Studied 5000+ Token Unlocks.. Our Findings đź‘€

Coinbase Goes International | PEPE Millionaire

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Good Morning,

Coinbase and Gemini are officially going international. Binance, Circle, and a16z are chiming in on UK crypto regulation. PEPE token hit $500M in market cap. Who said crypto doesn’t have any real utility?

Let’s dive in.

In Today's Email:

  • What Matters: Coinbase goes international 🌎

  • Case Study: The effect of token unlocks 📉

  • Governance & Features: Blur NFT lending 🤝

Narratives: Pay close attention to SUI ecosystem. Kujira total value locked has also been ramping up.

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WHAT MATTERS

Coinbase Goes International

State of play: It’s official. The largest US-based crypto exchange has rolled out its international venue. It’s currently live for institutional investors in eligible jurisdictions, and only via API.

  • The international exchange offers perpetual swaps products up to 5x leverage, starting with BTC and ETH.

  • All trading will be settled in USDC.

  • The international exchange is operating under the country of Bermuda’s regulatory framework.

Why it matters: This move marks a new era in which the largest crypto players in the US are actively trying to expand globally. They’re hedging their regulatory risks amidst the lack of clarity from US regulators.

  • Additionally, perpetual swaps (or futures) are accounted for ~75% of global crypto trading volume in 2022.

  • By going international, Coinbase is tapping into a new market, which will further boost their opportunities to become profitable.

For builders and investors: In general, it’s great that new actors are emerging to take on the seat that FTX left.

  • Competition is always good for the end users. It’s encouraging to see US-based exchanges finally competing with offshore global exchange, which are primarily based in Asia.

  • Coinbase might also become a replacement for banking infrastructure for crypto operators all over the world.

CASE STUDY

The Impact of Token Unlocks

Credits to 6thman.ventures for the original research.

State of play: Crypto venture fund 6MV released a report on the impact of token unlocks. They analyzed 5,000 unlock events across 20 protocol (with verified data).

  • The goal it to identify best practices in tokenomics design that will create minimum short-term price impacts and increase the tokens’ long-term stability.

Key takeaways:

  • Unlock events that increase circulating supply by 0-1% had no meaningful relationship to the tokens’ price.

  • Unlock events that increase circulating supply by more than 1% correlated to a noticeable negative relationship with the tokens’ price.

  • Tokens that vest 70%+ of their total supply had substantially lower volatility and higher relative prices.

  • Tokens with higher than average allocation towards private investors showed modestly better performance than tokens who primarily allocated to public investors.

  • A steady daily or weekly unlock correlate to more price stability in comparison to a large vest cliff.

More insightful data:

  • The average distribution of token allocations was 63% public and 37% private.

  • Projects with mostly vested tokens perform a lot closer to BTC and ETH (less market beta).

  • Large cliff led to the strongest price decreases.

Our take: Bullish unlock is one of the most famous meme in crypto. While every unlock event is unique, any sophisticated private investors will find a way to de-risk their exposure post an profitable unlock.

  • This is most often done via OTC desks and MM firms, in order to prevent public market panic.

  • We need more disclosures amongst private crypto investors that notify the public when and how they’ll sell their tokens, akin to how insiders in TradFi sell their equities.

Take a peek at our new referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses đź‘‡

INSIGHTS

PEPE Millionaire

We’re trying a new mini segment to share unique insights with you.

A “smart money” turned $4,400 to $1,710,000 via PEPE token.

  • The person discovered PEPE token six hours after it was listed.

  • After each price surge, he sold a percentage of his holdings.

  • He has sold $906,000 worth of PEPE, and currently holds $808,000 left.

  • This person is a prolific meme coin hunters, having bought multiple other meme tokens and even provided liquidity for them on Uniswap.

  • The person is now buying 4 other meme tokens: $WSB, $V, $IKUN, and $PIPI.

FEATURES & GOVERNANCE UPDATE

Blur Launches NFT Lending

Meet Blend, Blur’s lending protocol. Leading NFT marketplace Blur has launched an NFT lending platform which allows users to have a Buy Now, Pay Later (BNPL) option, enabling them to purchase NFTs without bearing the full cost right away.

  • Blend also has a peer-to-peer lending feature, where users can borrow capital against their NFTs.

  • Blend currently supports three NFT collections: CryptoPunks, Azuki, and Milady.

  • Blur launches Blend using the same business license that Uniswap used for its V3 AMM.

Why it matters: Blur has been a pioneer in making the NFT markets more “fungible”. It would be intriguing to see whether Blur can expand on this trend by creating a truly liquid and functioning NFT lending platform.

Other notable feature updates:

QUICK BITES

  • Coinbase launches an international exchange.

  • Gemini launches an international exchange.

  • Coinbase insiders sued for dumping stock.

  • White House pushes punitive tax on crypto mining.

  • Bullish partners with market maker B2C2.

  • OPNX reprimanded by Dubai crypto regulator.

  • Poloniex pays $7.6M settlement over sanctions violation.

  • a16z urges UK to consider a more nuanced crypto regulatory framework

  • Balaji closes his Bitcoin bet.

MEME & NOTEWORTHY READS

  • Ellen Brown’s read on how the war on crypto triggered a banking crisis.

  • LeXpunK Army’s read on HM Treasury public consultation.

  • @0xMonia’s read on the current state of hardware acceleration and ZK.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.