Web3 AI Daily Review (2024/9/4)

1. Attention Value - Market Highlights

1. Market Trends

(1) Macroeconomic Environment:

l "September Curse" Comes True! U.S. Stocks Plummet

The trigger for the crash was the overnight release of two PMI data points from the U.S. Among the sub-indices, the decline in orders and the rise in inventory are considered one of the most concerning signals since the global financial crisis, while the price index regaining upward momentum suggests a rebound in CPI, conveying worries about stagflation. On September 3, major U.S. stock indices recorded their largest single-day drop since August 5, with the S&P 500 down 2.4%, and the Nasdaq falling over 3%, marking the third-largest single-day drop in the past year. The Dow Jones, closely related to the economic cycle, retreated from its high, falling below 41,000 points. The leading U.S. stocks, the Mag7, collectively declined.

Figure 1, Nasdaq

Source: Coinglass, Dot Labs

l "Crash Culprit": PMI Data Points to Recession and Stagflation

The two PMI data points released overnight ignited market concerns about the U.S. economy. The ISM Manufacturing PMI showed a new orders index of 44.6, the worst since June 2023, down from July's 47.4; the inventory index surged to 50.3, up 5.8 points from the previous month, which was 44.5 in July; the manufacturers' payment prices index rose from 52.9 in July to 54. Markit Manufacturing PMI and ISM sub-data converged, conveying three significant signals:

First, the employment index showed a noticeable improvement from July, indicating that this Friday's non-farm payroll report will exceed expectations;

Second, the manufacturers' payment prices index regained upward momentum, suggesting that the cooling of goods inflation may have ended, and we may have already seen the CPI low for this cycle;

Third, the new orders/inventory ratio fell to recessionary levels, indicating serious issues in the manufacturing sector.

Figure 1, CPI Data

Source: Coinglass, Dot Labs

(2) Web3 Sector:

l Cryptocurrency Market Declines Again

The cryptocurrency market is quite sluggish. BTC fell again from around $58,000, hitting a low of $55,606. ETH also dropped from around $2,500 to about $2,300. Altcoins experienced a widespread decline due to the overall market performance. According to Coinglass data, $196 million was liquidated across the network in the past 24 hours, with $172 million in long positions liquidated. The performance of the BTC spot ETF is also not optimistic, as it has been in a net outflow state since August 27, when the data changed to a large net outflow of $127 million.

2. Hot Events

(1) Macroeconomic Sector:

l NVIDIA Plummets 9.5%, Market Value Erased by $278.9 Billion

On September 3, the first trading day of September after the long U.S. stock weekend, "catastrophic" became a fitting description, with "plunge" being a term that can be used to describe the leading decline of NVIDIA and a host of chip stocks throughout the day. NVIDIA gapped down 2.8% at the open, then continued to decline, closing down 9.5%, with the stock price dropping to $108, the lowest in three weeks since August 9, and a market value shrinkage of $279 billion, further distancing from the $3 trillion mark. NVIDIA's double-long ETF fell about 19%. The Philadelphia Semiconductor Index, a benchmark for the industry, plummeted 7.8%, breaking through the 5100 to 4800 points in integer levels, reaching a three-week low since August 12, while the ETF tracking this benchmark, SMH, fell 7.5%, marking the largest single-day drop in over four years.

Figure 1, NVIDIA

Source: Coinglass, Dot Labs

(2) Web3 Sector:

On September 4, Web3 cybersecurity company Ancilia announced that Penpie suffered an attack on its reward protocol, resulting in a loss of approximately $27 million. This attack caused the Penpie platform token PNP to drop significantly by about 40%; meanwhile, Pendle (PENDLE) also fell nearly 10% in the past 24 hours, indicating that the incident affected the entire Pendle ecosystem.

3. Hot Narratives

Recently, discussions and controversies surrounding Ethereum have increased, prompting not only Vitalik himself to clarify his views but also the Ethereum Foundation to issue announcements to quell community doubts. On August 25, KOL @0xstrobe publicly questioned Vitalik, accusing him of poor communication on the DeFi topic. Vitalik responded that the yields you mentioned come from borrowers, transaction fees, etc., which is precisely what concerns me. The value of crypto tokens lies in the ability to earn yields from them, and these yields are paid by those trading crypto tokens.

The answer is clear; for example, the yields for those earning an 8% annual interest rate in dollars are paid by those leveraging 2x to go long on ETH at an 8% annual interest rate, but this means that the DeFi market exists downstream of the ETH market. Thus, while DeFi may be great, it is fundamentally constrained and cannot become an explosive innovation that propels crypto technology to another 10-100x adoption.

However, Vitalik's response has drawn more questions and rebuttals. For instance, a partner at Electric Capital stated that Vitalik's comments apply to all finance. KOL @PaperImperium noted that Vitalik's statements reflect a misunderstanding of human economic history. The CEO of Alphaverse Capital stated that Vitalik's viewpoint is untenable.

J.P. Morgan provided reasons for Ethereum's poor performance in a research report: since the launch of the Ethereum spot ETF last month, it has generally seen net outflows, while the spot Bitcoin ETF launched earlier this year has been more successful. The net outflow for the Ethereum fund is approximately $500 million, while the Bitcoin ETF has seen net inflows exceeding $5 billion. The bank also noted that the weak data for the Ethereum ETF was somewhat expected and pointed out that Bitcoin's "first-mover advantage," lack of staking, and lower liquidity mean less appeal to institutional investors. Zhu Su believes that the issue with the Ethereum Foundation is not the premature sale of valuable tokens but the inability to provide a coherent roadmap and effective leadership.

4. Potential Catalysts

On September 6, the last non-farm payroll report before this month's Federal Reserve decision will be released. Against the backdrop of a downward trend in inflation, this employment report will undoubtedly be one of the most critical data points this week. The U.S. non-farm payroll for July, released on August 2, was 114,000, below the expected 175,000, raising widespread market concerns. Some opinions even suggest that there is a risk of recession in the U.S. economy, leading to a week-long global market decline, with cryptocurrencies, as risk assets, being particularly negatively impacted.

2. Attention Value - Hot Projects

1. Social Media Highlights

The Ethereum ecosystem is a decentralized platform that supports the development of smart contracts and DApps. There are over 1,400 projects in the Ethereum ecosystem, primarily categorized into DeFi, NFT, GameFi, infrastructure, and development tools. DeFi is the largest project category on Ethereum. According to DeFiLlama data, the TVL of Ethereum's DeFi projects exceeds $25 billion, with daily trading volumes exceeding $1 billion and approximately 300,000 active users; as of July 2024, the staking amount on Ethereum has increased from 25 million ETH in 2023 to 33.7 million ETH, indicating growing community confidence in the Ethereum network, especially after transitioning to a Proof of Stake mechanism, where staked ETH accounts for 28.28% of the total supply. Overall, the Ethereum ecosystem will continue to attract the attention of investors and developers in 2024.

Key Projects:

· $WELL

WELL3 is a Web3 health platform that transforms health data into valuable rewards by leveraging a decentralized physical infrastructure network (DePIN) and decentralized identity (DID), along with sophisticated AI analytics, fundamentally changing health data management.

Recently, WELL3 has drawn attention due to the resubmission and approval of proposals MIP-B23 and MIP-O02, which may positively impact the price. The recent sentiment around WELL3 is optimistic, with views that its community incentives, reduction of selling pressure, and improved stickiness through airdrop plans are excellent, leading to a relatively positive market sentiment. WELL3 is building a dynamic ecosystem that provides real value to users, which will be key to its long-term development.

2. Smart Money Accumulation

· Smart Money Holdings

Source: ChainEDGE, Dot Labs

Project Overview:

1. F16 (@CoinF16 /X)

F16 is a meme coin symbolizing freedom and resilience, with each token representing the fight for liberation, justice, and unity, empowering holders to defend their beliefs. F16 is not just a coin; it is a lifestyle, a statement, and a great journey into crypto.

2. r/snoofi (CA: 7M9KJcPNC65ShLDmJmTNhVFcuY95Y1VMeYngKgt67D1t)

Snoofi is a meme coin with no intrinsic value, no expected financial returns, no profit plans, and no central issuer. Snoofi is intended solely for entertainment purposes. While the r/snoofi subreddit exists on reddit.com, this subreddit and the snoofi meme coin have no affiliation with Reddit Inc. or any authorized partners of its mascot Snoo.

· Smart Money Inflows

Source: ChainEDGE, Dot Labs

Project Overview:

1. UNREAL (@TheUnrealAI /X)

UNREAL AI is a decentralized GPU computing network aimed at creating an advanced GPU computing network accessible globally. UNREAL AI optimizes AI training, mining, and rendering through a centralized GPU network: providing scalable and powerful GPU resources, allowing researchers and developers to efficiently train complex AI models using top-tier GPUs without expensive infrastructure; offering access to a global network of high-performance GPUs to enhance cryptocurrency mining, this decentralized approach reduces costs and complexities associated with traditional mining setups; utilizing decentralized GPU capabilities to deliver high-quality visual effects and animations faster, significantly shortening rendering times, allowing users to efficiently and economically render high-quality films and visual effects.

2. COLON (@colon_ethereum /X)

COLON is the father of Doge. Because Doge first appeared on the blockchain and inspired other dog-themed meme coins, Colon is the first precedent for all dog meme coins. According to mentions on the official X platform, this can be traced back to 2009; without Colon, Doge would hardly have become the beloved and cute meme it is in this field.

3. Attention Value - Sector Rotation

1. Hot Sectors

Source: Dune, Dot Labs

Source: Dune, Dot Labs

2. Internal Sector

Source: Dune, Dot Labs