TL;DR

• BTC dropped quickly below $56,000 after briefly surpassing $59,800. In the short term, $56,000 acts as a key support level.
• ETH experienced strong volatility between $2,500 and $2,700 over the past 24 hours, with $2,500 being the short-term support level.
• Recently, the altcoin DeFi sector has rebounded, showing minimal impact from BTC’s decline. Major fluctuations have mainly occurred in mainstream cryptocurrencies.
• MakerDAO passed a proposal to reduce the WBTC collateral cap.
• Meme launch platforms are gaining traction, with a surge in copycat platforms mimicking Pump.fun.
• The market is currently bearish, with the long-short ratio dropping significantly.
• U.S. stock indices have rebounded, with both tech and blockchain stocks rising in tandem.
  Note: Unless otherwise noted, the data in this article was collected as of 4:00 (UTC+0) on August 16, 2024

Market Review

• BTC —— In the past 24 hours, BTC briefly surged above $59,800 before rapidly falling below $56,000 within four hours, only to rebound quickly. Currently, BTC is trading at $57,896. The short-term support level is $56,000; if this level is breached, further declines could accelerate.[1]
• ETH —— ETH showed stronger performance than BTC over the past 24 hours, oscillating between $2,500 and $2,700. Following BTC’s drop, ETH quickly rebounded to around $2,600, with a short term support level at $2,500.[2]
• Altcoins—— Recently, the DeFi sector within altcoins has rebounded. The recent decline in BTC has had minimal impact on altcoins, with most maintaining stability. Only a few, which previously saw significant gains, have undergone a pullback. Major price movements have been concentrated in BTC, ETH, and other leading altcoins. If the market continues to decline, altcoins may find it challenging to remain stable in the long term.
• Stablecoins —— The total market capitalization of stablecoins is $167.651 billion, an increase of $830 million from the previous day, representing a 0.5% increase year-over-year. USDT’s market cap stands at $116.534 billion, up $400 million from the previous day.
• ETF —— The U.S. Bitcoin spot ETF saw a net inflow of $11.11 million yesterday, while the Ethereum spot ETF recorded a net inflow of $39.21 million.[3]
• U.S. Stock Indices —— The S&P 500 gained 1.61%, the Nasdaq rose 2.34%, and the Dow Jones increased by 1.39%.[4]
• Spot Gold —— Spot gold is priced at $2,456 per ounce, with a daily increase of 0.02%.

Top Performers

According to Gate.io, as of 12:00 on August 16, the top trending tokens over the past 24 hours, based on significant gains and a market cap exceeding $50 million, are as follows[5]:

• CAD （Caduceus Protocol） —— This token surged approximately 1,011% in a single day, currently trading at $0.3333. The 24-hour trading volume stands at $1.2866 million, with a total market capitalization of $380 million. Caduceus Protocol is a platform focused on blockchain technology and decentralized applications, offering developers a flexible development environment and efficient tools to drive widespread blockchain adoption. The recent price spike is closely tied to its upcoming airdrop event, which will take place from 00:00 AM on August 14, 2024, to August 21 (UTC). Participants can earn an airdrop of 10,556 CAD by completing specific tasks.
• RARE （SuperRare） —— The token experienced a single-day gain of approximately 29.36%, with a market cap of $68.82 million. The 24-hour trading volume is $8.0236 million. SuperRare is a digital art platform that allows artists to create and sell limited-edition blockchain-based digital artworks. The platform charges no commission on initial sales and takes a 3% commission on secondary sales. RARE has recently broken out of a descending channel or a bullish falling wedge pattern, which is typically seen as a bullish signal in technical analysis. This significant increase likely reflects the market’s ongoing interest in digital art and the NFT sector.
• VELO （VELO） —— The token saw a single-day increase of approximately 12.57%, with a total market capitalization of $87.95 million. The 24-hour trading volume stands at $11.3824 million. VELO is a blockchain-based financial protocol designed to achieve credit stability and stablecoin issuance through a decentralized ledger, suitable for cross-border remittances, loans, and payments. The recent surge in VELO’s price is likely driven by increased market exposure and trading activity, spurred by its listing on Uphold and a promotional event offering the top 200 traders $25 worth of VELO.

Spotlight Analysis

MakerDAO Approves Proposal to Reduce WBTC Collateral Cap
In the August 13th Gate Research daily report, we discussed MakerDAO’s proposal to reduce the WBTC (Wrapped Bitcoin) collateral cap, voted on August 12th. Today, the proposal officially passed, and the maximum collateral caps for the WBTC-A, WBTC-B, and WBTC-C core vaults within MakerDAO will be reduced from $500 million, $250 million, and $500 million to zero. Additionally, SparkLend will prohibit borrowing against WBTC and reduce the WBTC loan collateral ratio from 74% to 0%.

As we analyzed in a previous report, MakerDAO proposed eliminating WBTC from its collateral vaults due to concerns over the transparency and decentralization of WBTC following a transfer of control. The proposal aims to mitigate the risks associated with the changes in custody and limit MakerDAO’s exposure to WBTC.[6]

The approval of this proposal by MakerDAO is an effective measure to mitigate potential risks for the platform itself. However, for other protocols and projects that involve WBTC, the gradual unwinding of WBTC collateral following MakerDAO’s decision could introduce certain liquidity risks. It is crucial to closely monitor how other key applications of WBTC, such as AAVE (with $2.141 billion in exposure) and Compound (with $254 million in exposure), respond to this development. If large-scale liquidations of WBTC collateral occur, the market could face liquidity withdrawals amounting to billions of dollars, potentially triggering a chain reaction of liquidity risks and de-pegging events.[7]

As shown in the chart, WBTC dominates the market for BTC-pegged assets on Ethereum with a 98.8% market share. If protocols like MakerDAO close their WBTC exposure, it could open up new market opportunities for other BTC-pegged assets, such as tBTC, which is currently operational. Additionally, Coinbase has announced on X (formerly Twitter) that it plans to launch a product similar to WBTC, called cbBTC. [8]These developments suggest a significant potential for new Ethereum-based BTC asset solutions to gain traction in the market.

Pump.fun Copycats Proliferate as Meme Launch Platforms Become a Hot Business
Pump.fun, a low-barrier meme coin launch platform, has attracted a large user base eager to “mint coins with one click.” In the past few months, the number of tokens on Pump.fun has surged to over 1.7 million. However, only a mere 0.002% of these tokens (41 in total) have managed to maintain a market capitalization above $1 million for more than a few weeks. [9]Despite this, Pump.fun has generated substantial revenue by charging transaction fees, earning $6.18 million in the past week alone a new all-time high.

The simplicity of the business model has attracted more entrepreneurs to enter the meme launch platform space. As early as May, the meme launcher We.Rich, based on the Base chain, was launched. Following that, the data tool DEX Screener introduced Moonshot, another meme launch product. On the BNB Chain, platforms like Four.Meme, a fair launch platform for meme coins, and flap.sh, a SocialFi token launch platform, have also emerged. On August 13, TRON founder Justin Sun announced on X the launch of Sunpump.fun on the TRON network, sparking even wider discussion.

Although many protocols have introduced interfaces and product logic similar to Pump.fun, with some degree of innovation, none have yet produced standout projects. As shown in the chart, Pump.fun accounts for nearly 40% or more of the daily new meme coins launched across platforms. [10]Given Pump.fun’s first-mover advantage, mature operating model, thriving meme culture within the Solana ecosystem, and active community, it is highly likely that Pump.fun will continue to maintain its leading position in the short to medium term.

Data Highlights

Liquidations, Funding Rates, and Long-Short Ratio
As of 19:00 UTC on August 15, the total liquidation volume for BTC contracts across the network was approximately $30.521 million. Of this, long contract liquidations accounted for about $22.779 million, while short contract liquidations totaled $12.742 million. The weighted funding rate for BTC positions was -0.0074%, and for ETH positions, it was -0.0067%.[11]

Based on the data and the chart, BTC and ETH have experienced multiple shifts in long-short sentiment over the past 24 hours. On the 15th, the market was predominantly bearish, with the long-short ratio mostly below 1.0. However, on the 16th, there was a noticeable shift towards bullish sentiment for both BTC and ETH, with the long-short ratio exceeding 1.1 at certain points. This indicates that the market is currently in a phase of volatility. Despite this, the funding rates suggest that the market is still primarily driven by bearish sentiment.

Top 3 DeFi Protocols by TVL Growth
Rapid growth in Total Value Locked (TVL) often indicates strong investor interest in a protocol and the emergence of new DeFi products. Below are the top 3 fastest-growing DeFi protocols among those with a TVL exceeding $50 million:[12]

1. Beethoven X: Beethoven X saw a massive 108% increase in TVL today. It is a next-generation decentralized investment platform designed to unlock the full potential of DeFi. The platform offers a unique suite of financial tools, including weighted pools, boosted pools, and LBPs (Liquidity Bootstrapping Pools) for time-based Dutch auctions, enabling users to conduct efficient and secure transactions. Beethoven X plans to continue driving innovation in the DeFi space by expanding its financial tools and implementing technical upgrades in the future.
2. Colend Protocol: Colend Protocol, a decentralized lending protocol, saw a 62.97% increase in TVL today. The project aims to advance the concept of Bitcoin-Fi (Bitcoin Finance). Built on the Core blockchain, Colend enables individuals to engage in direct lending and borrowing. The recent surge in TVL is largely due to the launch of Pell Network on the Core blockchain. Pell Network introduced innovative non-custodial BTC staking features, attracting significant user participation and driving increased attention from the market.
3. Symbiotic: Symbiotic, a decentralized shared security protocol, saw a 45.21% increase in TVL today. The project is designed to enhance the security and scalability of decentralized networks through permissionless re-staking. Recently, Symbiotic announced a partnership with Pragma, which will see Pragma utilize Symbiotic’s permissionless re-staking infrastructure to bolster its economic security. This collaboration has garnered significant market attention, boosting investor confidence in Symbiotic’s potential.

Fear and Greed Index
Over the past three days, the BTC Fear and Greed Index (FGI) has hovered around 30, indicating persistently low market sentiment. It’s important to note that periods of fear often coincide with selling pressure and price declines. However, such times of fear can also lead to the formation of short-term market bottoms, presenting potential buying opportunities.[14]

U.S. Stock Market Rebound: Tech and Blockchain Stocks Rise Together
On August 15, U.S. stock markets continued their upward trend, with the Nasdaq gaining 2% and the S&P 500 rising by 1.3%. Blockchain-related stocks performed particularly well, with MicroStrategy up 1.20% and Hut 8 surging by 6.20%, reflecting positive investor sentiment towards digital assets and related companies.[14]

Funding News

According to RootData, the Web3 sector saw five funding rounds in the past 24 hours, raising a total of $95 million across AI, DeFi, and security sectors:[12]

CrunchDAO
Overview: CrunchDAO is an AI research community composed of data scientists, offering AI researchers the opportunity to participate in distributed machine learning competitions. CRNCH token holders enjoy governance rights and other privileges within CrunchDAO.
The seed round raised $3.5 million, led by Multicoin Capital with participation from Factor Capital.

Chaos Labs
Overview: Chaos Labs is a New York-based crypto startup specializing in on-chain risk management tools.
The Series A funding round raised $55 million, led by Haun Ventures with participation from F-Prime Capital and others. This funding comes as Chaos Labs expands its platform to meet the growing demand for automated risk management in the DeFi sector.

Orderly Network
Overview: Orderly Network is a liquidity platform built on the Near protocol, enabling peer-to-peer trading through smart contracts and offering users risk management and shared asset pools.
The company completed a $5 million strategic funding round, with investors including OKX Ventures and Nomad Capital. The funds will be used to enhance its on-chain liquidity infrastructure and develop new DeFi products.

Airdrop Opportunities

Pichi Finance

Pichi Finance is a decentralized points trading protocol that allows users to trade points earned from different protocols, such as Eigenlayer and Kelp DAO, before a Token Generation Event (TGE). Users can create an NFT wallet to store tokens earned through points (such as Pendle YT) and trade these points by selling the NFT wallet once points have accumulated.[15]

Airdrop Date: August 19, 2024 (UTC +0)
Token Distribution: Pichi Finance has announced the tokenomics for its PCH token, with a total supply of 1 billion tokens. The initial circulating supply will be 125.5 million tokens. The distribution is as follows: 5% of the total supply will be airdropped to the community, 18% allocated to the team, 20% to investors, 15% to the ecosystem, and 7% to partners.

Grass

Grass is an AI web-crawling project built on the Solana network. The team recently announced that with the conclusion of Epoch 7, they are taking a snapshot that will be used to determine eligibility for an upcoming airdrop. User engagement with the network, weighted by Epoch, will serve as the basis for rewards. In the coming weeks, more details on how to check airdrop eligibility and additional tokenomics information will be provided.

Airdrop Date: To be announced
Token Distribution: Few details about the token distribution have been released so far, but Grass has indicated that network participation will serve as the baseline for rewards, with distribution weighted by Epoch. This suggests that long-term contributors may enjoy a multiplier on their allocations.[16]

Reference：

1. Gate.io, https://www.gate.io/price/bitcoin-btc
2. Gate.io, https://www.gate.io/trade/ETH_USDT
3. SosoValue, https://sosovalue.xyz/assets/etf/us-eth-spot
4. Nadaq, https://www.nasdaq.com/market-activity/index/spx
5. Gate.io, https://www.gate.io/price
6. Dune, https://dune.com/queries/2355089/3857206
7. Defillama, https://defillama.com/yields?token=WBTC
8. X_Coinbase, https://x.com/coinbase
9. Dune, https://dune.com/hashed_official/pumpdotfun
10. Dune, https://dune.com/queries/3759745/6323211
11. Coinglass, https://www.coinglass.com/LongShortRatio
12. Defillama, https://defillama.com/protocol
13. Gate.io, https://www.gate.io/zh/bigdata/homeindex
14. SeekingAlpha, https://seekingalpha.com/symbol/MSTR
15. X_PichiFinance, https://x.com/PichiFinance/status/1823855716115083518
16. X_getgrass, https://x.com/getgrass_io/status/1823801038467404149

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