[Daily] How Polygon beat the bears

Good morning! Welcome to The Daily Moon. Jack Daniel’s is on the web3 bandwagon. The 150-year-old whiskey brand wants to attract young people so it has launched a web3 campaign that uses AR. Similar to Pokémon Go, users will have to walk around and look for a Jack Daniel’s crate. These crates have gift vouchers and NFT music that can be minted on Polygon. Neat.

As of Wednesday, 7:30PM IST

The markets were stable. Bitcoin was bullish on rising investor demand. Ethereum continued to see active buying ahead of the Shanghai upgrade. S&P 500 and Nasdaq were cautious on a selloff in technology stocks. Back home, Sensex and Nifty ended higher on gains in L&T, HDFC, and Hindustan Unilever.

Polygon Stays Sturdy

Polygon’s MATIC defied the odds amidst the crypto winter. When most tokens fell, it bounced back after the Terra collapse in 2022. Crypto analyst Dan Lim has discovered the secret behind MATIC’s resilience.

What is the formula?Lim says that Polygon survived the bear market because its velocity remained intact. In crypto-speak, velocity means the total amount of tokens moved during a period divided by the total supply. It is an indicator of a token’s circulation rate in the market.

In Polygon’s case, its velocity continued to increase even when the broader markets were down. The trading volume also stayed stable. So, MATIC was traded even when the market was volatile. A majority of MATIC HODLers erased their losses over the past six months.

The GameFi factorThe network has seen an increase in daily active addresses in the past 30 days. The zkEVM launch helped attract new users. ICYMI, zkEVM is an Ethereum scaling solution that can execute multiple transactions on a single protocol. Here’s a thread explaining why zkEVM is important:

Despite these wins, there’s some concern about a dip in dApp activity and unique depositors.

Partners FTWLatin America’s biggest investment bank, BTG Pactual, has launched its stablecoin on the Polygon blockchain. That’s the second stablecoin in less than a month after the digital Euro (EUROe) launch. Compared to 2022, Polygon has seen ~3X growth in its buyers and sellers. The bears are far away, at least for now.

Funds Trust Bitcoin

Crypto funds have recovered from the SVB-Signature collapse. Fund managers have reentered Bitcoin over the past two weeks and brought nearly 4,000 BTC.

Green shoots everywhere Digital asset trusts have added BTC because the demand picked up. The US government ensured that the bank runs didn't impact customers. As a consequence, investors want to buy BTC once again. The trust factor played a role.

Mining activity is robust too. Marathon Holdings mined a record 2,195 BTC during the year’s first quarter and increased its total holdings to 11,466 BTC.

Back to stabilityBitcoin’s rally above $28,000 is another factor. Funds are on a buy and HODL mode and own ~$20 billion worth BTC. The next trigger to buy will be no rate hikes by the US Fed in its monetary policy meeting in May.

ICYMI We hate to end with bad news, but it is what it is. Bitcoin platform Paxful has shut down citing regulatory issues.

All That Glitter

Guess what just crossed $1 billion in combined market capitalisation? Tokenised gold assets.

What is tokenised gold?It’s a kind of stablecoin which pegs its price to gold. The tokens on the blockchain represent ownership of physical gold. All this is managed by the entity that issues the token. In the US, there are two big gold stablecoins. Pax gold (PAXG), issued by the New York-based fintech firm Paxos Trust Company, and tether gold (XAUT), issued by Tether.

What does this mean?That people want to rely on safe haven investments like gold, as concerns over a banking crisis continue to do the rounds. Gold is getting more and more expensive. So investors find exposure to gold through gold tokens. And they don’t have to worry about management fees of an exchange-traded fund (ETF) or the burden of storing gold bullions.

Trump NFTs Are Hot Again

Former US President Donald Trump’s NFT trading cards are popular once again. No prizes for guessing why. He’s facing criminal charges for paying off a former porn star, and he is back in the news.

Wait, Trump has NFTs?Yes. The former president launched his digital collectibles in December. For $99, a buyer could purchase a token and enter sweepstakes for exclusive experiences. Those who owned 45 of these NFTs even had a chance to meet him for dinner.

Who’s buying?Trump Digital Card saw a 462% rise in activity in the hour after his court appearance. About 60 people have purchased Trump NFTs in the past 12 hours. But you know the drill. There are some who get a little too excited during these peaks. One of them paid $1,333 for a card featuring Trump holding a rifle.

Just a question. Where will they have those dinners if Trump is imprisoned?

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