Weekly Recap
July 7, 2023

Crypto Fundamentals #035

TrueUSD continues its growth despite Prime Trust challenges, BlackRock CEO talks Bitcoin + blockchain

Jimmy Zheng

This week the twitter accounts of the Aptos CEO and foundation were hacked, Gemini sued DCG over alleged fraud and Pudgy Penguins announced the launch of the Banana Suit collectible.

let’s jump right in 👇

🌞 TrueUSD continues to grow despite Prime Trust insolvency

💫 BlackRock CEO Larry Fink talks Bitcoin, blockchain on Fox Business

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

check it out here

The market fell slightly this week with average and median WoW price declines of ~1.3% and ~1.6%, respectively). While the overall market declined, SOL saw another double-digit increase of ~13.6%, the largest gainer across the L1 / L2 sector. As previously noted, 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 most of the losses. Meanwhile, the Multichain FTM bridge saw a ~$130mm hack which led to a sell-off in the FTM token, causing a ~12.4% WoW decline.

🌞 TrueUSD continues to grow despite Prime Trust insolvency

There’s been a lot of talk about TUSD recently. Despite recent challenges such as the insolvency of technology partner Prime Trust and temporary depegging of TUSD, the USD-denominated stablecoin has continued to grow, with its circulating supply surpassing ~$3 billion (up from ~$1bn in March 2023, per Defillama). With that said, Binance appears to be driving the vast majority of trade volume for TUSD and has been promoting the stablecoin throughout 2023 after Binance’s native BUSD was shut down by New York regulators.

Per data from Kaiko, TUSD trade volume has been almost entirely driven by CEXs and primarily sits on Binance. In March of 2023, coinciding with the growth in circulating market cap of TUSD, Binance removed trading fees for TUSD trading pairs which drove up the % of total trade volume derived from the BTC-TUSD pair from ~0% to ~49% in less than a month.

“TUSD trade volumes on DEXs averaged just $2mn in Q2, compared to $2bn on Binance.” - Kaiko Research
BTC-TUSD trading volume grew dramatically after removal of trading fees

In this thread by the threadooooor, Adam walks pulls together numerous threads ranging from the background of the auditors of TUSD to this interesting chart showing the growth in circulating market cap growth of the TUSD stablecoin (~$1bn was minted on June 15th, after concerns around Prime Trust were already made public)

While new details continue to surface around the TUSD stablecoin, its rapid growth and timing of its treatment by centralized exchange giant Binance has brought up some open questions in the crypto twitter community.

75% of on-chain TUSD (~$2.2bn) sits on TRON per Defillama

We expect there will be increased clarity as the Prime Trust situation plays out and will continue to monitor the situation.

💫 BlackRock CEO Larry Fink talks Bitcoin, blockchain on Fox Business

BlackRock CEO Larry Fink went on Fox Business this week to talk about the properties of Bitcoin, the potential of blockchain technology and his firm’s recent BTC ETF filing. While he has previous skeptic of the asset because it was “heavily used for… illicit activities,” he has since come around and called it an “international asset” akin to “digital gold.”

“Instead of investing in gold as a hedge against inflation, a hedge against the onerous problems of any one country, or the devaluation of your currency whatever country you’re in – let’s be clear, bitcoin is an international asset, it’s not based on any one currency and so it can represent an asset that people can play as an alternative.”

Larry spent his time speaking about about the potential for Bitcoin and cryptocurrencies to “revolutionize finance”. Fink hit the usual talking points around how digital currencies have the ability to impact how money is transferred and could evolve existing global payment systems. He acknowledged that Bitcoin sits outside of the control of a single government, and the fact that it represents an “international asset” means that people can utilize it as a hedge against the “onerous problems of any one country.” While these have been long-time talking points for the crypto and Bitcoin communities, it’s been the first time the CEO of a large-cap asset management firm has made such remarks about cryptoassets. With that said, BlackRock has previously dabbled in partnerships with crypto-native firms such as Coinbase. In August 2022, BlackRock’s Aladdin platform announced that Coinbase would provide crypto trading, custody prime brokerage and reporting capabilities to clients of both Aladdin and Coinbase. While BlackRock’s recent Bitcoin ETF filing followed by Larry’s positive statements towards Bitcoin come as a surprise to many, the firm has had a track record of investigating ways to support blockchain technologies such as the tokenization of securities. These recent actions appear to align with a longer-term strategy that Mr. Fink has been pursuing.

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

Vertex, a decentralized exchange for spot and derivatives trading on Arbitrum has seen recent growth in transactions and active users since its launch in April 2023. The protocol currently sees ~100-125 daily active users conducting 500-1500 transactions a day, and has been steadily growing over the past three months.

Per Coindesk, “Vertex, which had been operating on a test network, combines an off-chain order book layered on top of an on-chain automated market maker on a decentralized, self-custodial exchange. The firm, which has bases in Singapore and the Cayman Islands, counts Jane Street, Dexterity Capital, Hudson River Trading, GSR, Collab+Currency, JST Capital, Big Brain and Lunatic Capital among its early backers.”

Arbitrum daily active addresses vs. Vertex Daily Transactions / Daily Active Users
existing users continue to come back while new users continue to enter

While the nominal number of users of the protocol (~100-125) are still small compared to total Arbitrum daily active users (~140-170k DAUs over the past month), the rapid growth in daily transactions and a healthy mix of new and returning users indicates that users are coming back to further utilize the platform. The platform joins an increasingly competitive market on the Arbitrum network with other decentralized perp exchanges such as BlueFin and GMX.

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

check it out here

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 6/14/23.

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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