Inscriptions are booming, and DePIN is beginning to show its potential
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Inscriptions are booming, and DePIN is beginning to show its potential
The crypto market shows strong performance, reaching its highest level in over a year.
Navigating Web3 tides with focused insightsAuthor: Mike
A. Market Outlook
1. Macro Liquidity
Monetary liquidity is improving. The Fed's tightening cycle is nearing its end, and the timing of the first rate cut is key for global assets—this hinges primarily on employment data. U.S. job growth has slowed for four consecutive months, while wage growth continues to cool. The yield on the U.S. 10-year Treasury note has declined from 5% in October to the current 4%, slightly easing concerns about financial strain. The U.S. stock market remains volatile as investors worry about a potential economic downturn. Meanwhile, the crypto market has performed strongly, reaching its highest level in over a year.
2. Overall Market Performance
Top 100 gainers by market cap:
BTC surged this week, driving broad gains across altcoins. Market attention focused on BTC ecosystem projects, gaming, and DePIN. BTC inscriptions have been the engine of this bull run, attracting new users and capital, and motivating developers to build simple DeFi ecosystems around Bitcoin. The gaming sector saw widespread gains, with gaming blockchains, gaming guilds, launch platforms, and new games all rising several-fold.
1. ORDI: The leading project in the BTC ecosystem and the first inscription under the BRC20 protocol. Recently, significant position turnover occurred due to differing views among BTC core developers. Historically, leaders in new asset categories are likely to enter the top 30 by market cap.
2. RUNE: A cross-chain trading platform within the Cosmos ecosystem with strong value capture capability and built-in 3x leverage. Trading volume has grown rapidly recently, benefiting from substantial capital inflows into the Cosmos ecosystem. OLAS: An AI-focused oracle whose founding team comes from the original FET project and possesses strong technical expertise. OLAS has surpassed FET in market cap, becoming the leading project in the AI sector.
3. BONK: A meme coin from the Solana ecosystem originally created as satire against SBF, which united the Solana developer community. BONK rose more than 40x during this rally, trailing only DOGE and SHIB in market cap and becoming the third-largest dog-themed cryptocurrency.
3. BTC Market Analysis
1) On-Chain Data
BTC has generated higher daily revenue than ETH for the first time since 2020. The development of the BTC inscription market has significantly improved miner fee income. The proportion of transaction fees on the BTC chain has risen from 2% in August to 25% in November, primarily driven by the introduction of Ordinals trading pairs. This ratio is expected to reach 50% by April 2024, coinciding with the next halving event.
Stablecoin market cap continues to rise. USDT’s total market cap has surpassed $90 billion, setting a new all-time high.
The long-term trend indicator MVRV-ZScore measures overall market profitability based on total cost basis. Readings above 6 indicate overbought conditions; readings below 2 signal oversold levels. The MVRV has dropped below the critical level of 1, meaning holders are generally in a loss position. The current reading is 1.6, indicating the market is entering a recovery phase.
Crypto investment products targeting institutional investors have seen net inflows for ten consecutive weeks, totaling over $1.8 billion. Regionally, Europe and North America show net inflows, while Asia experiences net outflows.
2) Futures Market
Funding rates: Rates were positive this week, indicating normal market sentiment. The market began correcting after BTC funding rates hit their highest level of the year on November 12. A funding rate between 0.05% and 0.1% indicates excessive long leverage and often marks a short-term top; a rate between -0.1% and 0% suggests heavy short leverage and typically signals a short-term bottom.
Open interest: Total BTC futures open interest rose slightly this week, closely tracking price movements.
Long-to-short ratio: 0.8. Retail sentiment is bearish. Retail sentiment often acts as a contrarian indicator—ratios below 0.7 indicate fear, while those above 2.0 suggest greed. However, due to high volatility, the reliability of this metric is limited.
3) Spot Market
BTC surged past $42,000, returning to levels last seen in April 2022 during the LUNA collapse. This sharp rally was driven by the thriving BTC inscription ecosystem, growing expectations of spot ETF approval, and the upcoming halving cycle next year. MicroStrategy purchased another $600 million worth of BTC last month, bringing its total holdings to over $5 billion, making it one of the biggest beneficiaries. The next resistance level lies at $48,000—the starting point of the previous downtrend—where many holders may look to sell upon breaking even, potentially creating stronger selling pressure.
B. Market Data
1. Total Value Locked (TVL) Across Major Blockchains
2. TVL Distribution by Blockchain
This week, total TVL increased by $360 million, or approximately 7.8%. With the broader market surging, BTC broke through $38,000 and reached $44,000. All of the top 20 major blockchains experienced significant growth in TVL. ETH grew by 8.3%, BSC by 2.4%, while TRON, ARB, and POLYGON each rose around 7%. BASE increased by 10%, and with 194 protocols now deployed, it is on track to surpass OP in protocol count before 2024.
3. Protocol-Level TVL Analysis
1) Ethereum TVL Overview
2) BSC TVL Overview
3) Polygon TVL Overview
4) Arbitrum TVL Overview
5) Optimism TVL Overview
6) Base TVL Overview
4. NFT Market Data Trends
1) NFT-500 Index
2) NFT Market Overview
3) NFT Marketplace Share
4) NFT Buyer Analysis
This week, floor prices of top-tier blue-chip NFT projects rose significantly: MAYC up 11%, Pudgy Penguins surged 66%, Azuki jumped 50%, Moonbirds climbed 59%, and Milady increased 17%. Over the past week, NFT trading volume continued to grow substantially, with gas fees and usage also increasing. As the broader market strengthens, the NFT sector is gradually emerging from its slump. Ahead of the anticipated bull market next year, we may see more innovative NFT projects emerge—stay tuned for how NFTs will perform in the coming cycle.
5. Latest Project Funding Rounds
6. Post-Investment Updates
1) HyperOracle – ZK Infrastructure
HyperOracle is integrating with Polygon CDK, unlocking new possibilities and providing unmatched computational power for Polygon builders. HyperOracle will also develop a Type 1 zkWASM proof solution for CDK.
2) Space Nation – GameFi
Space Nation announces details of its first NFT Spaceships drop:
- Total supply: 1,155
- Launch platform: Logistikos
- Chain: Ethereum
- Minting stages: 4 phases
- WL price: 0.02 ETH
- Public sale price: 0.03 ETH
3) Shardeum – Layer 1
Shardeum has launched its Dapp Boilerplate—a plug-and-play, all-in-one solution enabling developers to start coding immediately using easily configurable template repositories.
Early access: https://t.co/YDeInokwH8
4) Polyhedra Network – Infrastructure
Polyhedra Network has added support for Trust Wallet, offering users a more secure and decentralized option for asset transfers and interactions. Users can now connect their Trust Wallet to initiate NFT and token transfers on Polyhedra Network.
Polyhedra Network focuses on designing and implementing zkBridge, providing cross-chain infrastructure that enables interoperability between Layer 1 and Layer 2 networks.
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