Today and tomorrow Jerome Powell will testify in front of the Congress, informing legislators about his current view on the US economy. The TLDR from today's testimony: Powell is not taking additional 50bp rate hikes off the table — the first time he has acknowledged this. The market has already reacted, increasing the likelihood of a 50bp hike to 48%, up from just 24% one week ago. Crypto prices saw a knee-jerk reaction to Powell's comments but recovered to relatively flat. It is likely this will be a near-term headwind until the next FOMC meeting on March 22. Dune, the crypto data analytics platform, announced an inorganic wave of activity from someone trying to game an airdrop. You absolute degens are trying to sybil attack a data platform for an airdrop? For a second there I really convinced myself the 2,000 likes I got overnight were just well deserved. Back to the drawing board. Continuing from yesterday's newsletter, Michael Bodley, a senior editor at Blockworks, published an excellent piece on the Amazon NFT marketplace that added more color to the situation. We now know that the marketplace will tie digital ownership to physical goods delivered to customers' doors, which answers a question I had from yesterday. It seems Amazon will push the evolution of NFTs forward. "Alexa, sweep the floor on Lavender Yankee Candle NFTs" - Dan Smith |
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On a weekly basis, Curve DAO voters allocate CRV incentives to various liquidity pools based on the proportional share of votes per pool. Around $3.7M of CRV incentives are distributed each week, making Curve DAO voting rights quite valuable. Convex has amassed 51% of Curve voting power and lets its token holders (CVX) control where the votes flow. As it turns out, CVX voters are willing to sell votes to the highest bidder, which opened a vibrant "bribe market" for Convex voters. Bribes are paid by protocols that want to purchase short-term incentives to attract liquidity into a Curve pool with its native token. Frax Finance is one of the most active participants in the bribe market, given its need to attract liquidity to promote stability for its stablecoins. The latest bribe round just closed with a total of $2.4M paid to CVX voters, which annualizes to 22% APR. While it's often quite rare to see stability in DeFi, the bribe revenue APR to CVX voters has never fallen below 20%, even throughout the latest bear market. |
Aura Finance has continued to rip higher since its launch last June. It is a yield aggregation protocol built to service the Balancer ecosystem, just as Convex services Curve. Its bribe market has also begun to pick up steam, with the latest round coming in at over $525k. For a protocol looking to bribe or rent liquidity, the most important metric is bribe efficiency or the amount of incentives received for every $1.00 paid in bribes. If this value is below $1.00, then it would be more efficient to directly pay LPs in the pool. Aura currently directs $2.07 of incentives to the briber's pool. The incentives consist of new BAL issuance and AURA issuance. When compared to Convex, which achieves a bribe efficiency of $1.37, Aura stands out as the better choice for protocols to use. Part of this is due to Aura's age. It is a newer protocol, so it is still on the heavy end of its emission schedule. It is likely we see the bribe efficiencies of these protocols converge considering they function quite similarly. This would imply an increased amount of bribe revenue flowing to Aura, making the token more valuable. If that real yield narrative is still alive, AURA looks like an attractive play. This is not financial advice. |
While the Superchain vision is just an idea today, Coinbase's commitment to the OP stack and partnership with the Optimism core development team makes it much more likely that it comes to fruition. |
In April 2022, Frax introduced FPI, an inflation-resistant stablecoin. The protocol recently launched a staking system for its FPIS governance token. With $2M in profits over the past year, it is worth diving into the protocol to see what comes next. |
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Tencent-backed Immutable's pitch to prospective buyers: "Liquidity and utility will turn NFTs into a trillion-dollar asset class" |
Mason Rothschild continues to promote MetaBirkins NFTs despite being found liable in Hermes' trademark infringement case, lawyers argue |
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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 |
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