Welcome to the monthly crypto market recap for May 2023! The crypto market encountered a series of challenges and noteworthy developments during this month. Continual uncertainties surrounding rate hikes and inflation cast a shadow of a doubt, dampening market sentiment and impacting investment decisions. Moreover, macroeconomic difficulties arose with the looming possibility of a US default on its debt without raising the debt ceilings, further exacerbating concerns.
In the midst of these struggles, the market experienced a surge of memecoins, notably PEPE, which reached a market cap of $1 billion during its all-time high in the middle of the month. Another noteworthy development was the emergence of BRC-20 tokens through Ordinal Inscriptions, bringing new possibilities and innovation to the crypto space.
However, it is important to note that the overall market conditions remained unfavorable, with only a handful of tokens managing to generate noticeable positive returns throughout the month. Join us as we delve into the key highlights and narratives that shaped the crypto market in May, despite its challenging landscape. Stay informed with our comprehensive monthly market recaps at Treehouse Insights and daily market analysis with Treehouse Daily.
PEPE, the memecoin inspired by Pepe the Frog, has taken the crypto market by storm, appreciating a staggering 373.5% since the start of May. The significant price increase is largely attributed to the growing interest in memecoins, a rewarding staking system, and a unique burning mechanism.
Launched on Ethereum, PEPE led the memecoin craze that has swept the crypto world. As a homage to the Pepe the Frog internet meme, this token carries a humorous charm that resonates with a certain slice of the crypto market. Beyond the lighthearted exterior, PEPE incorporates useful functionalities: a no-tax policy, a rewarding system for long-term stakers, and a burning mechanism to keep PEPE coins deflationary.
On 8 May 2023, PEPE's market cap swelled to a high of $1.1 billion, creating an abundance of wealth for early adopters. Its roadmap shows a clear path towards greater exposure, including listings on CoinMarketCap, trending on Twitter, and securing positions on tier-1 exchanges. While the dream of a "meme takeover" is yet to be realised, the considerable gains in the memecoin market suggested enormous interest from the public.
Despite the team behind PEPE remaining anonymous, they have successfully cultivated an engaged community via social media. The distinct features of PEPE like its rewarding system for long-term stakers, scarcity-oriented burning mechanism, and no-tax policy make it a unique player among the flood of meme coins. PEPE's maximum supply is set at a staggering 420.69T, but with a good portion already burned and the rest under a fair redistribution system, it is clear that the tokenomics are designed to reward those who hold.
Kava experienced a remarkable surge in May, with an impressive increase of 46.2%, reaching its highest level of the year at $1.28.
Kava is a DeFi lending protocol built on Tendermint Core, using the speed and interoperability of Cosmos. By collateralizing cryptocurrencies to mint USDX, Kava’s native stablecoin which is used to price all loan instruments, users receive weekly rewards in the form of KAVA, the governance token. Token holders can then participate in governance to vote on software policies and rules, including collateral options, collateralization ratio, and borrower fees.
On 18 May, the Kava 13 update went live, marking a significant milestone for the network. This update introduces a range of enhancements aimed at assisting developers in scaling and accelerating their protocols while improving the overall user experience. The network update included various modifications, such as optimizing full node programming and expanding the hosting provider.
Additionally, the latest update introduces a new internal bridge between Cosmos and Ethereum. The bridge will unlock liquidity and amplify the usability of protocols deployed on Cosmos SDK and EVM chains. Leveraging the security of IBC consensus, users can seamlessly transfer native Cosmos assets to a wide array of protocols deployed on Kava EVM. This streamlined bridging experience minimizes the need for multiple clicks, reduces waiting times, and eliminates uncertainties associated with relying on third-party middle-chain bridges.
Total value locked (TVL) on the Kava chain has been consistently growing since the start of the year. Over the past month, the three leading protocols on the Kava chain, namely Kava Earn, Kava Lend, and Kava Liquid, have witnessed significant rises in their TVL ranging from 15% to an impressive 40%.
Meanwhile, on 23 May, DAXA, a digital currency alliance comprising South Korea's top five cryptocurrency exchanges (UpBit, Bithumb, Coinone, Korbit, and Gopax), lifted the investment warnings and resumed deposits for Kava. This announcement resulted in a significant surge in the value of the Kava token, with its price pumping as much as 16.3%.
Earlier, DAXA issued warnings regarding Kava due to concerns about stablecoins associated with KAVA not being consistently valued at one dollar. However, after a thorough evaluation, DAXA no longer perceives Kava as a source for significant risks, and the reasons behind the cautionary designation have been addressed.
Finally, Kava Proposal #141 has been successfully approved which entails the complete cessation of all Kava emissions, including Proof-of-Stake (POS) rewards, Kava Rise rewards, and other types of reward emissions, effective indefinitely from 31 December 2023, putting a stop to future supply inflations.
Enjoyed reading this? Click on the link below to learn more about the narratives of Bitget Token (BGB), Tron (TRX) and Render Network (RNDR), as well as what we'll be looking at in the coming month of June 👇
Keen to know how you or your institution performed in May? Check out institutions.treehouse.finance to see the in-depth data our APIs can provide you. Alternatively, leverage Cryptosheets to easily extract our data for analysis on Excel or Google Sheets.