Spaziocrypto Newsletter #5
By Spaziocrypto profile image Spaziocrypto
10 min read

Newsletter #5

Official Newsletter #5 of Spaziocrypto.

In this Edition:

  • We talk about slowing inflation in the US
  • Ethereum (ETH) deposits rising
  • We talk about MakerDAO's Spark protocol
  • Altcoin Alpha from Spaziocrypto
  • Airdrop of the week
  • Amazon and Sotheby's revolutionise NFTs markets.

U.S. inflation continues to cool

U.S. inflation fell from 5% in March to a drum-roll of 4.9% in April.

The Fed has become like the Captain who managed to cool inflation for the tenth month in a row.

This is the first time in two years that inflation has been below 5%, albeit by a small margin. The core CPI index (excluding food and energy) rose 0.4 percent from the previous month and 5.5 percent from a year ago, in line with expectations.

The Fed claims the plan is working.

Lower inflation is good for both Bitcoin and the markets more generally. But let's face it, inflation has been persistent, to say the least.

Your money is still losing at least 4.9% purchasing power: not exactly something to celebrate.

Cognitive dissonance is showing up again, bringing mixed feelings. Data says one thing, predictions say another, and our real-life experiences paint a completely different picture.

In addition, there was a bit of a post-CPI panic after it was thought that the US government was potentially selling its Bitcoins. But this was fake news.

All of this makes for a confusing time even for savvy investors in anticipating what is going to happen next.

Soft landing or complete collapse? Let's explore both sides of the coin before placing your bet.

The elements of the common consumer basket are largely trending downwards. What is driving this decline? Lower prices for heating fuel, petrol, new and used cars, gas utilities, medical care, clothing, food and electricity.

But as far as inflation continues to persist, transport has risen by up to 11%, while essentials such as housing (8.1%), food (7.1%) and electricity (8.4%) all remain much higher than the official CPI index.

However, predictions suggest that in about 6 months, inflation may no longer be the word on everyone's lips. Instead, the issue will shift to the risk of deflation. The graph below shows that the M2 monetary base precedes the CPI data by 16 months. From here, we could see a sharp drop in the inflation number.

They will soon have no choice but to turn the money printer back on.

US Congressman Brad Sherman even said the silent part out loud during a hearing this week: 'They will accuse the US government of creating money out of thin air. That may be true, but we are the US government."

And when that happens...


Ethereum's staked deposits are increasing


Ethereum's gas commissions have reached a 12-month high due to, dare I say it, the "M" word again... so let's just say frog frenzy.

But it is precisely because of this that Ethereum's staking premiums have also reached a post-Merge peak of 8.6%.

Validators are enjoying ETH's gains at incredible levels. In the first week of May alone, validators earned $46 million, or about 24,997 ETH. This is an increase of 40% over the previous week!

In spite of these pesky gas fees that are currently high, Ethereum continues to break new records, positive ones. Ethereum staking deposits exceeded withdrawals for the first time since the Shapella version.

According to on-chain data, over 200,000 ETH were deposited this week, while only 29,000 ETH were withdrawn. This brings the total number of ETH blocked for staking to over 19 million tokens, corresponding to about 15 per cent of the total circulating supply.

Centralised exchanges such as Binance, Coinbase and Kraken continue to lead withdrawals, accounting for over 50 per cent. Users continue to prefer DeFi over CeFi, with over 6 million ETH staked now held on the liquid staking platform, Lido Finance.

This is due to the annual yield of 6.6%. Another piece of good news is the significant increase in the ETH burn rate. In the first week of May, 61,000 ETH were burned, almost half of which came from Uniswap.

In other reversing news, Ethereum's OFAC-compatible blocks have drastically decreased to 27% from 80% in November 2022. This is a positive sign. Last August, some relay operators started filtering specific transactions on the network. This was in response to the Office of Foreign Assets Control (OFAC), which was responsible for sanctioning Tornado Cash and associated ETH addresses.

Since then, censorship has been a major concern. Now that the percentage of blocks created using OFAC-compliant blocks has been greatly reduced, censorship at the network protocol level has also been reduced.


MakerDAO launches Spark lending protocol

Ethereum's MakerDAO has launched Spark, a new lending protocol.

Spark Lend is the first version of MakerDAO's lending platform that will allow DAI users to provide and borrow cryptocurrencies at competitive rates. Users will be able to access ETH, ETH staked, DAI and DAI staked.

Spark can offer extremely low rates due to its connection with Maker's Direct Deposit Module (D3M). D3M is a direct wholesale line of credit between Maker and third-party lending protocols. It can inject new DAI into Spark Lend. This offers a huge advantage to users, allowing them to borrow DAI at the initial annual rate of 1.11%.

Users can also take advantage of Spark's new DAI saving token, sDAI, for returns.

The Spark Protocol is part of MakerDAO's 'Endgame' journey. Currently, MakerDAO is going through a massive transformation that will lead to maximise decentralisation, transparency and efficiency.

The transition will lead MakerDAO to move from the "Endgame" era to the "Final State", resulting in the ultimate decentralisation of the DAI stablecoin.


The Altcoins-of-the-Week

CETUS, a DEX on Sui and Aptos, surpassed its fundraising goal within 30 seconds of launching its initial decentralised exchange offering. Public sale metrics indicate that Cetus has an initial valuation of $45.8 million.

Chiliz [CHZ] has just launched Chiliz Chain, an EVM-compatible tier 1 blockchain designed specifically for transactions related to sports and entertainment infrastructure.

MANTA is collaborating with Arbitrum to launch a private, on-chain identity verification system for Arbitrum users in the L2 ecosystem. This system will allow users to verify their identities when using certain L2 dApps without revealing any private data to any party.

The DAO of Uniswap [UNI]is considering a proposal to begin rewarding UNI token holders with a portion of the protocol's trading fees. The proposal is the latest iteration of a broader debate within the community on how the token can accumulate value.

Vega [VEGA], a blockchain built specifically for trading crypto derivatives, has just been launched on the mainnet. Vega's first marketplace is cash-settled futures, and other futures and options trading products are on the way.


New-projects/token

Levana Protocol, a DEX for leveraged trading on Sui, has just launched beta testing on Sui's testnet. A launch on the mainnet is on the way and plans are being developed for a token airdrop.

Pika Protocol, a DEX for leveraged trading on Optimism, will launch its new utility token - PIKA - on 23 May. The developers say the token will be released through a 'Token Generation Event' with a fair launch, with no VC or private investors.

Solunea, an upcoming DEX based on skSync, has announced a launch on Arbitrum. The plan is for 100 million SLNA tokens to be created with pre-sale and airdrop opportunities available.


Airdrop-of-the-week

Venom

Venom is a new layer 0 network with fast low-cost transactions and infinite shards that supports CBDC and WEB3 applications.

Venom recently announced their incentivised testnet and their intention to reward testers with VENOM tokens. To get started, you will need a Venom wallet. You can add the Venom extension to your Chrome browser or download the mobile app available on Android and iOS. Once you have set up your wallet, you can go to the Venom Testnet page and click on "Connect Wallet". Next, you need to log into your Twitter account and associate your profile with your Venom wallet.

After linking your Twitter account, you will need to go to step 3 and follow the Venom Foundation. Once you have completed all three steps, you will have to sign a request transaction to receive your 50 free VENOM testnet tokens. These can only be used on Venom's testnet.

You can obtain additional VENOM tokens by joining Venom's Discord server on the Faucet testnet page. Additional tasks will also be available on the tasks page. One of these tasks includes the possibility to create your first NFTs on Venom for free. After you have created your first free NFT, a new task will be available. This wallet task will require you to send a small transaction from your Venom wallet to the address provided on the task page. Once completed, you will earn your second free NFT on Venom.

The next task will be to explore Venom's exchange functionality through the Web3 World task. This will take you to the Web3 World testnet page and allow you to start exchanging your VENOM tokens with other testnet tokens. Complete a few exchanges to complete this part of the testnet.

Next, you will need to switch to the LP side fby adding liquidity to a pool of your choice.

Once completed, you can switch to the Farming option and deposit your LP tokens.

By completing these three processes on Web3 World, you will be able to create your third NFT. Several other tasks will be available, including Venom Pools, Venom Bridge, Oasis Gallery, Venom Pad and Venom Staking.

Once you have completed all these available tasks, you can go to Venom Discord and post your Venom wallet address in the #feedback section of the channel. This last step is one of the most important, as Discord members who provide this information are sure to receive the highest rewards for participating.


Blur, Amazon and Sotheby's shake up the NFT markets

Amazon
Amazon

In the context of NFT markets, Blur, Amazon and Sotheby's are creating a major stir with their innovative moves.

Blur is an NFT platform that is attracting attention for its offering of blurry digital artworks.

Blur
Blur

The idea behind Blur is to blur the initial NFT artwork and gradually reveal it over time. This unique approach has attracted interest among digital art enthusiasts, who are looking for unique and interactive experiences. Blur has attracted the attention of collectors and investors, helping to grow the NFT market significantly.

Amazon, one of the e-commerce giants, has decided to enter the NFT sector with the launch of its service called 'Amazon NFT Marketplace'. This new marketplace will allow users to buy, sell and collect NFTs directly on Amazon. With Amazon's vast reach and established customer base, entering the NFT marketplace could lead to greater adoption and awareness by the general public.

For its part, Sotheby's, one of the world's most renowned auction houses, announced its foray into the NFT market.

Sotheby's recently held its first NFT sales event, which included digital artworks by famous artists. This move brought digital art into the world of traditional auction houses, opening up new opportunities for artists and giving collectors the chance to acquire valuable digital artworks.

These moves by Blur, Amazon and Sotheby's are demonstrating the expansion and evolution of the NFT market. With the ever-growing interest and participation of prominent players such as these, the future of NFTs looks promising and full of opportunity.


The big news was Blur's disruptive market acceleration with the launch of its next innovation, a peer-to-peer perpetual lending protocol called Blend. This protocol has two features:

  • collateralised loans and the option to buy now and pay later.

Loans

For loans, NFTs can be used as collateral and are offered at fixed rates decided by the lender. Borrowers can exit at any time by paying off the loan in full, while lenders can exit at any time by triggering a refinancing auction, which means that a new lender can take over the loan with new terms, or, if no one accepts the offer, the result is liquidation (in which case the borrower must repay the loan or lose the security).

Buy now, pay later

Buy now, pay later means that buyers are borrowing ETH to buy NFTs, and the amount a buyer has to pay at the beginning can be very low (it is currently possible to buy an Azuki for less than 0.8 ETH at the beginning). Again, either party can walk away from the deal at will, either by paying the amount owed or by triggering a refinancing auction (and possible liquidation).

And if the value of the NFT rises before the loan is paid off, the buyer can put it up for sale and then make a profit after paying off the loan with the proceeds.

Opportunity and Risk

One thing to note is that lending activity is rewarded with Blur tokens and, as a lender, the more ETH you offer and the lower your APY, the greater the rewards.

However, once a loan is accepted, no more rewards are given, which may actually incentivise lenders to liquidate early so that they can then earn additional rewards on new loan offers.

All in all, Blend offers an interesting system to explore, with opportunities and risks for all parties involved. Since it is a product related to loans and NFTs, users should proceed with extreme caution and be prepared for volatility. Currently, Blend is active for four collections: CryptoPunks, Azuki, Milady Maker and DeGods, but more can be expected to be added.

By Spaziocrypto profile image Spaziocrypto
Updated on
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