Hello Defiers! This is a free recap of our latest DeFi Alpha Call that took place on 9/6/2022.
Market Overview
Markets were doing fine this morning on the back of a successful Bellatrix fork until stock markets reversed and dragged us lower. Was there any major news? Not at all. The majority of the pump occurred over the long weekend when the major markets were closed. So I guess it's just back to reality.
Macroeconomic conditions
The dollar is up, which isn't helping risk assets. It’s been a relentless rally this year.
The Euro broke the buck and is at its lowest level in 20 years
Stocks and crypto are likely to remain under pressure until we see a sustained reversal in the dollar.
Bellatrix
We had the Bellatrix fork today, and the first phase of the Merge was completed successfully. The actual merge is expected to take place in about nine days, between September 14th and 15th.
People are excited about the Merge, which is what is causing the bounces in ETH; otherwise, we'd be more like Bitcoin. I believe we will continue to see some upside in this market because people are buying and storing ETH in their wallets for the merge trade and the PoW ETH token airdrops.
The question is whether we will be able to capitalize, sell, and get out in time, despite battling with a high number of bots, whales, and other crazy stuff that’s bound to happen on the PoW chain.
Bitcoin
Bitcoin is not looking good. It’s about to break its July low.
NFT Roundup
y00ts are the most popular right now. It's the second collection from the DeGods project, which we wrote about in April when they were one-seventh of the current price.
RTFKT began forging their first season of real-world items. Clonex holders can use their avatar to customize various items, which can then be burned for the physical item. RTFKT has performed extremely well, at least in terms of sales. Nike has definitely found a good partner in Web3, as it has already done over a billion in secondary volumes.
DigiDaigaku. We've been following these every week since missing the mint. Limit Break, the company behind it, raised $200 million last week, which is a staggering sum. After an insane ran up, these crashed about 50%. There could be more selling to come as the majority of recent sales are to WETH offers.
🎉 Sudoswap Airdrop. If you followed our guide from August 12 and created some trading pools, you should be eligible. 🎉
Open Chat
Are we only going to see NFTs go to the moon when we're in a bull market again, or is there any chance that the NFT market depegs from everything else?
That's an interesting question. When people feel wealthy, I believe they are more likely to invest in NFTs and speculate. Last year, following the May crash, the NFT boom began. I believe the low price of ETH aided the initial momentum behind the first NFT run, but that was very different because there were so few people in the space at the time. It was a much smaller market. There is now an entire generation of bagholders who have so many worthless JPEGs they’re looking to offload.
Any new momentum will likely be met with massive waves of selling as people simply want to get out of their bags. I believe it is unusual for the NFT markets to take off while the crypto markets are still bleeding. However, there are still opportunities in NFTs.
When do you think we are going to see the bottom of the market?
Defier 1: I would say end of the year, or early next year.
Defier 2: Two years from now. Where does that put us in a price? That means we're nowhere near the bottom or are we going sideways for two years?
Defier 3: I'm not sure the market can take any more losses. I believe we are nearing the end. Year end, I believe.
yyctrader: I'm going to go out on a limb and say the 3AC liquidations in June marked the lows in terms of sentiment and price. I don't think we're going to crash significantly further than that. For example, I do not believe in the $200-$300 ETH range that many people are calling for. We could see a retest or a marginally lower low after a crab market for many months.
Solana Blockchain Footprint
Solana's blockchain footprint appears to be 100 terabytes of historical data. That's more than a hundred times that of Ethereum.
What is it that makes it so bloated in comparison to Ethereum? Do they simply store a lot more data on-chain than Ethereum?
Defier: Ethereum only processes a finite number of blocks per second. SOL has approximately 60K transactions, so they're just producing more data. Assume that every block contains some metadata. For example, if I save an Excel file with nothing in it, it will still be 10 KB. And if I add some data to it, it could be around 11, 12 KB.
Tutorials
The DeFi Alpha Call takes place every Monday at 2pm ET in Discord.
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