DeFi Rally Signals ETH/BTC is Ready for Take Off
Also, Idle Finance assets shoot up after token launch, Yield raises $4.9M
By:
Hello Defiers! Here’s what we’re covering today,
- An accelerating DeFi rally may signal ETH/BTC is ready for take-off
- Idle Finance assets soar after it issued its IDLE token
- Yield raises almost $4.9M inequity and token round
and more :)
💗 You Can Contribute to The Defiant’s Gitcoin Grant Here: Huge thanks to the 75 contributors so far. Your support for DeFi-focused journalism makes a difference.
If you’re receiving this email, that means you’re a paid subscriber of The Defiant, (thank you!) You’re getting the full content of this newsletter, while free subscribers are getting only a portion of it. Subscribers also get exclusive access to The Defiant’s Discord chat group for the community, here’s a new link to join.
📺 Watch the latest drop of The Defiant’s DeFi 101 Series on YouTube!
🎙Listen to this week’s podcast episode with Gnosis’ Stefan George:
🙌 Together with Zerion, a simple interface to access and use decentralized finance, 1inch.exchange v2, which aims to provide the best rates by discovering the most efficient swapping routes across all leading DEXes, and DeversiFi's Nectar Beehive V1, which allows traders to provide liquidity & earn Nectar ($NEC) tokens.
ETH/BTC Ready for Take-Off?
If history is a guide, an accelerating DeFi rally is a sign that ETH/BTC may be ready for take-off.
From May to August this year, ether was significantly leading bitcoin, propelling the industry to fresh highs amidst increasing optimism about decentralized financial technology and protocols.
ETH/BTC Image source: TradingView
By early September though, the ETH/BTC ratio peaked at 0.04051 satoshis and was in a downward trend until mid-November. Ether relative to bitcoin has rebounded from the lowest level since July and has been hovering between 0.02409 and 0.04051.
But a recent rally in DeFi, with FTX DEFI index surging 61% in November versus ETH’s 43 % increase, in addition to other technical signals, are indicating ETH may be preparing for a stronger climb against BTC.
COMP Front-Running ETH
Historical precedent is no guarantee of future performance but can inform expectations for the ETH/BTC pair. Similarly, individual protocols within the FTX DEFI index also suggest mid-term trend developments in the ecosystem.
For the uninitiated, decentralized money market protocols built on top of Ethereum unlock an array of possible financial products and applications that serve as a workaround to cumbersome and inefficient legacy systems. For instance, Compound is a lending protocol created by Compound Labs - an open-source software development company that aims to build up the decentralized finance (DeFi) ecosystem.
Back in early November, the slide in Compound’s COMP token moderated, before it began to bounce from the lowest point since it was issued in July. Back then, the relative strength index suggested a potential reversal to the $160 mark - which turned out to be a conservative figure given that protocol tapped $180 this week.
The resurgence of Compound, an Eth-based protocol may suggest further upside is in the works for DeFi protocols, and in turn for Ether.
ETH/BTC Shows Signs of Life
Meanwhile, ether versus bitcoin is showing signs of a trend shift and various confluent factors - some of which have already played out - support this notion.
In this case, the upwards trending support line provided structural support while the Relative Strength Index (RSI) showed decreasing sell-side pressure with a clear bullish divergence on the daily time-frame. As bitcoin and ether slide against the US Dollar, the RSI trend could be about to get another retest before it can cement the move and continue rising.
Failing a trend-based RSI bounce, then another retest of the upwards sloping support above 0.027620 satoshis would provide the ‘last stand’ moment for Ethereum bulls.
If history is a guide, then a narrative and leader shift should come as no surprise, bearing in mind that the second largest cryptocurrency and platform isn’t going to disappear overnight. In addition, ETH is over 130% away from it's all-time highs - unlike BTC - which informs a potentially lucrative risk-to-reward opportunity.
According to information from data aggregator DeFi pulse, the total value locked in decentralized finance protocols remains at all-time-high levels just under $14 billion. In January, DeFi TVL (total value locked) had just surpassed the $1 billion mark.
Clearly, investors remain optimistic about the burgeoning sub-sector, as the $20 billion landmark becomes the new target.
Idle Finance Assets Soar After Issuing $IDLE Token
Assets in Idle Finance have shot up by 100x since it started rewarding users with its native IDLE token, highlighting once more the power of incentives in DeFi protocols.
Assets in Idle, a DeFi protocol that automatically transfers users’ savings to lending platforms with the best yield, jumped to cross $100M today, from $1.7M on the day before the token went live, according to data compiled by Dune Analytics.
Image source: Dune Analytics
Idle relinquished its control over the protocol to token holders on Nov. 26, unveiling a DAO powered by the IDLE token. Anybody with 1% of IDLE delegated to their address, and who holds it during the entire voting process, can create an Idle Improvement Proposal. IIPs are executed if the majority of the voters cast a “For” vote and at least 4% of the total voting supply participates.
Most important to explain the jump in assets is that IDLE tokens are distributed among users who depositing funds in any pool.
While Idle had an increase in assets, which would leave it at the 16th place in DeFi Pulse’s total value locked leaderboard, there are only 441 token holders, according to Dune Analytics, and 611 unique deposits.
DeFi Platform YIELD Raises $4.9M
YIELD (yield.app) has raised $4.9 million from a private venture round, its YLD token pre-sale, and in an online equity crowdfunding platform.
YIELD raised $297k on the online investment platform BnkToTheFuture, in addition to $3.4 million in private funding from Alphabit Fund, Digital Strategies, PALCapital, Yeoman’s Capital, and Chronos VC. It also raised $1.2 million from its token pre-sale via TrustSwap.
S&P Global, State Street Back Crypto Data Firm Lukka in $15M Funding Round: The Block
Lukka said it closed a Series C fundraising round with S&P Global, State Street and CPA.com, The Block reported. Lukka did not share how much it raised, but a filing with the Securities and Exchange Commission shows it raised $15 million.
Grayscale Buys $266 Million of Bitcoin and $58 Million of ETH: Decrypt
Crypto asset manager Grayscale has bought an additional 14,591 Bitcoin (around $266 million currently) and 105,000 Ethereum ($58,5 million) on behalf of its investors, according to financial reports published this week, Decrypt repoted.
JPMorgan Completes Live Blockchain Repo Trade Ahead of New Product Launch: CoinDesk
The intraday repo application was developed by the bank's blockchain business arm Onyx and used the banks stablecoin JPM Coin for the cash leg, while blockchain was used for both collateral and cash legs, CoinDesk reported. The application enables settlement and maturity of such transactions in hours rather than days.
The Ethereum network will process more than $1 trillion this year. That’s more than PayPal, Messari tweeted.
Messari @MessariCryptoEthereum is a five-year-old technology that will process more than $1 trillion in real value transfers this year; a figure that's already eclipsed @PayPal Full report: bit.ly/2W50qIJ
10:21 PM ∙ Dec 9, 2020440Likes124Retweets
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money.
About the founder and editor: Camila Russo is the author of The Infinite Machine, the first book on the history of Ethereum, and was previously a Bloomberg News markets reporter based in New York, Madrid and Buenos Aires. She has extensively covered crypto and finance, and now is diving into DeFi, the intersection of the two.
