The Week in Charts: Issue #46
The charts and themes from the past week that tell an interesting story in crypto and investing…
1. To the Moon
Farcaster, a decentralized social media platform built on the Optimism tech stack, has witnessed a significant uptick in on-chain activity, manifested in both Casts (posts) and Reacts (interactions). This surge is primarily attributed to the recently launched "Frames" feature, which enables interactive elements like text, images, video, and even external links to be seamlessly embedded within Casts. This fosters a dynamic, user-driven experience that surpasses the limitations of traditional social media.
I have explored Farcaster's architecture and functionalities in my research piece. While recent discussions have compared Farcaster's growth trajectory to the meteoric rise and subsequent decline of Friendster, a closer examination reveals that the potential of "Frames" extends beyond mere speculative comparisons.
2. Soy-la-nah
On February 6th, 2024, the Solana network unexpectedly went offline for approximately five hours. This marked the first outage for the network in nearly a year, with the previous incident occurring on February 25th, 2023. While a detailed post-mortem analysis is available on Twitter, we'll focus on the current impact.
The outage resulted in a temporary halt to all transactions and block confirmations on the network. Following its resolution, transaction fees have shown a downward trend compared to their peak during the November 2023 through January 2024 hype period. However, it's important to note that fees remain higher than pre-hype levels.
This incident highlights the importance of ongoing network improvement and resilience within the blockchain ecosystem. While Solana boasts a commendable uptime record, this outage serves as a reminder of the need for continued development and stress testing to ensure sustained stability and user confidence.
3. GBTC outflows
Since the SEC's approval of the Grayscale Bitcoin Trust (GBTC) conversion to an ETF on January 10th, 2024, we've witnessed a sustained period of outflows from the trust. This trend is likely attributable to multiple factors, including:
● Profit-taking: Investors who capitalized on the historical discount between GBTC's net asset value (NAV) and Bitcoin's spot price may be exiting positions as the discount narrows.
● Fee arbitrage: Lower expense ratios offered by newly launched Bitcoin ETFs could incentivize investors to migrate their holdings.
However, a notable slowdown in outflows has emerged this week, potentially signaling a shift in sentiment. This slowdown could be driven by:
● Reduced selling pressure: As profit-taking tapers off, the pace of redemptions may stabilize.
● Increased confidence: Regulatory approval and growing acceptance of Bitcoin ETFs could attract new investors to GBTC.
Looking ahead, a reversal in outflows and potential inflows could indicate increased bullishness on Bitcoin and GBTC specifically.
4. New Read
Published two research pieces on NODO this week
● Beyond Twitter: Exploring the User-Owned Social Media of Farcaster
● AggLayer’s ZK-powered Future for Blockchains
And that's it for this week.
Have a great weekend everyone.
- Passie
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