Weekly Recap Ending February 24

Notable Messari Intel Updates

1. The Matter Labs team announced that zkSync 2.0, the team's EVM-compatible ZK rollup, has launched on testnet.
2. The Dfinity Foundation shared details about a trustless Bitcoin integration that implements Chain Key cryptography to establish a direct interface with the Bitcoin ledger.
3. The Ribbon Finance team announced the launch of Ribbon on the Solana network, partnering with Zeta Markets.
4. The Algieba release for Synthetix will begin on Feb. 24, 2022, and will not incur any downtime on L1 or L2. This release includes SIP-185, which adds three new Synths on Optimism with shorting: sAVAX, sMATIC, and sEUR.

Notable Messari Governor Updates

1. The Redacted Cartel DAO has introduced a proposal that aims to approve a $5M FRAX credit line via Debt DAO in the form of a 6 month loan with 9% APR on drawn balance and a 2% APR on any undrawn balance. The loan will be repaid by farming fees collected via cvxCRV, cvxCRV/CRV LP, and vlCVX. The credit line would be used to allow greater liquidity for DAO expenses and attractive investment and market opportunities. Preliminary discussions are ongoing.
2. Protocol DAO has submitted a proposal that aims to add AAVE and UNI to Optimism for trading and shorting. Voting is currently active.
3. The Frax DAO has submitted a proposal that aims to divert 20% of the Algorithmic Market Operations (AMO) profits from veFXS rewards to purchase wBTC below the price of $50k. The goal is to diversify and increase Frax DAO treasury holdings and eventually return to paying 100% of AMO profit as rewards to veFXS holders when the price of BTC goes above $50k. Preliminary discussions are ongoing.

Sector Returns

Sectors across the board have seen negative returns for the week driven largely by the escalating Russia-Ukraine conflict. Three of the six sectors covered posted single-digit negative returns with currencies having the least decline, followed by smart contract platforms and top assets by market capitalization at -5.27%, -6.42% and -7.47% respectively. Entering double digit negative returns, Web3 declined 14.19%, followed by gaming with -15.31% and DeFi in last place with an 18.0% loss.

Top Assets

All of the top assets by market capitalization traded in close synchrony as they made their decline this week with the exception of Terra (LUNA) which broke away from the pack heading into Tuesday. While all of the markets (not just crypto) have been experiencing drastic losses following the news of Russia invading Ukraine, Terra (LUNA) has been one of the few assets that have trended the opposite direction, bringing in an impressive return of 27.3% on the week. Cardano (ADA) was the laggard of the group with a 17.6% decline.

DeFi Assets

Although DeFi was the worst performing sector of the group, one of its top assets by market capitalization, Anchor Protocol (ANC) finished the week with a monumental 69.6% return. Anchor Protocol recently received a $450 million UST injection by the Luna Foundation Guard (LFG) just as its reserves were drying out. While Maker had a muted weekly return, the rest of the assets within the DeFi sector returned double-digit losses. Curve secured the endmost position with a -23.8% return. DeFi TVL has recently descended from the $200 billion mark and is currently sitting at $193 billion.

Smart Contract Platforms

Even though the smart contract platforms sector did not have a double-digit loss week, it showed similarities to DeFi as it only had one winner (and by a large margin as well). Terra (LUNA) had an impressive week while the broader crypto and global markets are down, possibly related to the news surrounding the $1 billion raise aimed at establishing a bitcoin reserve for Terra’s UST stablecoin. The Cosmos IBC-based Layer-1 asset ended the week with a 27.3% gain. Near (NEAR) was the worst performer of the week, returning -20.9%.

Currencies

Four of the ten assets within the top currencies by market capitalization returned single-digit declines (-4.8% to -9.9%) while the rest ranged from -10.2% to -17.3%. The asset with the least decline for the week was Bitcoin Cash (BCH) followed closely by Bitcoin SV (BSV) returning -4.8% and -5.0% respectively. Dash (DASH) took the last spot, returning -17.3% on the week.

Web3

Web3 tokens traded in a close pattern for most of the week with no clear outperformers. Arweave (AR) was the asset with the least decline for the week and also the only one that did not finish in double-digit loss territory. The data storage protocol brought in a 9.7% decline this week. Last place was secured by Theta (THETA) with a return of -23.9%.

Gaming

Similar to the previous two sectors covered above, gaming had no top assets by market capitalization that ended the week with positive returns. Only two assets, Aavegotchi (GHST) and Ultra (UOS) were in single-digit loss territory with -3.2% and -7.5% respectively while the rest had losses ranging from -12.5% to -22.6%. Enjin (ENJ) was the worst performer of the group.

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