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Bitget Research: ETHFI Continues Breaking New Highs, Leading Public Blockchain Memecoins Decline Overall

Jarseed & Aaron
2024/03/28
Bitget Research: ETHFI Continues Breaking New Highs, Leading Public Blockchain Memecoins Decline Overall
In the past 24 hours, many new popular tokens and topics have emerged in the market, which are likely to be the next wealth creation opportunities.

Overview

Yesterday, BTC ETFs saw net inflows of $254 million, indicating a recovery in overall market sentiment. BTC surged to $72,000 before pulling back, indicating a short-term profit rebound and a sustained take-profit trend. The restaking, ETHFI, and RWA sectors continued to show strong performance.
  • Sectors with strong wealth creation effects: Restaking, RWA, and DeFi 2.0.
  • Top searched tokens and topics by users: Layer 3, Ocean, Fetch.ai, Etherfi.
  • Potential airdrop opportunities: Renzo Protocol, Puffer Finance.
Data collection time: March 28, 2024, 4:00 AM (UTC+0)

1. Market Environment

Yesterday, BTC ETFs saw net inflows of $254 million, indicating a recovery in overall market sentiment. PoS tokens experienced a short-term setback when a U.S. judge allowed the SEC to proceed with its case accusing Coinbase of failure to register as a securities business. However, market sentiment continued to diverge when BlackRock CEO Larry Fink stated that even if Ethereum were to be classified as a security, Ethereum spot ETFs might be approved.
ETHFI was the first restaking sector project to launch its token, and its price continues to reach new highs, surpassing a market cap of $10 billion at one point. There is positive market sentiment for the entire restaking sector, which could serve as a strong foundation for future token launches by EigenLayer and various LRT projects. Supported by BlackRock and other TradFi giants, the RWA sector has developed a dynamic ecosystem, with various types of asset projects continuously emerging. As of now, the BlackRock on-chain fund BUIDL has attracted $245 million in deposits, indicating strong demand.

2. Wealth Creation Sectors

2.1 Sector Movements: Restaking Sector (ETHFI)

Primary reason: The re-staking sector is one of the strongest narratives in the Ethereum ecosystem in 2024. Various projects have launched liquidity restaking based on EigenLayer, pushing the boundaries of Ethereum's application ecosystem. As the first project in the restaking sector to issue its token, EtherFi plays a benchmark role in the market. Decentralized staking services have gained renewed market attention due to a U.S. court ruling allowing the SEC to proceed with its case accusing Coinbase of failure to register as a securities business, impacting CEX staking services.
Gainers: ETHFI is up 24.6% in the last 24 hours.
Factors affecting future market conditions:
  • TVL continues to rise: According to Defi Llama, the EtherFi protocol currently has a TVL of $3.14 billion, ranking first among projects in the restaking sector. As the ETHFI governance token can provide protocol staking income and generate a relatively stable cash flow, it's attracted a lot of attention from investors looking to get in early. A rising TVL will continue to generate more revenue for the protocol, which will lead to the protocol's governance token naturally rising in value.
  • Decentralized staking narrative: As CEX staking services face regulatory scrutiny, funds are naturally flowing into DeFi staking services. Investors should keep an eye on policy-level developments. Staking services will continue to face investigations and new regulations. If divestment from CEX staking services is required in the future, this could be a positive development for the restaking sector.

2.2 Sector Movements: RWA Sector (ONDO, POLYX, TRU)

Primary reason: BlackRock recently launched its first tokenized asset fund, BUIDL, on the Ethereum network, with Coinbase being chosen as the key infrastructure provider. Since the release of this news, the RWA sector has consistently dominated the cryptocurrency market, developing into a dynamic ecosystem with various types of asset projects continuously emerging. As of now, the BlackRock on-chain fund BUIDL has attracted $245 million in deposits, indicating strong demand.
Gainers: ONDO is up 24.6% in the past 7 days, POLYX is up 60.2%, and TRU is up 78%.
Factors affecting future market conditions:
  • Positive RWA sector sentiment: RWA assets have surged. Ondo Finance, a leading project in this sector, saw its native token ONDO increase by more than 24.6% over a week, leading the entire RWA sector with several tokens continually setting new highs. POLYX, TOKEN, and RIO (Realio Network) saw weekly gains of 60.2%, 109.2%, and 128.2%, respectively. This catch-up trend across the ecosystem indicates that some small-cap RWA projects that were lagging are now catching up, meriting investor attention.
  • Continued capital inflows: BlackRock's BUIDL fund has attracted $245 million in deposits, indicating strong demand. The entry of TradFi into the crypto industry through RWA projects is highly attractive for investors seeking stable income. As more TradFi players enter the sector, they will bring continued capital injections and drive the popularity of the sector and project token prices.

2.3 Sectors to Focus on Next: DeFi 2.0 (VELO, AERO)

Primary reason: The DeFi 2.0 sector revolves around project launches and their initial liquidity distribution. At present, various projects on the Base chain are very popular. New projects use tokens to incentivize Aerodrome voters to provide liquidity — a classic DeFi 2.0 ve(3, 3) model. Velodrome has recently announced a partnership with Layer 2 Mode, where the Mode network will offer $1 million in incentives to Velodrome voters to provide liquidity.
Gainers: AERO is up 103.6% in the past 7 days, VELO is up 191.8% in the same period.
Factors affecting future market conditions:
  • Flywheel effect: At its core, ve(3,3) aims to determine whether incentives can provide liquidity for project launches, boosting asset prices and addressing the problem of cold starts. At the same time, the continuous rise in asset prices encourages liquidity providers or veToken holders to keep providing liquidity. If the flywheel effect persists, it could have a positive impact on both protocol tokens and project tokens' cold start challenges.
  • Continuous development of the project ecosystem: The Base chain has garnered significant recognition through its memecoin projects and robust liquidity. The mode has joined forces with Velodrome to establish the latter as the primary liquidity hub on the OP superchain. If Mode successfully injects liquidity into cold start projects on the chain, facilitating their initial growth, this collaborative model may see increased demand as a favored approach for pooling liquidity and bolstering the ecosystem.

3. Top Searches

3.1 Popular DApps

Layer 3:
Layer 3 is an on-chain task platform designed to help users learn and discover high-quality projects in the Web3 ecosystem. Users can explore communities, complete tasks in the form of bounties, competitions, and projects, and earn project tokens or XP rewards. The project raised $2.5 million in a seed funding round led by ParaFi Capital, with participation from Electric Capital, and Lattice Capital in 2021. The project has a considerable community base and is worth monitoring as its token has not been launched yet.

3.2 X (Former Twitter)

Three leading decentralized AI projects—Fetch.ai, SingularityNET (SNET), and Ocean Protocol—announced yesterday their intention to merge their tokens into the newly created ASI token with a fully diluted valuation (FDV) of approximately $7.5 billion. AGIX, FET, and OCEAN experienced a short-term surge amid potential merger news. Among them, SingularityNET (AGIX) is currently priced at $1.25, with a 24-hour increase of 6.9%, Fetch.ai (FET) at $3.10, with a 24-hour increase of 5.8%, and Ocean Protocol (OCEAN) at $1.32, with a 24-hour increase of 11%. Its strong wealth-creation capacity has garnered attention from the community.

3.3 Google Search (Global and Regional)

Global focus:
EtherFi (ETHFI): Bitget data shows that the price of EtherFi's token has surpassed $9, setting a new all-time high. It is currently priced at $7.51, with a 20% increase in the last 24 hours. As the first token issuance project in the restaking sector, EtherFi and its value have a direct impact on other projects. According to data provided by Defi Llama, the total value locked (TVL) of EtherFi continues to increase, reaching $3.083 billion.
Regional focus:
(1) Different regions demonstrated varying interests in projects and sectors yesterday:
In Asia, there is significant interest in the EtherFi, AI, and RWA sectors, with FET, OCEAN, and ARKM emerging as trending search terms. In the English-speaking region, searches for blue-chip projects and Solana ecosystem projects were notably high. Searches for NEAR, UNI, PYTH, and other projects have also seen an increase. FLOKI has emerged as a trending search term in both the Middle East and Latin America. From a regional standpoint, sectors and ecosystems like restaking, AI, RWA, Solana, and Memecoin are drawing notable market attention. Continued inflow of market funds into these sectors is expected, making these assets worthy of monitoring.
(2) Crypto liquidation:
"Crypto liquidation" has become a trending term in countries like Turkey. On March 27, Bitcoin price briefly exceeded $71,000 before falling sharply to a low of $68,500. Within one hour, the entire network liquidated $64.5279 million, including $55.6047 million in long positions and $8.847 million in short positions. Bitget advises that amidst the recent Bitcoin uptrend, fluctuations and adjustments may occur, potentially resulting in false signals. Therefore, it is recommended that investors reduce leverage to mitigate the risk of liquidation and potential losses.

4. Potential Airdrop Opportunities

Renzo Protocol
Renzo is a restaking protocol built on EigenLayer. Renzo simplifies the complex re-staking process for end users, eliminating the need for users to actively select and manage operators and reward strategies. With a current TVL of $1.8 billion, the protocol stands as the second-largest project in the liquid restaking sector.
The project has raised over $3.2 million in a seed funding round this year, and it has a valuation of $30 million. Participating investors include Binance Labs and OKX Ventures. The project token's future release is also expected to receive support from leading exchanges. With the upcoming token launch approaching, its TVL is expected to keep increasing. The token airdrop's wealth creation is anticipated to be positive, given EtherFi's contribution to the overall sector valuation.
How to participate: (1) Stake ETH on Renzo Protocol's official website to acquire ezETH; (2) Deposit ezETH on other DeFi platforms to earn interest.
Puffer Finance
Puffer is a decentralized native Liquid Restaking Protocol (nLRP) built on EigenLayer. It introduces native Liquid Restaking Tokens (nLRTs) that accrue PoS and restaking rewards. With a current TVL of $1.3 billion, the protocol is the third-largest project in the liquid restaking sector.
Puffer Finance raised over $6 million in two funding rounds with participation from Binance Labs, Animoca Brands, and SNZ Holdings. Due to Etherfi's contribution to the overall valuation of the sector, as a leading project in this field, the anticipated wealth creation of the token airdrop is expected to be strong.
How to participate: (1) Bind your wallet and X account; (2) Stake ETH and become a liquidity provider (LP) on a DeFi platform.
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