Weekly Report | RootData launches Web3 project impact analysis index; Musk's xAI expected to complete $18 billion funding valuation as early as this week; JPMorgan: SEC may face legal challenges if it rejects approval for spot Ethereum ETF
Dialogue with Xterio co-founder Jeremy Horn: The "AI+GameFi" journey of a 15-year gaming veteran from Web2 to Web3; Western Bitcoin Layer2 sees a funding boom, learn about the progress of 5 early projects in one article; insider trading, large players monopolizing, and the deprivation of short-selling qualifications, the "hair-pulling" people trapped by points; over $40 million in funding, a quick look at the new "Big Hair" Movement backed by Binance and OKX capital.Organizer: Luan Peng, ChainCatcher
"What Important Events Happened This Week (5.6-5.11)"
1. RootData Launches Web3 Project Influence Analysis Index, Aiming to Make Quality Projects Easier to Discover
According to ChainCatcher, the Web3 asset data platform RootData has launched the Beta version of its X (formerly Twitter) analysis feature. By incorporating nearly 20,000 crypto projects, institutions, and individuals' X accounts into its data statistics and analysis, users can now view the X following relationships between various entities (following, followed by, recently followed, mutual follows), as well as the corresponding influence index and popularity index, allowing for a more multidimensional understanding of project strength and development status.
At the same time, RootData has created several rankings for X data, such as the most influential projects/individuals on X, the hottest projects/individuals recently, and the projects/individuals with the highest number of X followers, helping users to discover market trends and early alpha more timely. The influence index is primarily calculated based on the overall following relationships of X accounts among the nearly 20,000 accounts included in the platform, while the popularity index is mainly based on the number of followers of X accounts among the recently added accounts.
2. Binance Launches New Coin Mining for Notcoin (NOT), Usable with BNB and FDUSD
According to ChainCatcher, Binance's new coin mining has launched its 54th project, allowing users to mine Notcoin (NOT) using BNB and FDUSD. Users can invest BNB and FDUSD into the NOT mining pool on the Launchpool website starting from May 13 at 08:00 (UTC+8) to earn NOT rewards, with a total of 3 days available for mining. The website is expected to update about twenty-four hours before the mining activity opens.
Binance will list Notcoin (NOT) on May 16 at 20:00 (UTC+8) and open trading markets for NOT/BTC, NOT/USDT, NOT/BNB, NOT/FDUSD, and NOT/TRY, applying seed label trading rules.
3. EU Considers Including Crypto Assets in €12 Trillion Investment Market, Potentially Surpassing US ETFs
According to ChainCatcher, DL News reports that the European Securities and Markets Authority (ESMA) is consulting the industry and experts on whether crypto assets should be included in investment products, which could open up a broader market for cryptocurrencies, far exceeding the market size of Bitcoin spot ETFs.
The plan aims to expand the applicability of UCITS (Undertakings for Collective Investment in Transferable Securities), which has a market size of up to €12 trillion. If implemented, this would be a key step towards the mainstreaming of crypto assets in Europe, with financial regulatory expert Sean Tuffy calling it a "game changer."
The consultation deadline for ESMA is August 7, and approval remains to be seen. DLA Piper lawyer Andrea Pantaleo stated that the impact of this move would far exceed that of US ETFs, as many fund sectors might direct some liquidity towards crypto assets.
4. Elon Musk's xAI Expected to Complete Financing This Week, Valued at $18 Billion
According to ChainCatcher, Bloomberg reports that Elon Musk's AI startup xAI is expected to complete its current round of financing this week, with a valuation of approximately $18 billion.
Last week, Bloomberg reported that xAI aims to raise $6 billion in this new financing round (approximately 43.38 billion RMB), initially expected to be $3 billion, but the valuation has surged due to a large number of subsequent participants. Previous sources told Bloomberg that Musk's confidants from Sequoia Capital and Future Ventures, as well as other undisclosed investors, are also joining this financing battle.
It is reported that Musk recently stated that xAI's next-generation Grok model is being trained on 20,000 NVIDIA H100s, and the future Grok 3 will require an increase to 100,000 AI GPUs.
5. JPMorgan: SEC May Face Legal Challenges and Ultimately Lose If It Rejects Spot Ethereum ETF
According to ChainCatcher, JPMorgan (JPM) stated that the legal actions taken by the US Securities and Exchange Commission against cryptocurrency exchanges seem to be an attempt by the agency to influence US policymakers and legislators, who will eventually be responsible for passing regulations for the cryptocurrency market. Since futures-based Ethereum ETFs have already been approved, the SEC may face legal challenges and ultimately fail if it rejects the spot Ethereum ETF.
Previously, JPMorgan indicated that the SEC's Wells notice issued to Robinhood Crypto is unlikely to hinder the final approval of the Ethereum spot ETF.
6. Crypto Primary Market Dealer Arbelos Completes $28 Million Financing, Led by Dragonfly
According to ChainCatcher, Fortune reports that Arbelos has completed $28 million in financing, led by Dragonfly, with participation from FalcolnX, Circle, Paxos, Polygon, and Deribit. Arbelos Markets will primarily focus on derivatives and over-the-counter trading for institutional participants, providing trading liquidity for companies such as hedge funds and venture capital firms, acting as a counterparty for popular products like options and futures. This round of financing is expected to conclude in mid-2023.
It is reported that the two co-founders, Lim and Tang, both started their careers in traditional finance before transitioning to cryptocurrency. Lim previously served as Vice President of Trading at Circle and was responsible for trading strategies at Galaxy Digital, a commercial bank founded by Mike Novogratz, before becoming the derivatives head at Genesis Global Trading under Barry Silbert's crypto empire. Since 2017, Tang has served as the Chief Investment Officer and Managing Partner of LedgerPrime, a cryptocurrency hedge fund acquired by FTX.
7. CryptoQuant: Ethereum Burning Fees Have Decoupled from Network Activity, Dencun Upgrade Causes ETH to Inflate Again
According to ChainCatcher, analysts at data company CryptoQuant stated that the Dencun upgrade has caused Ethereum to inflate again, potentially undermining its low-inflation currency characteristics. Due to the Dencun upgrade, the amount of Ethereum burned has dropped to one of the lowest levels since the merge, when Ethereum transitioned from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism, and the supply of Ethereum is growing at the fastest daily rate since the network merge.
CryptoQuant analysts indicated that prior to the Dencun upgrade, higher network activity on Ethereum meant higher burning fees, resulting in a lower supply of Ethereum. However, after the Dencun upgrade, the total amount of burned fees has decoupled from network activity.
The report concludes that, at the current pace of network activity, Ethereum is unlikely to experience deflation again, or it will require higher network activity to revive.
8. SBF Insists He Is Innocent, Turns to Rice Commodity Trading in Prison
According to ChainCatcher, Cointelegraph reports that despite being sentenced to 25 years in prison for fraud, FTX co-founder Sam Bankman-Fried (SBF) still insists he is innocent. During his planned appeal, he has turned to commodity trading—specifically rice. In his first interview since entering prison in August 2023, he stated that he survives on beans and rice, with rice becoming a form of currency in prison. He joked that the arbitrage opportunities in prison are better compared to his past as a high-frequency trader.
In the interview, SBF expressed his view that he is the "scapegoat" for the FTX collapse. He admitted that his only negligence was allowing FTX to be in a position "vulnerable to bank runs and the malicious actions of competitors," but he believes that reasonable punishment should be civil rather than criminal. Reports indicate that SBF still does not believe he is guilty, portraying himself as an innocent participant and complaining about his inability to negotiate adequately with prosecutors.
9. LD Capital, Antalpha Ventures, Highblock Announce Launch of HK$1 Billion Hong Kong ETF Liquidity Fund
According to ChainCatcher, LD Capital, Antalpha Ventures, and Highblock announced the launch of a HK$1 billion (approximately US$128 million) Hong Kong ETF liquidity fund, aimed at providing market-making services for Hong Kong ETFs, enhancing liquidity, improving capital flow efficiency, and reducing risks associated with liquidity fluctuations and trading volatility.
10. RootData Releases April Hot Search Rankings, Xterio, Ethena, Monad, Omni Network, Berachain in Top Five
According to ChainCatcher, the Web3 asset data platform RootData has released its April hot search rankings, with GameFi platform Xterio, Delta neutral stablecoin protocol Ethena, parallel blockchain Monad, Ethereum interoperability layer Omni Network, and DeFi-focused EVM-compatible public chain Berachain ranking in the top five.
Other projects that made it onto the monthly search rankings include Saga, Wormhole, Avail, BOB, io.net, Hyperlane, Zircuit, zkLink, Karak, StakeStone, Eclipse, Bitlayer, Tensor, EigenLayer, and Aethir.
It is reported that this ranking is based on RootData's monthly search data of over 300,000 times, which can objectively reflect the market popularity and user attention of Web3 projects, serving as an important reference for users to discover quality early-stage projects.
"What Exciting Articles Are Worth Reading This Week (5.6-5.11)"
"The points system is a toxic means for project parties to manipulate the market, and I will no longer participate in point-based interactions," stated a veteran OG, excluding points and wash trading projects as a new criterion for filtering interactive projects.
Since EigenLayer announced the token EIGEN airdrop conditions on April 30, controversies regarding point-based airdrops have not ceased. That evening, the Bankless live stream, which was live-streaming with EigenLayer's founder, even disabled user comments.
Aside from the airdrop share being lower than some users' expectations and the airdrop tokens being unlocked in batches, EigenLayer also restricted users' IP addresses when claiming airdrops, leading to users who had already accumulated a lot of points being disqualified from receiving airdrops due to their IP addresses being in blocked regions.
The controversy over EigenLayer's airdrop has pushed the points system model into the spotlight, exposing long-hidden issues such as insider trading, shrinkage, and inflation under the points reward system.
The sentiment against point-based activities has also reached unprecedented heights, with calls to refuse participation in point-based activities spreading throughout the crypto community. Compound's founder stated, "The points era is over," while the founder of the "airdrop pioneer" suggested projects "issue tokens instead of points," indicating that the once-popular points system seems to be declining in reputation.
With the revival of the BTC ecosystem, waves of excitement in the AI and Meme sectors have followed, and the voice of "sector rotation" is gradually emerging in the crypto community, with the GameFi sector, as a leader in the last bull market, also beginning to attract attention.
During the bear market, the GameFi sector has accumulated some promising blockchain game developers and projects, and Xterio, which we are interviewing this time, is one of them.
According to RootData's April hot search rankings, Xterio has consistently ranked at the top.
At the beginning of April, Xterio announced its collaboration with AltLayer to create the pioneering Layer 2 network Xterio Chain, supported by the Optimism and EigenDA stack, aiming to define the growing AI-based Web3 gaming world. At the end of April, Xterio announced that BNB Chain, in collaboration with Xterio and AltLayer, would launch a new L2 chain centered around gaming, utilizing BNB as the Gas Token.
With the backing of BNB Chain, Xterio's development momentum has reached new heights.
Following BOB's completion of $30 million in financing at the end of March, Bitcoin Layer 2 projects with Western backgrounds have continued to secure funding.
On May 7, Botanix Labs announced the completion of a total of $11.5 million in financing, with participation from Polychain Capital, Placeholder Capital, Valor Equity Partners, ABCDE, and Domo, the creator of the BRC-20 token standard.
ZKM, incubated by the Ethereum Layer 2 Metis, which was co-founded by Vitalik's mother, although not entirely Western in background, has still garnered attention after announcing its development of Bitcoin Layer 2 and completing a $5 million Pre-A round led by OKX Ventures, with participation from Amber Group, Metis Foundation, and Crypto.com.
In April, the established crypto developer Thesis also announced that its Bitcoin Layer 2 Mezo secured $21 million in financing led by Pantera Capital, with participation from Multicoin Capital, Hack VC, and others.
According to ChainCatcher's incomplete statistics, in the past two months, Bitcoin Layer 2 projects with Western backgrounds have raised nearly $70 million, with participation from well-known investment institutions such as Polychain Capital, Pantera Capital, Multicoin Capital, and Hack VC.
Bitcoin Layer 2 has been one of the core narratives of this bull market, but with the underwhelming performance of the leading Merlin Chain token MERL after its launch, the community has begun to widely question the Bitcoin Layer 2 track, especially those projects with Eastern team backgrounds.
As Western Bitcoin Layer 2 projects continue to secure funding, will this rewrite the landscape of Bitcoin Layer 2? What is the current progress of the recently funded Western Bitcoin Layer 2 projects? What opportunities do ordinary investors have to participate? ChainCatcher provides a brief overview.
Recently, W3W.ai announced its rebranding to Hemera, providing a public infrastructure protocol for high-performance AI and data, adding a unique new competitor to the Web3 AI and data track—Hemera.
In fact, with the rise of Sora under OpenAI, the AI field has sparked another technological wave, and the topic of AI + Crypto = ? has become a hot topic in the current innovative technology field. In a16z's "2024 Outlook Checklist," "AI + Crypto" is listed, emphasizing that crypto technology can create multilateral, global, permissionless markets, allowing anyone to contribute computing or new datasets to the network and receive corresponding compensation. This sharing and utilization of resources not only reduces the cost of AI but also makes data more accessible.
At the same time, Vitalik Buterin also envisioned the potential of "AI + Crypto" in his article, believing that crypto technology can find a balance between the centralization and transparency of AI, further optimizing AI's data storage.
Hemera is steadfastly exploring the potential of Crypto + AI, empowering the crypto industry with the latest AI revolution, and creating an AI-native operating system for the entire industry through a high-performance data indexing network and a deeply optimized large model for Web3. According to Hemera founder Arthur Meng, the Hemera Protocol will be built as a public infrastructure for the entire industry, redefining the way users interact with blockchains in the Web3.0 internet era.
Recently, the blockchain development team Movement Labs completed a $38 million Series A financing led by Polychain Capital, with support from Hack VC, Foresight Ventures, Nomad Capital, Bankless Ventures, and OKX Ventures, making it one of the top five in terms of financing amounts in the blockchain sector for April.
This month, Binance Labs also extended an olive branch, announcing its investment in Movement Labs.
According to data from the crypto asset data platform Rootdata, Movement has ranked among the popular projects for a week in a row.
Data from the X platform shows that Movement has amassed 137,000 fans, while its Discord community has over 76,000 members.
With the backing of capital, expectations for Movement to become the next "must-farm big hair" are continuously fermenting, and its testnet interactions have become one of the most discussed topics in crypto recently.
On March 18, local time in the UK, 42-year-old British Chinese Jian Wen was found guilty by a UK court of "arranging money laundering," with a maximum sentence of 14 years in prison. Jian Wen's defense lawyer, Mark Harries, told this publication that due to the judge's busy schedule, the UK court has postponed the final sentencing for Jian Wen, originally scheduled for May 10, to May 24.
Jian Wen served Qian Zhimin, who had defrauded over 120,000 Chinese investors. On April 24, Qian Zhimin appeared in court in London. She is accused of obtaining, using, or holding cryptocurrencies related to crimes from October 1, 2017, to April 23, 2024, in London and other parts of the UK, which originated from her massive economic fraud conducted within China.
During the investigation of Qian and Jian, UK police seized over 61,000 bitcoins, the largest amount of cryptocurrency ever seized in the UK (valued at approximately £3.06 billion based on the exchange rate of about £50,190 per bitcoin on May 10).
As Qian's "steward and translator" in the UK, Jian Wen was born into an ordinary family in China and came to the UK in 2007, doing various physical jobs while hoping for a class leap overseas through legitimate channels for a long time. Throughout the six-year investigation and spanning two years of trial, one question has always existed: to change his fate in a foreign land, did Jian Wen willingly become an accomplice of an international fraudster, or was he manipulated into becoming a victim?
7. “Institutional Influx and New Financial Products Drive Rapid Growth in the RWA Sector”
Real World Assets (RWA) is one of the fastest-growing emerging sectors in the cryptocurrency field. Essentially, they are traditional financial assets (such as treasury bonds) tokenized for interaction with decentralized finance (DeFi) protocols.
RWA allows for the combination of traditional finance and blockchain technology, enabling broader liquidity and innovative financial products.
In the last quarter, the RWA market achieved remarkable growth. Driven by significant institutional interest and the launch of innovative products, tokenized treasury bonds, including BlackRock's dollar institutional digital liquidity fund, Superstate's short-term US government securities fund, and Ondo's USDY, grew by 41%, reaching nearly $1.3 billion. Let's review the major developments and trends in the industry.
8. “Small Money to Catch Big Fish: Unveiling the 1155 WBTC Phishing Incident”
On May 3, according to monitoring by the Web3 anti-fraud platform Scam Sniffer, a whale fell victim to a phishing attack involving the same first and last number address, losing 1,155 WBTC worth approximately $70 million. Although this phishing method has been around for a long time, the magnitude of the loss in this incident is still shocking. This article will analyze the key points of the same first and last number address phishing attack, the flow of funds, hacker characteristics, and provide suggestions for preventing such phishing attacks.
9. “Who Is Buying Bitcoin Spot ETFs?”
On May 7, The Block reported that Monolith Management, an investment firm founded by former Sequoia China partner Cao Xi, revealed in a document that it holds over $24 million in BlackRock's spot Bitcoin ETF (ticker: IBIT). This Hong Kong-based company not only ranks fifth in terms of holdings in BlackRock's ETF but also has more than double its investment in Meta stocks. Additionally, the company's two largest investments are in NVIDIA and Microsoft.
Currently, asset management firms in the US, Hong Kong, and Europe are entering the Bitcoin ETF market.
According to watcher.guru, a Hong Kong-based asset management company purchased $112 million worth of US spot Bitcoin ETFs. Specifically, data shows that Yong Rong Asset Management Limited purchased $38 million worth of BlackRock's iShares Bitcoin Trust (IBIT).
Similarly, documents from Ovata Capital Management, also based in Hong Kong, indicate that its investments in four other spot Bitcoin ETFs exceed $74 million.
10. “How to View ZKM Entering the BTC L2 Track?”
Seeing ZKM also entering the BTC L2 track, this track may become as crowded as Ethereum L2, and the final market pattern will depend on the results of technological and market evolution.
The underlying technology of ZKM is zkVM, and its ultimate goal is to have its zkVM technology adopted by more projects and ecosystems, thus becoming a foundational infrastructure. For example, it can connect assets from different ecological networks (Ethereum, Bitcoin, Cosmos, etc.) to form better liquidity. Within this broader framework, it is easier to understand why ZKM wants to enter the BTC L2 track.
Returning to the technical solutions, ZKM's core technology mainly consists of two aspects: "Entangled Rollup Architecture + zkVM." These two aspects primarily address two major concerns in the market: first, how to ensure the security of assets; second, how to achieve the sustainability of its own network.
