Crypto Ecosystem

How Base performed during its first week

, August 17, 2023

In this week’s crypto highlights, we explore the price movements of BTC, SHIB, XLM, and FTM. Additionally, this recap includes other notable industry news items that occurred over the last seven days. Without further ado, let’s dive into the latest market developments.

Noteworthy market events

Base reached $170 million in TVL in a week

If stablecoin wars weren’t exciting enough for you, then welcome to layer 2 (L2) wars. On August 9, Coinbase officially launched its L2 network Base, and its debut was considered relatively successful. 

In the week after its launch, Base reached the top five for all L2 networks, with $170 million in total value locked, according to DefiLlama. As of August 16, the Base network experienced an influx of over 700,000 new users, who have bridged a total of $242 million. In turn, Kaiko reported that OP liquidity neared its all-time high after the Base launch, as it’s a part of Optimism’s Superchain.

The network’s activity reached its peak on August 10, with 136,000 daily active users. One of the major contributors to this user count is thought to be the Friend.tech platform, which allows users to tokenize their social network identities. However, there were reports about problematic interactions with said platform.

Many DeFi services partnered with the chain, including Aave, SushiSwap, OpenSea, UniSwap, and Balancer. The largest Base-based (yes, the repetition is intentional) project is a native decentralized exchange (DEX), BaseSwap, with over $55 million in TVL. An additional significant development is the participation of Coca-Cola, which introduced its own collection of non-fungible tokens (NFTs) on the Base network.

However, bad actors also found a new… base for themselves. Base-based DeFi platform RocketSwap lost an estimated $870,000 worth of assets due to a hack, while crypto lender SwirlLend carried out a $700,000 exit scam. In addition, shortly before the official Base release, LeedSwap lost $600,000 as their liquidity pools were compromised, and the memecoin BALD dropped by 85% of its value due to arguably orchestrated rugpull on the Base network.

Visa introduced a way to pay gas fees using a card

Visa has been doing a lot of experimenting with crypto and blockchain, and recently the payment giant shared the results of its latest enterprise. 

According to a blog post, Visa finished testing a system that lets users pay Ethereum gas fees off-chain with its payment cards. The firm stated that the majority of users find current gas payment methods to be unnecessarily complicated. With its solution, Visa aims to simplify the process. As a result, this could potentially eliminate the need for users to hold ETH to pay transaction fees. 

To achieve this, Visa utilizes Ethereum’s ERC-4337 standards, and the “Paymaster” smart contract that allows off-chain gas fee payments. When a user initiates an Ethereum transaction, it is routed to the Paymaster. Then, Paymaster calculates the gas fee and charges Visa for said transaction. Following this, a digital signature is generated and transmitted to the blockchain. The blockchain validates the digital signature, leading to the settlement of the gas fee by the Paymaster.

Visa’s crypto team successfully tested this process on the Ethereum Goerli testnet.

Prime Trust filed for bankruptcy protection

Prime Trust, a custodian of digital assets, filed for Chapter 11 bankruptcy protection in Delaware due to a shortfall of customer funds. The company said in its filing that it has between 25,000 and 50,000 creditors, $100-500 million in liabilities, and $50-100 million worth of estimated assets. 

This move followed after Nevada’s regulator issued an order to cease the platform’s operations in June, saying its financial condition was “critically deficient,” and unable to honor customer withdrawals. Recently, there have been reports of massive layoffs for Prime Trust, estimating that up to 75% of jobs could be eliminated.

Bittrex agreed to pay $24 million to settle SEC claims

According to a press release, Bittrex agreed to pay $24 million to settle claims by the U.S. Securities and Exchange Commission (SEC) that the crypto exchange failed to register with the agency. This amount includes returning $14.4 million that Bittrex earned, $4 million in interest, and a $5.6 million fine.

Despite settling with the SEC, Bittrex will neither “admit nor deny the SEC’s allegations.” The SEC claimed that Bittrex acted as an unregistered broker, exchange, and clearing agency. It also claimed that the exchange offered and sold securities without being registered as a national securities exchange. 

One sentence news

  • Sei Labs, the company behind layer 1 blockchain Sei, announced that its mainnet is now live after a successful testnet phase.
  • The Federal Reserve incorporated the Hedera-based micropayments platform Dropp into FedNow.
  • Aptos partnered with Microsoft to integrate its Azure OpenAI Service into the layer 1 blockchain.
  • Digital Currency Group (DCG) filed a motion to dismiss the ongoing Gemini lawsuit against it and company founder Barry Silbert.

Bitcoin broke the eight-month support line

The SEC postponed its decision on an application to launch a spot Bitcoin exchange-traded fund (ETF) from Ark Invest and 21Shares. At the same time, the British company Jacobi Asset Management launched Europe’s first spot Bitcoin ETF. But Bitcoin didn’t seem to care, as it moved predominantly sideways over the last seven days.

Glassnode reported that the spread between upper and lower Bollinger borders is just 2.9%. Similar patterns were observed at the beginning of 2023, hinting that a substantial market move could soon follow. On August 16, the BTC price moved below the 20-day EMA and the eight-month-long support line (cyan) that we discussed in our previous crypto highlights.

The daily RSI is moving inside a downtrend. It entered negative territory, and is far from the oversold zone. This suggests that the path of least resistance could be downward, with the 200-day SMA as the next potential target. However, the asset has already reached an oversold zone on lower timeframes, hinting at a potential short-term rebound.

SHIB arguably lost its Shibarium momentum

A few weeks ago, we mentioned that SHIB experienced an upward movement ahead of the Shibarium release. On August 16, the Shibarium chain went live on the mainnet, but a few hours later, major issues started to arise. 

Shytoshi Kusama, the Shiba Inu community lead, posted that $1.7 million worth of ETH was stuck in the bridge contract, and unrecoverable. In addition, $750,000 worth of BONE tokens were reportedly stuck as well. Beosin analysts recommended users temporarily stop using Shibarium.

In turn, the SHIB price reached the overbought level, and started experiencing a correction. MACD lines formed a bullish crossover, and the asset is within the negative RSI zone on lower timeframes. This indicates that a price correction has the potential to continue. The closest support level could be the 0.5 Fibonacci point.

XLM moved below the symmetrical triangle

On August 15, Stellar Development Foundation (SDF) CEO and Executive Director Denelle Dixon announced that the organization became a minority investor in MoneyGram, and obtained a seat on the company’s board of directors. SDF has been collaborating with MoneyGram since 2019.

However, the Stellar native token, XLM, didn’t register a reaction to this news. It continued moving downward, after breaking a symmetrical triangle. Considering the height of the pattern, the XLM price could potentially move down to the 200-day SMA. 

However, the $0.1136 level could act as a major intermediate support. RSI moved to the negative territory, while MACD faced a zero cross, hinting at a potential continuation of downward movement. A bullish divergence with MACD on lower timeframes suggests that the asset may try to reclaim the 50-day SMA.

FTM consider switching to Optimistic rollups

Fantom Foundation Co-founder and Architect Andre Cronje said the organization is exploring the integration of Optimistic rollups into the Fantom blockchain, to connect it to Ethereum. According to Fantom Foundation CEO Michael Kongm, this will allow the Fantom network to access more liquidity from the Ethereum ecosystem.

Last month, the Celo community proposed, and then approved, a plan to migrate the blockchain to an Ethereum-based layer 2 solution. This announcement pumped its native token by 18%. Fantom’s move could be similar to Celo’s approach, but the FTM price didn’t experience significant change after the news.

However, the asset formed a bullish divergence with RSI and MACD, indicating that a trend reversal with following upward momentum could be around the corner. 

Tune in next week, and every week, for the latest CEX.IO crypto highlights. For more information, head over to the Exchange to check current prices, or stop by CEX.IO University to continue expanding your crypto knowledge.

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Disclaimer: For information purposes only. Not investment or financial advice. Seek professional advice. Digital assets involve risk. Do your own research.

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