Aptos expanded, The Merge releases soon, AMMs compete fiercely

Key insights: 

• Polygon and Tezos continued to be the center of the market.
• Solana was the blockchain with the highest total transactions in the market.
• Crypto market overview in the first 6 months of 2022.
• AMMs across DeFi ecosystems overview: Sushiswap, Uniswap, and Curve.
• Ecosystems highlight: Cardano, Solana, Avalanche, Aptos, and Ethereum.

Welcome back to "On The Road", a series to summarize the week through Infographic images to provide market insights in the most intuitive way for you. 

Market overview for week 29/2022

Tokens that received the most attention in week 29

Last week, EVMOS was the most searched token on CoinGecko. The Evmos Momentum Hackathon was hosted on July 18th in partnership with Huobi Incubator. Evmos was also integrated with AutoFarm Network, MathWallet, and CypherdWallet.

The project announced that a large amount of EVMOS tokens airdrop with a total value of more than $150M is still unclaimed. Anyone who used Ethereum before 2021 is eligible for the airdrop. From August 1st to September 30th, the unclaimed EVMOS tokens airdrop will be transferred to the community pool.

Last week, MATIC (Polygon) was the second most searched token on CoinGecko. On July 20th, Polygon introduced Polygon zkEVM, the first EVM-equivalent ZK L2 using ZK Rollup.

Developers can build on Polygon zkEVM the same way they would on Ethereum and deploy any Ethereum smart contract, with lower cost and at greater speeds. Right now, Polygon is open-sourcing the code for Polygon zkEVM, Testnet and Mainnet versions will soon be released.

Optimism (OP) ranked third on the list. The project held the Optimism community meeting in Paris, France, from July 18th to July 23rd.

There were 6 new tokens on the list: TIME, CRTS, IXT, BOND, LYRA, and ETC.

Highlights in DeFi Categories from week 29

Top 10 most mentioned NFT projects on Twitter

Last week, the most mentioned NFT project on Twitter was Tezos. This is the third week in a row Tezos has taken the top spot with many activities such as:

• Held Tez/Dev event from July 21st to 23rd in Paris, France.
• Sponsored and brought NFT, Web3 into sports projects such as Man of the match, Decathlon.
• Tezos India hosted the Tezasia Hackathon.
• Partnered with ArtBasel, Feral File, Circa
• Co-Founder Tezos - Kathleen Breitman, talked with BloombergCrypto about “The Macro Forces 2022” on July 19th.

The Kiba Inu project unexpectedly took second place on the list, despite being ranked seventh last week. Kiba Inu's token is a meme coin, tradable on both BSC and ETH bridges.

The third most mentioned project was StepN. Currently, StepN is giving away 5 boxes of Ape Realm OG shoes on Twitter to promote its product and increase its number of followers. When the project's Twitter reaches 700,000 followers, the winners will be announced.

Total transactions on popular blockchain platforms

Solana was the blockchain with the highest number of transactions at $85B due to its ultra-fast transaction speed and low costs. The number of transactions made on Solana was 24 times more than TRON blockchain at $3.5B.

The third place belonged to BNB Chain with $3.2B. Although launched 2 years after TRON, the number of transactions made on BNB Chain was close to TRON. The following blockchains including Polygon, Ethereum, Algorand, Harmony… were also accelerating their development over time.

Crypto Fundraising H1 2022 overview

In the past six months, 1,120 funding announcements were published with more than $28.8B in value. Most of the investments focused on GameFi, NFT, and Metaverse. The total fundraising amount and number of deals in H1 2022 were about 30% higher than in H2 2021.

In CeFi or related to the CeFi category, there were 164 investments with a total value of $8.6B. There were 1 investment worth more than $1B, and 25 investments worth more than $100B.

In DeFi category, there were 229 investments took place, raising about $2.4B. DeFi received less attention and money than others, as only under 10% of fundraising value was for this category.

Layer 1, Layer 2, and other infrastructure projects raised 276 investments with a total fundraising value of $11B. This sector received more attention and money inflow from big investors and VCs. 33 deals out of 276 were larger than $100M, and 52 deals were larger than $50M. Some familiar names on the list include Near Protocol, Aptos, Optimism, Starkware…

The category with the highest number of investments was GameFi, NFT, and Metaverse with 309 deals (27% of total deals), while the value of those fundraisings was $5.4B (20% of the total market value). In which, Epic Games raised $2B in April 2022. This category received more attention than DeFi but less than Infrastructure/CeFi. Although the number of deals was high, there were only a few big deals in this sector.

VCs and funds also raised money to expand their investment opportunities. A total of 27 investments were made with a total value of more than $14B. The average raise of VCs was $500M. Some biggest raises were from a16z, Haun Ventures, J◎e McCann, Pantera Capital, and Electric Capital, which were all worth more than $1B. There were 20/27 investments took place in March 2022 and April 2022.

Find out more: Crypto Fundraising Report H1 2022

Crypto market overview H1 2022

The macroeconomic situation witnessed many historical events when the oil supply decreased, which caused commodity prices to rise and economic growth to decline. The stock market in the US witnessed a sharp decline when the S&P 500 index fell 20.6% in the first half of 2022. This was the steepest decline in more than 50 years since the 1970s. The US government has implemented a quantitative tightening (QT) monetary policy to minimize excess cash from the economy.

The crypto market also experienced bad days as large institutions were forced to go bankrupt such as 3AC, Celsius, Voyager… Bitcoin price fell by 57.8%, leading to a 70% decline in market capitalization since ATH (equivalent to more than $2,000B).

The hackers attacked many projects and stole $1.6B. In which, EVM Compatible blockchains accounted for 52.4% of attacked projects. Alt-L1s gradually revealed certain limitations. Basically, they trade off one or more important features such as security and decentralization in exchange for low fees and instant scalability. 

DeFi was no longer the center of the market as its TVL went flat throughout Q1/2022. The stablecoin market cap was also down nearly $50B from ATH. Currently, the DeFi market is concentrated on a few leading chains like Ethereum and BSC.

The NFT market witnessed a strong boom as both the number of transactions and the transaction prices increased significantly. Many projects also started to integrate NFTs into their products such as Arbitrum, Zapper, Uniswap…

To sum up, the crypto market experienced a significant decline in the first half of 2022. It is possible that a bear market will emerge in the second half of 2022.

Find out more: Crypto Market Report H1 2022

AMM overview on DeFi ecosystems

Sushiswap: Cross-Chain AMM

On July 21st, Sushi launched a cross-chain AMM called SushiXswap, built on Stargate's cross-chain bridging technology. This marked a milestone in the evolution of Sushi's AMM.

Previously, in May 2021, Sushi planned to build its own blockchain called Sushichain to aggregate liquidity from different chains. However, this idea was quickly abandoned. Later, many cross-chain swap protocols were developed such as Synapse (liquid cross-chain for stablecoins), Chainhop (cross-chain swap built on cBridges), and VarenX (cross-chain swap built on Ren Protocol). Right now, there is no protocol dominating the cross-chain swap, which is an opportunity for Sushi.

However, building on the Stargate bridge will force Sushi to depend on Stargate in the long term.

Uniswap: The Fee Switch

Last week, the Uniswap community proposed to charge operation fees for the protocol. A controversial conversation took place when one group agreed to charge fees to increase the value of UNI token holders, while another group argued that the fees should not be charged because it would affect liquidity pools.

One Coin98 member commented that Uniswap Protocol should not charge fees because it will provide an opportunity for other AMMs to attract LPs. Instead, Uniswap Labs needs to build a new product that will increase the existing liquidity of Uniswap Protocol and then charge service fees for this product. This will solve the problem of adding value for UNI token holders.

Curve: The New Stablecoin

On July 21st, Michael Egorov, founder of Curve confirmed the launch of Curve Finance’s stablecoin in an interview with SCB 10X. The stablecoin will operate under the same over-collateralized mechanism as DAI.

Curve Wars game will change after Curve has its own stablecoin. Direct emission will become more competitive. Issuers of stablecoins that do not hold emission voting will find it difficult to attract liquidity. Meanwhile, issuers of voting stablecoins like Frax (via Convex), MIM (mCRV), DOLA (via Yearn) may have the advantage of direct emission into their pools.

The DOLA example shows the most obvious increase in liquidity when DOLA's Source Supply and DOLA3POOL liquidity quickly increased again after the launch of Yearn Fed.

With this launch, Curve can use its stablecoin as a base pair instead of a 3pool (USDC-USDT-DAI). DAI will need to change its strategy and prepare to own veCRV to maintain DAI liquidity on Curve. To own veCRV, MakerDAO can issue mkrCRV exactly as proposed 3 months ago by monet supply.

Previously, Aave, MakerDAO's D3M partner launched stablecoin GHO and Compound also wanted to issue stablecoin CASH. Therefore, the upcoming DeFi will have a lot of different stablecoins. This situation is quite similar to A16Z's "Every Company Will Be a Fintech Company" idea in the traditional fintech market. In the future, perhaps each DeFi protocol will issue its own stablecoin?

Highlights from ecosystems in week 29

Aptos Ecosystem

Although Aptos was just launched not long ago, it already owns a large community with 23 developed projects, expanding into many different categories such as Yield Optimizers, Aggregator, Derivative...

Notably, Aptos also launched the Aptos Name Service, similar to the Ethereum Name Service platform that has stormed the market recently. 

Cardano Ecosystem

For now, Cardano has gone through 3 hard forks from Byron to Shelley, Mary, and Alonzo. Shelley helped Cardano to integrate Proof-of-Stake into its ecosystem. Mary allowed Cardano to be a multi-asset ledger. With Alonzo, Cardano became a platform where developers can create dApps and NFTs.

The Vasil hard fork was scheduled to take place at the end of June 2022, but due to some technical errors, Vasil has been rescheduled to the end of July 2022. Vasil supports Cardano to interactions between Cardano sidechains.

The chart below shows the price reaction of the ADA token after each hard fork. After Shelley and Mary, the price of ADA grew quite clearly but with Alonzo, the price of ADA has experienced a steady decline.

Find out more: Cardano Ecosystem: The Rise Of A New Era

Solana Ecosystem

In the DeFi category, there are 64 projects developed on Solana. In which, the asset management/aggregator sector has 13 projects. The AMM and Lending/Borrowing categories also received a lot of attention when having 12 projects each.

Familiar projects that can be mentioned on Solana are Raydium, Saros, Phantom Wallet, USDC… Coin98 Wallet is also one of Solana’s partners.

Avalanche Ecosystem

In general, in the bear market, most of the ecosystems are "gloomy", and the activities of the projects in the ecosystems are also significantly reduced. However, this is a perfect time for blockchain foundations to better prepare for the upcoming bull run.

Avalanche's highlight numbers

• TVL held steady at $3B and has been decreasing significantly since May 2022. However, considering the number of AVAXs, this number has increased compared to the beginning of 2022.

• Avalanche was one of the five L1 blockchains that generated the most transaction fee revenue in the past week (this number does not include subnets), but currently the fees from the subnet are negligible, and the number of fees generated is very much different from BNB Chain.

• The total USDC native supply on Avalanche reached $1.54B, an increase of nearly 8% compared to June 20th, which was also close to the old ATH level. This showed that the capital flow out of the Avalanche system is not high and can grow again in the near future.

Avalanche Foundation introduced Core Browser wallet

In general, there are many outstanding decentralized wallets on the market such as Metamask, Trust Wallet, and Coin98 Wallet. However, the wallet market still attracts a lot of players. The biggest reason why Foundations develop wallets may be to create a solid foothold for their ecosystems.

Avalanche Core Wallet also has basic features like Swap, Archive, Web3 Dapp Browser integration. However, they will better support projects on the Avalanche system, support card payments, and integrate BTC Bridge, ...

Projects on Avalanche Ecosystem

• TraderJoe: Prepared to introduce Liquidity Book (Joe v2), reward $35M for JOE stakers.
• Pangolin: Launched Pangolin v2 Beta which mainly updated the interface, added Limit-Order feature, Portfolio tracking,...
• BenQi: Marked a big milestone when sAVAX (Stake AVAX issued by BenQi) was accepted as collateral by Aave.
• Yeti Finance: Announced Ragnar Finance project, a new protocol built on Yeti Finance that allows boosted yield and other benefits.
• Chainlink became a full coverage oracle on Avalanche.

Ethereum Ecosystem

The Merge is expected to take place in September 2022. If successful, this will be a promoting factor for the development of Ethereum as inflation falls to 0.22%/year. At the recent ETHCC event, Vitalik Buterin revealed details of major events after The Merge:

• The Merge: 100% conversion to POS
• The Surge: Increases Scalability for Rollups via Sharding
• The Verge: Optimizes data storage, reduced the node size
• The Purge: Reduces hard drive space required for Validators.
• The Splurge: Upgrades until ETH works smoothly.

Market overview for week 29

The market has experienced a quiet 8 months since November 2021. Many large institutions went bankrupt such as Celsius, 3AC, Terra… Many investors sold large amounts of their Bitcoins including:

• Luna Foundation Guard sold 80,393 Bitcoins.
• Tesla sold 75% of BTC at a break-even price (approximately 29,060 Bitcoin).
• Many purpose BTC ETFs were liquidated (approximately $24,510).
• Bitcoin miners were forced to sell BTC to stay afloat (about 14,600 Bitcoins).

Most of the people who wanted to sell or were forced to sell Bitcoin have already sold. It is expected that the next 3 months (Aug-Sep-Oct) will be the accumulation time for the whole market. It is likely that Bitcoin will increase in price by the end of the year.

In the short term, the market has had a certain recovery. Bitcoin is expected to rise to important support levels as the FED announces its interest rate change on July 27th.

Next week's events

• July 25th: TAO token will be launching the IDO on Poolz. Fusotao is a verification protocol for an order book-based matching system using the paradigm of "execute off-chain, verify on-chain".
• July 25th: AURA token will be launching IDO on Impossible Finance. Aura Network is a Layer-1 blockchain platform focusing on developing and expanding NFT.
• July 27th: WOMBAT token will be launching the IDO sale on Polkastarter. Wombat is an NFT game marketplace that allows players to participate and own NFT in the game.

Conclusion

The market has been quite active in recent times as projects continuously launch new products and promote their product. Ecosystems also have a lot of development with many stablecoins launched. This shows that the market is still actively working to prepare for the next bull run season.