Welcome to the Crypto.com Monthly Research Roundup Newsletter!
1. Market Index
The 30-day price and volume indices were negative at -10.84% and -0.55%, respectively, while the volatility index was positive at +54.02%.
2. Charts of the Month
Loaded Lions: Mane City, Crypto.com and Cronos’s first-ever collaborative Web3 game, launched on August 30. Loaded Lions: Mane City is a tycoon simulator featuring Web3’s most fabulous felines. Players can build their dream city from the ground up, deck out their very own virtual mansion, and compete against other players for fantastic rewards. The game became one of the top ten Web3 games by volume across all chains within just one day of its launch.
Telegram trading bots have gained attention in August, with the fully diluted valuation of associated tokens rising significantly in the past two months. However, there have been some discussions around potential security issues that warrant extra scrutiny.
Launched on 10 August, Friend.tech (Beta) is an invite-only Web3 social app built on Layer-2 blockchain Base. Users have shares, or ‘Keys’, tied to their X (formerly Twitter) account, which can be bought or sold on the platform.
Friend.tech was under the spotlight recently, and on 21 August, its fees climbed to US$1.68 million. However, after the hype cooled down, the platform’s daily revenues have dropped by over 95%, from a peak of $840,890 on 21 August to just $30,320 on 1 September. Meanwhile, the community has raised questions about issues relating to data retention and privacy. On top of these, the app also received intense criticism over a decision to punish users who chose to use forks or copycat versions of its tokenised social media platform.
3. Monthly Feature Articles
Monthly Feature Article | Decentralised Stablecoins
Decentralised stablecoins aim to provide a solution for common issues presented by centralised stablecoins. They operate on blockchain networks without the need for a centralised authority and maintain their pegs autonomously through smart contracts. In our latest report, we provide an overview and key developments in the current decentralised stablecoin market, examine popular decentralised stablecoins, and discuss some of the new entrants in the space. These include Aave’s GHO, Curve’s crvUSD, and Synthetix’s sUSD v3.
Check out Decentralised Stablecoins
- Stablecoins have become an integral part of the cryptocurrency ecosystem, rising dramatically in prominence and usage in recent years. They have helped to address a key limitation preventing greater mainstream adoption of cryptocurrencies — significant price volatility.
- Issued by centralised entities, centralised stablecoins maintain reserve assets like fiat currency to back each coin and ensure pegs are maintained. However, they present counterparty risks and other issues for the users. Decentralised stablecoins aim to provide a solution: They operate on blockchain networks without the need for a centralised authority and maintain their pegs autonomously through protocols (often involving collateralisation) and mathematical algorithms.
- Although decentralised stablecoins employ different mechanisms for maintaining price stability, there are some common approaches:
- Over-collateralisation: Stablecoins are issued by requiring deposits exceeding the value of collateral to mitigate the risk of insolvency.
- Real-world assets: Stablecoins are backed by an equivalent amount of real-world assets (RWAs), such as US Treasuries, as reserves to maintain stability and pursue better-yielding investments.
- New entrants are also gaining traction, riding the growth of their native ecosystems. While still nascent, their integration within leading DeFi protocols could give them utility advantages over stand-alone stablecoins.
- GHO applies a fixed oracle price (US$1), and interests are repaid to the DAO treasury directly.
- crvUSD employs a novel Lending-Liquidating AMM algorithm (LLAMMA), and the peg is maintained by PegKeeper.
- sUSD (v3) turns the stablecoin into collateral-agnostic without relying on SNX, becoming a cross-chain asset.
- Besides the traditional approaches through reserves and collateral to establish stablecoins, there are also other designs like float-pegging (Rai), as well as delta-neutral and yield-bearing stablecoins (Ethena). As the cryptocurrency ecosystem matures, stablecoins are well-positioned to facilitate broader mainstream adoption.
Monthly Feature Article | Innovative Stablecoins: Exploring Novel Stablecoin Protocols
Decentralised stablecoins have gained traction due to the drawbacks of centralised ones, including counterparty risks, lack of transparency, and centralisation concerns. However, traditionally, maintaining stability and decentralisation can impact capital efficiency. New designs are highly anticipated to address this challenge.
In this report, we selected several innovative projects and analysed new stablecoin designs that are emerging in the market. Read our latest research that explores selected innovative stablecoin projects in greater detail, exclusive to our Private members.
- Decentralised stablecoins have gained significant traction and usage, as they have notable benefits like speed, efficiency, and transparency. However, traditional methods aimed at preserving both stability and decentralisation often compromise capital efficiency. As a result, there is keen anticipation for new designs that address this trilemma.
- This report examines some examples of the new design of stablecoins:
- The Reserve protocol is a platform that enables the permissionless creation of asset-backed, yield-bearing, and over-collateralised stablecoins on Ethereum. The over-collateralisation is not required on minting stablecoins (RToken), but is provided by Reserve Rights (RSR) holders, who possess the option to stake their RSR tokens.
- RAI is a free-floating asset backed only by ETH. Unlike other stablecoin projects with a pegged asset design, RAI is designed to maintain a stable value but is not pegged to any fiat currency.
- Ethena is a platform that provides infrastructure to build crypto-native yield-bearing stablecoins that are not reliant on the banking system. One of the core products of Ethena is USDe, a delta-neutral, yield-bearing stablecoin. However, Ethena relies on centralised exchanges to execute short perpetual trading on ETH.
- Despite the innovative design of stablecoins, they remain in their nascent stages and have not yet been proven reliable. However as major industry players enter the market, there is a strong potential for new stablecoins to demonstrate their value and utility.
4. Alpha Navigator
This institutional-focused report dives into macro trends, market-neutral pairs, style-factor screens, and events. Read the full Alpha Navigator report here.
- Major asset classes mostly dipped in August, with BTC and ETH the relative underperformers.
- BTC’s 1-month correlations with other assets flipped into positive territory, in contrast to mostly negative correlations back in July.
5. Crypto Conference & Economic Calendar from Market Pulse
Crypto Conferences Calendar
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Research & Insights Team