BTC rallies to $64,000 nearing all-time-highs
BTC rallies to $64,000 nearing all-time-highs
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Welcome to Stay on-chain! Bitcoin soared to $64,000, Uniswap might activate its fee switch, and Reddit is stockpiling BTC and ETH ahead of its IPO. With prices climbing, resist the FOMO—take a seat, relax, and let us sift through the noise for you.
By the way, make sure to join us on Telegram 👾
In today’s edition:
Market & SoC wallet performance
News roundup
Farms of the week
Extra content from great minds
Meme of the week
The markets have been wild this week. Bitcoin hit its yearly all-time high nearly every day, peaking at $64,000. Ethereum has been on a roll too, climbing to $3,500, though it still lags behind Bitcoin in terms of performance. Solana, however, has been the standout, setting new yearly records.
The biggest winner is the Ethereum meme coin, PEPE, boasting a 150% gain, while Arweave, after unveiling a compute layer for social media, surged by 120%. On the flip side, WLD, last week's star, dipped into the red this week. It seems traders pulled back after eyeing its massive fully diluted valuation (FDV) of $90B - surpassing OpenAI's valuation 👀.
The fear and greed index indicates strong market greed, and notably, the DeFi TVL soared 23% in just one week.
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On Mantle, we had quite a bit of mETH and MNT just sitting idle. INIT Capital, a borrowing and lending protocol on Mantle, has introduced a points rewards system. So, we arranged a strategy to farm INIT points and, by taking out a loan, enter a long position on ETH/BTC (meaning we're betting on ETH outperforming BTC).
Let's break it down step by step:
We used 240 MNT and 0.447 mETH as collateral at INIT Capital (worth about $323) and borrowed 0.0035 WBTC (worth $179).
We then sold the WBTC for mETH and added the mETH (worth $178) back as more collateral. Next, we borrowed again, this time 0.0015 WBTC (worth $77), sold it for mETH, and redeposited the mETH at INIT Capital. This process, known as looping, uses leverage and requires caution.
The result is a collateral of 240 MNT and 0.13 mETH (total value $577) against a loan of 0.005 WBTC (worth $255), with a health factor of 1.74 at the time of writing, resulting in a net cost of circa -2% APY. Essentially, this operation comes with a cost.
However, despite the costs, we're earning INIT points, which will be exchangeable for INIT tokens in Phase 3 of the rewards program. Additionally, we're making a speculative bet that Ethereum will outperform Bitcoin.
Our reasoning is that INIT Capital is an excellent credit protocol, holding the highest TVL on Mantle, and we thus aim to accumulate as many INIT points as possible. We also believe Ethereum has the potential to outperform Bitcoin in the upcoming months for several reasons: the anticipated Dencun upgrade, the potential for an Ethereum ETF, and the start of an altcoin season. Although our strategy involves leverage, the risk of liquidation is relatively low since Bitcoin and Ethereum prices mostly move together, especially during significant market shifts. The real risk of liquidation arises if their price correlation breaks. However, history is generally on our side.
Check out Rabby Wallet — the ultimate EVM wallet for everything on-chain. Use our referral code to give Stay on-chain a boost. Thanks for the support!
$1B of inflows, in two days
This week kicked off strongly for Bitcoin ETFs, with net inflows topping $1 billion over just two days! BlackRock's IBIT spot bitcoin ETF saw a record daily inflow of $520.2 million on Tuesday. Overall, spot bitcoin ETFs have experienced mostly positive net inflows, except for some outflows — $125.6 million from GBTC. Additionally, BlackRock's IBIT broke its own record with a daily trading volume of $1.36 billion on Tuesday, surpassing the previous high of $1.33 billion set the day before. 😅
Avail secures $27M in a round led by Peter Thiel
Another project focused on data availability has successfully raised a ton of money. Avail secured $27 million from an early funding round and Peter Thiel, the co-founder of PayPal, led the round through his Founders Fund, along with the notable investment firm, Dragonfly Capital.
Avail aims to compete with Celestia and EigenDA by offering a service that helps new crypto projects quickly, securely, and affordably set up their blockchain networks. Founded in 2020 as part of Polygon Labs, Avail is managed by Anurag Arjun and Prabal Banerjee, former executives of Polygon. The company has not shared the valuation at which the investment was made, but we know that the funds will be used to develop products, expand the team, and boost marketing efforts.
Over 50% of Solana TXs fail on purpose, here’s why.
Uniswap prints +80% on fee switch proposal
Years have gone by with folks praying for Uniswap to enable the so-called fee switch, so long that the topic went into the abyss.. until a few days ago, when this proposal was published on Uniswap’s governance forum. Erin Koen, governance lead at the Uniswap foundation, describes within the forum post how enabling revenue sharing of fees generated by liquidity pools on Uniswap with UNI holders is vital to incentivize a thoughtful delegation process. In fact, the goal is to make it mandatory for UNI holders to delegate their tokens to someone (or to themselves) in order to improve Uniswap’s governance process.
UNI rallied 80% on the news topping at $12.8, with other minor DEXes following suit with similar proposals riding the hype train. While this is indeed a bullish announcement for holders, doubts have arisen among liquidity providers: will Uniswap be able to retain its liquidity even if liquidity providing becomes less profitable, or will LPs just move their liquidity? Only time will tell.
Coffee lover? Algorand & Lavazza are implementing RWA technology to track all things coffee — Reddit
Some rollups will be implementing Dencun at launch
After meticulous testing on Ethereum’s testnet, the latest network upgrade Dencun is set to be deployed on mainnet on March, 13. While the ETH/BTC pair rallies in anticipation of the update, we did some research on which Rollups will benefit since the beginning from the reduced fees enabled by Dencun:
Immediately: Arbitrum, ZkSync, Starknet
In a few days: Optimism, Base, and all the Rollups based on the Optimism stack
To be decided: Scroll, and others
Want to launch a Rollup? Say no more. Conduit lets you do it starting from $50/month.
Reddit is holding BTC and ETH in its treasury
In a S-1 filing, a necessary document for companies looking to IPO (initial public offering), it emerged that Reddit is holding BTC and ETH for treasury purposes, even though they ended their Ethereum-based Community Points beta program in October last year due to scalability limitations and the uncertain regulatory landscape.
As a cherry on top, it seems like Reddit is trying to create some sort of DAO for its soon-to-be stockholders. Based on one’s Reddit activity, some will be able to buy their stock at the IPO price, which is usually only reserved for institutional investors.
Kelp DAO launches tokenized EigenLayer points
Kelp DAO has just launched its KEP token, a tokenized version of Eigen Layer points accrued by rsETH holders. KEP creates a new way to trade Eigen Layer points, as until now you could only buy the rights for points by putting down collateral, whereas now Kelp made them liquid and freely tradable. While liquidity is still tiny with just $266k in the KEP-wETH LP, KEP (where one EL point equals one KEP) is trading at about $0.13, slightly below Whales market listings.
Init capital raises $3.1M ahead of Hooks launch
Init Capital is the leading lending market right now on Mantle, and they have just closed a $3.1M seed investment round by Electric Capital, Arthur Hayes, Bankless Ventures, Selini, and others. In a similar way to what Uniswap is planning to do with their v4, Init is enabling custom strategies (hooks) built on top of the lending market, with the first one allowing you to loop mETH tokens launched on February, 28.
Do Kwon is being extradited to the United States — 𝕏/WuBlockchain
Starknet changes unlock schedule favoring monthly unlocks until 2027 — 𝕏/tier10k
Starknet launches “DeFi spring” program to boost DeFi activity — 𝕏/StarknetFndn
Polygon had its last token unlock, with 10B MATIC now in circulation — 𝕏/WuBlockchain
Aave has launched on the BNB Chain — Cointelegraph
Adrastea Finance will offer leveraged JLP vaults — 𝕏/DefiSolar
Whales Pro is coming — 𝕏/dexter_cap
Avalanche has stopped producing blocks for 2 hours — 𝕏/AvaxDevelopers
Real Estate project Parcl introduces PRCL token — 𝕏/ParclLimited
Saylor’s Microstrategy bought BTC, again — 𝕏/News_of_alpha
Nim partners with Dymension: first airdrop coming? — 𝕏/dymension
Privacy-based wallet Railgun Connect coming by EOY — 𝕏/RAILGUN_project
Uniswap introduces Web extension wallet — 𝕏/Uniswap
Security-focused L2 Karak raised $48M — 𝕏/Karak_Network
Telegram introduces 50/50 channel revenue sharing in TON — The Block
Blast is launching its mainnet today at 10 pm CET — 𝕏/Blast_L2
ByBit will be launching pre-market trading for Wormhole’s token on March, 1 — 𝕏/Bybit_Official
Dymension’s governance proposal #4 aiming to enable liquidity incentives is up for voting — Dymension.xyz
Aark Digital unveils AARK airdrop for PYTH, TIA, and JUP stakers — 𝕏/Cosmos_Tic
There’s a huge frenzy around the newly launched Hooks on Init Capital, the premier lending protocol on Mantle, which has free on-ramps if you’re withdrawing from ByBit. There you can currently earn a 28.18% APY on your wETH, plus a 1.41% nice bonus in MNT tokens.
Remember Astroport? They were big on the defunct Terra chain, but kept building during the bear and are now one of the ruling DEXes in the Cosmos ecosystem. Plus, they have some nice liquidity incentives. See TIA-stTIA paying a nice 17.99% APR, or ATOM-NTRN offering an 85.12% APR.
Battle-tested yields on GMX: Newly added GM pools AAVE, ATOM, and NEAR are paying out respectively 91.99%, 89.77%, and 87.71% APR. As with JLP, you’re acting as the counterparty to traders so it’s not risk-free. Understand the risks.
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Disclosure: Authors may own crypto assets named in this newsletter. Stay on-chain is meant for informational and educational purposes only. It is not meant to serve as investment advice. Please consult your investment, tax, or legal advisor before making investment decisions.