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Weekend Movers: 1inch (1INCH) and Lido DAO (LDO)




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The second last week of July is here, and Bitcoin is still maintaining its position above $30,000 while Ether has fallen under $2,000. As of writing, the world's largest digital asset is trading at $30,109, in red over the last 24 hours, according to CoinGecko, while Ether is changing hands at $1,905.

This lull in price movement comes after last week's unexpected rally that came from a favorable ruling in the Ripple-SEC case. However, corrections are to be expected after such positive momentum.

A correction is “unlikely to see Bitcoin trading below $27K for long,” though, and the “market is likely to consolidate around the current zone for now,” wrote Joe DiPasquale, CEO of crypto fund manager BitBull Capital in a note.

After a busy last week which had scheduled economic data releases and then the XRP-led altcoin rally, this week is a quiet one, which means price action can be influenced by open interest (OI) levels.

As per data from Coinglass, the total OI is up by 0.52% at $28.14 bln, with Bitcoin accounting for the largest at $14.15 bln, followed by Ether's $6.14 bln and then XRP's $976.76 mln. Currently, short positions are dominating and climbing steadily.

Amidst this, investors are piling into the world's first spot Bitcoin ETF, Canada-based Purpose Investments' Bitcoin ETF BTCC, with 5638 BTC moving into the product in June and July. BTCC has $852.5 million in assets under management (AUM), and it is majorly held by retail traders, with only 0.03% being institutions.

This renewed interest comes after several big traditional institutions, including BlackRock and Fidelity, filed for a spot in Bitcoin ETF in the US. Moreover, BTCC's success shows the advantage of being a first mover, with the first-place product having about a billion dollars in assets while the second place has less than 100 million despite the difference between the two being just a couple of days.

Meanwhile, the world's largest crypto exchange completed the integration of the Lightning Network, a layer 2 scaling solution for Bitcoin to provide cheaper and faster transactions by creating transaction channels off-chain. Binance users will now be able to see an option called “BTC-Lightning,” in addition to BEP20 and SegWit, among others, when depositing Bitcoin.

As Binance integrated LN, the team behind the scaling solution, Lightning Labs, released tools to integrate the solution with AI. Earlier this month, the team announced that it had released developer tools to allow AI applications to handle Bitcoin payments both on-chain and on the Lightning Network.

Stablecoins & Regulatory Recommendations

Despite the recent positive market momentum, the total stablecoin market cap has been steadily declining, ever since April 2022, to $128 bln. With around $83.65 billion USDT in circulation, Tether remains the market leader with a 65% market share.

Tether's supply has grown by 27% since the beginning of 2023, boosted by profits from high-yielding US treasury reserves. Rival issuer Circle, meanwhile, has seen its supply shrink 38% in the same period to a 21% share with $27.24 billion USDC circulating. Together, they dominate 87% of the market.

Over the weekend, DeFi lending platform Aave launched its own stablecoin GHO. Similar to MakerDAO's DAI, it is an overcollateralized dollar-pegged token minted on Ethereum. Already, $2.2 mln worth of GHO has been minted.

Stablecoins by DeFi protocols will “increase capital efficiency, reduce dependence on native token emissions for liquidity attraction, and enhance the value proposition for their native governance tokens,” said Ignas, a DeFi researcher.

While new stablecoins are making an entry, the G20's Financial Stability Board revised its existing recommendations for stablecoins on Monday and published final recommendations on supervising firms that trade crypto, as requested by the G20.

“As recent events have illustrated, if linkages to traditional finance were to grow further, spillovers from crypto asset markets into the broader financial system could increase,” the FSB said.

The watchdog further said that all countries should apply its recommendation, even those who are not members, and globally agreed rules leave crypto firms with no option but to introduce basic safeguards to prevent casualties like the FTX blow-up.

“Crypto asset players need to stop operating outside the regulatory perimeter or in non-compliance with existing rules,” said FSB Secretary General John Schindler. “These players can no longer argue there is a lack of regulatory clarity, as our framework makes clear the standards that should apply.”

Best Weekend Performer

Last week was a green one for the crypto space that saw the total market cap rise from $1.224 trillion to $1.295 trillion before returning to $1.25 trillion on Monday. During this period, XRP surged as high as $0.95, with its 7-day gains still at 56.5%. During this period, Kaspa, Solana, Synthetic, Stellar, Optimism, Compound, and Arbitrum enjoyed decent gains.

Among the top 100 crypto assets, the coin that emerged as the winner this weekend, however, was 1INCH.

1inch (1INCH)

The $416.6 mln market cap cryptocurrency was trading around $0.325 on Saturday, lower than its yearly opening at $0.378 before it surged to $0.569, representing 75% gains. While the coin is giving back these gains on Monday as the 1INCH now trades at $0.430, it is still up 3.7% against USD and 5% against BTC and ETH. The volatility has its 24-hour trading volume surging by 161.40% to $636 mln.

With these latest gains, 1INCH is now up 55.5% in the past 30 days but down 33.6% over the past year and nearly 95% off of its $8.65 peak.

1INCH is the utility and governance token of decentralized exchange (DEX) aggregator 1inch, which unites several decentralized protocols, harnessing their combined potential to facilitate fast, secure, and highly profitable transactions within the crypto industry.

Launched in May 2019, the 1inch network was founded by Sergej Kunz and Anton Bukovwas and since then has expanded across Ethereum, Arbitrum, Optimism, Polygon, zkSync Era, and many more. The token wasn't released until Dec. 2020, which can be locked into liquidity pools to earn yield farming rewards in the form of new tokens.

Token holders can stake 1INCH using the swap platform, Fusion, which enables the users to govern the network and manage its DAO Treasury. During the recent protocol update, which targeted Fusion, the 1inch network sold approximately 11,000 ETH to test out new features.

The network actually recorded significant growth during the last quarter, with its aggregator users increasing from 3.3 million users in Q1 to 4.5 million users in Q2 and the Limit Order Protocol's user base surging from 261,000 to 438,000.

However, 1inch only processed over $28 billion in total volume during this period, a 37% decrease compared to Q1. Meanwhile, over $3.8 billion in transactions were facilitated through Fusion Resolvers. Unlike other aggregators, 1inch maintained its dominant position accounting for a significant 49% of all direct-user volume share.

When it comes to the 1inch DAO treasury, it experienced a decline of 10.8% to $16.3 million by Q2 end as the project discontinued swap surplus collection and focused on its Hardware Wallet and the implementation of the 1-inch Community Builders Program. The 1INCH V2 staking, meanwhile, saw an increase of over 20%, resulting in a total of 184 million staked 1INCH thanks to taking incentives such as Unicorn Power accumulation for voting and delegation.

Click here to learn all about investing in 1inch Network (1INCH). 

Worst Weekend Performer

While the market has primarily been green, many coins are still in the red. With a 9% drop in price, Bitcoin Cash is leading the 7-day losses, followed by Kava, Litecoin, and KuCoin. Meanwhile, in the past 24 hours, COMP went down the most by 10%, with Pepe, Stellar, Injective, Synethtix, Chainlink, Litecoin, and Fantom down by 4% to 5%.

But it is liquid staking providers that led the losses this past weekend, with RPL down by 8% and LDO even more so.

Lido DAO (LDO)

The $1.85 bln market cap token LDO had a volatile week, going from $1.88 on Thursday to $2.43 on Friday. Over the weekend, the price first dropped to $2.20 before surging to $2.45, only to drop back down to now trade at $2.11. The 11% drop in LDO price over the weekend has the market activity seeing a jump, with the trading volume up by 14% from a day ago to $50.9 mln.

While down by 9% in the past 24 hours, LDO's price is still up 11.1% in the past week, 33.7% over the past year, and 120% in 2023 so far. It has, however, lost 71% of its value since hitting an all-time high (ATH) at $7.30.

LDO is the governance token of the liquid staking protocol Lido and is used to govern its DAO to oversee Lido's development and manage its insurance and development funds. Lido allows any user to trustlessly stake their ETH easily, no matter how much they have while allowing them to access the locked value through the Liquid Staking mechanism. The protocol supports liquid staking on multiple blockchain networks, including Ethereum and Solana.

The protocol accounts for 32% of all staked ETH, more than the combined ETH staked via Coinbase, Binance, and Kraken. However, last week, crypto data provider Kaiko noted that while СЕХ volumes are on the rise, the off-chain liquidity of stETH is notably inadequate, though, in the DeFi space, things are still better with the likes of Pendle Finance providing support for seven stETH pools.

Earlier this month, the digital asset manager Grayscale Investments added LDO to its DeFi Fund. LDO is Grayscale's second-largest holding at 19.04% after Uniswap (UNI) at 45.46% of the fund's holdings and followed by AAVE (11.53%), MKR (10.82%), CRV (7.03%), and SNX (6.12%).

During the recent bullish sentiments in the crypto market, the total value locked (TVL) in Lido also saw traction, which is currently at almost $15 bln, according to DeFi Llama. The TVL has been on an uptrend since November 2022, when it was around $5.5 bln. According to Token Terminal's data, this increase in TVL came despite the number of active addresses on Lido falling by 36.4%. Meanwhile, the revenue generated by the protocol continued to grow.

Click here to learn all about investing in Lido DAO (LDO).

Gaurav started trading cryptocurrencies in 2017 and has fallen in love with the crypto space ever since. His interest in everything crypto turned him into a writer specializing in cryptocurrencies and blockchain. Soon he found himself working with crypto companies and media outlets. He is also a big-time Batman fan.