Daily News | BTC and ETH Continued to Decline; Dencun Upgrade May Cause Ethereum to Inflate Again; Sophon Raised $60 Million Through "Node Sales"

2024-05-09, 03:56

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## Crypto Daily Digest: The Dencun upgrade might lead to Ethereum inflation again; Sophon raised $60 million through "node sales"; Lyra Finance launches new token LDX airdrop
A report from data company CryptoQuant suggests that the upgrade to Dencun may lead to another inflation in <a href="/uk/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>, as Ethereum's transaction costs have decreased and its combustion has fallen to one of the lowest levels since the merger. This reduced combustion has led to an unprecedented growth in Ethereum supply, which is the first time since the merger of the Ethereum network.

Analysts point out that prior to the upgrade of Dencun, higher activity levels on the Ethereum network meant higher transaction costs, resulting in lower Ethereum supply. However, with the implementation of the Dencun upgrade, the relationship between combustion costs and network activities has been decoupled.

Overall, the conclusion drawn from the report is that Ethereum is "unlikely to experience deflation again" because at the current level of online activity, Ethereum's inflation may continue, and the depreciation of ETH is inevitable. This means that ETH may no longer possess the characteristics of a "supersonic currency", or that restoring this feature may require a higher level of online activity.

According to the block report, zkSync's "hyperchain" Sophon successfully raised approximately $60 million through node sales.

"Hyperchain" Sophon, is a Layer 2 network built on the modular open source framework ZK Stack of Matter Labs. Sales provided purchasing opportunities for 200,000 nodes and adopted a tiered pricing model; On Wednesday, the company stated that investors have purchased 121000 nodes, bringing Sophon approximately $60 million worth of wETH.

Sebastien, co-founder of Sophon and former DeFi manager at zkSync, stated that Sophon has raised 20800 wETHs. Sebstien stated that node sales empower communities as they can essentially acquire project tokens at discounted prices in the early stages and receive token airdrops.

Sophon plans to launch its network in the upcoming months. Around that time, it is also said that there will be a centralized sorter where node holders can delegate their licenses to Sophon and receive their share of network fees. The project states, "These holders will also be able to participate in Sophon's operations, such as running light nodes through index chains or using data availability layers selected by Sophon."

Sophon has determined that 20% of its total supply of tokens (SOPH) will be distributed to node license holders within the first 36 months after Sophon's mainnet is launched.

The DeFi tool Lyra Finance has announced a token transformation plan, launching the LDX token as the native currency of Lyra's derivatives network, with plans to launch it in the third quarter of this year. The existing Lyra tokens will be migrated to the new tokens. And they plan to conduct LDX airdrops to reward traders and profit farmers, encouraging them to increase the liquidity and adoption rate of Lyra products. The airdrop will adopt an integral system, with LDX allocated proportionally every four weeks.

Lyra also launched a product that tokenizes profitable derivatives, initially focusing on basis trading, and later launched a covered call option strategy for liquidity re-staking tokens on EigenLayer. This will allow users to deposit LRTs issued by protocols such as EtherFi (eETH) and Swell (rswETH) to earn profits. This protocol will tokenize policies on LRT and package them in the form of ERC-20 tokens.

Lyra Finance was initially introduced as an on-chain option trading protocol, using market maker vaults and a specific asset pool funded by liquidity providers using stablecoins in exchange for a portion of trading fees.

## Market Trends: BTC continues to decline, IO is about to make token airdrops
In the past 24 hours, the price of <a href="/uk/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a> (BTC) has experienced significant fluctuations, dropping below $61,000 at one point and has now rebounded slightly to around $61,500. Ethereum (ETH) also fell below the $3,000 mark, and the entire Altcoin market has also taken a hit. In addition, the market has observed a continuous outflow of spot ETFs, indicating investors' cautious attitude. In terms of macroeconomics, the performance of US stocks has been volatile, and the market is waiting for next week's Consumer Price Index (CPI) data as an important indicator to judge future economic and policy directions.
### Market Hotspots:
Oracle Protocol: Teller (TRB) experienced a three fold price increase within a few days and then experienced a decline. This price volatility typically demonstrates the behavior of strong currencies in volatile markets, where they rise at a rapid pace and then fall with the same intensity. In addition, the fluctuation of TRB has also driven the rise of other oracle protocol tokens such as UMA and API3. API3 recently announced a partnership with Xlayer's Layer2, which may be a factor driving its price increase.

The development of the DePIN concept: Io.net, the flagship project of the DePin concept, announced the launch of IO tokens, with a futures price of $3.66 on DEX, corresponding to a market value of nearly $2 billion. IO tokens are expected to be airdropped in mid May, which may stimulate market interest in IO. However, despite the long hype surrounding DePIN related concepts, the concept tokens in this field have not yet exploded collectively. Other tokens on the same track, such as RNDR and AKT, hold market values of $5 billion and $1 billion respectively, demonstrating the profound potential of this field.

The main market trend in this round still revolves around AI and Meme tokens. With the upcoming release of important CPI data next week, the market may face greater volatility. Investors should remain vigilant and pay attention to the development of macroeconomic indicators and related crypto projects in order to adjust their strategies in a timely manner in response to possible market changes.

## Macro: The US market is fluctuating, the Asian market is stable, and gold and crude oil prices are rising
On Thursday, as investors continued to bet on the support of US monetary policy, the Dow Jones Industrial Average closed higher on Wednesday, rising for six consecutive trading days and closing above 39000 points for the first time in five weeks. However, due to the stagnation of momentum on the day of the auction of 10-year treasury bonds and the rise in the yield of US treasury bonds, other benchmark indexes on Wall Street cooled slightly. The S&P 500 index closed flat after rising for four consecutive trading days, while the Nasdaq Composite Index fell for the second consecutive trading day.

In terms of the rise and fall of the three major indexes, the S&P 500 index remained unchanged, the Nasdaq fell 0.18%, and the Dow Jones index rose 0.44%.

The Federal Reserve policymakers who spoke on Wednesday are consistent with recent information, including at last week's Federal Reserve policy meeting. Boston representative Susan Collins said that the current monetary policy setting will slow down the economy, which she believes is necessary for the Federal Reserve's goal of "bringing inflation back to 2%.".

According to CMEGroup's Fedwatch tool, traders predict a 67% likelihood of the Federal Reserve cutting interest rates by at least 25 basis points in September, up from 54% a week ago.

The policies and market performance in Asia and Europe are quite different. On Thursday, May 9th, Asian stock markets are currently stabilizing, and investors are waiting for China's trade data to measure the health of the Chinese economy; Japan has indicated possible currency intervention, with the yen stabilizing after three consecutive days of decline.

Following the overnight rate cut by the Swedish central bank, the Bank of England (BoE) will also decide on its interest rate policy and is considering how long it will take to lower interest rates from the current 16 year high. Everyone is concerned about the prospect of a rate cut in June, which also highlights the divergence between Europe and the Federal Reserve.

Meanwhile, the employment market in the UK has become a focus of attention. The latest official data shows that in the three months ending in February, the annual wage growth rate was about 6%, while the unemployment rate rose to 4.2%, reaching a six month high. The task of employment has become more complex.

REC stated that more and more people are entering the labor market, and candidates are growing at the fastest pace in last five months, partly due to an increase in layoffs and a general increase in job seekers. The increase in labor supply is welcomed by the government, as the government and central bank are concerned about the inflation and fiscal impact caused by the continuous decline in labor force participation rate in the past two years.

In the Asian market, the MSCI Asia Pacific Stock Index rose 0.1% after Federal Reserve Chairman Jerome Powell reiterated his "loose policy stance" later this year, not far from the previous 15 month high. The Nikkei index in Japan rose 0.3%.

Due to a 2% rebound in technology stocks and the recovery of Chinese real estate developers, Chinese blue chip stocks rose 0.6%, while the Hong Kong Hang Seng Index stock market rose 0.7%. The CSI real estate index rose 0.9%, recovering from the previous day's decline.

Investors will pay attention to the April US consumer inflation data released next Wednesday to better understand the policy direction of the Federal Reserve; The data has unexpectedly risen for three consecutive rounds.

In terms of commodities, the decrease in US crude oil inventories indicates a tightening of supply, and the growing hope of the Federal Reserve cutting interest rates before the end of the year has led to a slight increase in oil prices on Thursday, rebounding from the two month low of the previous trading day. Brent crude oil futures rose 0.2% to $83.76 per barrel, while US crude oil futures rose 0.3% to $79.24 per barrel.

Gold prices rose 0.1% to $2,311.23 per ounce.

<div class="blog-details-info">
<div>Author:**Sherry S. & Icing**, Gate.io Researcher
<div>Translator:Joy Z.
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

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