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June 17, 2024: This past week, cooler inflation data revived market sentiment while Bitcoin hovered around $67K.
Nevertheless, we continue to observe a strong pipeline of airdrops, including the much-anticipated zkSync airdrop, suggesting that positive market sentiment persists. Outperformers in the past week included tokens that focus on real-world assets, such as OM and GNO.
Enjoy our weekly take on the market summary!
Cooling Inflation Buoys Market Sentiment
U.S. producer prices unexpectedly declined in May, marking the largest drop in seven months. The producer price index (PPI) for final demand decreased 0.2% from the prior month, lower than the 0.1% increase economists had expected. Compared to a year ago, the PPI rose 2.2%, less than the 2.5% annual increase that had been forecast.
The decline was driven largely by a nearly 60% drop in gasoline costs. Prices for other energy-related goods, such as diesel and jet fuel, also fell. Overall, goods prices decreased 0.8%, the most since October, while services costs were unchanged.
The unexpected PPI softness follows the recent cooling in consumer price inflation, providing further evidence that price pressures may be easing in the U.S. economy. This is likely to strengthen the Federal Reserve's confidence in its efforts to moderate inflation through interest rate hikes. The central bank has held rates at an over-two-decade high since last July, and is projecting just one cut this year as it awaits more progress on inflation.
The PPI report, along with an uptick in weekly jobless claims, led to a rise in stock futures and a drop in Treasury yields. Investors interpreted the data as potentially signaling a slowdown in the Fed's rate-hike campaign.
Next week, speeches from several Fed officials are expected to stir the market.
Source: CoinGlass
Strong Bitcoin Spot ETF outflows on Monday and Tuesday last week led to Bitcoin's underperformance against equities. However, it seems Bitcoin is maintaining strong support around $67K.
CRV Jumps 8.7% After Curve Finance's Founder Repays Most of Debt
Curve Finance (CRV), launched in January 2020, is a DeFi protocol on Ethereum that facilitates stablecoin trading using an automated market maker (AMM) model. It focuses on stablecoins pegged to the U.S. dollar and Bitcoin, enabling low-fee trading with minimal price variation through user-supplied liquidity pools.
Michael Egorov, founder of Curve Finance, faced a $27 million liquidation of his CRV tokens after its price plummeted to $0.219. Despite this, he retains substantial assets in stablecoins. The incident, part of a wider wave of CRV liquidations, didn’t directly impact market selling, but raised concerns about Curve's stability and community trust. This episode follows a history of market disruptions linked to Egorov's heavy borrowings, highlighting the broader risks to the DeFi ecosystem.
OM Hits All-Time Highs Due to Bullish Sentiment Regarding Tokenization of Real-World Assets
MANTRA (OM), a blockchain project launched in 2020 that focuses on tokenizing real-world assets (RWA) and bridging the gap between traditional finance (TradFi) and decentralized finance (DeFi), has seen its native token hit an all-time high. The bullish sentiment surrounding MANTRA is driven by several key catalysts, including the integration of Ondo Finance's USDY vault on the platform, a high circulating supply of 90% of the OM tokens, alignment with growing interest in the RWA narrative and MANTRA's efforts to connect the worlds of DeFi and TradFi.
GNO Jumps 6.8% After GnosisDAO's Consideration of a $20 Million Investment in the New GnosisVC Venture Fund
As a DAO, Gnosis uses the products it creates to transparently guide decisions on the development, support, and governance of its ecosystem. Gnosis Safe (multisig and programmable account), CoW Protocol (formerly CowSwap and Gnosis Protocol), Conditional Tokens (prediction markets), Gnosis Auction and Zodiac (standard and tooling for composable DAOs) are all products incubated by Gnosis. Their success is demonstrated by the recent spin-out of CoW Protocol and the formation of SafeDAO.
GnosisDAO is evaluating GIP-102, a proposal to invest $20 million into GnosisVC, a new $40 million venture fund focusing on early-stage projects in real-world assets, decentralized infrastructure and financial payment rails. The fund aims to strengthen the Gnosis ecosystem, structured as a Cayman-exempt limited partnership with a seven-year term and standard 2/20 fee structure. GnosisVC seeks to support and integrate these projects, providing regular updates to its stakeholders.
IO Jumps 12.35% After io.net Announces Claim Period for Ignition Rewards Program
io.net (IO), founded in 2022, is a DePIN project on Solana that provides scalable GPU computing power to AI and machine learning companies, enhancing the capacity for handling complex, data-intensive models through distributed computing. io.net announced that users of the Ignition Rewards Program can claim their rewards starting from 11am UTC on June 11, 2024, until 11am UTC, June 18, 2024, on the designated website. Additional details and restrictions, especially for users in prohibited jurisdictions, are available on the official website.
LPT Surgess 25.6% After Livepeer Launches the AI Video Startup Program
Livepeer (LPT), established in 2017, is an Ethereum-based network that optimizes video streaming by utilizing distributed computing for efficient transcoding, rather than hosting or distributing content. Recently, Livepeer introduced its AI Video Startup Program to support early-stage startups focusing on decentralized AI video technologies. The program offers $40K in funding, mentorship and technical support, leveraging the Livepeer AI Subnet for advanced AI video capabilities. Participants will benefit from a decentralized infrastructure that enhances security, lowers costs and scales effectively. Applications close on June 26, 2024.
Wormhole Airdrops W Token to Monad Community
Wormhole, a cross-chain messaging protocol, recently airdropped its W tokens to the Monad community on Discord, leading to speculation that Monad, which raised $225 million, could reciprocate by airdropping tokens to users who have the Steakorr role in Wormhole's Discord.
To be eligible for the potential airdrop, W holders need to "stake" their tokens (a governance delegation that doesn’t require the tokens to leave the wallet) and connect their wallet to the Galxe official link from Wormhole to receive the Discord role. While this airdrop is purely speculative, the process takes only a few minutes, and could potentially be considered in other snapshots. The deadline to obtain the role is June 10, 2023. Some users have reported delays with the Galxe requirement "Sybil prevention credential," so patience may be required.
ZkSync is About to Launch ZK Airdrop
Ethereum Layer 2 network zkSync has launched ZK Nation, a community-driven initiative aimed at decentralizing protocol governance ahead of details on zkSync's token allocation being revealed. ZK Nation will manage three key divisions: ZkSync Token Assembly for on-chain governance, ZkSync Guardians to enforce protocol security actions and ZkSync Security Council, comprising cybersecurity experts to review protocol upgrades.
This announcement comes as zkSync reports a transaction success rate of over 98% and a significant increase in total value locked (TVL) of 36% since the start of the year. Further details on the token airdrop and governance structure will be disclosed in the coming weeks.
Stay tuned for more institutional insights and crypto updates next week!