1. Summary of Industry Dynamics
Industry News
Last week, the crypto market rose sharply following the U.S. stock market. Bitcoin rose more than 5% for three consecutive trading days after strongly breaking through the weekly line on Wednesday. This led to a big rebound in the entire crypto market, and the trading volume also increased significantly. It rose from less than 10 billion U.S. dollars last week to 20 billion U.S. dollars. The market's long-short ratio quickly reversed, causing the liquidation of 100 million U.S. dollars in short positions (the liquidation data in 24 hours on January 14 was 650 million U.S. dollars). As of writing, Bitcoin closed at 20783.38, up 21.68% during the week, with an amplitude of 24.45%; Ethereum closed at 1552.81, up 20.37% during the week, with an amplitude of 24.03%. Last week's rise was first of all a big blow to the short side. Binance's contract positions fell by nearly 15% in a short period of time. This was basically a decrease in positions caused by short stop losses or liquidation. However, from the perspective of stablecoins, the main driving force for this rise is no obvious inflow of mainstream stablecoins. The supply of stablecoins this week is basically the same as last week. Therefore, this rise is mainly driven by existing funds. There is no new capital inflow for the time being. At the same time, there are voices in the market saying that CME Bitcoin futures positions increased by US$250 million last week, which may be one of the main drivers of this increase.
On the other hand, the US stock market rebounded strongly last week, and closed positive for four consecutive trading days starting from Tuesday. With the rise two weeks ago, the Nasdaq has risen 8.53% from the low point at the end of last year, and the S&P has also risen 5.7%, and is about to touch the annual line. The pressure is significant, the point is 4067 points. The annual line is a downward sloping curve. After the stock price plummets, it will be easier to stand on the annual line if it waits for the annual line to go down. After the annual line goes down, if the S&P can successfully stand on and stabilize the annual line, the bear market will technically see the end of hope. The most important news last week was that the CPI data showed negative growth month-on-month, with an annual rate of 6.5% year-on-year, and the core CPI annual rate of 5.7%. The data were in line with expectations and lower than the level before November. Although the improvement in inflation did not immediately pull up the stock index, it will gradually form a positive factor to support the confidence of bulls in the future. Janet Yellen, former Federal Reserve Chairman and current Treasury Secretary, also recently said that inflation has been relatively mild in the past six months, but rents are still rising. She expects the rental index to drop sharply in the next six months and said that she sees the prospect of a soft landing for the US economy. Although the Federal Reserve has always adhered to its independence and what the Treasury Department says does not affect the Fed's decision-making, Yellen's speech still shows that she is optimistic about the prospects of the US economic outlook.
Industry data
1) Public Chain & TVL
As of January 15, the overall locked-in volume of various public chains denominated in US dollars rebounded sharply, rising from about 40B last week to 44B, an increase of 10%.
The TVL of each public chain has increased significantly this week, with Tron, Avalanche, and Solana leading the gains.
Solana continued to rebound this week, continuing to rise by more than 50% in a single week. The price of SOL has risen by more than 180% since the lowest point. After the FTX incident, the Solana ecosystem was hit hard, with token prices falling, NFT projects leaving, and daily active users and active developers declining. However, due to the "calling orders" on Vitalik's Twitter and the popularity of the new project Bonk (a Shiba Inu-themed meme coin), the Solana chain has basically returned to the state before the FTX crash.
Avalanche also rebounded significantly this week. Affected by the good news, the price of AVAX rose by more than 30% in a single week. According to TechCrunch, Amazon Cloud (AWS) and Avalanche development company Ava Labs exclusively told TechCrunch that the two companies have reached a cooperation to help expand the adoption of blockchain by enterprises, institutions and governments. The main support is to make it more convenient to start and manage nodes on Avalanche and provide developers with more flexibility.
2) Stablecoins
As of January 14, 2023, the combined supply of the top four stablecoins (USDT, USDC, BUSD, and DAI) was approximately 132.2 billion, which was not much different from a week ago, only decreasing by approximately 50 million. After another eight consecutive weeks of decline, the supply of stablecoins finally showed signs of ending the downward trend and began to stabilize.
Among the three major fiat stablecoins this week, the supply of USDT continued to rise slightly, increasing by about 27 million (0.04%). Since the beginning of January, the supply of USDT has been rising steadily and relatively stable; USDC fell slightly again this week, with a supply reduction of 150 million (-0.34%); and after a sharp drop, BUSD's downward trend has stabilized, increasing by about 31 million (0.19%) this week. As we said last week, the negative impact of the Binance FUD incident has subsided.
It is worth noting that DAI, which serves as ETH leverage, has seen a rare rise this week, with its supply increasing by approximately 86 million (1.5%), and on-site funds have begun to enter the market to go long.
Overall, although market liquidity has not improved, the trend of capital outflow has begun to ease. If the stablecoin data is observed to rebound in the future, it will basically confirm that the bottom has been reached.
2. Macro and Technical Analysis
The violent rebound of the market is essentially not related to the overall macro situation, but more of an endogenous rebound demand in the market. BTC and ETH have rebounded to the previous sideways position, and a certain amount of energy is still needed to break through upward. At the same time, it has rebounded for 8 consecutive days, and the market has a certain demand for a correction. Be careful of funds taking advantage of the correction to ship out.
Two-year Treasury notes traded sideways.
Nasdaq rebounds to around 11,000
1. Ahr999: 0.5, can be used for fixed investment
2. MVRV: 1.01, cost performance is the same as Ahr999
BTC address number: 100-1k addresses rebounded, while the rest were sideways
Number of ETH holding addresses: the number of addresses holding 100-1k ETH is rising
III. Summary of Investment and Financing
Investment and Financing Review
During the reporting period, the number of investment and financing projects disclosed in the crypto market was 12, with a cumulative financing amount of approximately US$56 million;
During the reporting period, Cyber X completed a strategic round of investment (equity investment) of US$15 million exclusively participated by Foresight Ventures:
The financing will help CyberX expand its teams in Asia and North America, add more integrations with exchanges and decentralized finance (DeFi) protocols and build out its trading infrastructure. CyberX will use the funds to expand its teams in Asia and North America, add more integrations with exchanges and decentralized finance (DeFi) protocols and build out its trading infrastructure.
Cyber X’s current businesses include:
Exchange Market Maker
Defi Liquidity Provider
Prime Broker: Margin Financing & Asset Management
Labs: Research & Ventures
Organization News
Layoffs: Several well-known crypto institutions have recently announced layoffs to reduce operating costs:
Head mechanism dynamics
4. Crypto Ecosystem Tracking
1. NFTs & Metaverse
(1) This week’s NFT market
Market Overview: Although the NFT Blue Chip Index has fallen to a certain extent this week compared to last week, it still shows an upward trend based on the data within 30 days. As of January 13, the market as a whole continues to pick up. Looking at the sales data in December and early January, we can see that the monthly transaction volume of NFTs in December broke the downward trend of 8 consecutive months in 2022, an increase of 13% from November. We analyze that this is largely attributed to the blue chip projects, especially the recent series of BAYC-related activities launched by Yuga Labs and the upgrade of gameplay.
NFT total market value: This week, the total market value of NFT continued to rise, up 0.37%. The total transaction volume also increased by 9.16% compared with last week, and generally remained at a relatively stable position. The transaction volume also showed an upward trend in the past 30 days, with an increase of 64%.
Market activity: There was little change in the number of NFT market holders this week, but trader activity increased significantly compared to last week, with an increase of 16.97%). Buyers increased by 10.59% compared to last week, and sellers increased by 21.25% year-on-year.
The top three NFTs in terms of NFT market transaction volume this week are MAYC, BAYC, and BAKC, which are once again dominated by the Bored Ape family. The floor price of BAYC has dropped in the past week and is currently around 79ETH.
Overview of Metaverse Projects This Week:
This week, the total transaction volume of the 10 leading blue-chip projects in the Metaverse sector still showed a downward trend, down 12.31% in 7 days (down more than 10% for two consecutive weeks), mainly due to the otherside -4.74% and the sandbox - 13.64%, decentraland - 48.9%. The total market value has increased by 19%, and the holders have not changed much. The top three Metaverse projects are still Otherside, The Decentraland and the sandbox, and the floor price of land prices remains in the range of 0.9-1.5 ETH.
Azuki also announced its entry into the metaverse last Friday, officially launching the virtual city "Hilumia" built entirely by their own community. Azuki's NFT holders or community participants can now directly enter the city to participate in various exploration activities. The project has not yet released an official roadmap, but the project may be an immersive version of Azuki.
This week’s NFT & Metaverse News Focus:
NFT platform Nifty's has established a partnership with Warner Bros. and HBO, and plans to jointly launch a series of NFT digital collections related to "Game of Thrones" this year. The project released this time is called "Game of Thrones: Build Your Realm, Build Your Hero Box", which was released on January 10. The primary sale price is $150, with a total of 5,000 (3,450 pre-sales, 1,500 public sales, and 50 community gifts), deployed on the eth chain. It was sold out in the primary market 7 hours after the release. At present, the trading volume of opensea is not very active, with a total trading volume of 280 ETH, and the floor price has fallen to 0.045ETH.
The gameplay of the project is to upgrade the user's avatar by collecting different resource cards. Specifically, each Series 1 Hero Box contains a hero avatar, nine resource cards that can be used to build your empire, and three story cards containing iconic scenes, characters and locations from American TV series. The Game of Thrones NFT released in January is just the first chapter of the digital collection experience. Warner Bros. will also release related theme activities, on-site participation and other digital collections in the future.
The project owner mentioned that the transformation from web2 to web3 is to create more interactive collection experiences for fans, and the team also hopes to create a new narrative method and gameplay to introduce more die-hard fans to digital collections and the Web3 industry. However, some details after the project was released were also criticized by netizens, such as the rough workmanship of the hands of the character cards designed by the project owner, without any proportion or beauty.
Future development: Warner Bros. also plans to continue to expand the fan base and franchise of "Game of Thrones" in 2023, and will also attract fans on a deeper level through different ways and enhance the overall fan experience.
We believe that the IP of Game of Thrones should be an IP with top fan traffic and project resources in the world, but after one week of release, the effect of NFT from web2 to web3 is not very ideal.
(2) Key project: Memeland - CaptainZ
About 9GAG:
9GAG is a social platform that uses secondary creation to share interesting pictures and funny videos. The meme elements in its platform are loved by many users. Currently, there are more than 200 million global users on Instagram and an average of more than 8 million daily active users. 9GAG's success in web2 is inseparable from its users, and the team has been working hard to explore an effective incentive mechanism to connect Web2 and Web3 communities and give creators more power.
Project Introduction:
Memeland is the first NFT project launched by 9GAG. As the NFT market continues to be sluggish, the recent rise in the NFT blue chip index is inseparable from the issuance of CaptainZ. This project has also raised the popularity of the NFT market in a short period of time. The CaptainZ opened the mint window on January 5th, with a price of 1.069 ETH, and the whitelist is only open to Memelist and PotatoZ holders. The Captainz received more than 9999 deposits in just 669 seconds after opening the mint. The team's income exceeded 9800 ETH, and the current floor price has reached 5.6ETH.
Overall gameplay of the project:#Buildingthe Creator Economy: Launching NFT membership cards of different levels
Memeland is one of the strong narrative projects of NFT. It also introduced the Web3-style membership card gameplay. The three series of NFT projects issued by Memeland, "YOU THE REAL MVP", "Potatoz" and "The Captainz", correspond to different levels of membership. Holders can unlock membership of different levels of clubs by holding different nft products, as well as the whitelist of the future 9GAG project, short positions and some live event qualifications. This access-based gameplay allows holders to enjoy different rights and interests through different types of NFTs.
Project breakdown:
The Potatoz NFT is a basic membership to enter the Memeland ecosystem, including 9999 PFP images, released in the form of Free Mint, and MVP holders can directly obtain 3 airdrops, the current floor price is 2.2 ETH. In July last year, Memeland introduced the staking function of the NFT, allowing players to obtain tickets to participate in weekly draws by staking Potatoz’s NFT.
There are 420 MVP projects in total. They are premium members of the Memeland ecosystem. Holders can get 2 free "CaptianZ" Mint quotas and whitelists for all future Memeland and 9GAG projects. The sale price of MVP is 5.3 ETH, and the current floor price is as high as 38 ETH.
CaptainZ is the third series of NFTs, with a total of 9999. It is the top member of Memeland and can manage Memeland DAO. Holders will have the power to help Memeland make decisions about the financial governance rules of the DAO, expand partnerships, etc. After CaptainZ is minted, holders can directly participate in the project's weekly tasks to earn different types of Treasure Mapz, which will have the opportunity to be converted into $MEME tokens in the future or enjoy priority access to the yet-to-be-launched TREASURE ISLANDZ.
In summary, although 9GAG is a "newcomer" in the NFT field, this social platform with top traffic and outstanding operational capabilities has laid the foundation for the success of its Web3 transformation with its strong team lineup and huge user base. The team also hopes to continue to promote their meme culture and their mission of "Make the world happier" in the NFT field.
2. GameFi Chain Games
(1) Overall review
Overall, the industry continues to recover. In terms of token price performance, the token prices of the top ten blockchain games by market value all achieved positive growth, and the increase was more than 20%.
Gala: After leading the market last week, Gala continued to rise by 102.95% in the past week, and the 14-day increase exceeded 188%, but it has recently begun to fall back (it continues to release the positive news after the acquisition of the game studio, and announced that many games will use Gala coins as consumption tokens)
Stepn: The price has risen by more than 106% in the past week (the first monthly STEPN Town Hall in 2023 was held, and a series of events were announced; it is also possible that the industry recovery and market making have driven up token prices)
In terms of on-chain contract interaction volume, 70% of the top ten blockchain games have seen a slight year-on-year increase, but the top twenty blockchain games have hardly changed, with old games still dominating the list;
(2) This week's project
Oasys:
Oasys is a blockchain project jointly invested by top global game companies such as Bandai Namco, SEGA, Gumi, and three exchanges including Huobi, Kucoin, and bitbank, and built for game developers. It provides users with a high-speed, zero-gas-fee GameFi public chain by combining the best public L1 and private L2 blockchain technology solutions.
Technical solution:
Oasys uses the EVM-compatible protocol of the Oasys architecture. This unique architecture consists of multiple layers:
1. Hub-Layer: high scalability, high data availability, and high network stability.
The Hub-Layer is dedicated to storing and exchanging data in a secure and stable manner, so it does not allow applications to run directly. Since all data on Oasys is stored, this layer maintains high data availability. Block generation is set to every 15 seconds, with the same level of network stability as Ethereum.
Its node implementation is based on a forked version of geth (Go Ethereum) and uses PoS as the consensus algorithm. In order to maintain the stability of the blockchain network, the Hub-Layer will in principle leave the execution of applications to the Verse-Layer. The Hub-Layer is limited to limited uses such as batch transactions, FT/NFT management, and management of bridge information.
(II) Verse-Layer: Oasys Layer-2 technology. Verse-Layer is Oasys’s second-layer blockchain, and the current solution is a customized optimistic rollup.
Users can build a verse simply by depositing more than 1 million OAS on the verse contract. On the Verse-Layer, the Verse Builder is responsible for node operations and requires the correct operation of the server. In addition, it is also possible to configure which smart contracts can be deployed and which transactions can be executed without using any Gas. All data on Oasys is stored in the Hub-Layer and can be recovered even if the Verse-Layer is lost.
Token Economy: Oasys’ token system includes OAS tokens (the native token of the Oasys ecosystem infrastructure), Verse tokens (the tokens used to create an ecosystem for each Verse), and Game and Dapps tokens (the main tokens for games and Dapps).
The reason for adopting a multi-token economy instead of a single-token economy is to give Verse Builders and game developers the opportunity to freely create their ecosystems designed to deploy many different types of games and Dapps. Games on each Verse include a variety of types, from light casual games to heavy FPS and MMORPG. The differences in content and business types between these Verses and games require developers to be flexible in token design. Under the multi-token economic structure, each Verse Builder can build its own token utility ecosystem, total token issuance, allocation, etc. according to the characteristics of the Verse.
OAS Tokens:
Quantity and use: The total supply at the time of issuance is 10 billion. It has the following uses:
Paying Gas Fees
Verse Building: Anyone can build Verse as long as more than 1 million OAS are deposited into the verse contract. By collecting a certain amount of initial Verse Building deposit, the ecosystem can be better expanded to prevent the spread of fraudulent Verses and ensure the long-term credit of Verse Builders.
Decentralized governance: including changing inflation rate through staking, use of funds, voting on which contract to build on the Hub-Layer, etc.
Staking: Anyone who stakes 10 million OAS or more through the validator contract can become a validator.
Payments: Can be used for many small payments in and out of the game.
Token Allocation:
Token price performance: Currently listed on OKX, Kucoin, Bybit, Gate, Huobi
Financing: Oasys completed a $20 million financing on July 7, led by Republic Capital, with participation from Jump Crypto, Cryptocom, Huobi, Kucoin, bitbank and Mirana Ventures. In December, it announced the completion of a new round of strategic financing, with participation from Galaxy Interactive, South Korean game giant Nexon, popular game franchises MapleStory and Dungeon Fighter Online, as well as Presto Labs, MZ Web3 Fund, Hyperithm, Jets Capital, Jsquare, AAG, YJM Games and ChainGuardians. The core goal of this round of strategic financing for Oasys is to strengthen its validator network while expanding its gaming partner pool to enhance the Oasys ecosystem.
3. Web3 Social & DID & DAO
Virtualness
This week, the former head of Singtel’s sports department joined Web3 creator platform Virtualness to be responsible for sports and media relations; the platform has also previously worked with the Philippine Basketball Association and plans to launch a local NFT platform in the first half of this year.
Products (waitlisting):
Creators: One-click issuance of coins & NFTs, including but not limited to pictures, videos, and music
Fans: Buy and trade NFTs, and share NFTs on web2 platforms (ins, tt)
Team Background
Founding team: Facebook India’s No. 001 employee, SoftBank’s partner
Advisory team: Randi Zukerberg (Mark Zuckerberg’s sister) and other leading figures in the content Internet industry
Investors: Blockchange led the seed round with $8 million, and others included polygon ventures and better capital ventures;
summary:
The team with a strong background in web2 is very eye-catching in the current bear market. It has rich content IP resources and is familiar with the operation and marketing of Internet platforms, so it is expected to increase the volume.
Very early, with over 2,000 Twitter followers, but almost no attention in the Chinese-speaking world;
The business model makes sense. At present, it seems to be a typical web3-based approach of the fan economy, which uses IP traffic to attract users to join.
5. Team News
JZL Garden Progress
The "Khmer Girl in the Dream - Willow Leaf" project was officially launched last week and is expected to be launched soon. We welcome your continued attention.
JZL Garden Half Monthly Talk
At 8 o'clock on Monday night, we held the second episode of JZL Garden's semi-monthly talk to discuss possible new NFT paradigms in the next bull market.
JZL Research Annual Summary
2022 is a turbulent year. We have witnessed wars, epidemics, and the worst inflation in the United States in 40 years and the violent interest rate hikes by the Federal Reserve. The crypto market is also difficult to remain immune. The switching of bull and bear cycles and the depletion of liquidity have triggered a series of black swan events such as the LUNA death spiral, 3AC and FTX bankruptcy. The JZL team has compiled the weekly reports and research reports of the past year to review 2022 with everyone.
The content of the document includes: 1) JZL team's weekly crypto market review since March 2022; 2) JZL team's research reports on stablecoins, leading quantitative institutions, NFT platforms and projects, infrastructure tracks, etc. Welcome everyone to discuss and exchange, thank you!
about Us
JZL Capital is a professional institution registered overseas, focusing on blockchain ecosystem research and investment. The founder has extensive work experience and has served as CEO and executive director of many overseas listed companies, and has led and participated in eToro's global investment. Team members come from top universities such as the University of Chicago, Columbia University, University of Washington, Carnegie Mellon University, University of Illinois at Urbana-Champaign, and Nanyang Technological University, and have served internationally renowned companies such as Morgan Stanley, Barclays Bank, Ernst & Young, KPMG, HNA Group, and Bank of America.
