November Cryptocurrency Market Outlook Hot Projects and Catalysts to Watch

November's Cryptocurrency Market Forecast Top Projects and Key Catalysts to Keep an Eye On

Author: THOR HARTVIGSEN

Translation: Deep Tide TechFlow

With breakthroughs on the charts, many market participants (especially on Twitter) have overcome the psychological lows caused by long periods of volatility and poor price action, as hope emerges. With stablecoin market capitalization hitting bottom and total locked value increasing in various areas, activity has significantly picked up. This means that teams looking to capitalize on this momentum will be making a lot of updates in their work.

Bitcoin ETF

This topic seems to be frequently mentioned, but most of the time news organizations are just chasing the story without providing fresh, valuable information. While waiting for further developments, let us take a look at the estimated inflows of funds from Galaxy Digital Research when a physical Bitcoin ETF is listed.

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How much inflow can we expect?

This is a difficult question to determine, so we can only make assumptions. Looking across the entire addressable market and using conservative asset allocation estimates, we can anticipate approximately $79 billion in fund inflows over a three-year period.

How will this affect the price of Bitcoin?

The increased buying pressure is clearly favorable for offsetting third-party (e.g., the US government) and/or miner selling. According to Galaxy Digital’s calculations, we can see a potential 74.1% price impact within the first year, based on analogies to the gold market and estimated potential fund inflows.

Frax

Frax has a range of already released products and more exciting developments on the horizon, definitely worth paying attention to.

sFRAX

Successfully creating a yield mechanism for FRAX holders utilizing Real-World Assets (RWAs), sFRAX provides competitive returns to depositors while enjoying comfortable growth.

frxETH v2

An eagerly anticipated upgrade to frxETH with novel mechanisms is coming soon. Frax aims to drive innovation in the LSD realm, focusing not only on profitability but also on validators and decentralization.

Borrow from Validators instead of ETH

In order to increase decentralization, the nodes themselves act as borrowers, and the borrowers are validators. Collaterals from node operators will be placed into existing validators.

Low collateral requirements

The cost of borrowing from validators may be as low as 4 ETH or other collateral, which is determined by governance participants.

Floating Interest Rate

Validators will charge variable fees based on the market instead of the protocol operator’s set rate.

Unused asset utilization

Any unused Ether for validators will be sent directly to Curve to mint LP tokens for deeper liquidity and additional income. This solves centralization concerns while providing good returns that competitors can only dream about.

Fraxchain

As the central hub of the Frax ecosystem, the L2 roll-up is said to be launching at the end of the year.

Rollbit

The famous DeFi money-making machine Rollbit appears again in this newsletter, and there are some interesting things happening this month.

Rollbit Duel Arena

The Duel Arena, launched on Twitter by Rollbit co-founders, is said to be a 0% advantage PvP game inspired by RuneScape’s Sand Casino, which facilitated insane bets at the time.

One of the core components of this new feature will be the negotiation phase, which happens before the match, allowing the duelists to propose their terms for the bet. NFT staking for additional income is also promised, but the exact details in this regard are yet to be speculated.

To benefit RLB holders, the gambling platform operator will utilize a significant portion of its revenue to buy back tokens from the open market and burn them:

• 30% of futures revenue;
• 20% of sports betting revenue;
• 10% of casino revenue;

As of now, 37.87% of the total token supply has been burned.

Swell Network

Swell is a liquidity staking provider that operates the native ETH LST “swETH,” with a locked value of nearly 50,000 ETH ($95 million). swETH holders can earn competitive staking rewards and convert them into native $SWELL tokens called “Pearls” upon its release next year.

Swell recently launched the “Super swETH” vault, which allows users to stake their stETH acquired from Lido and receive swETH held in the vault as a reward. Its purpose is to increase swETH supply while diversifying the Ethereum liquid staking landscape and further decentralizing the Ethereum network. The vault will launch within 180 days and receive boosted Pearls and all DAO income throughout the duration. Currently, the yield is 59% as seen in the chart.

dYdX v4

In the v4 update, dYdX will shift towards full decentralization, and the platform will undergo fundamental changes in various aspects. The team has decided to no longer rely on L2 roll-ups to host their exchange but instead, they have created their own independent application chain using Cosmos. With this release, dYdX is empowering the community to have a say in protocol decisions going forward.

This update brings many benefits for those trading on the platform. Gas fees are eliminated, allowing traders to only pay fees related to their transactions. Additionally, the dYdX chain can process up to 2000 transactions per second (200 times higher than v3), greatly improving transaction execution efficiency. DYDX token holders can now stake their tokens to earn a portion of the income generated from fees.

What kind of returns can we expect from staking?

While we don’t have exact numbers to rely on, we can make reasonable guesses based on the information available at the moment.

Firstly, we need to determine the possible staking ratio. We can estimate it by calculating the average staking ratios of similar protocols like SNX, GMX, and GNS. Using this method, we arrive at an estimated staking ratio of 68.33%. With this ratio, the total value would be approximately $271.22 million. Next, we need to consider the annual fees generated by the exchange. According to Token Terminal’s current data, the annualized fees amount to $77.4 million. Based on these values, we can calculate returns of around 28.54%, assuming all fees are distributed to stakers.

Redacted Cartel

In early October, members of the Redacted Cartel deployed Pirex ETH (pxETH), which represents the liquidation and tokenization of ETH collateral on the Ethereum Goerli testnet. This marks the first step towards the phased appearance of Dinero. The Redacted Cartel’s vision for LSD allows users to choose to hold only pxETH or deposit it in the automatic compounding reward vault to receive apxETH. Dinero’s yield will be injected from the reward vault. The next crucial elements to follow pxETH will be the DINERO stablecoin and custom RPC provided to users.

Synthetix

The decentralized derivatives exchange Synthetix has recently been working on overcoming the disadvantages of decentralized exchanges to bridge the significant trading volume gap between DEXs and CEXs, thus increasing the adoption of DeFi.

Infinex

What is their solution? Infinex. By simplifying the cumbersome process of bridging assets to a more scalable and efficient L2, introducing one-click transactions, and eliminating the need for signatures for every operation on the platform, Infinex aims to bring many of the conveniences of traditional centralized exchanges to the blockchain without the dreaded counterparty risks (such as bankruptcy and sensitive data leaks). The protocol will be hosted on Optimism, with the release date yet to be determined, although signups for the waiting list can now be done on their website.

This approach is definitely a net positive for all DeFi, as attracting users with little or no experience has always been a challenge for developers trying to expand their user base.

Synthetix has consistently maintained a significant trading volume in the market, as it remains an important player in the market. If their Infinex is implemented, the expected increase in trading volume should be reflected on the activity chart.

Arbitrum Grant Recipients

In the follow-up steps of the recently concluded Arbitrum Foundation grant program, we have learned that well-known names such as GMX, Pendle, and Frax have successfully passed the statutory quorum and received sizable grants. How many tokens did they exactly receive, and how do they plan to use their ARB tokens?

GMX

Originally requesting 14 million tokens, later revised to 12 million, GMX is the largest grant recipient in terms of value. The expected use of the funding they received is to stimulate on-chain activity on Arbitrum by increasing adoption and attention to their V2 protocol. Most, if not all, of the obtained tokens will be used to create a series of highly liquid and capital-efficient perpetual and spot pools.

Proposed breakdown of funding usage:

50% (6 million ARB) – Trader incentives;

50% (6 million ARB) – Liquidity incentives.

Pendle

The 2 million tokens Pendle received from the Arbitrum Foundation will be used to increase yield trading volume, deepen the liquidity of existing pools, and provide token incentives to users to promote liquidity in the newly listed Pendle markets.

Proposed breakdown of funding usage:

55% (1.1 million ARB) – Liquidity incentives;

40% (80,000 ARB) – Trader incentives;

5% (10,000 ARB) – Integration incentives.

Frax

Requesting the lowest amount of tokens among these three projects, Frax applied for this funding with the aim of incentivizing widespread usage of the growing DeFi ecosystem on Arbitrum among Ethereum mainnet users.

Proposed breakdown of funding usage:

100% (1.5 million ARB) – User/Liquidity incentives.

Radiant Ethereum Mainnet Launch

Initially, Radiant planned to launch on October 3rd. However, they decided to delay the deployment until the 15th in order to optimize gas costs and improve the user experience on the platform. Unfortunately, this delay was followed by another setback. As of a few hours ago (November 1st), the Ethereum mainnet expansion has finally been launched, integrating assets such as wstETH, sDAI, rETH, allowing for borrowing and lending. Radiant is another protocol that has confirmed receiving a large ARB funding this month.

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