《On the threshold of liberty》 — — Rene Magritte

Introduction：

The US GDP in Q1 was lower than expected, while the core PCE exceeded expectations, indicating economic slowdown and inflation pressure. The market predicts only one rate cut in 2024, affecting overall market sentiment, entering a weak adjustment phase.

1、Investment and Financing Observation

Last week, the crypto market saw a total of 32 investment and financing events, a decrease of 5.8% compared to the previous week, with a total funding of $206 million, up 43% compared to the previous week:

In the DeFi sector, 3 investment and financing events were announced (-72%). YieldNest, a liquidity re-collateralization protocol, announced the completion of a $5.2 million new round of financing on the X platform.

In the blockchain gaming sector, 9 investment and financing events were announced (+200%). Among them, Web3’s 3D LBS game L3E7 completed nearly $10 million in Series A financing, co-led by Spartan Group and SevenX Ventures.

In the infrastructure and tools sector, 9 investment and financing events were announced (+12.5%). Movement Labs, an Ethereum Layer 2 blockchain, announced the completion of a $38 million Series A financing, led by Polychain Capital.

In the DePIN sector, 3 investment and financing events were announced (+50%). Natix Network, a decentralized infrastructure network focusing on map data, completed a strategic financing of $4.6 million, led by Borderless Capital.

In the AI-related field, 4 investment and financing events were announced (+400%). Prime Intellect raised $5.5 million in seed funding, co-led by Distributed Global and Coinfund.

Other areas such as Web3/crypto announced 3 financings (-66.6%). Adot, an all-in-one Web3 search engine, completed a $6 million financing round.

Looking at the week-on-week data, the number of cryptocurrency market investment and financing transactions has declined, but the total funding has increased significantly. Market enthusiasm is beginning to focus on infrastructure and DeFi sectors. In terms of VC, major focuses include Hack VC, IOSG Ventures, and Coinbase Ventures, primarily targeting blockchain gaming and infrastructure.

About Movement

Movement is a modular framework for building and deploying Move-based infrastructure, applications, and blockchains in any distributed environment. The framework is compatible with Solidity, bridges EVM and Move liquidity, and allows builders to customize modular and interoperable application chains out of the box.

About Aligned Layer

Aligned Layer is a ZK verification layer developed on top of EigenLayer. As an Eigen Layer AVS, it promises to provide cost-effective verification and multifunctional proof systems for L2 and bridges, meeting critical needs in the blockchain ecosystem. The project is developed by Yet Another Company.

About Roam

Roam is a decentralized global WiFi network that provides public access to enterprise-grade WiFi roaming, ensuring uninterrupted, low-cost access to Web3 and the Metaverse compared to cellular services. This investment will further drive Roam’s development in the DeWi track ecosystem and the construction of global WiFi roaming network nodes.

2、Industry Data

BTC Spot ETFs Have Seen Net Outflows for Three Consecutive Weeks.

HODL15Capital data: US Bitcoin spot ETF witnessed a net outflow of 5,176 BTC in the 16th week, marking the third consecutive week of outflows. On April 26, according to on-chain analyst @EmberCN, there was a net outflow of $83.61 million from US BTC spot ETFs, indicating an estimated total net outflow of around 1,310 BTC when the stock market opens on April 29 (Monday).

Since reaching a historic high on March 15, BTC has experienced two significant price declines, often seen as signs of waning upward momentum in the market. Currently, its price sits at a short-term high in a downward trend, suggesting a higher probability of entering a path toward $52,000. However, numerous factors influence BTC’s trajectory, necessitating cautious monitoring and assessment.

According to analysis by 10X Research, BTC currently faces some downside risk, potentially further declining towards the expected range of $52,000 to $55,000. This risk assessment stems from various market structural data, including reduced BTC miner income, reflecting potential issues with BTC’s fair value to some extent.

The Total Value Locked (TVL) in Ethereum’s re-staking protocols has surpassed $9.5 billion.

According to DeFiLlama data, the Total Value Locked (TVL) in Ethereum’s liquidity re-staking protocols has surged past $9.501 billion. The top five protocols by TVL are as follows:

ether.fi Stake with a TVL of $3.95 billion, showing a 7-day increase of 5.11%.

Renzo with a TVL of $2.423 billion, experiencing a 7-day decrease of -2.75%.

Puffer Finance with a TVL of $1.38 billion, recording a 7-day increase of 4.08%.

Kelp DAO with a TVL of $835 million, registering a 7-day increase of 3.98%.

Swell Liquid Restaking with a TVL of $385 million, reflecting a 7-day increase of 3.22%.

The rebound in liquidity re-staking TVL indicates both the enthusiasm for re-staking and a cautious attitude towards the current market situation. Many believe that liquidity re-staking is currently the optimal way to preserve and increase value, and the weakening trend in USD inflows further supports this sentiment.

The Price of ezETH has Significantly Deviated from the Price of ETH, Indicating a Substantial Dislocation.

On April 24th, Renzo’s tokenomics, perceived as too centralized, sparked strong community dissatisfaction. This led to a significant sell-off of ezETH, causing it to deviate, dropping to 0.8510 ETH momentarily. Many seized the opportunity to buy the dip successfully. During the deviation, a whale bought 2499 ezETH for 2400 ETH, worth $6.98 million, netting 99 ETH profit. Others also showcased their bargain hunting success. Currently, ezETH has mostly restored its peg, rising to 1:0.9875 ETH.

The Renzo incident highlights the fragility of the current Restaking sector, especially with projects still in their infancy, requiring time to validate models and security, particularly under sustained leverage. Participants should remain highly vigilant of potential risks.

Justin Sun has been Frequently Increasing his Holdings of Ethereum (ETH).

On April 25th, Justin Sun purchased 21,547 ETH ($67.5 million). On April 28th, another address suspected to belong to Justin Sun increased its holdings by 6,743 ETH ($22.3 million). Currently, the address holds a total of 14,146 ETH, valued at $46.76 million, with an average cost of $3,205 per ETH. Since December 2023, Justin Sun has been consistently accumulating large amounts of ETH through both centralized exchanges (CEX) and on-chain purchases.

Justin Sun’s continuous accumulation of ETH demonstrates his long-term support and recognition of ETH’s position in the industry. It also suggests his belief that the current ETH price is undervalued by the market and anticipates stronger performance in future market trends.

According to data provided by @EmberCN (余烬)Justin Sun currently holds approximately $4.165 billion in token assets across multiple Tron and Ethereum addresses. These assets primarily include: 598,900 ETH ($1.902 billion), 5.364 billion TRX ($602 million), 458 million USDD, 315 million TUSD, 300 million USDT, and 1.589 trillion BTT ($2.09 million).

Binance Launchpool Introduces New Investment Projects with a Yield of 11.05%.

RootData data: Since November 2021, Binance has launched a total of 30 Launchpool projects, with Binance Labs investing in 21 of them. This represents 11.05% of their 190 investment portfolios, significantly higher than the average of other investment institutions or individuals, which does not exceed 2% for projects launched on Binance Launchpool.

Binance’s high percentage has been controversial, with concerns about its fairness. However, in the latest eight Launchpool projects, only two received investment from Binance Labs. This suggests that Launchpool may be becoming more equitable, providing more opportunities for projects to receive investment.

More Binance Launchpool Data:

Among the 30 Binance Launchpool projects, those in which Coinbase Ventures, OKX Ventures, Polychain, Dragonfly, and GSR participated in investment exceed five.

Out of the 288 investors surveyed, the proportion of their investment projects launched on Binance Launchpool does not exceed 2% on average. However, Gemini Frontier Fund, Draper Dragon, Lightspeed Venture, and Folius Ventures have proportions exceeding 5%.

For individual investors, Synthetix founder Kain Warwick has an investment rate of 8.77%. Following closely is EthHub co-founder Anthony Sassal with an investment rate of 8.57%.

3、VC Holdings

Note: The above data is from https://platform.arkhamintelligence.com/, and the statistical time is 10:00 on April 29, 2024 (UTC + 8).

4、This Week’s Focus

April 29th

• Bitlayer’s $50 million developer airdrop registration opens until April 29th.
• Deadline for withdrawal requests of initial assets from BlockFi.
• Cellula, the AI gaming ecosystem, announces BNB Chain user reward addresses for Cellula mining on April 29th.
• Release of v2 version of Web3 social platform friend.tech on April 29th.

April 30th

• Hong Kong Stock Exchange begins trading Jasset Fund’s Bitcoin and Ethereum spot ETFs.
• Sentencing hearing for CZ Zhao Changpeng.
• Expected launch of OP_CAT protocol on Bitcoin testnet Signet on April 30th.
• Illuvium Private Beta 4 for blockchain gaming from April 30th to May 28th.

May 1st

• US April ADP employment figures.
• US April ISM Manufacturing PMI.
• Japanese financial giant SBI Holdings issuing NFTs for 2025 World Expo on XRP Ledger.
• Launch of Theta Network’s EdgeCloud Phase One on May 1st.
• Farcaster developer conference FarCon 2024 from May 1st to 5th in Venice Beach, Los Angeles.

May 2nd

• Federal Reserve interest rate decision.
• Press conference on monetary policy by Jerome Powell.
• US weekly initial jobless claims.
• Pragma Sydney on May 2nd in Sydney, Australia.
• Shibarium network, Shiba Inu’s L2 solution, undergoes hard fork to enhance speed and reduce costs on May 2nd.

May 3rd

• US April unemployment rate.
• US April nonfarm payrolls data.
• Social platform UXLINK announces first season airdrop covering 10% of active users.
• ETHGlobal Sydney from May 3rd to 5th in Sydney, Australia.

May 5th:

• Avail token airdrop validation extended to May 5th, planning to distribute 600 million AVAIL tokens to 354,605 wallet addresses.

5、Conclusion

Last week, the cryptocurrency market saw a decline in the number of investment and financing activities in the United States due to the slowdown in GDP growth and the higher-than-expected core PCE index. However, the total fund size increased significantly, indicating continued optimism in the capital market for infrastructure and DeFi sectors. Meanwhile, BTC spot ETFs experienced three consecutive weeks of net outflows, signaling insufficient bullish momentum and a potential downward trajectory towards $52,000.

This week, the market continued its trend of volatile decline, especially with the SEC’s frequent actions, including issuing a Wells Notice to ConsenSys, accusing MetaMask of operating without a license, and attempting to classify Ethereum as a security. The market is likely to continue experiencing the “cicada effect.” However, the progress and plans of projects such as TON, PYUSD, Renzo, and Avail remain unaffected, particularly with modular blockchain projects advancing rapidly towards implementation.

Furthermore, Sun Yuchen’s frequent accumulation of ETH, James Fickel’s repeated purchases of ETH, and activities like borrowing WBTC from Aave to go long on ETH/BTC may reflect industry optimism about ETH’s future performance, potentially bringing warmth to the entire market. Investors are advised to closely monitor these developments.

Lastly, tomorrow CZ will face his final sentencing hearing. Wishing for everything to go as desired, and may he have a peaceful life ahead!

Note: All of the above opinions are not investment advice. If there are any inappropriate points, please feel free to leave a message to correct them.

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