Gate Research Institute: September effect is evident, BTC, ETH are showing weakness, Ethervista cumulative volume exceeds 100 million US dollars

Gate Research Institute Weekly Report, this week BTC and ETH entered a range of fluctuations, with shorting dominating the entire network of contracts. The market sentiment of “falling on every ninth” has made market participants more pessimistic. A few zones such as Privacy and Yield Farming are being sought after by capital. Ethervista volume is strong, and community interest is sparked by upgrades to the Polygon project Token, among other developments. The attacker of Penpie exploited verification vulnerabilities to steal encrypted assets. Next week’s Token unlocking and macro data release are expected to impact market trends.

Market interpretation

Market Review

According to gate market data, as of September 5, 4:00 (UTC+0):

BTC— Since August 31, the price of BTC has significantly oscillated and fallen. At the beginning of September, the price maintained close to the level of $59,000, and then entered a continuous falling phase. On September 4, it fell to around $55,568 at one point. As of 00:00 (UTC) on September 5, the price has slightly rebounded from the low point. From the BTC daily candlestick performance, the price has tested

The previous support level was $55,000, and despite a small rebound after a sharp drop in trading volume, market sentiment remains cautious. The future trend may continue to face volatile adjustments.

ETH - Since August 31st, ETH PA has experienced a significant fall. On August 31st, the price of ETH was close to $2,555. Starting from September 3rd, the price has sharply fallen, reaching a low point of around $2,303, and then rebounded slightly to $2,410. Overall, there is a clear downward trend in ETH.

AltCoin - AltCoin is influenced by the overall market and the entire zone is showing a downward trend, with the market capitalization of AltCoins other than ETH falling by more than 6.82%. This week, zones such as Privacy and Yield Farming have shown relatively strong price performance.

ETF - The US BTCSpot ETF had a weekly net outflow of $317 million, with a daily net outflow of $288 million on September 3, reaching a new high in daily net outflows for BTC ETF in the past three months. As for the ETHSpot ETF, due to poor performance caused by continuous selling pressure from Grayscale, the net outflow reached $47.4 million on September 3, with a total net outflow of $84.91 million for the week.

Gas Fee - The activity on the Ethereum blockchain remained low last week.

US stock three major indexes - This week, the US stock market fluctuated and fell, with the three major stock indexes, Dow Jones, Nasdaq, and S&P 500, falling by 1.41%, 3.34%, and 2.27% respectively.

Hot Concepts

According to gate and Coingecko data, the hot concepts in the past 7 days are as follows:

Privacy - The price has risen by about 4.3% in the past 7 days, with a market capitalization of approximately $6.2 billion.

Privacy Coin refers to a cryptocurrency that allows users to conduct private and anonymous transactions. This design ensures that transactions cannot be traced and the identities of the parties involved remain confidential. This is achieved by hiding the source and destination of the transactions. In some cases, multiple transactions are mixed together to increase the difficulty of on-chain analysis.

Or affected by the recent news of the arrest of the Telegram founder, encryption users pay more attention to privacy rights, pushing up the attention of Privacy Coin zone. Among the larger market capitalization and stronger performing coins are ZANO, XMR, and BDX, which have pumped 25.4%, 12.4%, and 4.5% respectively in the past 7 days.

Yield Farming - The 7-day increase is about 3.4%, and the circulating market value is about 103 billion US dollars.

In the field of Decentralized Finance, Liquidity Providers can utilize assets that are originally idle in exchanges or hot wallets to earn transaction fees, interests and other benefits by providing liquidity in Decentralized Finance protocols such as Uniswap, and these governance tokens of Decentralized Finance protocols are referred to as Yield Farming zones.

With the recent market calls for the revival of Decentralized Finance, the Decentralized Finance zone, represented by AAVE, has pumped against the trend, becoming a hot zone in the market. As of 2:00 on September 5th (UTC+0), the leading tokens in this zone, AAVE and UNI, have increased by 7.4% and 7.9% respectively in the past 7 days.

Hot Currencies

According to gate and Coingecko data, the following popular currencies in the past 7 days are as follows:

RDNT - The price has increased by approximately 29.7% in the past 7 days, with a circulating market capitalization of $96 million.

Radiant Capital recently launched the RFP-44 proposal, which aims to optimize the release schedule of tokens and enhance cross-chain interaction liquidity. RFP-44 proposes to allocate 25% of the future RDNT token supply (approximately 125 million RDNT) to users with Lock-up Positions, thereby encouraging more users to participate in Token Lock-up Positions, in order to enhance the liquidity and stability of the Radiant Capital ecosystem.

STMX - Up approximately 25.6% in the past 7 days, with a circulating market capitalization of $71 million.

StormX is a gamified micro-task platform where users can earn Crypto Assets in multiple ways. Merchants on the platform can use Token to publish tasks, while users can earn STMX Token through shopping, watching videos, and completing tasks. The official community platform of StormX has had no updates in the past three months. Recently, the CEO announced that they have actually been planning a merger for the past few months and plan to make a major update in September, while also initiating a vote on the proposal.

VELO - The price has increased by approximately 25.3% in the past 7 days, with a circulating market capitalization of $12.6 million.

VELO is a financial protocol that achieves credit stability and stablecoin issuance through decentralized ledger technology, and in May of this year proposed a new way to securely hold gold through Digital Money. Velo announced a partnership with investment holding company PTL Holding Co. Ltd. (PTLH) earlier this year and subsequently released a ‘Digital Gold White Paper’. Recently, Laotian media reported that a gold and silver bank will be established in September, with VELO as one of the participants.

Focus of the Week

Hotspot Comments

The September effect is evident, encryption market prices are under pressure The market view of “falling on nines” resonates among investors, especially in the Cryptocurrency market and TradFi market. Over the past decade, the performance of the Nasdaq index, the average return rate in September is usually lower than in other months, and sometimes even negative. In 10 years, there have been 8 instances of market falling in September.

For the encryption market, September is also a month with relatively high seasonal risks. Since 2013, BTC has fallen in September 8 times out of 11 years, even during the Bull Market cycle. As of 6:00 on September 5th (UTC+0), the price of BTC in September has already fallen by 3.16%.

Various seasonal factors, the release of macroeconomic data, and annual portfolio rebalancing can increase market volatility. However, the market performance in September 2024 could still be different. On the one hand, the Fed may start cutting interest rates in September, which usually has a positive impact on the investment market. On the other hand, 2024 is an election year, and historically, U.S. stocks have generally performed better in election years, and there may be economic stimulus. Since the Cryptocurrency market is closely correlated with TradFi markets such as U.S. stocks, the Cryptocurrency market may also be stimulated by these macroeconomic factors. In summary, “every nine must fall” is a reaction to market sentiment, but whether to rise or fall still needs to follow the macro environment and relevant data progress.

Meme Launchpad Adds Another Hot Project - Ethervista Ethervista is an Ethereum-based Meme issuance and trading platform, where popular MEME Tokens like VISTADOG, VISTAPEPE, and BONZI are issued. After its launch, the platform’s volume quickly rose, with a total volume exceeding $100 million, reaching a peak volume of $43.27 million on September 2nd, with over 40,000 transactions. Although the trading activity declined in the following days, it remained active. The governance token VISTA on the platform has also seen a rise of up to 1,500% since its launch, attracting a large number of followers.

Ethervista’s trading mechanism is different from Uniswap, with the main highlights being:

Liquidity Lock: The platform requires an initial Liquidity Lock for 5 days to enhance market confidence and prevent short-term Arbitrage activities.

Money Laundering Distribution: The transaction fee is denominated in ETH and will be distributed between Liquidity Providers and protocol to incentivize more users to participate in Liquidity provision.

Deflationary Mechanism: VISTA is known as a ‘value compounding deflationary currency’ that maintains its value through automatic buyback and burn mechanism. So far, it has burned 2.17% of the total supply. Although Ethervista has some innovations in Liquidity locking and Money Laundering allocation, such innovations are not uncommon in the field of Decentralized Finance, and more users see them as a fusion of Uniswap, PumpFun and various lending protocols. The popularity of MEME launch platforms such as PumFun and SunPump has made the market pay extra attention to such platform projects, driving their rapid popularity.

In August, the monthly settlement volume of ETH-based lending on the chain reached the second highest in history According to The Block data, the on-chain lending market on ETH experienced the second highest monthly liquidation in August, reaching a total of 436 million USD, second only to the record of 671 million USD set in May 2021.

Due to the fact that ETH and related Derivatives Tokens are the most widely used Collateral, the price fluctuations of ETH have a critical impact on the on-chain lending market. In August, the price of ETH dropped by 22% month-on-month, and reached a big dump of 35% at its lowest point in the month. Not only did the on-chain lending market experience liquidation due to price fluctuations, but also 7 futures long positions were liquidated on 7 different dates in August, with a total liquidation amount exceeding $150 million.

on-chain lending, Centralized Exchange Perptual Futures, Decentralized Exchange Perptual Futures, etc., have not been spared in this round of market downturn. On-chain activities and gas fees are also affected.

Security Incident

PENDLE ecosystem Decentralized Finance protocol Penpie encountered Hacker attack On September 4th, the Pendle ecosystem’s Decentralized Finance protocol Penpie was attacked by a Hacker. According to incomplete statistics, approximately $27 million worth of encrypted assets were stolen, including stake of Ether, sUSDE from Ethena, and wrapped USDC stablecoin.

The attacker prepares sufficiently before the attack, calls the forged income contract in the transaction, then uses these contracts to register fake Liquidity pools on Pendle, mints a large amount of PT (Principal Token, principal part) and other Tokens, deposits these Tokens into the market to obtain corresponding LPT (Liquidity Provider Token, Liquidity Provider Token), and finally deposits LP Tokens into the corresponding pool of Penpie to exchange for deposit certificates PRT (Pendle Reward Token, reward Token).

The fundamental reason for this theft is that the Penpie project code lacks strict validation of the market and pool registration process, and key functions lack effective reentry protection measures. Attackers exploited these vulnerabilities to repeatedly reenter the contract through a single transaction, repeatedly obtaining Tokens, ultimately leading to the theft of funds. As of 4:00 on September 5th (UTC+0), the Penpie attacker’s Address has transferred 1,000 ETH (worth approximately 2.44 million US dollars) to the mixed currency platform Tornado Cash.

Project follow

BTC stakeprotocol Lombard will soon launch public beta testing Lombard will launch the public beta on September 5th in the stake protocol. Lombard improves the capital utilization efficiency of BTC through the LBTC Token. LBTC is a 1:1 Liquidity stake Token supported by BTC. The protocol will participate in users’ BTC stake in the Babylon protocol while maintaining its Liquidity and availability in the Decentralized Finance field through LBTC.

Holding LBTC will generate income, enhance liquidity, and improve cross-chain interaction accessibility, breaking the limitations of BTC in complex financial applications. As a stake protocol in the Babylon ecosystem, Lombard is expected to bring more decentralized finance gameplay. Previously, after the first phase of stake opening in Babylon, the stake volume quickly exceeded 1000 BTC, with about 12,700 participating addresses. It is one of the top players in the Bitcoin ecosystem. In addition, Lombard completed a $16 million seed round financing led by Polychain Capital in July, which is relatively rare in the Babylon ecosystem.

Polygon (MATIC) Mainnet Upgrade The Polygon project proposed a token upgrade plan in September 2023, intending to change the token name from MATIC to POL, which will be officially implemented on September 4th this year. After the upgrade, MATIC on the Polygon PoS will automatically convert to POL, while MATIC on Ethereum, Polygon zkEVM, and major exchanges will actively migrate their tokens to POL through the migration contract. MATIC holders can refer to the official tutorial for token migration. POL will be exchanged at a ratio of 1:1, with an initial supply of 10 billion and an annual release of 2%, with 1% for validators’ stake rewards and another 1% for the community treasury to support ecosystem development.

Highlight Data

Buy and sell BTC Recently, the buy-sell ratio of BTC has shown market sentiment volatility. In the past week, the price of BTC has been oscillating narrowly around $58,000. On September 1, the price of BTC bottomed out, and at the same time, the buy-sell ratio plummeted sharply. The market saw a large amount of dumping behavior, with short positions dominating, and the price of BTC continued to decline. On September 2, the market experienced a rebound, with the buy-sell ratio stabilizing and rising, and at the same time, the price of BTC rebounded.

Weighted funding rate According to Coinglass data, as of September 5, 0:00 (UTC+0), the BTCHoldings weighted funding rate is 0.0074%, and the ETHHoldings weighted funding rate is 0.0030%. Over the past seven days, the BTCHoldings weighted funding rate has been overall positive. BTC and ETH are in a downward trend, and since the large-scale liquidation of long positions on September 4, the market has been volatile. In the past 24 hours, the total contract holdings volume of BTC on the entire network has decreased by 0.65% to 29.978 billion US dollars, and the total contract holdings volume of ETH on the entire network has decreased by 0.96% to 10.506 billion US dollars.

ETF Data As of September 4th, the total net assets of BTC ETF amounted to 52.58 billion US dollars, accounting for 4.59% of BTC’s market capitalization, with a cumulative net inflow of 17.27 billion US dollars. This week, the BTC ETF market continued to experience net outflows, with a high outflow of 288 million US dollars on September 3rd. Fidelity, Grayscale, and Ark 21Shares accounted for the majority of the outflows, with 1.623 billion US dollars, 50.4 million US dollars, and 33.6 million US dollars respectively. Despite the market’s expectation of a possible rate cut by the Federal Reserve, investors’ risk aversion sentiment has kept the BTC price weak, and the short-term market recovery momentum remains insufficient.

As of September 4, the total net asset value of the Ethereum ETF was $6.73 billion, with a cumulative net outflow of $562 million. The Ethereum ETF market continued to weaken this week, with a net outflow of 4,551 ETH (about $11.11 million) on September 4, and a significant outflow from Grayscale, reaching 6,412 ETH (about $15.65 million). Overall, since trading began on July 23, the Ethereum ETF has shown a net outflow trend in funds, with only a brief net inflow of funds at the beginning of August.

Stable CoinMarket Cap changes Over the past seven days, the Stable CoinMarket Cap has decreased slightly by 0.19% to 1694.56 billion US dollars. USDT continues to dominate with a market share of 69.69%. Compared to last week, the USDT Market Cap has decreased by 0.08%, while the USDC Market Cap has increased by 0.7%. Overall, the Stable Coin market has remained relatively stable this week, with minor adjustments in Market Cap and little change in the scale of funds.

Ethereum Gas Overall, the Gas fees of ETH experienced significant fluctuations in the past 7 days, with several noticeable peaks, especially reaching the highest level of the week on September 4th to September 5th. This is related to the launch of popular projects like Ethervista and the significant cryptocurrency price fluctuations this week, leading to more frequent on-chain transaction activities. However, overall, the Gas fees of ETH are still relatively low. In the past 7 days, the supply of ETH increased by 16,554 ETH, equivalent to an annual inflation rate of 0.718%.

Market Opportunities

Project Airdrop

The Airdrop projects that can be followed this week are: Lumoz and Grass

Lumoz is a modular computing layer and ZK-RaaS platform, focusing on asset diversity and infinite scalability, dedicated to providing a user-friendly operating environment for high-throughput Web3 applications. The Lumoz network, combined with the DePIN network, provides a powerful, secure, and flexible computing platform, offering robust computing capabilities for cutting-edge technologies such as artificial intelligence and supporting Zero-Knowledge Proof services. In May this year, Lumoz completed a Pre-A round of financing with a valuation of $120 million, with participating institutions including Hashkey Captial, OKX Venture, Polygon Cofounders, Comma3, Waterdrip, and YBB.

Its incentive testnet officially started on August 27th, providing 50 million Lumoz points, equivalent to 50 million MOZ Tokens (exchange rate of 1:1), as rewards.[26]

Participation Method:

Go to the Lumoz official website, connect your wallet and start completing tasks to earn points.

Login to the Lumoz Telegram Bot and complete basic tasks such as following social media accounts and joining community groups to earn points.

Tip:
The Airdrop plan and participation methods may be updated at any time. Users are advised to follow Lumoz's official channels for the latest information. At the same time, users should participate cautiously, be aware of the risks, and conduct thorough research before participating. gate does not guarantee the distribution of subsequent Airdrop rewards.

On September 5th, Grass launched the Airdrop query webpage, where users can check if they are eligible to participate in the Airdrop. Currently, the query webpage only provides distribution information for the Closed Alpha phase and Rounds 1-7, and does not include ongoing Bonus Epoch and undisclosed distributions.

The total supply of GRASS Token is 1 billion, of which 10% is used for the first Airdrop.

Airdrop allocation is as follows:

• Closed Alpha: 1.5%
• Epochs 1 to 7: 7%
• Bonus Epoch: 0.5%
• Not announced: 1%

Tip:
The Airdrop application has not yet started. Users need to be vigilant against fraud and obtain information for inquiries from official channels of Grass.

Financing Weekly Report

Several projects have successfully completed financing this week, involving a wide range of applications in areas such as solutions, AI, stablecoins, etc. According to RootData, from August 30th to September 5th, a total of 10 projects announced financing, totaling $48 million. Here are the top three financing cases:

Hypernative successfully raised $16 million in Series A funding led by Quantstamp on September 3, with other well-known investors joining in. The new funds will be used to enhance its AI-driven security solutions tailored for the Web3 ecosystem. Over the past year, Hypernative Platform has doubled its network coverage to over 40 chains and added 100 new detectors to identify the largest risk sets in multiple categories in the industry.

IDA - On September 2nd, IDA, a digital asset company based in Hong Kong, announced the completion of a $6 million seed round of funding. This round of funding was led by Titan Fund under CMCC Global and Hashed, with participation from institutional investors such as Hack VC, Anagram, GSR, and angel investors including Raj Gokal, co-founder of Solana. IDA plans to use this funding to promote the development and issuance of its first Fiat Currency reference Stable Coin, HKDA.

TrendX - On September 2nd, Web3 trend tracking and intelligent trading platform TrendX announced the completion of a $5 million Series A financing. This round of financing was participated by Promontory Technologies, Coinstash, and other institutions. TrendX has raised a total of $6 million. Since its establishment in 2022, TrendX has processed over 20 TB of data and provided reliable investment advice to users through intuitive interaction. The new round of financing will be used to drive technological development, expand market share, and recruit talent.

Next week follow

Token Unlock

According to the data of Token Unlocks, several important Token unlocking events will take place in the market next week (2024.9.6-9.12), with most Token unlocking scales below a million dollars, totaling 1.12 trillion dollars. Among them, the unlocking situation before the 3rd week is as follows:

APT will unlock 11.31 million Tokens at 10:00 AM (UTC+0) on the 11th, accounting for 2.33% of the circulating supply. Among them, core contributors will unlock 3.96 million Tokens, accounting for 35% of the unlocked Tokens this time. After this round of release, the release rate will slow down.

IMX will unlock 32.47 million Tokens at 12:00 (UTC+0) on the 6th, accounting for 2.06% of the circulating supply. Among them, 16.56 million Tokens will be unlocked by project developers, accounting for 51% of the Tokens unlocked this time.

XAI will unlock 35.88 million Tokens at 9:30 AM (UTC+0) on the 9th, accounting for 6.31% of the circulating supply. Among them, investors will unlock 3.31 million Tokens, accounting for 48.3% of the Tokens unlocked this time.

encryption calendar

In the coming week (2024.9.6-9.12), the blockchain and cryptocurrency industry will see several key events. On September 7th, the Liquidity stake protocol EigenLayer’s Phase 1 Season 1 EIGEN claim window will close; on September 9th, the BTC expansion network Fractal Bitcoin will officially launch on Mainnet. Some important macro-level data releases also have a significant impact on the industry. Of note is the speech by Federal Reserve Board Governor Wall, covering key areas such as economic growth, inflation, and the job market. These data are important foundations for understanding the future direction of the Federal Reserve’s monetary policy.

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