⚡️Weekly Crypto Newsletter 11.14.21
Enjoy industry highlights for the week.
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General News
Polkadot DeFi: Acala Attracts $600M
Acala is very like to win the first Polkadot parachain slot in the auction process. The highly anticipated protocol has lured in 12M DOT which represents 1.1% of the total DOT in circulation. This significant because DOT holders must lease their tokens out for 2 years and in return they get rewarded with ACA (Acala governance token) tokens. However, given that they’ll be provided with a liquid crowd loan token, IcDOT, which allows them to access their locked liquidity, it explains why investors are eager to participate. The seven day auction concludes on 11/18 and soon afterwards we’ll see Acala unveil their stablecoin and decentralized exchange.
As I’ve stated in my videos and newsletter, Acala is likely to be the number 1 DeFi protocol on Polkadot. Their stablecoin will be ubiquitous within the Polkadot ecosystem and thus likely to have a large TVL. The stablecoin will be initially collateralized by DOT and later by additional assets. If I’m able to get a good entry, I definitely plan on getting exposure to ACA.
Cardano Builds DeFi Ecosystem
Cardano released smart contract support with the Alonzo hard fork. The initially had a major set back, however ADA finance has recently started building DeFi services on Cardano. To begin with, they’ll offer a launchpad, swaps, derivatives, staking, and lending. They’re currently in the process of building community and airdropping their governance token ADAFI to early supporters.
This will provide Cardano with a much needed second wind. Assuming we see a Cambrian explosion of DeFi protocols on Cardano, I expect ADA to break new all time highs.
SEC Releases Report Urging DeFi Operators to Reach Out
SEC Commissioner Caroline Crenshaw issues a public statement on 11/9 advising DeFi platforms to contact them. Prior to this in August the SEC worked with blockchain analytics firm AnChain Ai to monitor the DeFi space. She stated enforcement is not the desire path and would like projects to voluntarily comply.
It’s practically impossible to regulate DeFi and the SEC is likely to learn that the hard way. They may have some initially success but they lack the resources to go after every one. It’s so easy for protocols to launch these day. With forked code projects can launch within hours. They maybe able to successfully stop a few but many more will replace them soon afterwards. As a result, I believe we’re likely to see a bifurcation of DeFi services into regulated and unregulated. Large players are likely to flock to regulated service providers because they have more at stake and curtailing regulators is not worth the risk. Retail on the other hand will flock to unregulated protocols as they become more comfortable using them.
OTC Action
Asia: Weak demand for BTC, but strong demand for AAVE, COMP, CRV, DOT, ETH, and SOL.
Europe: For another week ETH, SOL, and DOT demand outpaced BTC demand.
Americas: BTC bids are concentrated at $62k. Like other regions SOL, DOT, and ETH have the highest demand.
Altcoin Index: With the altcoin index sitting at 49, I’ve never seen it look so bullish.
Crypto Fear & Greed Index:
Portfolio Update
I believe the inflation narrative will force retail to FOMO into crypto hard over the next few months. For this reason, normie coins that are widely available like XLM, LTC, and BAT will perform really well in the coming months. Despite not caring for XLM, I decided to bet on my thesis by selling some ETH and getting exposure to XLM. This is intended to be a swing trade and not a long term hold. I also bought a large amount of JEWEL tokens to get exposure to DeFi Kingdoms. DeFi Kingdoms is basically a gamified automated market maker (AMM). With this novel design they’ve become the largest AMM on Harmony. As I do more research I grow increasingly confident this project is going to be big. I’ll make a video in the future discussing my full thesis, but if you’re in the discord feel free to ask questions. I sold my BADGER, XTZ, and TOWER to buy and JEWEL and stake it.
Token of the Week
This is the governance token for DeFi Kingdoms. You’ll it need to buy land, heroes, and stake for rewards. This is the first AMM to ever gamify liquidity mining. Their unique approach has resulted in a massive increase in total value locked. The user base is also growing very rapidly and likely to go exponential with the launch of guilds. I’ll be making a video soon on the cheapest and easiest way to get exposure. No centralized exchange supports JEWEL, you can only purchase the token on DeFi Kingdoms.
Notable Tweets
