Web3 AI Daily Review (2024/9/6)

1. Attention Value - Market Highlights

1. Market Trends

(1) Macroeconomic Environment:

l Non-farm payrolls about to "explode," Nasdaq futures drop over 1% before US stock market opens

This week, the employment data released in the US has continuously signaled weakness, and market expectations for a 50bp rate cut by the Federal Reserve have been rising. Tonight, the highly anticipated non-farm payroll data may trigger significant market volatility. US stock index futures are trending lower before the market opens, with Nasdaq 100 futures down over 1%, Broadcom down nearly 8%, and Nvidia down over 1.5%. The Asia-Pacific markets are generally lower, and European stocks also opened lower. Economic concerns are intensifying, leading to increased risk aversion, and US Treasury yields have continued to decline today. Meanwhile, the dollar has weakened again, and the yen has strengthened. The "fear index" VIX has risen. All three major US stock index futures are down before the market opens. Nasdaq 100 futures are down over 1%, Broadcom down nearly 8%, and Nvidia down over 1.5%.

l Reasons for the abnormal market in September

Historically, market sentiment and investor behavior indicate that September marks the end of summer for most regions globally. Investors typically reassess their portfolios and trading strategies during this period. Trading volumes are usually lower in the summer as many market participants are on vacation, leading to a slowdown in overall trading volume. Trading volumes will recover in September, and it is not uncommon for assets with low liquidity during the summer to experience a correction.

Another factor contributing to the bearish sentiment in September is tax planning and fiscal cycles, especially in the US, where investors may be preparing for quarterly tax strategies, leading to selling pressure. The overall performance of the stock market may exacerbate this selling, and volatility in the stock market typically increases in September.

Regulatory and macroeconomic events September is usually a month for macroeconomic adjustments, where governments and regulatory bodies often announce new policies or adjust existing ones. This regulatory uncertainty, especially in regions like the US and EU, often creates market tension and negatively impacts speculative assets like Bitcoin.

Figure 1: September is the worst-performing month for global stock markets

Source: Bloomberg, Dot Labs

(2) Web3 Sector:

l CryptoQuant Research Director: Bitcoin's closing price in September expected to be around $55,000

CryptoQuant Research Director Julio Moreno released a simulated forecast for Bitcoin's price movements in September. According to his simulation results, Bitcoin's price may slightly decline in September, with an expected end-of-month price around $55,000. The simulation chart shows that Bitcoin's price will fluctuate between $44,000 and $66,000 for most of the time. However, Moreno specifically pointed out that these simulated forecasts are based solely on historical daily return data for Bitcoin in September.

Source: CryptoQuant, Dot Labs

2. Hot Events

(1) Macroeconomic Environment:

l Trump promises to embrace cryptocurrencies, artificial intelligence, and other "future industries"

According to Mars Finance, on September 6, Trump reiterated during a public speech at the Economic Club in New York that if elected president again, he would make the US the world's cryptocurrency capital, embracing cryptocurrencies, artificial intelligence, and other "future industries." He stated, "We will not attack future industries, but will embrace them, including making the US the world capital of cryptocurrency and Bitcoin." In a one-hour speech, Trump outlined his plans for reforming the US economy upon re-election, including reducing regulations and promoting domestic energy production. Trump also mentioned that he would adopt Musk's suggestion to establish a government efficiency committee to audit federal spending, identify waste, and propose leadership for that committee.

(2) Web3 Sector:

According to an official announcement, Binance Kazakhstan has received formal approval for a comprehensive regulatory license from the Astana Financial Services Authority (AFSA). Binance Kazakhstan has completed the necessary steps to operate with a full license in Kazakhstan, including a series of internal and external audits and regulatory inspections, and will be authorized to operate virtual asset trading facilities and provide a range of virtual asset-related services.

3. Hot Narratives

On August 29, Layer1 blockchain Kaia announced the launch of its mainnet, which is a merger of Klaytn, developed by the South Korean social giant Kakao, and Finschia, a popular instant messaging application in Japan.

In a recent interview, Kaia's core developers stated that the merger of Klaytn and Finschia was inspired by the success of the TON ecosystem. In the future, developers will be able to create mini dApps on messaging applications through a software development kit (SDK), achieving integration of Web3 native applications similar to Telegram. In South Korea, 96% of users use Kakao's messaging application, while LINE is the leading instant messaging software in Japan. According to official data, Kakao and LINE's messaging applications have a combined user base of 250 million.

Aidan Kwon stated, "After the merger, Klaytn's DeFi and gaming services will be combined with Finschia's NFT, payment, and AI services, forming a vast ecosystem with over 420 dApps and services. The Kaia Foundation's announcement also mentioned that 'Kaia is the largest Web3 ecosystem in Asia, integrating Kakao and LINE messaging applications, which together have over 250 million users.'" According to public information, Klaytn launched in June 2019 and quickly became one of the leading blockchain networks among South Korean users. According to DappRadar's 2023 report, Klaytn ranked among the top 10 blockchains in terms of user numbers in 2021, and in 2023, its user base grew by 1100%, reaching 873,000. In the past 30 days, the most popular dApp on Klaytn has been Kgken, a Move-to-Earn application with 743,000 users, followed by Superwalk with 50,700 users, and Iskra with 45,000 users.

Overall, emulating the mini app model of the TON ecosystem, combined with the advantages of a large user base and strong funding from Web2 companies, adds more possibilities to Kaia's ambitions. For similar Web3 native companies, the entry of these two mature Web2 giants, Kakao and LINE, will bring greater competitive pressure, as these established social media giants have large user bases, abundant funding, and mature product experience, creating a new competitive landscape.

4. Potential Catalysts

According to Mars Finance, Mitsubishi UFJ Bank, Sumitomo Mitsui Banking Corporation, and Mizuho Bank will pilot a stablecoin platform to facilitate cross-border transfers. According to a press release, this pilot test, named "Project Pax," will utilize stablecoins issued by Progmat, a blockchain startup supported by SBI Holdings and the Japan Exchange Group. The project will be operated by Progmat, Datachain, and TOKI to facilitate cross-chain transaction testing. The project plans to use SWIFT's existing banking API framework to instruct Progmat to settle on the blockchain network. This helps address anti-money laundering and other compliance challenges. The project stated, "This allows financial institutions to avoid operational redundancies in fiat currency transfers and minimize investment costs." According to the statement, "Project Pax" will start with a prototype, aiming for commercialization of the platform by 2025.

2. Attention Value - Hot Projects

1. Social Media Highlights

Ethereum is one of the largest and most preferred public chain networks globally. With the development of 2.0 and Layer 2, it will continue to lead blockchain technology. Justin Drake, a member of the Ethereum Foundation, has made significant contributions to the advancement of 2.0 and technological innovation. He pointed out that after the Cancun upgrade, Ethereum's performance improved, L2 network fees decreased, enhancing its attractiveness to developers and projects. He also noted that the Ethereum Foundation recently reduced its holdings of ETH due to providing tens of millions of dollars in unconditional grants to the community, which is beneficial for the decentralization of the ecosystem in the long run. The foundation currently controls 0.23% of the ETH supply, and bringing this number close to 0% over the next few decades is healthy.

Key Projects:

· AAVE

AAVE is a decentralized finance protocol for lending and borrowing, where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn passive income, while borrowers can take loans with over-collateralization or under-collateralization. Additionally, AAVE can be staked in the protocol's safety module to provide security for the protocol and depositors.

Recently, AAVE proposed integrating its native stablecoin GHO with BlackRock's tokenized fund BUIDL, which could positively impact prices. The market believes it can become a pillar of any real-world credit, and market sentiment is optimistic. The most noteworthy perspective is that AAVE's model can be applied to various credit scenarios, making it the most transparent, resilient, and accurately priced credit market.

2. Smart Money Accumulation

· Smart Money Holdings

Source: ChainEDGE, Dot Labs

Project Overview:

1. E (@EtheismProtocol /X)

Etheism is an ERC-20 token with a serial number that contains a unique feature: it directly embeds the SVG image of "EtheistFreak" into the token's transaction data, establishing Etheism as a protocol distinct from traditional token standards. Notably, in the case of token sales, its associated genome does not disappear but re-enters the available genome pool, ready for use in future purchases, ensuring a dynamic and evolving system. In summary, Etheism embodies an experimental approach that combines art with blockchain technology, providing aesthetic and collectible value through a unique method.

2. FARM (@TaxFarming /X)

TaxFarming is a platform that simplifies the creation and deployment of tokens on the Ethereum blockchain, providing developers with secure and cost-effective solutions aimed at empowering creators and protecting investors, ensuring a fair and transparent environment for all. The vision of TaxFarming is to enable everyone to easily and securely create tokens, allowing for the effortless launch of tokens with minimal risk while ensuring that all participants (creators, investors, and holders) can benefit fairly.

· Smart Money Inflows

Source: ChainEDGE, Dot Labs

Project Overview:

1. WELL (@MoonwellCN /X)

Moonwell is an open decentralized lending protocol built on Base, Optimism, Moonbeam, and Moonriver. Moonwell provides a clean user interface that is intuitive and easy to navigate, allowing both novice and experienced users to effortlessly lend and borrow digital assets. Security is at the core of Moonwell's design philosophy, employing robust security measures to protect the protocol and ensure users can safely engage in digital asset lending. All operations on Moonwell are visible on-chain, providing transparency often lacking in traditional centralized financial systems. Additionally, all changes and updates to the Moonwell protocol require on-chain governance proposals, ensuring alignment with community interests while eliminating single points of failure, effectively enhancing the protocol's resilience and resistance to disruption.

2. AIUS (@arbius_ai /X)

Arbius is a decentralized network for machine learning. By participating in the network, users can generate new coins using GPU computing power. Holders vote on-chain to support protocol upgrades. Models operate as DAOs with customized allocation and reward rules, providing a way for model creators to earn income. Recently, Arbius launched its new tool, Arbius Playground, a powerful toolkit that integrates advanced features with Arbius's AI models and infrastructure (including the upcoming V4 launch of the 405b unreviewed model). Users can interact with AI solutions and customize them.

3. Attention Value - Sector Rotation

1. Hot Sectors

Source: Dune, Dot Labs

Source: Dune, Dot Labs

2. Internal Sector

Source: Dune, Dot Labs