Web3 AI Daily Review (2024/9/25)
Last week, the Federal Reserve initiated a significant rate cut of 50 basis points. Jill Carey Hall and her team of quantitative strategists at Bank of America pointed out in their latest research report on Tuesday that the bank's clients have been aggressively buying U.S. stocks, with a net purchase of $6.9 billion, marking the largest inflow of funds since October 2022 and the third-largest inflow in the history of Bank of America's data, with the so-called "smart money" inflow being the most pronounced.1. Attention Value - Market Highlights
1. Market Trends
(1) Macroeconomic Sector:
l Bank of America clients heavily bought US stocks last week, with the net purchase amount being the largest in nearly two years, led by smart money
Last week, the Federal Reserve initiated a significant 50 basis point rate cut. Bank of America quantitative strategist Jill Carey Hall and her team pointed out in their latest report on Tuesday that the bank's clients aggressively bought US stocks, with a net purchase of $6.9 billion, marking the largest inflow since October 2022 and the third largest inflow in the history of Bank of America's data, with the so-called "smart money" inflow being particularly notable.
(2) Web3 Sector:
l Federal Reserve officials consider further rate cuts, impacting Bitcoin
Arthur Hayes claimed in a post on X, noting that Bitcoin's price remained stable over the weekend. This contradicts his previous skepticism that Bitcoin might not benefit from rate cuts. A series of other experts expressed similar optimism in exclusive interviews with BeInCrypto, although some cautioned.
For instance, Harsh Agarwal, investment director at Cypher Capital, pointed out, "If Bitcoin reaches $68,000, it will generate $14.5 billion in profits." He claimed that several bullish factors are consistent, but this does not guarantee success. Mithril Thakore, CEO and co-founder of Velar, further described these dynamics:
"The Fed's rate cut on September 18 seems to have awakened the cryptocurrency market from its coma and provided the much-needed catalyst for BTC to consider retesting previous highs. However, before reaching this level, $64,000 has proven to be a key resistance area, and whether BTC can convincingly break through this barrier remains to be seen," Thakore claimed.
Figure 1, Glassnode Prediction
Source: X, Dot Labs
2. Hot Events
Web3 Sector:
l SBF's ex-girlfriend Caroline Ellison sentenced to two years in prison
On September 25, Fortune reported that U.S. Judge Lewis Kaplan sentenced SBF's ex-girlfriend and former Alameda Research CEO Caroline Ellison to two years of federal imprisonment. Ellison will begin her sentence in early November and will be sent to a minimum-security prison. The judge approved Ellison's request to serve her sentence in a prison near her family in Boston.
l BNY Mellon is advancing crypto ETF custody services
BNY Mellon is advancing its custody services for Bitcoin and Ethereum for its exchange-traded fund (ETF) clients. Previously, the U.S. Securities and Exchange Commission (SEC) decided after review that BNY does not need to comply with the controversial crypto asset accounting rule SAB 121. Since its introduction in 2022, SAB 121 has required companies that custody crypto assets to account for them as liabilities, putting pressure on the crypto industry. The SEC stated that the customer protection measures of banks like BNY are sufficiently robust, allowing them to align their accounting treatment with traditional custody arrangements. BNY still needs to obtain approval from other regulatory bodies to officially offer the service.
3. Hot Narratives
The Facebook-affiliated public chain Sui has recently gained significant attention, with the most discussed topic on social media being "the SUI token seems to be replicating SOL's trajectory in 2021." Many opinions suggest that SUI's recent rise is very similar to the launch phase before SOL's last major surge, leading to the inference that Sui may become the next Solana.
From on-chain data, Sui's current metrics overall outperform Solana's performance in 2021. In fact, while Solana's token SOL experienced a massive surge in 2021, the ecosystem's data was evidently not impressive enough. Especially in terms of on-chain daily active users, Solana's daily active users were basically in the tens of thousands range in 2021, only breaking above 100,000 in early 2022. In contrast, Sui's metrics have seen significant changes recently. Before April of this year, Sui's on-chain daily active addresses were similar to Solana's in 2021, averaging in the tens of thousands. After experiencing SPAM "boost" in April, Sui's on-chain daily active addresses began to surge to over a million, maintaining above 400,000 even during the quiet phase in August, and recently experiencing another significant increase, with daily active addresses surpassing a million again.
Among the bullish narratives for Sui, a frequently mentioned metric is that Sui's TPS peak can reach 297,000 transactions, while Solana's maximum peak is 65,000 transactions. However, looking at the current daily TPS, Sui's TPS data still falls short of Solana's data level in July 2021.
Overall, from an on-chain perspective, Sui's activity level is significantly better than Solana's in July 2021, which indeed provides an argument for Sui to become the next Solana.
4. Potential Catalysts
Recently, DeFi has seen many new application scenarios. It is no longer limited to early trading and lending. New trends such as dual staking, liquid staking, native yield, new stablecoin solutions, and tokenization of real-world assets (RWA) are making the ecosystem more vibrant. Even more exciting is that new infrastructure is continuously being built. Currently, what catches my attention are on-chain credit default swaps (CDS) and fixed-rate/term loans built on existing lending infrastructure.
Since the end of 2023, with the emergence of a new wave of DeFi protocols, we have witnessed a revival of DeFi activity. First, observing the total locked value (TVL) in the crypto ecosystem, we notice that after a prolonged period of stability, momentum has begun to pick up. From $41 billion in October 2023, the TVL nearly tripled, reaching a local peak of $118 billion in June 2024, before falling back to the current level of about $85 billion. Although this is still below the all-time high (ATH), it is undoubtedly a significant upward trend, which may represent the first wave of a long-term upward trend in TVL.
Another interesting metric is the ratio of DEX to CEX spot trading volume, which measures the relative trading activity between centralized exchanges (CEX) and decentralized exchanges (DEX). We again notice a positive long-term trend, indicating that an increasing amount of trading volume is shifting on-chain.
The influence of DeFi in the entire crypto ecosystem has risen in recent months, and in this market where everyone is vying for attention, DeFi is regaining focus.
2. Attention Value - Hot Projects
1. Social Media Hotspots
Solana is a high-performance blockchain platform dedicated to providing fast, secure, and scalable solutions for decentralized applications and cryptocurrencies. The platform employs an innovative consensus algorithm—Proof of History, capable of processing tens of thousands of transactions per second while maintaining decentralization and security. Solana aims to achieve large-scale adoption of blockchain through its unique technological advantages, serving various complex decentralized applications and the global financial system. Recently, the most noteworthy developments for Solana are its collaboration with Google Cloud to launch GameShift and Metaplex's launch of a decentralized indexing and data availability network, Metaplex Aura, which is expected to have a positive impact on prices.
Key Projects:
· io.net
io.net is a decentralized GPU network designed to enhance the scalability, accessibility, and efficiency of computing. By aggregating GPU supply from underutilized resources, io.net creates a network that allows machine learning startups to access nearly unlimited computing power at a fraction of traditional cloud costs, making it a decentralized AI computing and cloud platform. Recently, the most noteworthy development for io.net is its strategic partnership with TARS Protocol, which is expected to positively impact the development of AI and Web3 infrastructure. The recent sentiment around io.net is optimistic regarding its application prospects in distributed computing and AI.
2. Smart Money Accumulation
· Smart Money Holdings
Source: ChainEDGE, Dot Labs
Project Overview
- WOLF(@Wolf0x67 /X)
LandWolf ($WOLF) is a newly launched meme coin on Solana, aimed at uniting Pepe fans with the broader crypto community. As one of the four main characters of the Boys Club, LandWolf has gained significant trust and support from the degen community, and due to its close association with Pepe the Frog, $WOLF quickly garnered attention from the community.
- POPCAT(@POPCATSOLANA /X)
$Popcat is an internet meme that originated in October 2020, featuring a series of videos showcasing two pet short-haired cats named "Oatmeal," one with its mouth closed and the other with its mouth open, the second image edited to make its mouth form an "O" shape. Recently, the sentiment around Popcat (SOL) is optimistic regarding its position and potential within the Solana ecosystem, with market sentiment being relatively positive. The most noteworthy viewpoint is that Popcat is expected to challenge the $1 mark again, based on its position in the Solana ecosystem and trading activity.
· Smart Money Inflows
Source: ChainEDGE, Dot Labs
Project Overview:
- HIM(@HIM /X)
$HIM is a catalyst token initiated by $NHI within the NHI ecosystem, acting as a magnifying glass-type community optimizer that guides three types of intelligence into an exponential growth force for decentralized disclosure. It is designed as a hive mind/AI-driven automatic intelligence analysis system that ensures neutral and immutable processing of data and processes, providing maximum returns for those who choose to invest in undeniable truths. $HIM will launch on May 8, 2024.
- $WIF(@dogwifcoin /X)
Dogwifhat ($WIF) is the latest sensation in the Solana ecosystem, sweeping through the crypto world. Since its launch in November 2023, the value of this meme coin has skyrocketed by up to 3000%. With such astonishing growth, market analysts predict a bullish future for $WIF, with the potential to surpass established meme tokens like Shiba Inu and BONK.
3. Attention Value - Sector Rotation
1. Hot Sectors
Source: Dune, Dot Labs
Source: Dune, Dot Labs
- Internal Sector
Source: Dune, Dot Labs
