September Alpha Report

September Asset-Level Fundamental Analysis

*Price data is as of September 23rd, 2024 unless noted otherwise. // Analysis period: August 24th to September 23rd.

The return data below is the % Change from 08/24/2024-09/23/2024

The return data below is the % Change from 09/24/2023-09/23/2024

Bitcoin (BTC)

Bitcoin is the first distributed, consensus-based, censorship-resistant, permissionless, peer-to-peer payment settlement network with a provably scarce, programmable, native currency. The Bitcoin network is an emergent decentralized monetary institution that exists through the interplay of full nodes, miners, and developers.¹

Bitcoin leads $321M crypto inflows following Fed rate reduction

Crypto Inflows Surge: Cryptocurrency investment products experienced a remarkable inflow of $321 million from September 15 to September 21, following the US Federal Reserve’s decision to cut interest rates by 50 basis points (bp). This significant adjustment in monetary policy has sparked renewed interest in crypto assets, as reported by CoinShares.

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Bitcoin Dominates: Leading the charge, Bitcoin-based investment products attracted an impressive $284 million in inflows during this period. In contrast, Ethereum products faced a challenging trend, witnessing a notable $29 million in outflows for the fifth consecutive week, highlighting the ongoing fluctuations and investor sentiment within the Ethereum market.

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Solana Gains: While Bitcoin took the spotlight, Solana investment products also showed promising growth, drawing in $3.2 million in inflows. This indicates a growing interest in Solana as an alternative investment, reflecting its rising popularity in the cryptocurrency landscape.

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Market Reaction: The recent rate cut not only influenced inflows but also triggered a significant market reaction, resulting in a 9% increase in total assets under management across the cryptocurrency sector. The overall investment product volumes surged, reaching an impressive total of $9.5 billion, demonstrating the increasing confidence of investors in the cryptocurrency market amidst changing economic conditions.²

SEC approves options for BlackRock's spot Bitcoin ETF

The SEC has officially approved Nasdaq to list and trade options for BlackRock’s highly anticipated spot Bitcoin ETF. This marks a significant milestone in the evolving landscape of cryptocurrency investment.

The ETF will be available for trading under the ticker symbol IBIT on Nasdaq, providing investors with an exciting new opportunity to engage with Bitcoin in a regulated environment. Importantly, options on IBIT will be physically settled, allowing for American-style exercise, which gives investors the flexibility to exercise their options at any time before the expiration date.

Trading for these options will adhere to the same established rules that govern other ETF options on Nasdaq, ensuring a consistent trading experience for market participants. To maintain its status, the ETF must meet Nasdaq’s rigorous initial and continued listing standards, which include maintaining a substantial number of widely held and actively traded shares. This is crucial for ensuring liquidity and fostering investor confidence in this innovative financial product.³

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Ethereum (ETH)

Ethereum is a distributed Layer-1 blockchain computing platform for smart contracts and decentralized applications. The network enables users to build extensively through the use of smart contracts and has since led to the creation of various new assets and industries, such as Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), Decentralized Autonomous Organizations (DAOs), Web3, and more.⁴

Biggest Changes Coming in Ethereum’s Super-Sized Pectra Upgrade

Pectra Upgrade Split: Ethereum's upcoming major upgrade, known as Pectra, is set to be a significant milestone in the network's evolution. This upgrade will be divided into at least two phases, with the first update scheduled for February 2025, marking a crucial step towards enhancing the platform’s capabilities and user experience.

Gas Fee Flexibility: One of the key features of this upgrade is EIP-7702, which will allow users to pay gas fees using various cryptocurrencies instead of being limited to just ETH. This flexibility is expected to enhance the overall user experience by making transactions more accessible and allowing third-party sponsors to cover gas fees, thus reducing the financial burden on users and encouraging more participation in the network.

Staking Improvements: Another exciting aspect of the Pectra upgrade is EIP-7251, which will introduce significant improvements to the staking process. With this enhancement, stakers will be able to earn rewards on any amount they hold over 32 ETH, facilitating validator consolidation. This change is anticipated to reduce the network's bandwidth requirements, thereby improving efficiency and performance across the Ethereum ecosystem.

Automated Staking Pools: Additionally, EIP-6110 and EIP-7002 will pave the way for fully automated and permissionless ETH staking pools. These innovations will streamline operations for various staking services, including options like Rocket Pool, making it easier for users to participate in staking without the need for manual management or complex processes. This will ultimately democratize staking and expand opportunities for more users to engage with the Ethereum network.⁵

‘Silly’ to shade Ethereum, the ‘Microsoft of blockchains’ — Bitwise exec

Bitwise CIO Matt Hougan argues that despite the current negative sentiment surrounding Ethereum, dismissing it as an irrelevant asset is "silly," given its foundational and pivotal role in the blockchain ecosystem. He emphasizes that while Ethereum's ETH/BTC ratio is currently at a three-year low and its price performance lags behind competitors like Solana and Bitcoin, it still serves as a critical platform, hosting an impressive 50% of all stablecoins and 60% of decentralized finance (DeFi) assets in existence.

At the recent TOKEN2049 conference, a strong interest in Ethereum was evident, with numerous discussions highlighting its capabilities and potential. Furthermore, Ethereum's developer activity remains robust, illustrated by over 37,800 commits on GitHub in the past week alone, showcasing a vibrant and engaged community that continues to innovate and build on the platform.

Hougan draws a compelling analogy by likening Ethereum to the "Microsoft of blockchains," suggesting that it will emerge as the preferred choice for traditional companies looking to navigate and enter the blockchain space. This comparison underscores his belief in Ethereum's long-term viability and importance, not just as a cryptocurrency, but as a foundational technology that will drive the future of decentralized applications and services.⁶

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Solana (SOL)

Solana is a public base-layer-1 blockchain protocol that optimizes for scalability. Its goal is to provide a platform that enables developers to create decentralized applications (dApps) without needing to design around performance bottlenecks.⁷

Solana Seeker Preview: Everything We Know About the Next Crypto Phone

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Seeker Unveiled: At the highly anticipated Token2049 event in Singapore, Solana Mobile introduced its revolutionary crypto smartphone, the Seeker. This unveiling marks the most detailed public reveal of the device since the initial teasers were shared back in January, generating significant excitement among tech enthusiasts and crypto investors alike.

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Release and Pricing: The Seeker is scheduled for a mid-2025 release, and the response has been overwhelming, with 140,000 pre-orders already secured. The initial pre-order prices began at a competitive $450, but due to high demand, they have since risen to $500. Experts suggest that prices will continue to increase as the launch date approaches, reflecting the growing interest in cryptocurrency-integrated mobile devices.

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Specs and Features: The Seeker boasts impressive specifications designed to enhance the user experience. It will come equipped with 128GB of internal storage, ensuring ample space for apps, media, and digital assets. With 8GB of RAM, users can expect smooth multitasking and performance. The camera setup includes upgraded 108MP and 32MP lenses, allowing for stunning photography and videography. In addition, the smartphone features a compact 6.36” AMOLED display that delivers vibrant colors and sharp contrast, making it perfect for media consumption. Extended battery life will ensure that users can stay connected and use their devices throughout the day without frequent recharging. Furthermore, the Seeker will include the innovative Seed Vault, providing secure storage for digital assets and enhancing the overall security of users' cryptocurrency holdings.⁸

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Franklin Templeton Plans Mutual Fund on Solana

Franklin Templeton, a prominent asset management firm overseeing an impressive $1.3 trillion in assets, recently announced its plans to launch a new mutual fund on the Solana blockchain during the highly anticipated Breakpoint conference. This innovative mutual fund aims to pool investments from various sources to create a well-diversified portfolio of securities, which will include a mix of stocks and bonds. This represents a significant shift from Franklin Templeton’s previous approach of offering tokenized funds, showcasing their evolving strategy in the digital asset space.

This initiative aligns with similar efforts by other leading firms in the financial industry, such as Libre, Brevan Howard’s WebN Group, and Nomura’s Laser Digital, all of which have embraced the tokenization of funds on the Solana platform. By joining this trend, Franklin Templeton is positioning itself at the forefront of the growing intersection between traditional finance and blockchain technology.

Furthermore, Franklin Templeton has a history of engaging with blockchain technology, having previously launched on-chain treasury funds on platforms like Stellar, Polygon, and Arbitrum. The introduction of this new mutual fund on Solana could signify not only a deeper involvement with this specific blockchain but also a broader commitment to leveraging innovative technologies to enhance their investment offerings and meet the evolving needs of their clients. As the financial landscape continues to change, Franklin Templeton's proactive steps reflect the increasing importance of integrating digital assets into traditional investment strategies.⁹

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Render (RENDER)

Render Network is a peer-to-peer GPU compute network connecting users needing GPU compute services (e.g., GPU rendering and machine learning inferences) to idle GPU owners willing to fulfill compute requests for profit. The network provides a distributed GPU compute marketplace where users can monetize idle GPU power while offering creators or compute clients more accessible computing services.¹⁰

Render’s Dropbox and AWS S3 Integration

The Render Network has officially announced exciting new integrations with Dropbox and Amazon Web Services S3, enhancing the user experience significantly. With this development, users can now seamlessly download files directly from the Render Network to these popular cloud storage providers, streamlining their workflow and increasing efficiency. This integration is particularly beneficial for users who rely on cloud storage for easy access and management of their digital assets. Furthermore, the announcement highlighted ambitious plans to expand this capability by adding support for over 60 major cloud storage providers in the near future, promising even greater flexibility and convenience for users as they manage their files across various platforms.¹¹

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Moody’s Touts DePIN as Promising Approach to Infrastructure

Moody’s Ratings has identified blockchain and digital tokens as a promising and innovative future for physical infrastructure, coining the term decentralized physical infrastructure (DePIN) to describe this emerging concept. This forward-thinking report emphasizes blockchain's unique capacity to significantly enhance network efficiency and scalability while remaining cost-effective, making it an attractive option for various industries. However, it also raises important concerns regarding regulatory clarity and security, issues that must be addressed to ensure widespread adoption.

DePIN represents a groundbreaking integration of decentralized blockchain networks with off-chain infrastructure elements such as data storage, computational power, and telecommunications. This synergy not only streamlines operations but also offers a more resilient and adaptable framework for managing physical assets. As such, DePIN is poised to be a significant trend in 2024, likely influencing how we think about and interact with our physical infrastructure.

Furthermore, a recent report by Wintermute highlights the growing interest in these technologies, revealing that $8.6 billion has been raised in private funding for the year 2024. Notably, the infrastructure and Web3 sectors, including the promising DePIN initiative, are leading the charge in attracting this investment. As more stakeholders recognize the potential of blockchain to revolutionize traditional infrastructures, we can expect an acceleration in development and deployment in the coming years.¹²

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Artificial Superintelligence Alliance (FET)

Earlier this year, blockchain networks Fetch.ai, SingularityNET, and Ocean Protocol combined their tokens into one and created an alliance for decentralized AI — their team kept Fetch.ai’s ticker (FET) The partnership aimed to provide an alternative to tech giants' growing control of the AI industry.¹³

Addition of CUDOS to ASI Alliance

Voting has commenced on the proposal within the ASI Alliance, Singularity Net, and Cudos governance portals, set to conclude on September 24, 2024.

On September 11, 2024, at 3:39 PM, the Artificial Superintelligence Alliance put forth a proposal to integrate CUDOS into the alliance and merge the CUDOS token with FET. CUDOS represents a decentralized cloud computing network that facilitates access to AI GPU resources, enabling distributed AI processing and computation for various AI applications.

The proposed token merger suggests a conversion rate of 112.427 CUDOS to 1 FET, accompanied by a 5% fee on the token merge. This fee will be allocated by the ASI Alliance for purposes including marketing, research and development, integration, legal fees, and other associated costs. Vesting periods for public and treasury tokens are established at 3 months and 10 months, respectively. CUDOS has committed to ensuring all token merge transactions adhere to these terms, and a governance proposal will be initiated if the merger receives approval.

Throughout this transition, the CUDOS blockchain will remain operational. Voting on the initial proposal will begin in both communities on September 19 and conclude on September 24, 2024.¹⁴

Injective (INJ)

Injective Protocol is a decentralized finance (DeFi) platform that offers a DEX for derivatives and futures trading. It allows for permissionless trading with zero gas fees and operates on a layer-2 blockchain, ensuring high speed and scalability. The platform supports various financial markets, including cryptocurrency, synthetics, and NFTs.¹⁵

Proposal 432 passes: Deploy inj-interchain-persona Contract on Injective Mainnet

Voting on this proposal has officially concluded, and the results are in: the proposal passed with 19.97% of the votes in favor, reflecting a significant interest in this initiative. The date of this decision is September 7, 2024, at 12:40 AM.

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Injective Proposal 432 aims to approve the deployment of the inj-interchain-persona contract on the Injective mainnet. This innovative contract is designed to empower users by allowing them to securely manage and seamlessly link their wallets across various blockchain networks. By facilitating this cross-chain connectivity, the contract not only enhances the functionality and interoperability between different blockchain systems but also prioritizes user security, ensuring that transactions and data remain protected.

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Moreover, this initiative is expected to contribute to the growth of cross-chain services within the Injective ecosystem, opening up new avenues for users to engage with various blockchain applications.

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It's important to note that voting on this proposal continued until September 10, 2024, providing stakeholders with ample time to weigh in on this critical development for the network's future.¹⁶

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The Graph (GRT)

The Graph is a protocol for indexing and querying data from blockchains, removing the need for developer teams to run nodes that store historical blockchain data. The protocol allows users to read and retrieve complex blockchain data via a standard JSON file called a Subgraph Manifest. Developers can then utilize an open API (called a “subgraph”) that maps smart contract event data to provide standard definitions and descriptions of the required data. Subsequently, developers can retrieve indexed data by querying the subgraphs built for specific applications using the GraphQL language.

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The indexing protocol was initially released as a hosted service, in which developers relied on centralized node infrastructure provided by the project team to build and deploy subgraphs for decentralized applications. While the hosted service continues to operate to date, the protocol also exists as a decentralized network. On the decentralized network, developers can deploy subgraphs to a registry hosted on Ethereum, Arbitrum, or other supported networks rather than deploying subgraphs to a local or hosted Graph node. As the decentralized network matures, the hosted service will eventually be discontinued. As of April 2024, the hosted service continues to provide subgraph support for several applications and networks (for free).Although the hosted service is being discontinued in three phases, the second phase is ongoing.¹⁷

Mainnet Launch of Timeline Aggregation Protocol (TAP)

The Graph has announced the launch of the mainnet for the Timeline Aggregation Protocol (TAP), a micro-payment system designed to replace Scalar. Unlike its predecessor, TAP allows Indexers to manage receipts off-chain and redeem them later using Receipt Aggregate Vouchers (RAVs) on-chain.

Indexers should take note of the following software updates necessary for the TAP migration:

indexer-service-rs: This is a complete rewrite of the original indexer-service in Rust. Indexers must transition to this version, as it exclusively supports TAP.

tap-agent: This component monitors query fees for each gateway and automatically requests receipt aggregates, ensuring accurate collection of query fees.

tap-aggregator: Operated by the gateway operator, this component enables Indexers to request RAVs by submitting valid receipt batches for on-chain redemption.

indexer-agent: Updated to facilitate the redemption of RAVs for on-chain payments, this agent will remain backward-compatible with Scalar until its eventual deprecation. However, it will require a new subgraph endpoint for TAP.

Gateway: Upgraded to accommodate TAP payments, the gateway currently maintains backward compatibility with Scalar, although support for Scalar will eventually be phased out.

While the exact completion date for the transition to TAP has not been specified, it is important to note that the Scalar protocol will be deprecated "soon." Indexers are strongly encouraged to consult the documentation and begin migrating to TAP as soon as possible.¹⁸

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Livepeer (LPT)

Livepeer is a decentralized network for video infrastructure, catering to both live and on-demand streaming. It provides a distributed marketplace where users can access video streaming services like transcoding or video streaming integrations for applications. Similarly, infrastructure providers can supply compute resources to the network and fulfill video streaming requests of individual users or developers for a fee. Livepeer initially launched on Ethereum but has since been redeployed to Arbitrum.¹⁹

Livepeer launches Livepeer AI to power the next wave of generative video applications

Livepeer has officially launched the Livepeer AI Subnet, as of September 17th, 2024. According to a press release by Livepeer featured on CoinTelegraph, Livepeer AI now offers "production-ready tools that leverage Livepeer's decentralized compute network, enabling affordable, scalable, and reliable AI-powered video capabilities."

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Key features of Livepeer AI include:

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-Affordable AI Inference: By utilizing a global network of decentralized nodes, Livepeer AI significantly reduces the costs associated with GPU compute for AI inference, making high-performance capabilities accessible to all developers.

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-Limitless Scalability: The platform provides on-demand scaling without requiring long-term commitments or hardware investments.

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-Comprehensive Video Tooling: Livepeer AI supports the entire video development process, offering end-to-end solutions from video generation to upscaling and subtitling.

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-Open Access: By eliminating gatekeepers, Livepeer AI ensures that anyone can access and contribute to the development of AI infrastructure.

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-Content Authenticity: As a member of the Coalition for Content Provenance and Authenticity (C2PA), Livepeer is dedicated to combating misinformation by ensuring verifiable content authenticity throughout the media lifecycle.

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The press release also mentions that "in the future, developers will be able to bring their own models, weights, and fine-tunings, as well as deploy custom LoRAs on top of existing models within the network."²⁰

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Doge (DOGE)

Dogecoin is a peer-to-peer payment settlement layer and meme-based community project. The project launched as “a joke” on Dec. 6, 2013, using the popular internet meme of a Shiba Inu dog as its token mascot. The creators, Billy Markus and Jackson Palmer, “thought that cryptocurrency was being taken far too seriously and wasn’t much fun.” Dogecoin is a fork of the now-defunct cryptocurrency Luckycoin (a fork of Litecoin, which itself is a fork of Bitcoin). The official website states that the Dogecoin payment network intends to serve “as a viable and legitimate alternative currency to traditional fiat money.²¹

Elon Musk, Tesla beat Dogecoin manipulation lawsuit

A court has dismissed a staggering $258 billion lawsuit against Elon Musk and Tesla, determining that Musk's tweets regarding Dogecoin were not factual statements that investors could depend on. The lawsuit claimed that Musk's social media posts manipulated the cryptocurrency's price and misled investors, but the court found insufficient evidence to support these allegations. This ruling underscores the complexities of addressing the impact of social media on financial markets and the responsibilities of influential figures like Musk in communicating with their audience.²²

Pepe (PEPE)

PEPE is a meme cryptocurrency designed for entertainment purposes, emphasizing its status as a non-serious, purely memetic digital asset. It operates with zero taxes, and the liquidity provision tokens are burnt, ensuring that contract ownership is renounced. The token is positioned as a playful alternative in the crowded space of novelty cryptocurrencies, appealing to users through its association with internet meme culture.²³

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Over the previous 30-day cycle, there are no pertinent updates regarding Pepe.

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References

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