Crypto Fundamentals #017

Happy Friday! 👻 The 2023 crypto market saw a drop-off at the end of the week after higher than expected inflation figures came out (see below). The blockchain ecosystems we track saw median and average 7D price declines of ~2.3% and ~1.9%, respectively, with a meaningful portion of the price drop happening on Friday. Let’s jump into it 👇

L1 Comps Dashboard

Price / Activity WoW Change:

This week’s biggest winner saw OP realize a whopping ~18% WoW gain on the back of the Base testnet launch (more on that below), while the ecosystem on the whole declined across the board. The largest price declines again came from some of the more heavily traded names that had also run up a ton in recent weeks, including FTM (down ~12% WoW) and APT (up 13% WoW).

Price action has primarily been attributed to higher than expected inflation figures coming out on 2/23. The 4.3% annualized rate was higher than the estimate of 3.9% while finalized core inflation was also higher than expected. Stocks also closed down on Friday after the hot inflation report (https://www.cnbc.com/2023/02/23/stock-market-today-live-updates.html).

Trading Volumes WoW Change:

7D Trading volumes came down marginally vs. the prior week for some choppy price action with median 7D volumes of ~$7.3bn (excl. BTC) vs. prior week of ~$7.6bn. MATIC saw another heavy week of trading with $6.3bn in nominal volume traded (up from $6.2bn last week), representing ~55% of its market cap. SOL saw another ~30% increase in trading volumes ($6.3bn this current week vs. $4.9bn last week vs. $3.2bn two weeks prior) while BNB saw an uptick in trading volume as well with $5.8bn traded over the past week (vs. $3.8bn in the prior week). As usual, the highest volume traded tokens as a % of circulating market cap were OP (~342% of circulating market cap), FTM (~205% of circulating market cap) and APT (~101% of circulating market cap)

Other Ecosystem Highlights 👇

Base / Optimism

The big crypto story from this week is Coinbase announcing that they’re working on a new Ethereum L2, built off of the Optimism Stack. Coinbase stated that in a press release that “our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy. In pursuit of this goal, Base will serve as both a home for Coinbase’s onchain products and an open ecosystem where anyone can build.”

Coinbase has noted that there is no upcoming token launch for Base, but Artemis Protocol traction caught some gas usage and daily active transaction activity on Optimism related to Base. We can see in the chart below that daily gas paid and daily active addresses / transactions ticked up for the ERC_1155 category.

Turns out, the contract associated with that movement was called “Base Subscription” 🤔🤔. The single contract has eaten up ~15 ETH of gas over the past day, which is quite material for a scaling solution.

After digging into it further, we realized there was an NFT mint associated with subscribing to the Base blog at base.mirror.xyz. Once you subscribe, you’ll have the option to mint a “BASEd and Optimistic” NFT to commemorate the “historical collaboration between Base and Optimism.”

~76k people have subscribed for the blog so far per data on OpenSea, which coincides with the spike in usage on Optimism to ~73k on 2/23/2023 (!!).

Meanwhile, the Base team has also created a similar contract on Ethereum L1 that is has burned a whopping ~205 ETH worth of gas over the past 24 hours, putting it in 3rd in smart contract gas usage behind Blur and Uniswap.

The collection has traded 412 ETH in total volume with almost 100k unique owners.

that’s all folks

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

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 2/10/23.

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.