Gryphsis Cryptocurrency Weekly: SEC Delays Bitcoin Spot ETF Application

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Welcome to the weekly cryptocurrency summary from Gryphsis Academy. We bring you key market trends, in-depth insights into emerging protocols, and the latest industry dynamics, all aimed at enhancing your expertise in cryptocurrency and Web3.

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Market and Industry Snapshot:

Layer 2 Overview:

Last week, most Layer 2s, except for Starknet, were in a downward trend, with Base and zkSync showing notable declines of 5.18% and 6.97%, respectively. Starknet was the only Layer 2 to see slight growth, up 0.27%. Protocols like Lighter, Idle, and Yearn Finance demonstrated significant TVL growth.

LSD Sector Overview:

In the LSD sector, Ethereum staking maintained slight growth, but the increase was not significant, with no obvious indicators of change. In terms of market share, wstETH saw growth, while the others remained stable.

RWA Sector Overview:

Last week, the total market capitalization of real-world assets remained above $10 billion, continuing its growth trend. Additionally, RWA active private credit values and tokenized treasuries also saw increases. Notable growth tokens included $TRADE, $IXS, and $DEXTF. Tokens like $WECO, $TOKEN, and $CFG experienced significant losses.

Main Topics

Macroeconomic Overview:

• US Stock V.S. Crypto

Major Events This Week:

• SEC Delayed Bitcoin Spot ETF Application

Weekly Protocol Recommendation:

• Match Finance

Weekly VC Investment Focus

• Blockchain.com ($110M)

• Civitai ($5.1M)

Twitter Alpha:

• @defiinfant on smart contract wallet

• @hmalviya9 on Render Network

• @milesdeutscher on potential airdrop

• @poopmandefi on Celestia

• @zerokn0wledge_ on intent-centric

Macroeconomic Overview

This week, the stock market and the crypto market showed opposite trends. The S&P 500 and Nasdaq rose by 2.2%, while $BTC and $ETH declined by 1.6% and 4.6%, respectively. In the coming week, keep an eye on major events such as the FOMC, initial jobless claims, and PMI.

Major Events This Week

SEC Delayed Bitcoin Spot ETF Application

The U.S. Securities and Exchange Commission (SEC) delayed its decision on Hashdex's application to convert its existing Bitcoin futures ETF into a spot ETF and postponed Grayscale's action to launch a new futures-based Ethereum ETF. Both applied for Bitcoin and Ethereum ETFs in the same month but faced delays.

This delay comes amid high market expectations for federal regulators to approve a spot Bitcoin ETF. So far, regulators have rejected every attempt to list blockchain assets for general public investment. Many companies have applied or are even in development but have been denied.

However, this rejection has not dampened market enthusiasm, as BTC's price surged over 5% on the afternoon of the 16th, reaching $37,500.

Despite the SEC's further delay on the spot ETF application, the market expects a batch of spot Bitcoin ETFs to be approved by January next year, making it easier for institutional and retail investors to access Bitcoin, and with the ongoing excitement in the crypto industry, sentiment is increasingly bullish. Bitcoin's price has risen 129% to date.

However, one issue investors face is whether the significant rise in Bitcoin's price this year has already factored in the approval of a spot Bitcoin ETF. Sui Chung, CEO of digital asset index provider CF Benchmarks, stated that the approval of a spot Bitcoin ETF may already be priced in, but the question is how much capital flow it will attract. He noted that given the long-term lack of correlation between Bitcoin and assets like stocks, the benefits of diversification are driving discussions around Bitcoin investment.

https://x.com/crypto/status/1724871377981747653?s=20

Weekly Protocol Recommendation

Welcome to our weekly protocol segment—here, we focus on protocols making waves in the crypto space. This week, we chose Match Finance, an aggregator yield protocol built on Lybra Finance.

Match Finance launched in October this year and has been audited by Beosin. To understand its product mechanism, one can first get a general idea of the protocol it serves, Lybra Finance. Lybra Finance is an LSDfi stablecoin protocol where users earn eUSD (stablecoin) by over-collateralizing stETH.

Additionally, LBR serves as the governance token to incentivize holding eUSD or providing liquidity for eUSD-USDC/LBR-ETH. esLBR, as a third-party custodial token, can be exchanged 1:1 for LBR, and all mining rewards from the protocol are distributed in this form, which is non-tradable and non-transferable. However, esLBR holders enjoy the protocol's revenue sources and governance rights. They can also convert their esLBR into LBR through linear unlocking.

Overview of Match Finance Workflow:

As a Yield platform, what incentives does Match Finance offer to attract users?

1. Lowering the threshold for acquiring esLBR

In Lybra Finance, users must maintain 5% of the total value of eUSC in LBR/ETH liquidity to earn esLBR rewards. If they fail to maintain this, the esLBR they could have earned turns into a bounty. However, in Match Finance, users only need to deposit eUSD or dLP (LBR/ETH pool) to earn esLBR, significantly lowering the barrier to acquiring esLBR and reducing risk.

2. Increasing dLP rewards

1) 100% of trading fees

2) 100% of esLBR rewards as LBR/ETH liquidity providers

3) An additional 10% esLBR reward from the Mint Pool

4) An additional 10% esLBR reward from the Treasury

5) All dLPs in Match Finance are eligible for $MATCH airdrops

3. mesLBR/esLBR pools receive instant rewards.

4. Serving as a bribery platform for Lybra War

In short, Match Finance attracts users to participate in dLP or stake eUSDC to earn esLBR with high returns through these mechanisms.

Our Insights

Why is esLBR so attractive that all of Match's incentives revolve around it? This is due to the governance rights it holds, which trigger the Lybra War.

Lybra Finance launched its DAO organization in October this year, allowing all esLBR and LBR holders to participate in Lybra's decision-making by submitting governance proposals. However, one must hold 10,000 esLBR to initiate a proposal, and holders of LBR/esLBR have voting rights, but during voting, LBR will automatically convert to esLBR.

Thus, esLBR holds both proposal rights and governance rights, along with the protocol's revenue sources. Holders can decide the emission rate of esLBR in the LST Vault, leading to governance tokens having bribery value to attract users to use their issued tokens as collateral to mine stablecoins (eUSDC & peUDC) and earn additional esLBR rewards.

Lybra allows the use of Lido's stETH as collateral to mint eUSDC, and this Lybra War has also received support from Lido. As the first bribery platform in the LSDfi track, Match's value expectations are quite optimistic.

From the data, Lybra currently holds a 25.6% share in the LSDfi track, with its stablecoin eUSD accounting for 35.6% of the total track, both ranking in the top three.

Due to the liquidity value of staked assets being over-collateralized to stablecoin eUSD, and the protocol charging a service fee of 1.5% of the total annual circulation of eUSDC as its main revenue source, esLBR holders enjoy both protocol revenue and governance rights, providing them with high backflow value.

Moreover, esLBR is non-transferable and non-tradable, and can only be obtained through mining as an LP in Lybra. Therefore, compared to the higher threshold of Lybra, Match may be the most efficient gateway for ordinary users in this war.

Weekly VC Investment Focus

Welcome to our weekly investment focus, where we reveal the most significant venture capital dynamics in the crypto space. Each week, we will spotlight the protocols that have received the most funding.

Blockchain.com

Cryptocurrency exchange Blockchain.com has completed a $110 million Series E funding round, led by UK investment management firm Kingsway Capital, with participation from Baillie Gifford, Lakestar, Lightspeed Venture Partners, Coinbase Ventures, and others. According to Bloomberg, Blockchain.com’s valuation is "less than" half of its valuation during the Series D round (below $7 billion).

https://www.theblock.co/post/263079/blockchain-com-raises-110-million-in-series-e-funding

Civitai

Content creation platform Civitai has completed $5.1 million in funding, led by a16z. Civitai's current total valuation is $20 million, and it is a generative AI content marketplace that surpassed 1 million registered users within three months of its establishment. Currently, the number of registered users is about 3 million, with monthly unique visitors ranging from 12 million to 13 million. In the future, the startup aims to expand beyond AI image models to other modalities.

https://www.cointime.ai/flash-news/content-platform-civitai-completed-us-14038

Protocol Events

OKX launches new ZK Layer 2 network 'X1' with Polygon CDK

dydx chain trading goes live beta mainnet stage

Reddit admins reduce moons supply then token surges

Cboe launches margined bitcoin and ether futures

Aave launches social graph Lens V2 on Polygon

Bithumb eyes IPO in second half of 2025

Industry Updates

Crypto fund inflows break $1 billion for 2023, led by Bitcoin, Ether, and Solana

South Korea's national pension fund buys $19.9 million worth of Coinbase shares

Bitcoin ETP exposure hits all-time highs as approval window for spot ETFs nears end

XREX obtains in-principle approval for Major Payment Institution license in Singapore

Monetary Authority of Singapore to start 'live' wholesale CBDC pilot

New York financial watchdog releases guidance to strengthen crypto listing, delisting

Twitter Alpha

There is a lot of Alpha in crypto Twitter, but navigating through thousands of Twitter threads can be challenging. Each week, we spend hours researching to curate insightful threads and present you with a weekly selection. Let’s dive in!

https://x.com/defiinfant/status/1725420547763249564?s=20

https://x.com/hmalviya9/status/1725043901957111898?s=20

https://x.com/milesdeutscher/status/1725268373184086523?s=20

https://x.com/poopmandefi/status/1725094175979548991?s=20

https://x.com/zerokn0wledge_/status/1725070163752649059?s=20

Upcoming Events

News Sources:

https://www.coindesk.com/policy/2023/11/15/sec-delays-decision-on-hashdex-bitcoin-spot-etf-application-grayscale-ether-futures-filing/

https://m.techflowpost.com/article/detail_12616.html

https://match-finance.gitbook.io/whitepaper/

https://www.theblock.co/post/263243/new-york-financial-watchdog-releases-guidance-to-strengthen-crypto-listing-delisting

That concludes this week's content. Thank you for reading this week's report. We hope you benefit from our insights and observations.

You can follow us on Twitter and Medium for real-time updates. See you next time!

This weekly report is for informational purposes only. It should not be considered investment advice. You should conduct your own research and consult independent financial, tax, or legal advisors before making any investment decisions. Past performance of any asset does not guarantee future results.