Author: MIIX Capital

1. Investment and Financing Observation

Last week (02.26-03.03), there were 23 investment and financing events in the crypto market, with a disclosed total amount of approximately $800 million:

The DeFi sector announced 6 investment and financing events, among which Ether.Fi completed a $23 million Series A financing round, led by Bullish Capital and CoinFund;

The NFT and Metaverse sector announced 1 investment and financing event, the NFT project Imaginary Ones completed a new round of financing, with participation from Animoca Brands;
The blockchain gaming sector announced 2 investment and financing events, among which the blockchain gaming infrastructure company READYgg completed a new round of financing of $4 million, with participation from Delphi Digital;
The infrastructure and tools sector announced 13 investment and financing events, among which the Ethereum scaling project Taiko completed a $15 million Series A financing round, with participation from Hashed;

Other Web3/crypto-related sectors announced 7 investment and financing events, among which the blockchain data analytics company Octav announced a $4 million strategic investment;

The centralized finance sector announced 1 investment and financing event, the crypto exchange Backpack completed a $17 million Series A financing round at a valuation of $120 million;

Last week, the number of investment and financing events in the cryptocurrency market slightly increased, focusing on infrastructure and DeFi: 9 events in the infrastructure sector, 3 in asset management, 6 in DeFi, 1 in blockchain gaming and NFT, and 3 in Web3; among them, there were 5 financing events of tens of millions of dollars, including the Polygon modular blockchain project Avail, DePIN infrastructure MXC, Backpack.exchange and its ecosystem projects, liquidity re-staking protocol ether.fi, and AI robotics company Figure.

Projects with undisclosed financing amounts
Trustless full-chain ledger protocol Cycle Network, Taproot asset issuance protocol Flash Protocol, Babylon, Blast ecosystem DeFi project Ring Protocol, liquidity protocol Aerodrome, decentralized lending protocol Morpho Labs, and Humanity Protocol have not disclosed their financing amounts.

About Ether.fi
Ether.fi is a decentralized, non-custodial delegated mining protocol that also features Liquid Staking derivative tokens. A notable characteristic of Ether.fi is that delegators control their own keys. Additionally, the Ether.fi mechanism allows for the creation of a node service market, where delegators and node operators can register nodes to provide infrastructure services and share the revenue from these services.

About Backpack
Backpack is the next-generation cryptocurrency exchange and multi-chain wallet. Backpack's technology provides a self-custody solution that integrates multi-party computation (MPC) technology to ensure fund security.
The Backpack ecosystem consists of various products and services, including the popular Backpack non-custodial wallet, the regulated global crypto trading platform Backpack Exchange, and the Solana ecosystem blue-chip NFT Mad Lads. At the same time, Backpack is also the creator and developer of Anchor, the Solana smart contract framework, and the executable NFT (xNFT) token standard.

2. Industry Data

Multiple On-chain Data Hits New Highs

DefiLlama data: The total value locked (TVL) in DeFi lending across the network has returned to above $30 billion, currently approximately $32.29 billion, reaching a new high since June 2022.

L2BEAT data: The current total locked value (TVL) in Ethereum Layer 2 is $33.83 billion, with a 7-day increase of over 10%, reaching an all-time high. Additionally, the OTC price of USDT has risen to 7.4 yuan, while the current USD to RMB exchange rate is 7.2 yuan, resulting in a USDT premium rate of 2.7%.

Spot Market Leads, MeMe Coin Market Stimulated

In last week's market performance, the spot buyers of mainstream coins were very strong; derivatives data also began to become active, leading to a gradual increase in market leverage levels; the MeMe coin, after nearly a month of accumulation, was stimulated last week; the overall market showed a bullish sentiment driven by the spot market, with a significant expectation of acceleration.
From the actual performance, the current upward trend is a very typical spot market trend, but even in the current atmosphere of extreme FOMO, the implied volatility (IV) of major expirations has not even reached recent highs, indicating a long-term downward trend. Clearly, FOMO sentiment still cannot drive IV to take off, which is a very positive phenomenon for the options market. The Bitcoin options market has matured, and investors need to be cautious and reference the sudden drop in the market during a bull run.

Uniswap Proposal Support Rate 100%

Uniswap opened a vote for the fee switch last week, which is expected to end on March 7, 2024. Currently, the voting support has reached 12 million votes, with a support rate of 100%. Based on previous voting on snapshot, the number of participating votes is estimated to be between 10M-30M, with a probability of over 90% for the proposal to pass. However, even if the vote passes, UNI only confirms the opening of the fee switch, and the specific fee rate has yet to be determined.

Additionally, with the UNI token reaching a nearly one-year historical high, its market capitalization has reached $9.4 billion, and the fully diluted valuation (FDV) has reached $12.5 billion. From on-chain data, institutions still maintain a positive outlook on the subsequent market trend and have not shown signs of reduction.
As this proposal receives widespread attention, several other projects like Frax are considering following suit. If this trend continues in other mature DeFi protocols, we believe it may begin to bring clarity and fundamentals to the valuations of previously speculative tokens, especially for tokens and protocols that generate sustainable fees.

Smart Money Increases Holdings in $BEAM

Last week, in addition to projects in the LRT track continuing to receive increases from Smart Money, additional projects include Matic and BEAM (nearly $9 million).

Benefiting from a large influx of funds, the price of BEAM reached a historical high, with a market capitalization of $1.77 billion and an FDV of $2.137 billion.

Additionally, it can be seen that there are a large number of VC holdings in this project, and currently, with the price increase, these VCs have not sold.
Comprehensive analysis shows that the price increase of BEAM is mainly supported by the narrative of the gaming track, but its main business still relies on investment returns (approximately 18% annualized), and no remarkable ecosystem has been seen yet, so investors should remain cautious when entering.

About BEAM
BEAM was formerly known as Merit Circle, a decentralized DAO gaming guild built on Ethereum and BSC. BEAM is a gaming chain launched on AVAX in August last year, and its native token $MC can also be exchanged for $BEAM at a ratio of 1:100.
MC has always had its own thoughts on token empowerment. As a guild, it previously relied on unsustainable gold farming, as games have their own play cycles, leading to the need for continuous improvement of this model. Later, it gradually transitioned to a model of buying back and burning tokens with investment returns and covering multiple aspects of the gaming industry chain from incubation and investment to infrastructure, establishing its own gaming chain BEAM.

3. Some VC Holdings Data

Note: The above data is sourced from https://platform.arkhamintelligence.com/, statistical time: March 4, 2024, 12:00 (UTC+8).

4. This Week's Focus

March 4

• CoinList will conduct a public sale of the MASA token for the decentralized data network Masa, with registration closing on this day;
• MOBOX will airdrop 600 ETH to MODragon NFT holders on March 4, with the snapshot completed on February 29;
• The Solana Foundation, in collaboration with venture fund Colosseum, is opening registration for the 2024 Global Online Hackathon, with event information and entry available on March 4;
• South Korean telecom giant KT will shut down its non-NFT platform MINCL starting March 4 due to changes in business conditions;

March 5

• The SEC will delay its decision on Fidelity's spot Ethereum ETF proposal until March 5;
• Liquity token LQTY will unlock 657,000 tokens on March 5 at 8:00, worth approximately $1.16 million, accounting for 0.69% of the circulating supply;
• AltLayer will distribute the ALT first-quarter airdrop to Celestia stakers, with the deadline for users to claim being March 5 at 16:00;
• Puffer Finance will update its EigenLayer points and pufETH points policy starting March 5 at 16:00, with only users who staked before the announcement deadline on February 9 eligible to earn EigenLayer points;
• Galxe token GAL will unlock 2.03 million tokens on March 5 at 8:00, worth approximately $6.98 million, accounting for 2.26% of the circulating supply;

March 6

• Federal Reserve Chairman Powell will testify before the House Financial Services Committee;
• The L2 network Mint Blockchain plans to officially launch its testnet and simultaneously announce 30 initial supporting ecosystem partners;
• SingularityNET (AGIX) will unlock 8.97 million tokens at 8:00, worth approximately $6.8 million;

March 7

• The European Central Bank will announce its interest rate decision;
• Initial jobless claims data for the week in the U.S.;
• Federal Reserve Chairman Powell will deliver his semi-annual monetary policy testimony before the Senate Banking Committee;
• Frax Finance will airdrop FXTL points to veFXS stakers based on their veFXS balance as of March 7 at 7:59 Beijing time. In the second week after this airdrop, the Flox mechanism will go live, allowing users to earn points from each block;
• The voting on the Uniswap governance proposal will end on March 7, with on-chain voting results to be released on March 8;
• Hashflow token HFT will unlock 13.62 million tokens on March 7 at 8:00, worth approximately $6.47 million, accounting for 3.83% of the circulating supply;

March 8

• U.S. unemployment rate for February;
• U.S. non-farm payroll data for February;
• CoinList will open the public sale of the MASA token for the decentralized data network Masa at 00:00 on March 8;
• Mantle will stop supporting the Goerli testnet on March 8, advising users to migrate to Sepolia;
• The Bitcoin native staking chain BounceBit will launch its testnet on March 8, stating that users who register an account and deposit $100 will receive BounceClub (formerly BounceBox) when the testnet launches;

March 9

• DeGate will open the claim for 40 million DG tokens for the Key exchange event and plans to start a social media round token distribution (Social Token Offering) within 60 days;
• The SEC will delay its decision on BlackRock's spot Ethereum ETF submission until March 10;

5. Conclusion

In the past week, the crypto market continued to show strong vitality, from Bitcoin's rebound to the development of DeFi and NFT projects, reflecting the rapid progress of the industry and the active participation of market participants. Especially, the investment and financing activities in the infrastructure and DeFi sectors have remained highly active for several consecutive weeks, demonstrating the industry's ongoing investment and confidence in future technology and service development.
In terms of industry data, the spot market is leading the market, and the performance of the derivatives market also indicates that a new cycle is approaching; Uniswap's fee switch proposal has a support rate of 100%, which may stimulate other protocols to follow; the increase in holdings of projects like BEAM by smart money reflects market recognition of potential projects. As the crypto market continues to mature, the attention and expectations from both inside and outside the industry are sharply increasing, seemingly all voices are shouting that the bull market has returned, and the future looks promising.
In the coming week, there are several noteworthy events and proposal votes, with a focus on the Uniswap fee switch vote and the SEC's decision on ETF proposals. Additionally, be cautious of potential risks such as high financing rates and open contracts in perpetual futures products, as well as the possible hidden market leverage issues behind the active derivatives data. Actively adapt to changes and participate in this wave of bull market trends together.
Note: All views above are for reference only and do not constitute investment advice. If there are any objections, please feel free to contact us for correction.

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