Category: NEWS

New protocols are launching every day on different networks in the crypto space and the trend is likely to continue through this year. When looking at the top five networks by total value locked (TVL) — Ethereum (ETH), Terra (LUNA), Binance Smart Chain (BSC), Avalanche (AVAX) and Solana (SOL) — according to data from DeFiLlama, Ethereum have 579 protocols (including L1 and L2); Terra has 25, BSC has 348, Avalanche and Solana have 187 and 64 protocols, respectively. The low number of protocols and high TVL from Terra surely stand out as the outlier here.

Terra’s TVL reached an all-time high at $20 billion in December 2021 before dropping to $13 billion during the January 2022 crash. To date, the ecosystem has managed to boost its liquidity back to $26 billion.

With only 25 protocols built on the chain, Terra has attracted enough TVL to become the second largest network after Ethereum. The recent announcement of backing UST (Terra’s stablecoin) with $1 billion worth of Bitcoin (BTC) reserves and the Mars protocol launch coincide nicely with the sudden rise in LUNA price at the end of February 2022.

The rise in the chain’s governance token is often an indication of confidence in the network and the protocols, but does a new protocol launch always add value to the network and stimulate user activity and engagement?

Let’s take a look at how the price of LUNA changed when new protocols launched on Terra; then investigate how the most recently launched Mars and Astroport protocols impacted native token prices, user engagement and LUNA price.

LUNA is the tool that ensures the UST-USD peg

Before looking into the correlation between LUNA price and the new protocol launch, it is important to understand the LUNA-UST mechanism that ensures the peg of stablecoin UST to USD.

LUNA is used as a counterpart to UST to maintain the price peg of UST to USD. When UST is worth more than $1, it means there is a greater demand for UST than the supply in the Terra ecosystem. So the protocol incentivizes participants to burn LUNA and mint UST to meet the increasing demand for UST until the value of 1 UST is equal to $1. On the contrary, when UST’s price is lower than $1, the supply of UST is larger than the demand so UST will be burnt and LUNA will be minted until UST’s value reaches $1 again.

By regulating the supply of LUNA in the ecosystem, Terra can effectively keep UST pegged to USD. This mechanism also causes LUNA’s price to increase as the demand for UST increases.

LUNA price is highly correlated with new protocol launches

Very often during the initial pre-launch phases of a new protocol, there is a sudden increase in demand for UST. This is because participants wish to obtain airdrop incentive tokens from the new protocol and they are often asked to lock up UST to provide enough liquidity for the protocol when it launches.

The increasing demand in UST from participants during pre-launch phases of the new protocol causes more UST to be minted and more LUNA to be burnt, resulting in a sudden increase in LUNA price during these pre-launch phases.

Here is an example of the recently launched Mars protocol, where LUNA price jumped from sub $50 to over $60 in two days right after the new protocol pre-launch phases started.

Here is another example of how LUNA price went up from sub $60 to over $90 in December 2021 right after Astroport’s pre-launch phases started.

The new protocol launch in the past two recent cases did help push up LUNA’s price, which can be seen as a positive effect on the Terra network. But to know whether they add value to the Terra ecosystem, one needs to also look at the protocol’s token price and user engagements after the launch.

ASTRO price and volume after the launch

Astroport accumulated $90 million in the lockdrop, but the token price of ASTRO has experienced a downturn after the launch of the protocol due to the bearish market environment at the beginning of 2022. The price has picked up since the beginning of March and now is trading its launch valuation.

The daily number of swaps on Astroport has been gradually increasing since the launch for about three months, indicating active user engagement on the platform after the airdrop.

The total trading volume transacted on Astroport has also shown a strong increasing trend since the launch, which peaked in the middle of March.

The Astroport launch was successful and the post launch data also show that the platform has been able to maintain user activities and engagements. The story of Mars protocol is however quite different.

Mars price and volume after the launch

Immediately after the Mars launch on March 7, 2022, MARS token price dropped off a cliff within an hour from 1.65 UST to 0.7 UST. This is very different from the price reaction right after Astroport’s launch. So what happened to MARS?

It turns out that the protocol couldn’t load successfully in the web browser at the time when it was scheduled to go live on March 7, 2022, 11 am GMT. Users who attempted to claim the airdrop tokens through the protocol’s website failed to do so and had to wait until the website became functional.

However, sophisticated users who knew how to interact with the Terra chain directly called the claim rewards method on Terra station and managed to claim MARS ahead of the non-tech savvy users. They dumped the tokens immediately in the market, causing an immediate drop in price.

To explain a bit more in detail how one could claim MARS by interacting with Terra chain, the investor first needs to know Mars protocol’s airdrop contract address, which is publicly available on etfinder; then they need to know which method in the code to call on Terra Station to claim the rewards, which is the tricky part.

Since the protocol just launched, the code is often not available in the public domain for people to find the claim method. But a wild guess most of the tech-savvy investors had was that Mars protocol was forked from Astroport. So the claim method was highly likely the same as Astroport’s. It turned out to be true and these investors managed to claim the MARS airdrop using the same function “claim_rewards_and_unlock” on the chain.

Three hours after the official launch time, Mars protocol’s website was still not functioning and the airdrop MARS still couldn’t be claimed from the website. The price of MARS had already dropped to $0.64 from $1.65 — a 60% drop in three hours and nothing could be done if the investor did not know how to interact with Terra chain.

Protocol is still not working… and $MARS are getting dumped like trash…

— E.Hu (@elenahoolu) March 7, 2022

Let’s have a look at the two major products on Mars protocol right after the launch. Red Bank, the saving and lending space, has failed to maintain user engagements after the airdrop. The number of transactions peaked on the third day after the launch to almost 5,000 a day and has been dropping since then. The daily volume in USD has also been decreasing since day 1 from $212 million to $13 million as of March 27.

Fields is the space in Mars protocol for yield farming strategies where users can provide liquidity to ANC-UST, LUNA-UST and MIR-UST. Fields’ historical transaction and volume after the launch show a similar story. The product struggles to maintain the same level of activity as the launch day and the number of transactions is 1/8 of what it was at the peak while the volume in USD is less than 1/30 of the launch day.

Although it’s not certain that the incident at the launch affected Mars protocol’s user engagements and confidence, the data shows the protocol has been struggling to attract volumes and activities since the launch.

A new protocol launch does not necessarily always add value to the network, as shown in the comparison between Astroport and Mars, which have very similar pre-launch strategies but very different outcomes post launch.

Incidents on the launch day jeopardize not only the protocol, but could also affect user confidence in the ecosystem. An airdrop incident allowing only the tech savvy investors to claim first will drive away the vast majority of future investors. New protocols launching on Terra chain in the future should make greater efforts to prevent such incidents, otherwise investors’ long-term interests and trusts could evaporate sooner than one could imagine.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

According to Axie Infinity’s official Discord and Ronin Network’s official Twitter thread, along with its Substack page, the Ronin bridge and Katana Dex have been halted after suffering an exploit for 173,600 Ethereum (ETH) and 25.5M USDC, worth a combined $612 million at today’s prices. In a statement, its developers said they are “currently working with law enforcement officials, forensic cryptographers, and our investors to make sure that all funds are recovered or reimbursed. All of the AXS, RON, and SLP [tokens] on Ronin are safe right now.” 

There has been a security breach on the Ronin Network.https://t.co/ktAp9w5qpP

— Ronin (@Ronin_Network) March 29, 2022

As told by Ronin developers, the attacker used hacked private keys in order to forge fake withdrawals, draining the funds from the Ronin bridge in just two transactions. More importantly, the hack occurred on March 23, but was only discovered today after a user allegedly uncovered issues after failing to withdraw 5,000 in ETH from the Ronin bridge. At the time of publication, RON, Ronin’s primary governance token, has fallen nearly 20% to $1.88 in the past hour.

This is a developing story and will be updated accordingly.

“The Market Report” with Cointelegraph is live right now. On this week’s show, Cointelegraph’s resident experts discuss the best altcoins to buy for under $3.

But first, market expert Marcel Pechman carefully examines the Bitcoin (BTC) and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down.

Next up: the main event. Join Cointelegraph analysts Benton Yaun, Jordan Finneseth and Sam Bourgi as they discuss the best altcoins to buy for under $3. First up, we have Bourgi with his first pick of 1INCH, the governance token of the 1inch decentralized exchange, which aims to offer the best rates by discovering the most efficient swapping routes across all leading DEXs. Second on his list is Enjin Coin (ENJ), which he describes as the plumbing for the metaverse and gaming projects building on the blockchain. Enjin Coin is an Ethereum-based token that aims to make it easy for individuals, businesses and brands to use nonfungible tokens (NFTs). 

Yuan is next with his first pick of SUPER, the native token of SuperFarm, a blockchain-based decentralized ecosystem that enables users to create, deploy, develop and farm NFTs. It offers cross-chain NFT farming, making the process, and NFTs in general, more accessible and available to the average user. For his second pick, he’s decided to go with NCASH, the native token of Nitro Network, which launched in 2014 and aims to bridge the divide between the online and offline retail world. The project is an Internet of Things-based, contactless identification system that enables retailers to identify and better serve their customers by using customer records to make precise decisions on product preferences without the use of WiFi or Bluetooth.

In the third spot, we’ve got Finneseth with his first pick of MATIC, the native token of Polygon, which is a layer-2 scaling solution that seeks to provide faster transactions and lower costs for users. It acts as a speedy parallel blockchain running alongside the main Ethereum blockchain. Last, but not least, is RON, the native token of Ronin — another sidechain designed for crypto gaming that currently hosts Axie Infinity, one of the most active games in crypto. Third-party developers are also coming soon, which could bring thousands of new games to the Ronin network. They are all interesting picks, as always, so make sure to stick around till the end of the show to find out who had the best choices, which will be decided by our live poll.

After the showdown, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Axie Infinity Shards (AXS) and NFTX.

Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a free month of Cointelegraph Markets Pro, worth $100.

The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.

WAVES price surged by up to 70% on March 29, reaching a new all-time high around $54. Traders betting against the rise of Waves — the native token of the WAVES blockchain network — suffered losses worth millions of dollars as the WAVES/USD pair extended its recovery to a record level in the past 24 hours.

The price rebound, which started on Feb. 22 when WAVES price was at $8.25 caused around $13.75 million worth of liquidations due to crypto-based futures on a 24-hour adjusted timeframe, data from Coinglass shows.

Around $11 million of the total liquidated positions were short.

2.0 hype, Neutrino behind WAVES rally

As Cointelegraph earlier covered, traders may have jumped into the WAVES market after assessing its three consecutive optimistic updates: the migration to Waves 2.0, the launch of a $150 million fund and the partnership with Allbridge.

Edson Ayllon, product manager at dHEDGE — a decentralized asset management platform, told Cointelegraph that the euphoria surrounding the release of Waves 2.0 in October was reflective in the rising total value locked (TVL) in the Waves ecosystem that reached an all-time high of $4.36 billion on March 29.

“Waves 2.0 adds EVM support to the execution layer, and adds proof-of-stake with sharding to the consensus layer,” the analyst noted, adding:

“Sharding and proof-of-stake have been concepts Ethereum has been working towards for years on their roadmap.”

Interestingly, Neutrino, an algorithmic price-stable “assetization” protocol built atop the Waves blockchain, appeared largely behind the increasing Waves TVL.

Notably, the protocol witnessed an inflow of 8.91 million WAVES in one day — worth nearly $450 million — to its smart contract, data from Defi Llama shows.

Neutrino allows the creation of decentralized stablecoins that maintain their U.S. dollar-peg by collateralizing WAVES tokens. The protocol has launched just one stablecoin project so far, called Neutrino USD (USDN). 

The supply of USDN increased from around 800 million to 832 million on a 24-hour adjusted timeframe, coinciding with the rise in the WAVES inflow into the Neutrino smart contract. That presented Neutrino as one of the active WAVES buyers in the past 24 hours.

What’s next?

WAVES appears to have been breaking out of a bullish continuation pattern called a “bull flag.”

In detail, the chart pattern looks like a downward sloping channel that appears after a strong price move upward (called “flagpole”). In a perfect scenario, it resolves by breaking out toward the level at a length potentially equal to the flagpole’s size.

Related: Here’s how traders were alerted to RUNE’s, FUN’s, WAVES’ and KNC’s big rallies last week

Applying the classic interpretation of the bull flag pattern to WAVES’ ongoing price action suggests a continued price rally toward $100, as shown in the chart below.

However, WAVES’ weekly relative strength index (RSI) has turned overbought — a sell signal. That could have the WAVES/USD pair retrace towards $34 as its interim support level. That would also mean that traders are returning to bull flag’s top for another upside confirmation.

As a result, a continued selloff below $17 would risk invalidating the entire flag setup. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Terra (LUNA) rose to its best level to date on March 29 as the Luna Foundation Guard’s (LFG) plans to increase its Bitcoin (BTC) reserves eased anxiety about the impact of an increasingly hawkish Federal Reserve and the ongoing Ukraine-Russia war on crypto markets.

LUNA price hits new record high above $106

LUNA’s price breached above the previous record high of $106.29 by minuscule margins, reversing the losses incurred during the selloff between December 2021 and January 2022.

The latest price rally pushed Terra token’s net capitalization crossed $37.17 billion, now making up 1.76% of the entire crypto market, compared to 0.39% at the beginning of this year.

Terra does a MicroStrategy

Bitcoin wallets associated with LFG, a nonprofit spearheaded by Terra’s creator Do Kwon, saw an inflow of 2,830 BTC worth $135 million on Monday. The influx occurred as a part of LFG’s Bitcoin accumulation spree following a community proposal that suggested to use BTC as collateral to “provide deep liquidity at a discount when the UST peg is under pressure.”

UST is the Terra’s decentralized stablecoin otherwise collateralized by the blockchain’s native cryptocurrency LUNA. As such, Terra’s economy supports the burning of LUNA tokens to mint more UST units as a strategy to maintain the latter’s dollar-peg.

We’re seeing some of the earliest and most ambitious ideas in crypto starting to unfold

Crosschain decentralized stablecoin backed entirely by digitally native assets was the holy grail in 2016

Bless$BTC $LUNA

— Zhu Su (@zhusu) March 29, 2022

LFG has outlined plans to boost its Bitcoin reserves to $3 billion with a long-term strategy to swell the pool to $10 billion. In a theory, that could lead to an increase in demand for UST, thereby forcing more LUNA tokens out of active supply permanently. 

LUNA faces immediate selloff risks

From a technical perspective, LUNA faces the prospects of undergoing a 50% price correction in the coming weeks, though this may not necessarily hurt the bullish long-term outlook.

In detail, the Terra token has been consolidating inside what appears to be an ascending channel, a continuation pattern that appears after the price fluctuates inside a range defined by an upper horizontal and a lower rising trendline.

Related: Terraform Labs donates $1.1B for Luna Foundation Guard‘s reserves

In a perfect scenario, the setup resolves with a breakout in the direction of the asset’s previous trend, rising by as much as the maximum distance between the channel’s upper and lower trendline. As a result, LUNA’s price could rise toward $425 in 2022, as shown in the chart below.

But the upside outlook needs further confirmation, beginning with a decisive breakout above the triangle’s upper trendline. If it does not come, LUNA’s prospects of a sharp pullback towards the lower trendlines appear higher, which means a price drop towards the $50-$60 range, down around 50% from today’s price. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The American exchange-traded fund (ETF) provider WisdomTree continues expanding its cryptocurrency products in Europe by launching three new crypto exchange-traded products (ETP) backed by Solana (SOL), Cardano (ADA) and Polkadot (DOT).

WisdomTree announced Tuesday the launch of three new physically-backed crypto ETPs, including WisdomTree Solana (SOLW), WisdomTree Cardano (ADAW) and WisdomTree Polkadot (DOTW).

The ETPs are already listed on major European digital exchanges like Deutsche Boerse’s Xetra, the Swiss SIX exchange and the Swiss Stock Exchange. The pan-European exchange Euronext is expected to list the crypto ETPs in Amsterdam and Paris on Thursday, the announcement notes.

The ETPs are designed to offer investors in Europe another option to gain exposure to the price of Solana, Cardano and Polkadot via regulated exchanges. SOLW, ADAW and DOTW have a total expense ratio of 0.95% and are available for sale in Austria, Belgium, Denmark, Finland, France, Germany, Italy, Ireland, Luxembourg, Netherlands, Norway, Poland, Spain, Sweden and Switzerland.

The new ETPs follow the growing crypto asset product offering by WisdomTree in Europe, joining products like WisdomTree Crypto Mega Cap Equal Weight ETP, which is backed by physical assets including Bitcoin (BTC) and Ether (ETH), as well as WisdomTree Crypto Market (BLOC) and WisdomTree Crypto Altcoins (WALT).

WisdomTree’s head of Europe Alexis Marinof said that the new offering aims to meet the growing demand from institutional investors to diversify their crypto portfolio, stating:

“While bitcoin and Ethereum grab the headlines, altcoins are now viable options for many institutional investors, providing more options to diversify their crypto holdings just like they would with any other asset class.”

Related: SEC could approve spot Bitcoin ETFs as early as 2023 — Bloomberg analysts

As previously reported by Cointelegraph, WisdomTree has been actively launching ETPs in Europe amid regulatory hurdles in the United States. In late 2021, the U.S. Securities and Exchange Commission rejected WisdomTree’s spot Bitcoin ETF after delaying a decision on the product multiple times. The firm subsequently amended its spot BTC ETF filing, naming U.S. Bank as a custodian for its BTC trust.