[Weekly Xangle] Arbitrum Airdrop & Orbit, USDC Repeg, Ethereum Upgrade, Starbucks NFT and More

Translated by elcreto

Xangle’s Take on the Market This Week

• USDC had depegged to a low of $0.87 on the back of the news that the stablecoin issuer Circle held part of its reserves with the now-collapsed Silicon Valley Bank (SVB), which came at a time when a flurry of bank runs had already been rattling the crypto space. DeFi cratered as tumbling USDC-related assets hurt the sector.
• The tide has turned, and the market came back to its senses as the Fed and financial regulators began to intervene. A searing rally ensued as investors increasingly anticipate a quarter-point hike, and Bitcoin emerged as a potential solution to the banking system.
• Fueled by the CPI numbers that matched the consensus forecast, Bitcoin advanced further and crossed $26K at one point. It later snapped the rally and returned some of the gains after the Credit Suisse turmoil refreshed the memory of a run on deposits.
• The liquidity threat from the banking sector did not translate into over-the-top risk aversion and selloff. Instead, Bitcoin has emerged as an alternative to the banking system, rallying the market as a whole. As recession fears appear to outweigh a possible rate hike slowdown, demand may rise for crypto given its lesser exposure to the cyclicality of the real economy.

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Top Stories & Takeaways

 

Arbitrum Launches $ARB

• Arbitrum announced the launch of native governance token $ARB on the 16th, along with its plan to airdrop 11.5% to the community starting 23rd of March.
• ARB tokens will be offered based on the snapshot of users’ on-chain activities on Arbitrum One and Nova as of Feb 6, 2023. The number of tokens granted will be determined by and proportional to the points assigned to their activities.
• The Arbitrum network also released Arbitrum Orbit, a layer 3 solution that allows for easier development of L2 and L3 chains using Arbitrum technology.

Xangle’s Take: The launch of the Arbitrum token (ARB) may likely have been geared towards garnering funds to boost the ecosystem amid the growing turf war in the layer 2 market further accelerated by Optimism and Coinbase Base. The rivalry between Arbitrum and Optimism looks set to heat up.

Link: arbitrum.foundation

 

USDC Repegs. Yet Market Share Slides.

• USDC lost its $1 peg last Saturday as $3.3B of Circle’s $40B cash reserve was said to be held with SVB.
• The stablecoin had fallen to as low as $0.87 but has managed to regain parity after the Fed jumped in to insure deposits.
• The circulating supply of USDC has dropped from $43B to $36B, further widening the gap with USDT’s $75B.

Xangle’s Take: While this may seem like a one-off incident as USDC shortly regained its peg, the collapse of trust has caused a great deal of anxiety in the market. As USDC is the underlying asset for multiple DeFi protocols, including DAI, the cascading effect could have been devastating if not for the quick actions of Circle and the US government. The incident has earned USDT an even stronger grip, and stablecoins like TUSD are gaining traction as alternatives to USDC. USDC may take some time to recoup its pre-depeg market share.

Link: Tether's Stablecoin Market Cap Now Double USDC After SVB Chaos: Decrypt

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Mainnet

 

Ethereum Shanghai Hard Fork Tentatively Set for April 12

Ethereum developers set a target date of April 12 for the Shanghai hard fork during the All Core Developers Execution Layer #157 call on March 16.

Link: CoinDesk Report

 

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DeFi

 

Euler Finance Hacked

Euler Finance has lost $197M in a flash loan attack.

Link: CoinDesk Report | etherscan.io

 

MakerDao to Take Actions Upon DAI Depegging

After DAI broke its peg alongside USDC, MakerDAO is proposing several improvements to the stablecoin.

Link: MakerDao Official Twitter Thread – Immediate Actions

 

Uniswap Expands to BNB Chain

Uniswap V3 officially goes live on BNB Chain.

Link: Uniswap Governance: Cross-Chain Bridge Assessment Process

 

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NFT

 

Starbucks’ Limited-Edition "Siren Collection" Took Off

The price of Siren Collection, an NFT collection released by Starbucks Odyssey, rocketed to a high of $1,500.

Link: Entrepreneur Report | Nifty Gateway – Floor Price

 

OpenSea Introduces Proxy Contracts to Lower Gas Fees

OpenSea has introduced proxy contracts to allow creators to save up to 90% on gas fees.

Link: OpenSea Official Twitter Announcement

 

Claynosaurz Tops the List of Solana-Based NFTs

Claynosaurz became the most-traded NFT in Magic Eden over a one-week period.

Link: magiceden.io - Claynosaurz

 

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Regulatory Landscape

 

Gensler Suggests Tokens Using Staking Protocols Could Be Considered Securities

SEC Chair Gary Gensler reiterated that Proof-of-Stake tokens are securities.

Link: The Block’s Report

 

EU Parliament Passes a Kill Switch Requirement

The European Parliament voted in favor of a bill mandating smart contracts to include a kill switch.

Link: CoinDesk Report

 

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Macro/Industry/Corporate

 

Signature Bank Is Shut Down

In the wake of the collapse of two of the crypto-friendly banks, Silvergate and SVB, Signature Bank became the third to cease its operation.

Link: CoinDesk Report

 

Circle Adds Cross River Bank as Banking Partner

USDC issuer Circle announced a new partnership with Cross River Bank for automated settlements.

Link: Cointelegraph Report

 

Meta Ends Support for NFTs

Meta said it is winding down its support for NFTs on Instagram and Facebook.

Link: CoinDesk Report

 

Ark Invest Raises $16M for Crypto Fund

Cathie Wood’s Ark Invest has formed a new $16M crypto fund.

Link: CoinDesk Report

 

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Previous Xangle Weekly Reports

• [NFT Weekly] Yuga Labs’ Otherside 2nd Trip, Gitcoin Presents’ Parabolic Surge, and More!
• [Weekly Xangle] Silvergate Announces Voluntary Liquidation, NYAG Labels Ethereum Security, Huobi Token Sinks