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Berachain Launches Artio Testnet

In our very first edition of Web3 Watch back in May last year, we highlighted Berachain as an L1 to keep an eye on. Their private alpha testnet had already been live for a while before the launch of their public testnet, Artio. Berachain ecosystem NFTs have surged since then, and we expect such NFTs to establish these higher support levels, as free ecosystem mints within the ecosystem continue, and the reality of potential airdrops draw closer.

The launch of Berachain’s testnet was met with much excitement, with a total of 116,700 active addresses on the public testnet’s launch day. (chart below)

Chart 1
Source: Chart 1

The active addresses then peaked on 12 January at 192,800 addresses. However, this started to fall off, with only 74,980 active addresses on 13 January, and 14,710 active addresses on 14 January. This could be due to users being discouraged from utilizing the testnet faucet and dApps, due to the congestion of Ankr RPCs. The team at QCP also experienced this as well - from our end, the faucet ran smoothly, but the user experience of the dApps felt clunky - we had various failed attempts to approve and execute transactions.

Despite the subpar experience on the network, the recent attention resulted in massive spikes in the price floors of its ecosystem NFTs (chart below). Users speculate that holding onto Berachain’s various Bear NFTs could entitle them to airdrops, while holders of honeycombs and honey jars have granted users free mints for various NFTs of protocols in the ecosystem thus far.

Chart 2
Source: Chart 2

From the charts above, we observe that floor prices of NFTs in the Berachain ecosystem have been spiking in lockstep since ~20 November 2023, with surges ranging from ~3x to 7x. We would expect the recent attention, and continued hopes of incentives and airdrops to form higher support levels for these NFTs, especially as the ecosystem and its users grow.

$TIA supply events

Celestia ($TIA) has been the talk of the town, due to (i) its high APYs of ~16% for stakers, and (ii) potential airdrops from the ecosystem through staking. Although there are supply events for $TIA this month through undelegations, we postulate that such events may have a slight negative impact on the token’s price, in a similar fashion as $INJ, when it had its largest supply event on 16 January.

The huge shakeout in overall markets on 5 January, due to ‘sell-the-news’ sentiments surrounding the Bitcoin Spot ETF, had caused overall prices to fall, including $TIA - from $17+ to $12+ and many to unstake their $TIA from validators. Because the unbonding period for $TIA stakers is ~21 days, we can attribute the overall market shakeout on 5 January to the large supply of 798,904 $TIA (USD ~9.8m at the time, USD ~14.78m as of 15 Jan) that is about to be released on 27 January 2024. (chart below)

Chart 3
Source: Chart 3

However, when looking into specific addresses that had undelegated their $TIA, we observe this sentiment is central to only a handful of addresses with a large long spot exposure to $TIA, and not the overall market. Out of the total 798,904 that are being unstaked on 27 January, here is the breakdown:

  1. celestia1m6x90n60rhz452f7mldzyene7t62c3jjrthtqd unstaking 200,000 $TIA
  2. celestia1m6x90n60rhz452f7mldzyene7t62c3jjrthtqd unstaking 150,000 $TIA
  3. celestia1m6x90n60rhz452f7mldzyene7t62c3jjrthtqd unstaking 150,000 $TIA
  4. celestia1n3eveyf9qlyzg3ftg4y895au3v0m75q797df5m unstaking 103,925 $TIA
  5. celestia1m6x90n60rhz452f7mldzyene7t62c3jjrthtqd unstaking 100,000 $TIA
  6. celestia1zsdk7v4d5klh6pf9tgr4jqtxgdmlpylrpld2xr unstaking 100,000 $TIA

Looking into a couple of these wallet addresses, they have appeared to have begun staking their $TIA since its launch on 1 November 2023, indicating that they are the earliest movers into the token, and many multiples in profit. Paired with the fact that these addresses hold extremely large long spot exposure to $TIA, this explains their knee-jerk reaction to unstaking a large amount of tokens during the 5 January shakeout.

It remains to be seen if the market would bear the full brunt of the 798,904 $TIA that will be released into the market on 27 January. However, given that the price of $TIA had regained its footing since the shakeout, and has even reached its ATH this past weekend, we expect the impact of this supply event may be less severe than expected, especially if $TIA continues to shine.

The same conclusion can be drawn, when it comes to the supply event of 745,150 $TIA on 2 February, as the bulk of $TIA being unstaked (604,752 $TIA - ~75.7%) on that day comes from a single wallet (celestia19muml8sjpnecnm8geul4l3zfju24l04mcdrpgp). As of 16 January, 48% of circulating supply is staked, with over 300,000 unique wallets (twice compared to a week ago).

$INJ supply events

$INJ has also seen extraordinary performance in the past couple of months, with similarities to $TIA in terms of (i) staking yield (~15%), and (ii) potential airdrops from the ecosystem that stakers hope to receive. 16 January was a day where the asset saw the highest amount of tokens ever, being undelegated and released into the open market (chart below) - 673,982 $INJ worth ~$26.96m at current prices. Despite this supply event, the price of $INJ was not severely impacted, outside any negative price action that was correlated with the overall markets. As such, we would not expect the subsequent large undelegations to negatively impact $INJ’s price in the coming 1-2 months.

Chart 4
Source: Chart 4

$INJ is yet to see above average amounts of tokens being undelegated on 24 January (322,899 $INJ worth ~$12.9m) and 29 January (410,387 $INJ worth ~$16.4m).

Looking at the profile of wallets that are delegating their $INJ on 16 January, it paints a similar picture to that of $TIA, where the bulk of $INJ being undelegated is highly concentrated to a small number of wallets. Out of the 673,982 $INJ being undelegated, 632,995 of the $INJ come from 2 wallets alone:

  1. inj149pxjtn2dq4z88lpu9mgmqh5du8dgy3n8e2uau unstaking 133,495 $INJ from Black Panther validator
  2. inj149pxjtn2dq4z88lpu9mgmqh5du8dgy3n8e2uau unstaking 499,500 $INJ from SCV-Security validator

Alongside quantitative and fundamental similarities between $INJ and $TIA mentioned above, the two assets also share a similar percentage of token supply staked, at 47.7% and 48% respectively. The glaring difference in metrics between the two tokens is its market cap compared to FDV - $INJ has 83.75% of its total token supply in circulation, which appears much healthier than $TIA having 15.5% of its total token supply in circulation.

Despite their similarities and singular stark difference, the resilience of $TIA and $INJ despite supply events can be attributed to the high staking yield and potential airdrops awarded to stakers.

Is the sun still shining in the Solana Summer?

LD Capital launches Solana Ecosystem Fund

On 12 January, crypto investment firm, LD Capital, announced the establishment of a Solana Ecosystem Fund, to invest in Solana ecosystem projects, and actively participate in the development of the ecosystem, along with its projects and teams.

Unfortunately, this did not impact price and Solana closed lower at the end of the day. It seems that news on ecosystem funds may not have a similar impact, as compared to announcements of grant programs funded by the ecosystem themselves. Jupiter (DEX on Solana) to launch $JUP on 31 January

Jupiter, a DEX that had recently garnered much attention in the Solana ecosystem, recently announced that they will be launching their native token, $JUP, on 31 January at 10am EST.

To test their new launch platform, Jupiter will be doing 2 major test launches with (i) mockJUP and (ii) a real memecoin launch. This has managed to garner much excitement in the community, while others have come out to criticize the idea, citing that a single protocol synonymous with two tokens or brands would only foster liquidity and community division.

Following the juicy $JTO airdrops, many have flocked to tokenless projects like Jupiter, to farm for potential airdrops, in hopes to receive similar returns. Such users would most probably see the fruits of their labor on 31 January, although it may be less impressive than $JTO’s, due to dilution from increased attention and capital inflow into Solana and Jupiter itself - After all, we can attribute Solana’s recently rediscovered relevancy to $JTO’s success.

December 2023 was the month when airdrop eligibility for $JTO was revealed, and only 9,852 unique addresses were eligible to receive the airdrop. However, when looking at unique active wallets (UAW) of Jito (chart below), it appears to have had its biggest spike in early-December 2023, when airdrop eligibility was revealed - these people were already too late. Looking back in time, the second-largest spike in UAWs was 5,890 in early-November. Before that, we are looking at merely 100-200+ UAWs per day.

Chart 5
Source: Chart 5

When looking at UAWs on Jupiter (chart below), it started with a whopping 18,830 UAWs on launch day, and hit a peak of 121,210 UAWs in December. Twitter user @tweetsbyadit also showed in November 2023, where Jupiter had more 30D UAWs than Uniswap v2 and v3. In total, there are 89,409 unique wallets that have transacted on Jupiter - ~9x more than the eligible wallets for $JTO’s airdrop. Users will probably have to adjust their expectations on what they would be receiving from the $JUP airdrop.

Chart 6
Source: Chart 6

JitoSOL surpasses mSOL in terms of LST market share, but are they winning?

Investment and Research Analyst, @jermywkh, recently shared that Jito has surpassed the Solana liquid staking incumbent, Marinade, in terms of share of LSTs on Solana. (39.1% vs 38.2%)

However, when looking at TVL, Marinade’s TVL stands at $998.27m - way ahead of the second largest protocol by TVL on Solana, Jito, at $635.93m, according to Defillama. At first glance, this may seem rather contradictory. However, this can be explained due to Marinade’s two verticals - (i) liquid staking, where mSOL is minted, and is counted towards the market share of LSTs on Solana, and (ii) native staking, where mSOL is not native, and therefore is not counted towards the market share of LSTs on Solana. Currently, the amount of SOL staked into its native vertical comprises of ~38.1% of TVL, which explains the ~$380m lead in TVL that Marinade has over Jito, but is not accounted for when it comes to market share of LSTs on Solana.

Solana Mobile plans to launch second smartphone

Coindesk reports that Solana Mobile is looking to sell a second model of Solana smartphone, with new hardware, but at a cheaper price point. A representative from Solana Mobile did not immediately return a request for comment.

Solana’s first smartphone, Saga, came with a price tag of $1000, but saw prices reduced amid struggling sales. However, as mentioned in a previous Web3 Watch, the price of the Saga surged to over $3,000, and even selling for $5,000, as soon as people realized that the phone came with an allocation of $BONK.

It remains to be seen if Solana’s second smartphone will be successful, and we postulate that it probably has to have a similar $BONK-like offering in order to succeed. That being said, Solana phones could be collectibles that may surge in value in the long-run, like how old iPhones kept sealed in their boxes are selling for a hefty price today. However, this is contingent on the longevity of $SOL, and the ability of Solana to become a household crypto brand years down the road.

Hedera approves 4.86b $HBAR for ecosystem growth

On 13 January, the Hedera Global Governing Council approved the allocation of 4.86b $HBAR (~ $388.8m), to be directed towards further development and enabling its decentralized governance. From various historical examples of ecosystem stimulus, such announcements typically have a positive impact on the ecosystem token’s price action and TVL. However, as we observe from $HBAR’s price action, it appears that this announcement did not have any impact on price - Instead, its price action has been moving in lockstep with the majors, specifically BTC. (chart below)

Chart 7
Source: Chart 7

This is most probably due to Hedera not being an ecosystem or asset that is closely followed by the highly crypto-native retail market, and hence is sensitive or reflexive when it comes to such news that are catalysts for positive price action.

Hedera announced that the majority of this allocation (4.248b $HBAR comprising ~87.4% of the allocation) will be channeled towards existing initiatives such as the HBAR Foundation, the Hashgraph Association, and the DLT Science Foundation.

The remaining 614.06m $HBAR ($49.12m) is said to be used for the council’s operational costs and to compensate early SAFT buyers - this may not sit very well with retail holders.

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War Room - 20 November 2023
Alpha
Disclosure: The authors of this content and members of Nansen may be participating or invested in some of the protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol. Nansen does not recommend any particular course of action in relation to any token or protocol. The content herein is meant purely for educational and informational purposes only and should not be relied upon as financial, investment, legal, tax or any other professional or other advice. None of the content and information herein is presented to induce or to attempt to induce any reader or other person to buy, sell or hold any token or participate in any protocol or enter into, or offer to enter into, any agreement for or with a view to buying or selling any token or participating in any protocol. Statements made herein (including statements of opinion, if any) are wholly generic and not tailored to take into account the personal needs and unique circumstances of any reader or any other person. Readers are strongly urged to exercise caution and have regard to their own personal needs and circumstances before making any decision to buy or sell any token or participate in any protocol. Observations and views expressed herein may be changed by Nansen at any time without notice. Nansen accepts no liability whatsoever for any losses or liabilities arising from the use of or reliance on any of this content.