Huobi Research Weekly Report: DEC.6 - DEC.12, 2021

Weekly Summary

Crypto market analysis: The overall cryptocurrency market cap was 11.5% lower than last week. Crypto market price fell down in the weekend. BTC is shaking at a low level after a sudden plunge, with a clear downtrend. ETH price has shaken sharply after the plunge and the trend is unclear.

Market review: Total value locked (TVL) is $247.19 billion, with Tron Ecosystem performed well last week.

TVL in layer 2: total value locked (TVL) is $5.68 billion, 2.3% lower than last week.

Projects review: NEAR (Near), BitTorrent(BTT) and Convex Finance(CVX) are the top three gainers among top 100 market cap projects. New projects such as Unbound Finance, Lumerin, Benqi, Merit circle, Vega are worthy of attention.

Weekly Breaking News: Vitalik Buterin released the roadmap of "Blockchain for Large Blocks"; Ethereum network successfully completed the upgrade of "Arrow Glacier".

Investment and Financing News: There were 38 investment and financing projects in the past week, with a total amount of $1.268 billion, a decrease by 50% from last week.

Market indicators:

Crypto Market Analysis

BTC & ETH technical analysis

Last Saturday BTC suddenly plummeted in volume and the price fell below the trend line to as low as 417818 USDT. Then the price rebounded and the K-line touched the downtrend line and immediately went down. This indicates a strong downtrend at the moment. Until the price stabilizes, buying is not recommended.

- ETH also plunged on Saturday, then it rebounded much stronger than BTC, but again, it fell back again. It is not yet possible to tell that ETH is fully in a downtrend, and if the price can stay above 3985 USDT, a rebound may follow. If the price falls below 3900, the downside pressure increases.

Market overview

BTC Long/Short Ratio showed that a large percentage of participants long the market, indicating bull sentiment and can be used to gauge long interest in a security. The short side slightly dominated this week, and market sentiment was bearish.

Market sentiment continues to fear.

Market review

Total Value Locked (TVL)

- TVL in chain: total value locked (TVL) is $247.19 billion. Ethereum has $163.53 billion, holding 66.2% of total TVL; BSC has $16.33 billion, holding 6.6% of total TVL; Terra, Solana, Avalanche hold 5.0%, 4.6%, 4.6% of total TVL respectively.

- TVL in layer 2: total value locked (TVL) is $5.68 billion, 2.3% lower than last week. Arbitrum, dydx and Boba network hold 41.3%, 17.2% and 13.5% market share respectively. Loopring, zkSync and Metis Andromeda locked value had increased during this week.

Projects overview

Weekly mainstream cryptocurrency gainers

Near(NEAR): NEAR is a sharded, developer-friendly, proof-of-stake public blockchain. It partnered with KYVENetwork last week. Partnering with KYVE to provide simple, reliable access to Arweave. In mid Nov, NEAR protocol announced took a first steps towards a fully sharded blockchain, indicating the overall underlying performance has improved.

- CVX(Convex Finance): Terra announced a new $UST-Wormhole pool on Convex Finance with a vAPR of 63.48%. Convert CRV to cvxCRV. By staking cvxCRV, investor would earn the usual rewards from veCRV and boost earnings

New projects introductions

Top 10 GAS Consumers of Ethereum

ETH burnt volume: indicates most used or most expansive projects. Top 5 areas that consumed the most GAS on Ethereum this week were ETH transfers, DEX transactions, NFT transactions and stablecoin transfers.

Weekly Breaking News – mainstream projects

Vitalik Buterin released a roadmap for "Big Block Blockchain". The roadmap mainly includes the following 4 points: 1. Add a Layer 2 pledge, which has low resource requirements, so distributed block verification can be carried out. 2. Introduce fraud proof or ZK-SNARK, allowing users to directly (and cheaply) check the validity of blocks. 3. Introduce data availability sampling, allowing users to check block availability. 4. Add secondary transaction channels to prevent review.

• Comments: The "Endgame" article published by Vitalik Buterin describes the roadmap of the big block competition chain and Ethereum. From the article, we can see that the fragmentation scheme is difficult and the implementation time is unpredictable, and V God strongly supports the Layer 2 Rollup scheme. At least for a few years, the new public chain can continue to develop, and even layered solutions will appear. The article also proposed that although the Rollup scheme is centralized in the block generation process, it can emulate the Cosmos IBC scheme to achieve trustless and highly decentralized block verification.

• Polygon spent US$400 million to acquire Mir, a developer of zero-knowledge technology. Mir will be integrated into the existing Polygon ecosystem after being renamed "Polygon Zero" and will work with other Polygon solutions.

• Comments: Since zero-knowledge proof is the only possible high-performance solution for Rollup, other layer2 solutions also hope to be compatible with zero-knowledge proof. Polygon's acquisition of Mir also indicated its desire to deploy

Layer 3 quickly. At the same time, Polygon may have recently received a new round of financing from venture capital institutions such as Sequoia Capital India and Steadview Capital.

• Bill Gates: In the next two to three years, most virtual conferences will turn to the meta universe.

• The ENS community proposes to launch a $25,000 bonus program to build ENS data analysis infrastructure.

• BadgerDAO announced details about the theft of 120 million US doll

Weekly Breaking News – Industry Regulation

• The U.S. House of Representatives holds a cryptocurrency hearing. Mainly focus on regulatory issues, such as Stablecoin, investor protection issues, and the current development status of the crypto market.

• Comments: The hearings marked a historic change in the U.S. government's attitude towards blockchain technology and cryptocurrency. It also shows that the scale of the encryption industry can no longer be ignored, and the active lobbying behavior of the encryption industry this year has also exerted a great influence.

• Indian Prime Minister Narendra Modi will make a final decision on the cryptocurrency regulatory framework in the near future.

• Comments: India has recently taken frequent regulatory actions in the crypto industry. According to the attitude of the government, India will not completely ban cryptocurrencies, and from the re-establishment of business relations between Binance and Bank of India, the banking industry is reopening its doors to the crypto community. But India may have strict supervision. Especially in order to control the flow of domestic currency, this will have the possibility of legislative restrictions

on exchanges and investors.

• The Australian government will initiate a large-scale reform of the payment system, and cryptocurrency will be included in the scope of supervision.

• The International Monetary Fund urges the world to jointly regulate cryptocurrencies.

• South Korea proposed to ban withdrawals from CEX platforms to non-KYC wallets such as MetaMask.

• Japan will limit the issuance of cryptocurrencies (such as USDT) backed by reserve assets (such as U.S. dollars or Japanese yen).

• The Central Bank of Russia opposes the provision of cryptocurrency-related financial services in the country, and believes that such products are highly risky and are not conducive to the interests of Russian investors, and rejected the proposal of members of the financial sector to authorize the provision of crypto-related services.

Weekly Breaking News – industry

• Sequoia Capital may focus on the deployment of the blockchain field. Sequoia Capital changed its Twitter profile to "We help bold people build a legendary DAO and turn their ideas into reality. From ideas to Token airdrops. Let's rush together!", and then delete DAO related content.

• Comments: Recently, Sequoia Capital has frequently issued All in Crypto and Web 3.0 signals, including changes to Twitter profiles, auctioning NFTs to catch up with the craze and other behaviors. In fact, Red Shirt Capital has already started the layout of various blockchain tracks in 2014. Its high-profile voice has attracted more people's attention to the Web3 and DAO fields.

• In the first nine months of 2021, U.S. crypto companies spent a total of more than $5 million to lobby U.S. Senate officials.

• Comments: Since encrypted assets have exceeded 70 billion U.S. dollars in 2021, they have attracted the attention of regulators in various countries. This year, especially the frequent actions of the chairman of the SEC on the blockchain industry, accelerated the legislative process for the industry. Encryption companies also need to communicate to allow regulators to learn more.

• Blockchain infrastructure company Alchemy launched Alchemy Ventures, a venture capital unit used to develop Web3.

• SBI Digital Asset Holdings, a subsidiary of Japanese banking giant SBI, recently announced the establishment of a cryptocurrency joint venture with the Swiss SIX Digital Trading Platform (SDX)

• OpenSea is discussing a new round of fundraising with institutions such as a16z, with a valuation of over US$12 billion.

Investment and Financing News

There were 38 investment and financing projects in the past week, with a total amount of US$1.269 billion, about 50% decrease from last week. From the perspective of the track, the investment and financing of the track was mainly distributed in infrastructure and Web3 this week. Among them, there are four financing rounds over $100 million:

- Crypto 1 Acquisition Corp, a financial services company focused on digital assets and cryptocurrency business, announced that it has completed a US$230 million initial public offering (IPO) and traded on the Nasdaq Global Market under the code "DAOOU". It is said that Crypto 1 Acquisition Corp is currently We are studying payment systems including wallets, lending and DeFi.Assembly blockchain completes $100 million financing;

- Some of Asia's largest venture capital companies and crypto hedge funds will invest US$100 million to further develop applications on a new blockchain called Assembly under the IOTA network. Assembly will focus on DeFI, NFT and cryptocurrency games.Web3 talent network Braintrust completes $100 million financing;

- Polygon, the Ethereum Layer 2 expansion solution, announced the acquisition of zero-knowledge technology developer Mir for $400 million. Mir will be integrated into the existing Polygon ecosystem after being renamed "Polygon Zero" and will work with other Polygon solutions;

- Web3 talent recruitment platform Braintrust raised $100 million through the sale of private tokens. This round of financing was led by Coatue, with participation from Tiger Global, True Ventures, Blockchain Ventures, and HashKey.

- It is worth noting that OpenSea is discussing a new round of fundraising with institutions such as a16z, with a valuation of over US$12 billion.

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