1. Summary of Industry Dynamics
Industry News
This month is an unprecedented month for the crypto market. Bitcoin has rebounded from around $16,500 at the beginning of the month to over $23,000 in less than four weeks, with a monthly return rate of nearly 40%, which is basically the best "January" in ten years. The market is extremely active, and the trading volume has also increased from 11 billion at the beginning of the year to more than 33 billion. As of writing, Bitcoin closed at 23557.96, up 12% in two weeks; Ethereum closed at 1614.92, up 4.05% in two weeks. Looking back at the past year of the entire industry, the most painful rapid decline of this round of bear market after two major black swan events has passed, and the market is also in a stage of gradually regaining confidence, finding new narrative logic, and rectifying. Major institutions have also become more active, and have published articles looking forward to the future. The keywords for 2023 are still more focused on ZK Layer 2, parallel computing (APT, SUI), MEV, decentralized exchanges, and Ethereum upgrades. The narrative has also shifted from the more superficial gameFi, metaverse, etc. to the underlying technology and infrastructure, and the market is also laying the foundation for the next bull market.
On the other hand, the US stock market has performed strongly in the past two weeks. Since January 20, both the S&P and the Nasdaq have shown six consecutive positive days. The trend of strong rebound is continuing and strengthening, and both reached a relatively important position last Friday. The Nasdaq successfully broke through the upper track of the rectangular box on Friday, and the trading volume also increased slightly. The Nasdaq has been in this rectangular consolidation for four months. The multiple peaks and bottoms in four months have also formed a solid multiple bottom pattern for the Nasdaq. The S&P also stood on the 250-day moving average, that is, the annual line, for the second consecutive day, closing at 4070.56 points. The annual line is a position where the average cost of long-term owners holds shares, so it has a relatively important significance. This is also the first time that the S&P has stood on the annual line again after 9 months. The technical bear market can be temporarily put to an end. At the same time, the panic index has broken a new low again. The market sentiment is quite stable, and the market is also in a stable upward state. In the short term, we can expect the market to continue to rise. In terms of events, the US PCE was released on Friday. The data showed that PCE continued to decline. The core PCE rose by 4.4% year-on-year and 0.3% month-on-month, which were all within expectations. The overall PCE rose by 5% year-on-year and 0.1% month-on-month. From the data, it can be seen that inflation is indeed being slowly and effectively resolved. This data is also the most important data before the first interest rate meeting of the year, which has greatly increased the market's information on the 2/1 interest rate hike of 25 basis points, and it can also be expected that the interest rate hike will stop in the first half of the year. The current market trend is very good. At this time, there is usually no need to predict when the decline will start. The success rate of bullish trend will be higher. Of course, the risk of thunderstorms in individual stocks still needs to be treated with caution.
Industry data
1) Public Chain & TVL
As of January 29, the overall locked-in volume of various public chains denominated in US dollars continued to rebound, rising from about 44B two weeks ago to 48B, an increase of 10%.
The TVL of each public chain showed an upward trend, among which Fantom and OP had the largest increase, both exceeding 10%.
The Fantom chain performed poorly overall in 2022, with an annual decline of nearly 95%. At the end of last year, with the favorable effects of Andre Cronje's return and new development plans, it began to pick up. On January 19, the Fantom Foundation released the Ecosystem Vault plan, announcing that it would use 10% of the FTM burned in the original transaction fees to transfer to the Ecosystem Vault as an ecological fund to stimulate ecological development. Since January 19, the price of FTM has increased by more than 50%. In addition, the number of active users on the chain has increased in the past month.
2) Stablecoins
As of January 28, 2023, the combined supply of the top four stablecoins (USDT, USDC, BUSD, DAI) was approximately 132.246 billion, with little change from two weeks ago, a slight increase of approximately 28 million (0.02%). The supply of stablecoins continued to stabilize and did not continue the previous downward trend.
Compared with two weeks ago, among the three major fiat stablecoins, the supply of USDT has increased significantly, increasing by about 1.23 billion (1.86%), the largest increase in the past two months; USDC continued to fall, with a supply decrease of 500 million (-1.18%), and North American funds continued to flow out; BUSD failed to continue its previous downward stabilization trend, and its supply decreased significantly by about 690 million (-4.2%). Since the Binance FUD, the supply of BUSD has basically recovered all the gains in 2022, a decrease of 31% compared with the supply high of 23 billion in early November.
DAI, which is a leverage of ETH, showed a trend of rising first and then falling. Compared with the beginning of January, the highest increase was 2.4%. The current increase has fallen back to 1.5%, and some funds have taken profits.
Overall, although no external capital inflow has been observed, the outflow trend has stopped, and it can be confirmed that the bottom has been reached.
2. Macro and Technical Analysis
The market has fallen into a sideways trend after a violent rebound, and the short-term bottom has been established. If there is a correction, you can gradually increase your position. Our view is still to look at 30000u.
Two-year Treasury notes traded sideways.
Nasdaq is still suppressed by the annual line, and the short-term rebound is relatively fierce
1. Ahr999: 0.59, the cost performance is not as good as before
2. MVRV: 1.169, cost performance is the same as Ahr999
BTC address number: All addresses are flat
Number of ETH holding addresses: All addresses are flat
III. Summary of Investment and Financing
Investment and Financing Review
In the fourth week of 2023, the crypto VC market disclosed 14 investment and financing events, with a cumulative financing amount of more than US$238 million;
During the reporting period, in addition to the $125 million financing completed by crypto infrastructure provider Blockstream in the form of convertible notes and secured loans, which was participated by Kingsway Capital to expand its institutional Bitcoin mining hosting services, the only financing scale exceeding 10 million US dollars was the $60 million Series B financing completed by Web3 development platform QuickNode, which was participated by 10T and Tiger Global.
Organization News
4. Crypto Ecosystem Tracking
1. NFTs & Metaverse
NFT Market of the Week
Market Overview: This week, the NFT blue chip index performed generally, with a certain degree of decline compared to last week. The blue chip index also showed a downward trend in the past 30 days. As of January 28, the overall NFT market did not show a strong recovery trend.
NFT total market value: This week, the total market value of NFT has not changed much, up 1.01%. The total transaction volume has dropped compared to last week (-7.58%), but from the overall data within 30 days, it has remained at a relatively stable position, with an increase of 2.09%. The transaction volume has also increased by 10.31%.
Market activity: There was little change in the holders of the NFT market this week, and trader activity dropped significantly compared to last week, by -5.25%. Buyers fell 8% compared to last week, and sellers fell 4.82% year-on-year.
The top three NFTs in terms of NFT market transaction volume this week are Sewer Pass, MAYC, and BAYC. The floor price of BAYC has dropped in the past week and is currently around 73ETH.
Overview of Metaverse Projects This Week:
This week, the 10 leading blue-chip projects in the Metaverse sector performed well compared to the NFT market, and the total transaction volume still showed an upward trend, with a 7-day increase of 29.7%, mainly attributed to the recent good performance of NFT Worlds. The current transaction volume has come to the second place, surpassing decentraland and the sandbox. In terms of total market value, the top three Metaverse projects are still Otherside, Decentraland and the Sandbox. The floor price of land prices has also increased, remaining in the range of 0.9-1.73 ETH.
This Week’s NFT & Metaverse News Focus: Sewer Pass
Yuga labs launched the Sewer Pass, an NFT pass for Dookey Dash, a Bayc-based casting game, last week. Currently, the transaction volume of Opeasea has exceeded 26,000 eth, and the floor price is around 2.6 eth.
The gameplay of Dooky Dash is similar to Temple Run. Sewer Pass is the ticket of Dookey Dash, and there are 30,000 of them. Sewer Pass is divided into four levels. TIER1 requires MAYC, TIER2 requires both MAYC and BAKC, TIER3 requires BAYC, and TIER4 requires both BAYC and BAKC. The higher the level of Sewer Pass, the higher the possibility of getting better rewards in the future.
The overall gameplay of the game is divided into three steps:
1) Obtain Sewer Pass (BAYC and MAYC holders can apply for it for free, and it can also be traded in the secondary market);
2) Play Dookey Dash with a Sewer Pass and play at least once with a score greater than 0 to be eligible for the following rewards;
3) Keep the Sewer Pass in the same wallet you use to play the game until the Dookey Dash game ends on February 8, 2023. Users with more than 0 points in their wallet will be eligible to receive a mysterious new energy source. There are not many details about the new energy source yet. The highest-scoring verified Sewer Pass will also receive a rare key. The number of Sewer Pass conversions will be determined by the number of Sewer Pass and wallet combinations that meet the conversion conditions, up to 30,000.
Overall, since the beginning of 2023, the NFT market has begun to show a trend of recovery, and market sentiment is currently relatively high. Moreover, as the leader of NFT blue-chip projects, BAYC's operations and storytelling capabilities have always been among the best. Yuga Labs is good at maintaining a sense of mystery, using storytelling and leaving Easter eggs to set up suspense and leave a lot of room for imagination for the community. The launch of this new game has also attracted attention from the entire network, and there are additional rights and empowerments for BAYC/MAYC/BAKC and APE tokens. This has also attracted many users to explore investment opportunities in this game.
Key Project: Azuki officially enters the metaverse: important clues in the virtual city "Hilumia"
In the last weekly report, we mentioned that the NFT blue chip project Azuki announced the official launch of the community-built virtual city "Hilumia" on its first anniversary. Although the public news did not mention the financing and coin issuance of the project that many people are concerned about, as well as some rewards in the form of short positions like last year, we will still share with you the innovations that the project may launch based on this virtual city and their worldview.
Introduction to Azuki's dream town "Hilumia":
Hilumia is a very dreamy little town with 10 main interactive locations that clearly show the purpose of each location and the plans that are being implemented.
#1 Ember Square
A design store that has the latest designs and styles from every corner of Hilumia, a place to discover current and future trends. Combined with Azuki’s recent series of collaborations with fashion brands, such as the limited edition clothing launched with Japanese street brand AMBUSH, the XNOR-Assassins virtual sneakers launched in collaboration with Meta Street Market, and the PBT technology (physical bond token, a technology used to support some real-world physical objects to go on the chain), we can also boldly guess that in the future Azuki metaverse, NFTs related to virtual fashion will be an important part of Azuki’s development.
#2 Slowpokes Toy Haven
A toy store, originally a stall selling red beans and stuffed toys, also corresponds to Azuki's airdrop project Beanz. (After the news of the Metaverse came out, the floor price of Azuki's airdrop project Beanz began to rise, with a 24-hour increase of 69%). This place should also produce other high-quality toy NFT projects, or launch some new Azuki airdrops or derivative projects. The toy store may also be the location for mint.
#3 9 Lives Arcade
A game hall, a place that connects fans of classic old games with modern game enthusiasts. Players can experience the metaverse in the game every day, and tournaments are held regularly. From here we can foresee that Azuki is likely to release a gaming platform. Currently, the entire building appearance and logo are designed with cat themes.
#4 Golden Skate Park
A community of skateboard enthusiasts. Azuki previously held an offline exhibition of golden skateboards in Hong Kong, and later held an online auction of a total of 9 golden skateboards. The highest skateboard was sold for more than 400 ETH. It seems that this golden skateboard collection hut, which does not have many uses, is likely to host many metaverse experiences related to graffiti and street sports in the future. It can be said that Azuki is slowly enriching its story and is building a metaverse ecosystem step by step according to its original roadmap.
There are still many areas and venues under construction in the city that have not been shown the design drawings, such as MODA, which will probably store some art creations or artworks from the azuki community in the future, because azuki's secondary creation community is very active and rich. There is also#LoveIsland, a heart-shaped building, which may be used for online social and matchmaking experience. What is currently shown is only part of azuki's worldview.
Azuki's Metaverse Trilogy
#1 Hilumia is not the first attempt of Azuki’s Metaverse plan. As early as last June, Azuki held an offline event with the theme of "Enter The Alley" at NFT.NYC, the world's largest NFT event, showcasing various art installations, tattoo shops, physical peripherals, etc. This event is also the first display under the World section on Azuki's official website. Alley is defined as the door for Azuki holders to the future world, and there are many airdrop clues left inside the door.
Then, in July last year, Azuki’s official website World section added a game interface called “The Ruins”, but no more features were shown. At that time, the function only supported Azuki holders to display their profile homepage, which included the NFTs they held, the NFT airdrops they had participated in, and other activities. Azuki officials also said at the time that the profile setting function was just the beginning, and they would explore more innovations in the future as the community developed, such as IP interaction, community interaction and other functions.
Hilumia, launched today, is the third showcase under the World section. In the past year, we have also seen Azuki integrate past products and technological updates to start a new narrative.
We have also seen that Azuki's community atmosphere, user creations, and future story development are all growing upwards, and we can also see that Azuki is making some interesting attempts and innovations. However, on the first anniversary of the project, the Azuki community did not bring too many substantial and surprising things to holders and players, which inevitably disappointed the holders, so we are also looking forward to the project's fourth phase of development and construction in the metaverse.
2. GameFi Chain Games
1) Overall review
In general, the Gamefi industry as a whole continues to recover. In terms of Token prices, 80% of the top ten blockchain games by market value have achieved positive growth, and the upward momentum has slowed down compared with the first half of the month. Among them, TreasureDao Token continued to lead the rise this week after leading the rise last week, with a price increase of 72.71% and a 228.2% increase in the past 30 days (Treasure DAO announced that it will soon launch MagicSwap V2 to support asset transactions within the ecosystem;
According to the on-chain contract interaction volume, 70% of the top ten blockchain games achieved positive growth. Among them, WAM grew by 123% year-on-year. (WAM 3.0 version will be released in February, introducing AI technology)
2) Project of the Week: WAM
WAM App is an active mobile leisure blockchain game platform. Developers can upload their own games to WAM App, and players can get rewards by playing games. The platform also encourages users to socialize and build their own fan communities. In addition, WAM App also encourages players to promote in order to obtain more benefits.
According to official introduction, the WAM platform currently has 45 blockchain game products.
Games + Social:
WAM also adds social functions. In WAM, players have their own personal pages and can communicate with their friends in the APP. At the same time, the APP can rank individuals according to their gaming level and grade.
Creator Tools：
Players on WAM.app can create their own private tournaments where they can invite friends or members of their community to participate. Tournament hosts will be rewarded with more WAM coins.
Positive: WAM 3.0 will be released soon. According to official news, it will be deeply integrated with AI technology. Creators can also build their own casual games by issuing some simple instructions to the AI system. Through these games, they can create more attractive and fun tournaments to let their communities participate.
User data: WAM was founded in 2019 and attracted 2.5 million users within 45 days of its launch, gaining extremely high attention. In August 2022, WAM became the top-ranked game app on the BNB chain. Since the launch of P2E, WAM has made more than 1 million transactions within the app, becoming a star project on the BNB Chain. Google Store downloads 500,000+. Since January, the number of visitors to the details on Google Play has increased by 31% to 253,308 visitors.
Recently, WAM's on-chain interaction data has risen sharply. As of January 20, the transaction volume has surged 66,725% in the past few weeks to 18.71k. This increase may be attributed to the end-of-season settlement of the 1-year tournament, which rewarded more than 3,300 players with merchandise prizes and $WAM. And from the past thirty days, all data have achieved high growth.
Team: Founder Daniel has extensive experience in the mobile gaming industry. He has founded Transylgamia, REVMIX, Idea Studios, SMTH Big, Gamerina, Digitap and WAM, and has extensive experience in gaming entrepreneurship and the blockchain industry.
Token:
In the past month, the token price has risen sharply by 40% along with the rebound of the gamefi sector, but the increase is average compared with other gamefi projects (such as magic and gala);
Tokens are almost all unlocked;
Summarize:
Overall, WAM's on-chain activity has increased significantly recently. In addition, the WAM 3.0 version will be launched in February. Combined with AI technology, it is expected to bring a better experience to players and further promote innovation. You can keep an eye on the performance of WAM tokens.
3. Web3 Social & DID & DAO
Web3 social networking is more valuable than web2 social networking 1/value of social network = number of individuals in the network x average value of individuals x average physical distance between individuals
2/ The real social radius in the Web2 world is relatively small, with most social interactions among acquaintances, and a little more social interactions among strangers in the same city. There are not so many commercial elements in social interaction, and there are relatively few international elements.
3/ Web3 social interaction is often accompanied by commercial activities, because blockchain technology allows capital and human capital to circulate globally at a lower cost. Therefore, more globalization means a larger social radius and physical distance, more social topological relationships, and higher individual value (because it is closer to business)
4/ Therefore, in theory, the social network value of Web3 is far greater than that of Web2. Compared with Web2's acquaintance social networking and stranger social networking in the same city, Web3 is a global stranger business-oriented social networking. This is what I believe to be the real new social demand and opportunity generated by the birth of blockchain technology from the demand side.
The infrastructure of web3 social networking needs to be improved
5/ How are social relationships among strangers formed around the world? If Web2 social relationships are formed by families, schools, and companies, then Web3 stranger social relationships are formed by communities, DAOs, events, and cooperation between communities. First there are various scenarios around the community, and then there are stranger business-oriented social relationships.
6/ Currently, there is no platform that can meet this new social demand. Although Discord is the closest, it is actually very inconsistent with the spirit of Web3 because it is too private, not conducive to cooperation between communities, does not emphasize individuals, has a lot of personal profile information, has poor user experience, and poor content accumulation ability, all of which are very unfavorable to the establishment and management of social relationships among strangers around the world.
7/To meet this new demand, both Web2 and Web3 infrastructure are needed. Complete Web3ization is a kind of ideological inertia and ignores the real needs of users. Web2 is an information Internet, which requires a certain degree of centralization. Because social networks themselves need centralized information and resource exchange, which has not changed in human society for thousands of years. Web3 is a value Internet, responsible for value transfer and social asset chain.
Web3’s socialfi’s fi may be realized on NFT
8/ Web2 is often criticized for several issues, such as information sovereignty, account controllability, information distribution circle, and profit sharing rights. It is already remarkable if each individual problem is partially solved, and there is no need to overturn all of them at once. Users need to have their own choices. Some users are particularly concerned about a certain point, and they can appropriately sacrifice convenience and cheapness to selectively upload important information and social relationships to the chain.
9/ If fi only means x to earn in a narrow sense, then social and fi are essentially contradictory. People and content with real social value will not spend time and energy for petty profits, and bots and speculators who accumulate by combing their hair will not significantly increase the value of social networks. Fi in a broad sense should refer to the ability to transfer value in social networks and the rights and interests of sharing value networks. From this perspective, fi is meaningful.
10/ Compared with socialfi, I prefer socialnft, because nft can carry more information, is more diversified, has a longer tail, and is more suitable for honor systems and labels, thus becoming a social asset behind the wallet, reducing the trust cost of stranger social interaction, and becoming a lubricant for commercial behavior between strangers around the world. NFT/SBT will have great potential in this regard.
A better entry point for Web3 social networking is the Renaissance of Tieba/forums
11/Instant messaging is not the best entry point for Web3 social networking, because many Web2 apps have already solved this problem well, and there is no need to add unnecessary details. On the contrary, the forum format of the ancient times is more suitable for this kind of content precipitation. However, compared with the original forums of that year, there are now new technologies such as personal information flow, tag classification, algorithm distribution, community distribution, etc., which will greatly increase the efficiency of information distribution.
12/ In the era of mobile Internet, one of the important reasons for the demise of forums is that the monetization efficiency of the community is too low. The existence of Web3 value Internet makes the monetization path of the community shorter. With more efficient content distribution efficiency, Web3 will usher in a renaissance of the community.
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.
