Weekly Recap
June 30, 2023

Crypto Fundamentals #034

Shopify's blockchain team showcases token-gated storefronts, FTX unveils plans to restart exchange, BlueFin sees traction on Arbitrum

Jimmy Zheng
COO

This week saw regulatory feedback from the SEC on the slew of BTC ETF filings, Celo users popping off, and Harry Styles issuing digital rewards on the blockchain. let’s jump right in 👇

🌞 Shopify blockchain team showcases token-gated Shopify storefronts

💫 FTX unveils plans to restart its international crypto exchange amidst US regulatory crackdown

🤝 Trends to Look out for on the Artemis Blockchain Activity Monitor: BlueFin (Perps Exchange on Arbitrum)

The market chopped sideways this week on with average and median WoW price decline of ~0.2% and ~2.2%, respectively). While the overall market declined, major tokens including SOL and ETH ended the week on positive notes. SOL saw a whopping ~13.0% WoW increase, followed by ETH which rose ~2.0% WoW. Solana sold-off earlier in the month on news that centralized exchanges such as Robinhood would no longer support trading of the SOL token after the SEC categorized it as a security, but has since recovered towards the end of the month.

🌞 Shopify blockchain team showcases token-gated Shopify storefronts

This week, Tobi Lutke, CEO of Shopify, tweeted that Shopify recently created a new tutorial for its token-gated Shopify storefront product. The purpose of the tutorial was to show online creators how to construct token-gated storefronts entirely from scratch, using a set of crypto native tools and Shopify functions. Shopify has been in the process of marketing the “Shopify Blockchain Experience,” which allows Shopify merchants to create, sell, and manage digital items and non-fungible tokens (NFTs) directly within their online store. Merchants can interact with popular blockchains like Ethereum and Flow directly through Shopify's platform, and Shopify’s features provide an easy and streamlined way for merchants, specifically content creators and artists, to tokenize and sell digital collectibles through their existing ecommerce stores.

The prospect of seamlessly integrating blockchain technology into existing ecommerce stores has been a long-talked about real-world application for online creators and merchants. Shopify’s solution allows creators to offer digital collectibles and NFTs to their fans and customers without having to manage their own blockchain wallets or set up separate marketplaces. Creators can leverage their existing audiences and merchants can expand their offerings through the Shopify Blockchain Experience, providing an easy way to monetize and distribute digital content and tokenized assets.

Shopify Blockchain Experience Case Studies:

Novel x CPG: The Shopify Blockchain Experience has already been implemented by companies such as Novel, a cosmetic and personal care company, which launched an interactive novel experience through its Shopify store. By integrating Shopify's blockchain tools, the company was able to issue limited edition NFT accessories corresponding to different chapters of the novel. Readers could purchase these NFT accessories, which then unlocked exclusive bonuses and content within the novel experience. Through this initiative, the cosmetic company was able to engage readers in a new interactive way, while experimenting with tokengated content and NFTs to create a unique digital experience for their customers, all without having to manage a separate blockchain infrastructure.

Fox’s Blockchain Creative Labs: Fox’s Blockchain Creative Labs is using blockchain technology to enable a novel way for fans to interact with and participate in the creation of their content. Enter: Dan Harmon’s (of Rick and Morty fame) Krapapolis. The company is allowing fans to purchase governance tokens on the blockchain that give participants voting rights for certain story decisions. These tokens provide fans direct ownership and participation in the media they enjoy, while the company benefits from a more engaged fan base that helps shape the narrative direction. The blockchain does its thing by ensuring transparency and recording all votes and token ownership in an immutable ledger. The show has already let tokenholders vote on some truly pivotal episodic narratives such as “choose the sacrificial goat”, and “which sailor gets slapped by the Kraken”?

A series of two images, Blockchain Creative Labs' Key to Krapopolis NFT attribute and show voting available fans holding a Krap Chicken NFT style=

which sailor tho

💫 FTX unveils plans to restart its international crypto exchange amidst US regulatory crackdown

FTX is in early talks to potentially relaunch a new international cryptocurrency exchange as it navigates through bankruptcy proceedings. FTX’s current management team that took over in bankruptcy after founder Sam Bankman-Fried's resignation is looking to resume some operations, focusing on jurisdictions where FTX maintained healthy businesses. FTX CEO John J. Ray III said on Wednesday that the company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange” (Wall Street Journal). With that said, any restart would exclude the U.S. affiliate, FTX US. Investors have appeared to respond positively to rumors of an FTX relaunch, with the native FTT token jumping ~33% on June 28, 2023.

Ultimately, any rebirth of FTX would face significant challenges - while $7bn of the $8.7bn of client funds have reportedly been recovered, criminal misconduct under previous management is still being evaluated by federal courts and is unlikely to be resolved in short order. Regulators would need to approve a relaunch, which is far from guaranteed in today’s regulatory climate, particularly in the United States. The new international exchange would also have to work to regain consumer trust which could be even more difficult than passing the necessary regulatory hurdles. Given the real potential of returning value to existing creditors and the fact that management has continually pushed the reopening of the exchange as a preferred exit strategy, it definitely appears possible that we see a revival of the FTX brand sometime in the coming quarters.

🤝 Trends to Look out for on the Artemis Blockchain Activity Monitor: BlueFin (Perps Exchange on Arbitrum)

Bluefin, a perpetuals exchange on Arbitrum saw a meaningful jump in gas usage as the number of transactions conducted by traders on the platform jumped to ~9.5k at its peak on June 21st. Bluefin offers orderbook style trading on perps markets such as DOGE, BTC, ETH and ARB.

Bluefin daily transactions, gas usage and transactions all spiked in June 2023

Based on Bluefin’s statistics, cumulative trading volume grew from ~$209mm on June 1, 2023 to $565mm on July 1, 2023 implying daily average trading volume over the course of June of ~$12mm, an increase of almost ~12x its prior monthly daily trading volume of ~$1mm.

Cumulative trading volume has inflected from ~$209mm on June 1, 2023 to ~$565mm on July 1, 2023

Bluefin’s trade and earn program that was launched in mid-May to incentivize traders on its platforms appears to have contributed heavily to its recent growth. The trade and earn program allocated ~20% of its native BLUE tokens for distribution for trader rewards. While the protocol has seen meaningful volume and transaction level growth, the nominal number of traders at its peak gas usage (72) appears to be meaningful lower than some of its larger counterparts including dYdX (2,243 unique traders in last 24H) and GMX (1,526 unique traders in last 24H). We will see whether Bluefin’s impressive growth can be sustained over a longer time horizon.

Detailed L1 dashboard for people who love more numbers in smaller font:

Note: Revenue represents fees that go to the protocol’s treasury or are returned to tokenholders via a burn mechanism (source: Token Terminal). Weekly commits and weekly dev activity as of 6/7/23.

The content is for informational purposes. None of the content is meant to be investment advice. Use your own discretion and independent decision regarding investments.

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