🟣 Give me your worst

The YTD price action for BTC and ETH looks strong at +42% and +37%, respectively. In contrast, the 30-day performance seems to have leveled out, with BTC and ETH at +2% and +3%, respectively. Seemingly, the 2023 rally has finally cooled off. As the Shanghai upgrade nears, I see more and more doom posting of the impending ETH unlock. So what's the worst case scenario?

The YTD price action for BTC and ETH looks strong at +42% and +37%, respectively. In contrast, the 30-day performance seems to have leveled out, with BTC and ETH at +2% and +3%, respectively. Seemingly, the 2023 rally has finally cooled off. As the Shanghai upgrade nears, I see more and more doom posting of the impending ETH unlock. So what's the worst case scenario?  The exit queue has limitations to prevent the entire validator set from leaving at once. Rich Falk-Wallce modeled the worst case scenario by assuming the maximum outflow of validators until just 100k of the 536k validators remain. It would take over two years for this to occur.  The analysis answers the question everyone wants to know: How large will the sell pressure be? 6% of daily volume (0.2% of total ETH) over the first 3 days, 1% for the next 6 months, and 0.3% for the next 18 months. So, in the worst case scenario, we go back to PoW issuance for a few days then call it a day.  Once again, I ask you to ignore the noise. Relax. - Dan Smith     Blur continues to dominate weekly NFT volumes, even after filtering out wash trading. Its airdropped arrival has undoubtedly changed the NFT marketplace landscape.  A new dashboard by J. Hacksworth analyzes exactly how airdrops impact NFT marketplace performance, namely Blur. I focus on Blur below, but this dashboard also takes a close look at the LooksRare and X2Y2 airdrops.  While Blur has a low overall wash trading score, most of the top users were wash trading around 25% of their total volume. Some wallets had 100% wash trading, yet still received $100k in BLUR rewards. 79% of the 119k addresses that claimed the BLUR airdrop have sold at least 95% of their tokens. 55% of Blur users have a positive net trading PnL (buy - sell volume) on the platform. After considering the airdrop  (buy - sell volume + airdrop), that figure jumps to 74% of users. Volume is quite skewed on the platform toward power users with 17% of the total volume from just 15 users, and 27% from the top 50 users. Most of this tracks in line with what I expect from a bear market airdrop. It was heavily farmed by wash traders, and a vast majority of BLUR recipients dumped the token to secure USD profits.  I have never seen an analysis of how the airdrop impacted profitability, so it's quite impressive to see an additional 20% of users ended positive after adding the airdrop to their trading PnL. The 25% of wallets that STILL ended in the red might be great countersignals for NFT traders to watch… Lastly, the volume distribution is potentially concerning for the longevity of Blur, as such a significant portion of usage comes from power users who are likely only there to farm the next airdrop. How will Blur retain them when the next NFT marketplace with a token airdrop comes along? This is an excellent dashboard, highly recommend spending some time with it!   Our latest report, covering basis trading on dYdX, is free! Trading the basis on perps offers the potential for positive returns while mitigating many risks typically associated with crypto assets.  The report finds that dYdX has tremendous potential value for basis traders. The collapse of FTX highlighted a prime benefit of dYdX: self-custody. With the enablement of multiple collateral types, a spot market, and even lending, dYdX could continue its push to siphon market share from centralized trading venues. Check out the full report now! Basis Trading With dYdX Trading the basis on dYdX perps offers the potential for positive returns while mitigating many risks typically associated with crypto assets. Read More → Jump Executes Counter Exploit Against Wormhole Exploiter Jump Crypto has seemingly recovered 120.69k wstETH and 3.21k rETH ($225M of assets) from the infamous Wormhole Exploit that occurred one year ago. Read More → Yuga Labs Debuts First NFT Collection on Bitcoin "F**k doing expected things," Yuga Labs said of its debut of a generative art collection based on the Bitcoin blockchain Read More → Ethereum Steps Towards Staking Withdrawals With Successful Testnet Upgrade Ethereum Steps Towards Staking Withdrawals With Successful Testnet Upgrade Read More →   The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm's Financial Disclosures. 133 W 19th St, New York, NY, 10011 Unsubscribe