Artisan – #20 Weekly: Feb 20 – 26

Omnichain Fungible Tokens, Blur surpassed OpenSea, Sudoswap lockdrop, ETH is not ultrasound money, Helium migrated to Solana, EigenLayer whitepaper, SushiSwap plans derivatives exchange on Sei blockchain, Frax Finance to fully collateralize its stablecoins……

🤔 Analysis & Thoughts

Tracking the growth of Omnichain Fungible Tokens (read more)

• Omnichain Fungible Tokens (OFTs) are gaining traction as a multichain standard for fungible tokens
• The unique 1:1 mint and burn properties of OFTs mitigate honeypot attack vectors while reducing resource requirements for liquidity and transfer fees
• OFTs are positioned to bring multichain capabilities to the long-tail of application-native assets

Delphi Digital: how Blur surpassed OpenSea to become the largest NFT marketplace (read more)

• Blur’s airdrop has fueled an incentive flywheel to create real network effects and it has achieved 53% market share within a few months of launch
• Blur offers zero marketplace fees along with an option to skip or reduce royalty payments. The platform also offers the fastest NFT sweeps and NFT swipes. But the biggest reason for Blur’s rise in market share is the $BLUR airdrop.
• Blur shows how tactical incentives that power quality products rule the world. The distribution model works via a point system that rewards users for filling the liquidity pool orderbook. This mechanism incentivizes liquidity to fill Blur’s liquidity pool orderbooks
• Blur executes a lot of high value trades with an average NFT sale price of $1,365 vs. OpenSea’s $351. But, OpenSea has managed to retain a large portion of its traders. Trader Market Share for Blur has only reached 30%

Sudoswap ($SUDO) lockdrop: understanding the math (read more)

• Sudoswap’s token ($SUDO) went live on February 19th. With both $SUDO and $XMON live, does it make sense to lock $XMON into the lockdrop contract or buy $SUDO directly?
• Here are $SUDO and $XMON token distributions: 25.12m (41.9%) of the 60m $SUDO max supply will be distributed via the lockdrop contract, with every $XMON being exchangeable for 10,000 $SUDO.
• With $XMON at $41.6k — FDV is $416mm, and MC is $104mm ($416 * 0.2512). This 25.12% $XMON MC “becomes” the 41.9% $SUDO distribution, implying a $249mm FDV for $SUDO ($104m / 0.419).
• This means that theoretically $SUDO trades at a discount of 8.8% — and traders are better off buying $SUDO directly rather than buying $XMON to deposit into the lockdrop contract.

ETH is not ultrasound money: Part 1 (read more)

• The primary components of ETH’s value flows are transaction fees, other MEV, and issuance.
• PoS issuance is not a direct expense to the network as it is a redistribution from all holders to stakers.
• A net inflationary network is not inherently unsustainable if there is sufficient demand for the underlying token based on various utility and value capture mechanisms.
• Physical operational costs must be accounted for in measuring profitability of a blockchain.

Creator’s royalties face extinction – A blessing or a danger for NFTs? (read more)

• Basically, according to OpenSea’s announcement on Feb 18th, the seller can choose if he/she wants to pay more royalties than the minimum or not from now on.
• This marks the end of an era that defined the NFT world, setting it apart from Web 2.0 until now. It’s a heavy heart that we see how the ecosystem has changed, taking away lifeblood for creators.
• His Web3 prediction is that with royalties out of the picture, every NFT business will need to restructure for sustainability and longevity. And the founders have the chance to become a real business. With multiple launches, exclusive offers, and subscriptions without the need to feel ashamed.

🌍 Layer 1/2s

Helium to migrate to the Solana blockchain on March 27th (read more)

• To ensure a smooth transition, an Upgrade Readiness Working Group is being formed with volunteers in the community to oversee the migration process and will have the final say in the migration date.
• A majority of Hotspot Owners and token holders (HNT and MOBILE) will not need to take any action to participate in the upgrade.

Introducing the EigenLayer whitepaper (read more)

• EigenLayer introduces two novel ideas, pooled security via restaking and free-market governance in order to solve the problem of fractured trust networks.
• Ethereum validators can set their beacon chain withdrawal credentials to the EigenLayer smart contracts, and opt into new protocols built on EigenLayer to earn additional rewards from providing security and validation services.
• Using EigenLayer, protocols could impose additional slashing conditions on the staked ETH of validators who opted into the protocols. EigenLayer also uses several risk management to prevent malicious or intended slashing.
• EigenLayer could enable various new apps, massively expand blockspace via staker heterogeneity, incentivize Ethereum stake decentralization, break the trade-off between democracy and agility.

💰 DeFi / CeFi / NFTFi

SushiSwap plans derivatives exchange on Sei blockchain in Q2 (read more)

• Sushi plans to release a decentralized derivatives exchange on the Cosmos-based blockchain Sei.
• The derivatives platform called Vortex will support on-chain, peer-to-peer derivatives trading.

Frax Finance votes to fully collateralize its $1 billion stablecoin (read more)

• The proposal FIP-188, posted last week on Frax’s governance forum, suggested setting the target collateral ratio to 100% using protocol earnings to increase the stablecoin reserves.
• The result represents a significant shift for FRX, the fifth largest stablecoin with more than $1 billion in market capitalization, as it eliminates the algorithmic element of the stablecoin’s stabilizing mechanism.

Obol released the road to mainnet for distributed Validators (read more)

• Obol has created a distributed validator on the Ethereum mainnet for the first time in an internal alpha testing phase. In the coming weeks, they will share a series of critical updates and community calls as we march towards the Obol V1 milestone.

Platypus salvages $2.4 million in hacked funds with BlockSec’s help (read more)

• The hacker who exploited Platypus only made off with a small portion of the initially stolen funds.
• Blockchain security firm BlockSec found a loophole in the attacker’s contract and called back $2.4 million into Platypus’ address with an upgrade proxy implementation.

NFTPerp hits $100m in volume during its beta phase (read more)

• NFTperp is a decentralized application on L2 solution Arbitrum. The product allows users to open perpetual futures positions on NFT collections.
• According to the data of Dune, NFTPerp has hit $100m in volume during its beta phase while it has only 1500 traders.

Former Coinbase engineers launch NFT lending platform with Coinbase funding (read more)

• Four former Coinbase employees have launched an NFT lending platform called PaprMeme with $3 million in funding from Coinbase Ventures
• The platform doesn’t offer direct peer-to-peer lending but instead adopts a novel mechanism built around its native token.

Arbitrum-based algorithmic stablecoin project Hope Finance exploited for $2M (read more)

• Prospective users of an Arbitrum-based decentralized finance (DeFi) project have been left out of pocket following a $2 million exploit.

🖼 NFT / 🎮 Gaming / 🎭 Metaverse

Web3 game Worldwide Webb raises $10 million led by Pantera Capital (read more)

• Web3 MMORPG game Worldwide Webb raised a $10 million Series A with Pantera Capital as its only investor.
• Launched in 2020, Worldwide Webb offers an interoperable massively multiplayer online roleplaying game (MMORPG) where players can bring their own NFTs from multiple blockchains to use as avatars engaging in battles, quests and raids.

Blur released a token distribution plan to the community in Season 2 (read more)

• The secret to maximizing rewards is loyalty. Listing rewards will be as large as bidding rewards. Max listing points = listings x loyalty.
• In Season 2, users get a 100% loyalty score if they don’t have listings anywhere else. Use the new maximize loyalty button to remove their third party listings and get the score to 100% in a single transaction.

The new YouTube CEO is bullish on Web3 tech like NFTs and the Metaverse (read more)

• After serving as YouTube’s Chief Product Officer for over seven years, Neal Mohan was appointed last week to lead the Google-owned streaming platform.
• Last year, Neal Mohan disclosed in a blog post that YouTube was looking at ways it could possibly integrate Web3 technology, whether by “making YouTube more immersive” by leveraging the metaverse or tapping technology like NFTs, unique digital tokens that are often used to assert ownership of online content.

SUDO transferability is now enabled (read more)

• Sudoswap is a concentrated liquidity AMM protocol designed specifically for NFTs. Sudoswap airdropped its $SUDO tokens to users in January this year. However, the tokens are initially non-transferrable. Now, the transfer function has been enabled.

🧑🏻‍⚖️ Regulations

Sam Bankman-Fried faces new criminal charges including conspiracy to commit bank fraud (read more)

• The Federal Trade Commission is investigating failed crypto broker Voyager Digital’s “deceptive and unfair marketing” of cryptocurrency.
• The commission objected to Binance.US acquiring Voyager’s assets in a new court filing.

SEC objects to Binance.US’ $1B Voyager Deal, alleging sale of unregistered securities (read more)

• Federal and New York regulators object to a billion-dollar deal they say may be unlawful and discriminatory as they examine Voyager’s VGX token.

Hong Kong’s New Proposal Might Let Retail Investors Buy Crypto  (read more)

• Hong Kong might let retail investors back in the game.
• Hackers are phishing people going to this major crypto conference.

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