SushiSwap Launches Sushi Studios; Abu Dhabi Announces $2B Web3 Startup Accelerator

GM Treehouser 🌳

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Our Daily View

What We Are Covering Today

• The balloon saga continues as tensions rise between US and China; Apple pushes back mixed-reality headset launch (more in Macro & TradFi)
• Square Enix, the Final Fantasy game producer, to launch a new NFT game on Polygon; Sushiswap launches new licensing initiative, Sushi Studio (more in DeFi & CeFi)
• BTC rise to $24.5K driven mainly by perpetual buying (more in On-Chain)
• Near dated IV jumps up for both BTC & ETH (more in Crypto Derivatives)
• BTC and ETH spike up massively to hit 6-month high (more in Crypto Technical Analysis)

Macro & TradFi

The balloon saga continues between the US and China with Beijing officially announcing that they will retaliate against the actions of the US. Meanwhile, Japan suspects that 3 more Chinese balloons were sent into its airspace.

On the other hand, Apple postponed the launch of its mix-reality headsets from April to June due to existing software issues during product testing. As a new product category since the launch of its smartwatches in 2015, Apple is planning to charge $3,000 for the headset.

US markets rose yesterday with SPX and DJIA up by 0.8% and 0.6% respectively. The bond yield curve was relatively flat, the 10Y treasury note’s yield rose slightly to 2.48%. Yield on the 2Y treasury note, on the other hand, remained unchanged at 1.93%.

DeFi & CeFi

• Crypto Index Platform Alongside closed an $11M seed round led by a16z
• Abu Dhabi launches a new $2 billion fund to support Web 3 startups
• Square Enix to launch NFT game on Polygon
• Conflux Network partners with China Telecom to launch its first blockchain-based SIM card
• Sushiswap to launch Sushi Studios, a brand licensing and incubator framework
• Silvergate Bank faces another class action lawsuit on the alleged claim of aiding and abetting on the FTX and Alameda fraud case
• BitDAO community voted for a new budget for its Optimistic Rollup Layer 2 network Mantle

Square Enix, a Japanese video game producer behind many popular franchises such as the Final Fantasy series, announced that it will launch a new NFT-based game called Symbiogensis on Polygon instead of Ethereum. Square Enix said that the game will feature 10,000 new NFT characters tied to the strategic in-game mechanics along with the support for other NFTs to be used in the game. However, Polygon Labs has shared in a document that owning the NFT is not required to play the game but rather provides additional in-game value.

On the other hand, Sushiswap launched Sushi Studios, a decentralized brand licensing and incubator framework that allows external product teams to leverage the Sushi brand and develop protocols without requiring Sushi DAO Treasury funding. In return for the use of the Sushi brand, Sushi Studios will receive a royalty fee in perpetuity. Independent token economies are also allowed to allow for bootstrapping liquidity, fundraising, and distribution of new products.

Lastly, Abu Dhabi announced a new initiative called Hub71+ Digital Assets, which dedicates $2 billion to accelerate web 3 startups’ growth. Further support will be given to businesses that relocate to Abu Dhabi to provide growth in the Middle East which includes startups even at the “unicorn” stage.

On-Chain

As bitcoin jumped to a 6-month high, there has been some increase in the number of addresses holding 100-1k $BTC. Meanwhile, the number of larger whale addresses has stayed relatively flat.

Looking at the Bitcoin exchange flow to derivative exchanges, there has been a sharp rise in the past 24 hours. The price increase is likely fueled by perps buying and short liquidation as funding rate and open interest across all exchanges climbed higher.

Crypto Derivatives

• BTC and ETH funding rates remain positive
• 30-day ATM IV rose to 48.97% and 59.34% for BTC and ETH respectively
• 30-day 25d call skew rose to -0.05% for BTC and fell to -1.05% for ETH respectively

Top 3 CEX USDT perp funding rate arbitrage based on last 24-hour lookback:

For futures, total liquidations in the past 24H amounted to $203.88M, majority coming from longs at $183.86M.

On the options front, front-end IVs spiked upwards as near-dated IV saw a huge increase. Term structure became steeply backwardated for both BTC and ETH. RV continues to rise jumping up to 44.55 for BTC and 57.09 for ETH. Variance risk premium rose to 14.0% for BTC and dropped to 7.85% for ETH. Volume of put-call ratio is at 0.45 and 0.32 for BTC and ETH respectively.

On the flow front, the bulk of the 24H volume comes from near-dated options. 16 Feb has 40.17K contracts traded, 17 Feb has 89.73K contracts and 24 Feb has 74.72K contracts. Looking at the top instruments OI change, it could be seen that there is strong market interest in the $1,800 strike price which seems to be a speculative play on delta.

Lastly, the VIX further fell 3.60% to 18.23.

Crypto Technical Analysis

Onto TA, BTC took a massive leap in price by jumping 8.73% to $24.3K as bullish momentum is carried into today’s Asia session. Momentum indicators spiked higher though it remains below their previous high. The next resistance zone to look out for is at $28.5K-$30K and the $23K-23.9K resistance turned support zone should the bears take control.

Similar to BTC, ETH spiked by 7.65% to $1,675. The next levels to watch out for would be the $1,770 resistance level if the rally continues and the $1,570-$1,600 resistance turned support zone if the bearish momentum takes over.

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Daily Readings

TradFi

• JPMorgan's top trader sees China as biggest overseas opportunity

• NAB says rates will soften economy, house prices as profit jumps

• EU sues Poland over violations of EU law by Constitutional Tribunal

• Norway may tax power exports to keep domestic prices down

• U.S. could face debt-ceiling crisis this summer without deal, CBO warns

• Walmart in Mexico gross margin shrinks, quarterly profit up 12%

• Trump pick Malpass surprises with early exit from World Bank

• Russia's Yandex beats 2022 revenue target; revamp details awaited

• Elon Musk says end-2023 'good timing' to find new Twitter head

• Twilio's better-than-expected earnings, buyback plans boost shares

Crypto

• Column: Latest FTX lawsuit casts investors Sequoia, Thoma Bravo as co-conspirators

• FTX customers sue financiers for giving bankrupt crypto exchange an 'air of legitimacy'

• Celsius Network chooses NovaWulf bid for bankruptcy exit

• Coinbase, Anchorage Say They'll Be OK Under SEC Custody Proposal, But Risks May Lurk for Others.

• Crypto Trading Firm Auros Global Restructures $18M in Debt on Maple Finance.

• Blur Escalates Royalty Battle With OpenSea, Recommends Blocking Platform.

• FDIC Tells Crypto Exchange CEX.IO to Stop Claiming US Dollars Held in Its Wallets Are Insured.

• Lido DAO’s Governance Token LDO Jumps on Treasury Proposal.

• Interactive Brokers Rolls Out BTC, ETH Trading to Professional Investors in Hong Kong.

• Ether Staking Service Lido Granted 1M Optimism Tokens to Incentivize Wrapped Staked Ether Adoption.

• Gaming Company Square Enix Partners With Polygon for NFT Art Project.

• Former Warner Music CEO Joins Web3 Company OneOf’s Board.

• Zipmex says it may resume 100% of Z wallet withdrawals subject to conditions.

• Conflux partners with China Telecom to develop blockchain SIM card.

Deal Flow

• Napster Revives Its Music Ambitions With Web3 Acquisition of Mint Songs.

• Abu Dhabi to back the growth of Web3 startups with $2B.

Yours sincerely,
Treehouse Research 🌳