Overview
- The “State of Crypto” by a16z recap
- Bitcoin clawing out of the depths
- We are the DXY bears
- A Terra fork is looking unlikely
Intro
Crypto has been growing tremendously in some forms, and even though prices are hurting, the innovation behind the scenes continues to grow exponentially.
To highlight some of web3’s growth, a16z released “State of Crypto,” a 56-page report that digs into the rapid growth of crypto and what it means for web3 creators.
Since we understand how busy you are, we recapped the report into a two-minute read. If you’d like to read the entire piece, you can see it here.
“State of Crypto” recap
5 Main TDLR
- We’re in the middle of the fourth “price-innovation” cycle
- Web3 is much, much better for creators than web2
- Crypto has a real-world impact
- Ethereum is the clear leader but faces competition
- Yes, it’s still early.
- Crypto develops in cycles, and we are currently in the 4th cycle. The processes result in a feedback loop between interest and innovation, leading to continual compound growth.
- Utilizing the security of Ethereum, Layer-2 chains are making a big entrance, Optimistic rollups are the most popular L2 tech, but zk Rollups are just beginning.
- Developers have many blockchain options to build on, but Ethereum remains the most popular. Ethereum has nearly 4000 developers versus its nearest competitor, Solana, with 1000 devs.
- Defi has grown from nearly zero to $100 billion in less than two years, with exchanges and lending protocols being the most popular Dapps. There are several forms of stablecoins, and their growth demonstrates the demand for a digital dollar. Additionally, stablecoins only represent a tiny fraction of the world’s money supply.
- An array of NFT categories have emerged, but it’s still the very early days. Mainstream adoption is slowly taking hold, considering the lower taker rates of platforms vs. web 2 competitors. NFTs offer creators never before seen opportunities to interact with fans online.
- Video games have seen tremendous growth and the intersection of web3 and gaming offers a world of opportunity. For example, metaverse land sales exceeded two billion US$.
Closing remarks
In its closing, the report notes that it’s still the early days for web3. But, like the internet in 1995, it contains a lot of potential growth in all sectors. Of course, many aspects of web3 need improvement, such as infrastructure, but things are moving quickly. Nonetheless, creators will drive innovation and push the boundaries of creativity in various web3 aspects like tokens, games, NFTs, DeFi protocols, and DAOs.
Market update 🌍
Today was a positive day for bitcoin (BTC) despite some hesitancy from investors. Price continues to claw its way up despite macroeconomics headwinds. If price follows a similar pattern to 2021 summer woes, we could see a few weeks of up and down the action, aka the accumulation phase. During accumulation phases, you might notice the news cycle flip and openly attack crypto – they have plenty of fuel this time around, after the Terra blow-up. But after the accumulation phases comes the fun part. We need the 30k support level to hold for now. BTC climbed 1.84% to US$30,452.
Source: Trading View
Call us the DXY Bears
While we’re all used to cheering for price charts to go up, there’s one chart that we’d like to see drop. In fact, we need it to break in the short-term support. The US dollar index (DXY) represents the US dollar weight against a basket of currencies. The index broke a decade-long high as investors began a flight to safety. So now we’d like to see investors leaving the trenches and start retaking risks. DXY showcased a small but significant victory today and closed the day down 0.85% to 103.29.
Source: Trading View
| US markets close | Gain |
| S&P 500 | +2.02% |
| Nasdaq | +1.82% |
| Dow | +2.93% |
| VIX | -4.92% |
| Protocol (Coin) | Price ($) | Gain (%) |
|---|---|---|
| Kusama (KSM) | 83.58 | +14 |
| Zcash (ZEC) | 115.55 | +13 |
| STEPN (GMT) | 1.61 | +11 |
| Convex Finance (CVX) | 12.29 | +11 |
| Klaytn (KLAY) | 0.43 | +11 |
| ApeCoin (APE) | 8.89 | +10 |
| Kyber Network Cry. (KNC) | 2.15 | +37 |
| Songbird (SGB) | 0.03 | +23 |
| Ethereum Name Ser. (ENS) | 12.83 | +22 |
| OKC Token (OKT) | 25.63 | +14 |
| Vela (VLX) | 0.09 | +14 |
| Aurora (AURORA) | 4.76 | +34 |
| Bitcoin Fear and Greed Index | 12 Extreme Fear |
| “Crypto” Google Trends 90d | 61 |
| “Bitcoin” Google Trends 90d | 55 |
Newswatch 📰
No Terra fork! The Terra Community votes overwhelmingly “NO” on a preliminary appeal to revive the Terra blockchain employing a fork. Instead, the community appears more interested in paying out the remaining funds to UST holders, who watched the algorithmic stablecoin reach lows of 0.08 cents this week. The proposal for reimbursement was initially brought about by a Terra member that goes by Fatman but is supported by Vitalik Buterin and CZ of Binance.
Look who’s back mining. China returns to its former status as a bitcoin mining hub. Well, almost. Once the largest mining hub in the world, In the summer of 2021, China banned crypto mining altogether. The country appears to have eased off bitcoin those regulations and currently accounts for 21% of the total BTC hash rate.
Source: Cambridge Centre for Alternative Finance CJBS
Robinhood releases self-custodied crypto wallets. In the wake of Sam Bank-Fried acquiring 7.6% of the company, Robinhood will allow users to self-custody cryptocurrencies and NFTs in a separate app. The move could put Robinhood in direct competition with Coinbase and Metamask, especially if transactions remain free to users. Sign up here to get early access.
News Tidbits:
- Certona announces a US$36 million Series B funding round, led by Jump capital.
- Tiger Global leads US$15 Series A for web3 infrastructure startup Conshift.
On-chain ⛓
On-Chain Tidbits:
- Coinbase announces users will soon be able to register ENS domains.
- Bancor V3 (BNT) TVL skyrockets to 250m.
NFT & metaverse update 🐵
Ape off Ethereum. Yuga Labs and ApeCoin DAO listen to offers to migrate ApeCoin (APE) off Ethereum after a disastrous “Otherside” NFT mint. AVAX and FLOW appear to be the frontrunners for the deal. Honestly, all of it seems orchestrated, as many people were complaining about the minting outline for the “Otherside” NFT plots before the mint occurred. The teams had to have known that you can’t open popular projects on Ethereum without an ensuing gas war.
Notable Mints:
| Project | Type | Mint price | Date of mint | Time |
|---|---|---|---|---|
| Sixth Reseau | pfp | 0.16 ETH | 18 May | 8:00 AM UTC |
| Chimpers | pfp | 0.07 ETH | 20 May | 4:00 PM EST |
Banter’s take
If you’re losing interest in crypto, it’s likely because you’re in the trap of only looking at prices.
But there’s so much more occurring behind the charts. The “State of Crypto” helps show how rapidly the creative niches of web3 are growing. The growth that innovators are spawning rivals the internet and will create a world of opportunity for those who stay tuned in. Whether you’re into finance, art, gaming, computing, or even socializing (who’s not into socializing?), there’s a protocol for every creator and user. The main difference with web3, though, is we all can get a piece of that pie!
Gabri
