Overview
- Post merge supply shock.
- A few altcoins break the downtrend.
- OP token hack.
- USDT and USDC Oasis depeg.
Ethereum’s post-merge supply shock
Good Morning Banter Fam,
With the successful merge of the Ropsten testnet just deployed, the Ethereum mainnet inches closer to a Proof of Stake (PoS) consensus mechanism and could deploy as early as August, according to its developers.
The merge will be one of the most extensive fundamental changes to supply in crypto history, but why?
Firstly, the supply issuance of ETH will be reduced by 90%! Once the merge switches from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus mechanism, miners will become obsolete. And the high cost of running expensive equipment will be a thing of the past.
Deeper into the detail
The Ethereum protocol compensates miners as much as 13,200k daily ETH for securing the chain while the Ethereum mainnet remains in Proof of Work (PoW). In addition, they tend to sell approximately $10.5m worth of that ETH to pay for equipment, electricity, or to secure some profits.
Turning off the supply faucet
Starting at the base, the current balance between supply (sellers) and demand (buyers) equates to the recent ETH price of about $1800.
What happens when the Merge removes 13k of ETH of daily sell pressure from the equation?
The $10.5m net SELL pressure switches to $8.2m net daily BUY pressure. Talk about flipping the script.
Conclusion
Despite its current supply dynamics, Ethereum (ETH) remains one of the best-performing assets in crypto. Now, imagine when the supply faucet gets turned off.
Considering crypto prices are driven by two major themes: supply vs demand, and narrative. Post Merge, Ethereum will have quite the boost in both departments!
Charts and numbers are provided by Korpi’s post.
Market update 🌍
Not much to see on the Bitcoin (BTC) chart, which now looks painfully familiar to the avid chart watchers. BTC continues to range as it inches closer to testing the downtrend that began in late March. BTC completed the US session down -2.63% to US$30,305.
For a high-resolution chart, click here.
Looking at the broader crypto market, Helium (HNT), Cardano (ADA), and Chainlink (LINK) appear strong. Looking at the HNT chart below shows a clear break of the downtrend and the beginning of a reversal if the price continues creating lower highs.
The ADA and LINK charts resemble HNT. Moreover, the Chainlink team announced the commencement of LINK staking for 5% rewards. Finally, Cardano has hinted at a major announcement at the yearly Consensus event scheduled to begin tomorrow.
For high-resolution chart click here
| US markets close | Gain |
| S&P 500 | -1.08% |
| Nasdaq | -0.55% |
| Dow | -0.19% |
| VIX | -0.33% |
Notable Gainers:
| Protocol (Coin) | Price ($) | Gain (%) |
| Theta (THETA) | 1.36 | +9% |
| Radix (XRD) | 0.079 | +7 |
| Cardano (ADA) | 0.64 | +4.5 |
| Helium (HNT) | 10.77 | +4.5 |
| TitanSwap (TITAN) | 4.03 | +44 |
| Frax Share (FXS) | 5.79 | +17 |
| Coti (COTI) | 0.13 | +9 |
| Solana (SOL) | 57.85 | +11 |
| Bitcoin Fear and Greed Index | 11 Extreme Fear |
| “Crypto” Google Trends 90d | 20 |
| “Bitcoin” Google Trends 90d | 26 |
Newswatch 📰
$20m in hacked OP tokens. The Optimism Foundation engaged Wintermute for liquidity provisioning services to bring about a smoother OP token airdrop that occurred on May 31. Unfortunately, Wintermute unknowingly provided an Ethereum multisig address that had not deployed on Optimism, allowing an attacker access to all $20m worth of OP tokens meant for Wintermute. Wintermute has claimed the error and will buy OP tokens as the attacker’s address begins to sell the token.
NY issues stablecoin requirements. The New York Department of Finance has issued compliance guidance for the issuance of stablecoins, marking it the first US financial regulator to give such a policy. Under the guidance, stablecoins would need to meet the following criteria:
- Be fully backed by a reserve of assets.
- Issuers must set clear guidelines for the redemption of tokens into USD.
- Redemption requests must be processed in two days, except under “extraordinary circumstances”.
News tidbits:
- Entropy announces a $25m raise led by a16z.
- Ledger and Cathay Innovation debut $110m crypto fund.
- Osmosis (OSMO) is exploited for $5, and validators halt the network.
- Major exchanges delist Litecoin (LTC) over new privacy features.
- Arrington’s $100m Moonbeam (GLMR) growth fund.
At the protocol level ⛓
A step closer to Ethereum Merge. Ethereum’s Ropsten testnet has merged from Proof of Work (PoW) to its Proof of Stake (PoS) beacon chain, and the event marks a significant milestone in the Ethereum Merge. Some predict the move could be completed as soon as August this year, but no official dates have been released.
USDT and USDC depeg on Oasis (ROSE). Both stablecoins began de-pegging on Oasis Protocol and fell as low as $0.12. The team responded by saying ValleySwap and EvoDeFi bridge are both third-party bridges and not supported by Oasis. The stablecoins are not native assets on the chain, and the de-peg likely occurred due to low liquidity on exchanges.
Frax buyback proposal. Stablecoin project Frax (Frax) project members propose to use 20m FRAX tokens to buy back FXS, the project’s growth token. The swap would eliminate 5% of all FXS supply and transfer the value to the holders. The team believes the FXS token is one of the most undervalued tokens in the market, considering its $80m annual revenue.
Protocol level tidbits:
- DeFi Safety scores Solana second-to-last in technical score.
- DeFi Safety scores Bancor V3 (BNT) a 96%
- Claim your $HOP tokens tomorrow!
- List of Avalanche (AVAX) subnets.
NFT & metaverse update 🐵
Unlimited Apes code burned. A year after making the promise, Yuga Labs head EmperorTomatoKetchup held their word and burned off a piece of code that would allow for the unlimited minting of Bored Apes.
Banter’s take
What a time to be alive. Bouncing off $28k, before banging our heads up at $32k. Rinse and repeat. Stuck in a range. An endless loop of indecision.
But don’t be fooled. With so little volume in the market, these are treacherous waters for the average trader. Those are choppy waters, brimming with whales. Or should we say, sharks, hunting those stop losses like the predators they are.
There are no two ways about it: we break out, or we break down. At some point, something’s gotta give. And one can’t help but feel like the market is stuck in a Mexican standoff between the Federal Reserve, the ECB, and a range of macro uncertainties.
Meanwhile, we wait for someone to make the decisive move.
Gabri
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Disclaimer
Good Morning crypto (issued by Crypto Banter) is a newsletter for entertainment purposes only.
All opinions expressed by the publisher, writers, and chartists should not be construed as financial advice and do not necessarily reflect the views of Crypto Banter. The publisher, writers, and chartists may hold positions in the tokens and assets discussed. Readers are encouraged to do their research.
