Author: Gryphsis

 

Market and industry snapshot

Layer 2 Overview:

Last week, all Layer 2 protocols except zkSync Era and Optimism grew, with Base growing the most significantly at 3.82%. Protocols such as Sablier, Superfluid, Interport Finance, Dexilla, and StarkDefi showed noteworthy TVL growth rates.

LSD Sector Overview:

In the LSD field, both Ethereum deposits and total withdrawals have increased slightly, but the withdrawal volume is relatively more obvious at 4.49%. In terms of market share, all blue-chip LSDs have declined to a large extent, among which stETH has the most obvious decline of 17.47%.

RWA Sector Overview: 

Last week, the world's real asset market capitalization fell by 1.56%, and the 24-hour trading volume fell by a more significant 37.94%. RWA tokenized treasury rose and the value of tokenized US Treasuries changed little. Notable growth tokens include $LCX, $TIA and $BRTR, while tokens like $IMO, $MZERO and $MIMO experienced larger losses.

Main Topics

Macro overview:

  • US Stock V.S. Crypto

This week's big events:

  • FTX Expects to Reimburse Customers in Full, BTC Price Rebounds to $43,000

Weekly Protocol Recommendations:

  • Puffer Finance

Weekly VC Investment Focus:

  • BRC-137 (2.5M)

  • Stride (4M)

  • Clusters (9M)

Twitter Alpha:

  • @0xTindorr on Puffer Finance

  • @Flowslikeosmo on AVAX

  • @poopmandefi on WhalesMarket

  • @MoonKing___ on B Squared Network

  • @the_smart_ape on $ALEO

Macro Overview

This week, the stock market SPX and NASDAQ increased by 1.39% and 1.27% respectively. In the coming week, pay attention to major events such as the S&P Global Services Purchasing Managers Index, the ISM Non-Manufacturing Purchasing Managers Index, the ISM Non-Manufacturing Price Index, and consumer credit.

This week's big events

FTX Expects to Reimburse Customers in Full, BTC Price Rebounds to $43,000

FTX, the bankrupt cryptocurrency exchange founded by Sam Bankman-Fried, said it expects to repay its customers in full, but that will depend on when FTX actually goes bankrupt, according to a court hearing. That date has been tentatively approved by U.S. Bankruptcy Judge John Dorsey.

“Many of the claims are based on currencies that have depreciated significantly during the turbulent period prior to the filing date,” Kris Hansen, an attorney for the FTX creditors committee, said at Wednesday’s hearing.

The U.S. bankruptcy court required applicants to submit proof of assets they held and subsequently lost on FTX for review by restructuring advisers. Due to a lack of buyers, the exchange has abandoned plans to relaunch its platform and instead focused on compensating its former customers. According to Xclaim, a bankruptcy claims exchange platform, approximately 15 million people lost $30 billion to $35 billion worth of various cryptocurrencies after the FTX collapse.

FTX’s native token, FTT, surged more than 11% following news of the company’s plans but soon fell sharply, ending the day down about 15% on Wednesday.

As of publishing time, the price of Bitcoin has rebounded to over $43,000, up 110% from around $20,500 when FTX crashed in early November.

https://www.coindesk.com/policy/2024/01/31/ftx-expects-to-fully-repay-customers-but-wont-restart-defunct-crypto-exchange/

Weekly Protocol Recommendations

Welcome to our weekly Protocols segment — where we spotlight protocols making waves in the crypto space. This week, we picked Puffer Finance, a native Ethereum Liquidity Restaking Protocol (nLRP) powered by EigenLayer.

Puffer is a decentralized native Liquid Restaking protocol built on EigenLayer. By introducing the native Liquid Restaking Token (nLRT) - pufETH, it lowers the threshold for nodes to participate in Ethereum staking and increases the rate of return through re-staking.

Binance Labs has announced a strategic investment in Puffer Finance. In addition to this round of financing, Puffer has also received a total financing amount of 6.15 million yuan. It has not only received funding from the Ethereum Foundation, but also received investments from Jump Crypto, Brevan Howard Digital, Bankless Ventures, Animoca Ventures and many angel investors in two rounds of financing.

The protocol mainly includes: ordinary stakers (retail investors), node pledge NoOp, and the RestakingModule contract in the system

The following is its workflow diagram:

Source: Official Doc

Ordinary stakers can deposit ETH and mint pufETH as a pledge certificate, which can provide more rewards to its holders compared to traditional liquid pledge tokens (LST). PufETH not only includes PoS rewards and pledge rewards, but also its value can be rapidly accelerated due to the sale of Validator Tickets.

NoOp validators need to deposit a validator ticket and 1 or 2 ETH as collateral for the PufferProtocol contract, in return pufETH will be minted and kept locked until it is confirmed that their validator has successfully exited.

Each RestakingModule contract contains a queue of pending NoOp registrations. As PufferPool accumulates 32 ETH blocks from deposits and rewards, these blocks will be provided to pending validators of NoOps as scheduled.

Once a NoOp validator is registered, they are eligible to validate for the number of days they deposited their validator ticket. During this time, the NoOp retains 100% of the PoS rewards generated. Their execution rewards are immediately deposited into their wallet, while their consensus rewards accumulate in the module's EigenPod and can be withdrawn following the NoOp withdrawal process. Since NoOps receive 100% of the PoS rewards, they are incentivized to maximize their validator performance and help protect stakers ETH.

Our insights

Puffer Finance belongs to the Liquid Restaking track and opened the $stETH staking service on February 1. Just two days after the launch, it has obtained $300M TVL, becoming the TOP2 of the track. Compared with the first-ranked Ether.fi, it has reached half of its TVL, which shows its strong momentum.

Source: Defilama

Stakers stake ETH and receive pufETH at the same time. NoOp validators need to purchase Validator Ticket (VTs) to operate, and the ETH spent on the purchase will be returned to the staker to provide additional subsidies for the validator to provide funds. After the purchase, the validator needs to lock VTs and 1 ETH of pufETH as collateral, and re-stake the ETH staked by the Staker to ReOps. ReOps returns the re-staking rewards to the validator and Staker, and the POS rewards obtained in Ethereum are all returned to the validator. ReOps will charge a portion of the re-staking fee as income.

Source: Official Doc

In addition to the multiple benefits of Puffer Finance, its AVS technology and Secure-Signer remote signature are also highlights of the project. Puffer's Secure-Signer remote signature has received funding from the Ethereum Foundation, allowing validators to reduce slashing risks while improving capital efficiency within the Puffer protocol.

As part of their strategy, Puffer plans to run their upcoming L2 as an EigenLayer AVS. This move is expected to generate network effects, especially as more AVS come into play and benefit from the economic security provided by Puffer. This integration plays a key role in increasing the rewards for Puffer's permissionless validators. This not only incentivizes participation, but also helps strengthen the decentralization of Ethereum.

Weekly VC Investment Focus

Welcome to our weekly Investment Spotlight, where we uncover the most significant venture capital developments in the crypto space. Each week, we’ll highlight the protocols that have received the most funding.

BRC-137

The BRC-137 protocol is based on the Ordinals protocol and allows anyone to create composable DIDs on the Bitcoin blockchain in a completely permissionless and decentralized manner. BRC-137 enables users to monetize their digital identities and facilitate on-chain value exchange and social ecosystems.

https://x.com/brc137io/status/1753704919272685632?s=20

Stride

Stride is the largest liquidity staking protocol in Cosmos today, with 90+% market share and $100 million TVL on chains such as Cosmos Hub, dYdX, and Osmosis. In just one year, Stride has launched more than 10 LSTs and has been focusing on liquidity staking.

https://x.com/stride_zone/status/1753468392428728639?s=20

Clusters

Clusters is a multi-chain domain name service that aims to solve problems such as address fragmentation, wallet management complexity, and domain name grabbing. It was launched by Delegate in collaboration with the cross-chain interoperability protocol LayerZero.

https://x.com/clustersxyz/status/1753085068522963012?s=20

Protocol Events

Ryder Ripps must pay Yuga Labs $9 million after lawsuit's final judgment

Genesis asks bankruptcy court to approve $1.4 billion sale of GBTC shares

Epic Games is listing Call of Duty-style crypto video game 'Shrapnel'

OPNX a crypto derivatives exchange to shut down in February

Aevo plans airdrop for early adopters of derivatives protocol

Industry Update

BlackRock’s spot bitcoin ETF overtakes Grayscale’s GBTC in daily volume

Hong Kong to release consultation on regulating OTC crypto venues

DOJ charges trio for $400 million SIM-swapping hack targeting FTX

Valkyrie adds BitGo as custodian for its spot bitcoin ETF

Bitfinex Securities launches digital asset services in El Salvador

Twitter Alpha

There's a lot of alpha in crypto Twitter, but navigating through thousands of Twitter threads can be difficult. Every week, we spend hours researching, handpick insightful threads, and curate a weekly curated list for you. Let's dive in!

https://x.com/0xTindorr/status/1753794385807114584?s=20

https://x.com/Flowslikeosmo/status/1753810645718622488?s=20

https://x.com/poopmandefi/status/1751256778044739870?s=20

https://x.com/MoonKing___/status/1753478935801741443?s=20

https://x.com/the_smart_ape/status/1753825705337708963?s=20

Next week's events

news source

https://www.theblock.co/post/275909/ryder-ripps-must-pay-yuga-labs-9-million-after-lawsuits-final-judgment

https://www.theblock.co/post/275907/genesis-asks-bankruptcy-court-to-approve-1-4-billion-sale-of-gbtc-shares

https://www.theblock.co/post/275776/epic-games-is-listing-call-of-duty-style-crypto-video-game-shrapnel

https://www.theblock.co/post/275735/blackrock-spot-bitcoin-etf-gbtc-daily-volume

https://www.theblock.co/post/275728/hong-kong-to-release-consultation-on-regulating-otc-crypto-venues

https://www.theblock.co/post/275695/crypto-derivatives-exchange-opnx-to-shut-down-in-february

https://www.theblock.co/post/275530/aevo-airdrop-token

 

That’s all for this week. Thank you for reading this week’s report. We hope you benefit from our insights and observations.

Follow us on Twitter and Medium for instant updates. See you next time!

This weekly report is for informational purposes only. It should not be construed as investment advice. You should conduct your own research and consult an independent financial, tax or legal advisor before making any investment decision. Past performance of any asset is not indicative of future results.