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The dust appears to have settled: it’s time to survey the damage to the crypto market.
Terra TVL Damage Report

Terra TVL Damage Report

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Terra TVL Damage Report

Overview

  • TVL insight after Terra Collapse 
  • Seven down weeks, a BTC first
  • El Salvador host a world bitcoin meeting

TVL insight after Terra collapse

I was interested to see the effects of Terra’s collapse on Total Value Locked (TVL) today. After last week, I imagine trust in networks and smart contracts is at an all-time low. The collapse strongly affected staking, lockups, and overall value locked on protocols.

Source: Defi Llama

On May 7th, Ethereum’s and Terra’s TVL percentage was 55% and 14.86%, respectively. Today, Ethereum holds 63.75% of all TVL and Terra 0.46%.

To say the Terra collapse occurred quickly is an understatement. Nearly

US$28.75b abandoned the chain in a week.

Source: Defi Llama  

The collapse contaminated fear across protocols and dropped total market TVL from $US198b to $US114b, a drop of 27%. The chart above shows the most significant drawdown in VALUE since Defi Llama began recording the metric in late 2019.

Things will be different in the future. Protocols will have to get creative to onboard lost users, and it could open the door to many reasonable solutions. I don’t believe high yields will do the trick any more. Security, sustainability and practically will play a larger role from here forward. Markets counter by building better, so how the markets react to a terrible mishap like Terra will be compelling to witness. 


Market update 🌍

The bitcoin (BTC) daily chart looks similar to Friday’s. The price began to climb up slowly over the weekend as the turbulent week ended. Unfortunately, the collapse of the largest alternative layer one network (Terra) forced the BTC price down for the seventh straight week, a first in bitcoin’s history. Although, the high volume and pin bar rejection does show promising signs of holding this level for the time being.

Source: Trading View

I tend to look at L1s weighed against BTC to feel how crypto is doing versus the top dog. In bear markets, BTC will begin to gain over all the tokens that grew at tremendous speed during the good times.

Most L1s are bleeding against bitcoin and Ethereum (ETH) in this market. Although, I did find one interesting chart amongst the pain. The DOT/BTC chart shows a pin bar rejection at the same level the pair tested in July’s price drops.

After the collapse of Terra (LUNA), sustainability will take the forefront when discussing alternative smart contract platforms. Considering its slow-growth approach, Polkadot (DOT) network could be one of the networks that emerge strongly out of the new stringent criteria of hesitant investors. Therefore, I recommend keeping an eye on DOT/BTC to see how it performs in the coming weeks.  

US markets closeGain
S&P 500-0.63%
Nasdaq+0.31%
Dow-0.11%
VIX+2.27%
Protocol (Coin)Price ($)Gain (%)
JUNO (JUNO)8.21+34
Celsius Network (CEL)0.93+22
Evmos (EVMOS)1.85+20
Synapse (SYN)1.66+19
Arweave (AR)18.56+16
Osmosis (OSMO)1.76+14
Cosmos Hub (ATOM)12.38+14
Solana (SOL)57.85+11
KuCoin (KCS)14.39+10
Cardano (ADA)0.59+10
Monero (XMR)169.74+9
Bitcoin Fear and Greed Index14 Extreme Fear
“Crypto” Google Trends 90d81
“Bitcoin” Google Trends 90d78

Newswatch 📰

SBF on bitcoin. According to the Financial Times, FTX CEO Sam Bankman-Fried claims bitcoin has no future as a payments network because of its inefficiencies. Noting Ethereum’s merge to a proof of stake (PoS), SBF said PoS networks provide a less energy-intensive model for the future. Despite his views on bitcoin, SBF said he believes in the largest digital asset’s future as a store of value.  

Worldly bitcoin meeting. President of El Salvador, Nayib Bukele, announced that 44 countries would visit his country to discuss bitcoin’s benefits, including financial infusion, digital economy, and banking the unbanked. The meeting comes at an unprecedented time but shows the dedication that El Salvador and it’s officials 

Nigeria regulates crypto. The SEC of Nigeria has issued a 54-page set of digital regulations indicating that its government is reconsidering its original strict stance on cryptocurrencies.

Tidbits:

  • The South Korean president’s raising of the crypto tax threshold meets a roadblock.
  • NY-based crypto CEO accused of fraud and arrested by FBI.
  • Chile’s central bank says it needs more time to study CBDCs.

On-chain

Tidbits:

NFT & metaverse update 🐵

Tidbits:

  • Axie Infinity (AXS) Origin goes live on Android.
  • Sorare partners with MLB, launching players in Summer 2022.
  • CoolCats NFT releases a new roadmap.

Notable Mints:

ProjectTypeMint priceDate of mintTime
Sixth Reseaupfp0.16 ETHMay 18th8:00 AM UTC
Chimperspfp0.07 ETHMay 20th4:00 PM EST

Banter’s take

I wonder what the coming week will bring?

After the cray we just experienced, part of me wants a hangover recovery. But, somehow, I don’t think that’s how it’ll work. So, on that note, below are some interesting subjects that will likely be visited next week:

  • Fed Powell speech Tuesday @ 14:00 EST
  • Where are Terra’s BTC reserves?
  • Terra 2.0? CZ seems interested in helping.
  • What are the new criteria for crypto investments after the Terra collapse?

So, stay strapped in, keep your tray tables up and prepare for some turbulence. This market never sleeps.

Gabri

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