscale news. Interestingly realized vols are actually higher than IVs at the moment.

• BTC IVs have risen slightly to 39.23(37.26 last week) which implies the options markets expect a 2.05% daily price move.

• Short-term skews shot up almost 10 points on the weekend which is quite unusual. In some cases, aggressive options buying in either direction is an indication of insider knowledge. However considering the low liquidity, even small trades can move the markets in current conditions.

• BTC gamma charts are displaying some negative gamma below the current price suggesting that if we lose the 25.5k level, we could move to 25k quickly due to option flows covering their short positions.

• ETH IVs fell slightly to 38.42(39.13 last week) implying the options markets expect a 2.01% daily price move. Currently, the 30d IV is higher than the historical volatility of 42.2%.

• ETH skews are also very positive implying option market participants are very pessimistic. Currently, they are at similar levels to the FTX crash. Either puts are overpriced(relative to calls) or perhaps there really is some bad news brewing under the surface. Only time will tell.

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

📈 HTF Price Action Scenarios

Gm frens!

Last week we had some positive news regarding ETFs and whatnot, causing a spike in price. I started following the 30m chart to see if there is any re-accumulation that I could get involved in, but unfortunately, the entire pump has retraced since then and we are now back at local lows inside the daily demand.

• Daily demand tapped

• Re-accumulation playing out

• Looking to follow bullish momentum

On the HTFs nothing has really changed though. I still expect accumulation inside this daily demand, which means I’ll be looking for new bullish momentum to follow.

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

Courtesy of Vlad - trend-based trader and MentFX student

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Virtually yours,

The Castle

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