Summer Chop

Week in Review:

The summer chop continues. BTC has traded in a 9% range for the past two weeks, while ETH & SOL trade even tighter. To add insult to injury, TradFi has V-bottomed and is testing ATHs across major indices.

On the bright side, it looks like the Yen carry trade unwind marked the bottom, and we are in the process of putting in a higher low. Each passing day gets us closer to Q4 and the election ending, so not all hope is lost.

Where are we?

The second half of 2024 has been challenging for OGs. Expectations were high after we broke $70K, but relentless selling has crushed the spirits of many. Below is a tweet about the overhangs that plagued the market (which are now close to being over). While things feel dark, crypto has a way of pumping at peak desperation. Q4 - Q1 historically produces the highest returns. In my 2024 predictions thread, I said $80K BTC, $5K ETH EOY. We are still on track for that, with a blowout year in 2025. The boredom phase of the market has been brutal, but after September, I expect things to look different.

Tron

Tron is experiencing its own hype cycle. The coin is up 18.4% this week, led by a combination of fundamentals and memes. Many forget that TRON has ~$60B in stablecoins on-chain, second only to ETH at $82B. In the past 30 days, it has $41.87M in token revenue and $469M for the year, surpassing Solana at $37M and $306M, respectively.

So, while the fundamentals are impressive, this past week’s activity was driven by memes. Justin Sun created his version of pump.fun called Sunpump. Since its launch in early August, 31K+ coins were created & 12M TRX (~$1.9M) in revenue has been collected. The most popular coin has been SUNDOG, a dogcoin with an endorsement from Justin Sun. At one point, the coin was $250M+ in marketcap.

My take: Justin Sun has a history of apeing the top of narratives: DeFi in late 2020 and algorithmic stablecoins ($USDD) in 2022 after the Terra Luna blowup (lol). Tron has had impressive fundamentals even before its meme szn, but I personally would not touch it with a 10ft pole. I expect meme szn to be short-lived on Tron. The greater question of can Tron capitalize on this momentum is up for question but I’m personally fading.

AAVE

AAVE is up 22% this week. Yes, a coin with fundamentals is outperforming. I first noticed the AAVE chart showed strength on HTF in late July and it’s up ~35% since then. The path of least resistance short-term is a re-test of local high $153, but this has a shot of testing ATHs in the next year, imo.

This article from Arthur goes into detail behind the numbers

TLDR: AAVE has $9.9B in TVL without token incentives. Despite that, its P/S ratio is at 17x, making it appear undervalued. A revenue-sharing mechanism and AAVE v4 are upcoming events that have driven excitement.

While AAVE is the clear leader, attention for greater DeFi is on the upswing. According to Kaito, mind share is on a 3-month uptrend and has doubled this year. The market is searching for something to believe in. DeFi is a battle-tested sector reminding people that open permissionless systems are good for more than apeing dog coins.

Drift

Solana-based DEX DRIFT (up 54.5% this week) has entered prediction markets. While this is the first competitor to challenge Polymarket, it won’t be the last. Predictions markets today are where AMMs were in 2020, and NFT marketplaces were in 2022. 0-1 breakthroughs with a proven market that competitors want a piece of. Early liquidity on DRIFT has been driven by $FUEL incentives and yield on collateral.

Polymarket still has a massive lead on DRIFT, but I expect more competitors to come to market. Combined with more collateral options, new markets, and yield for LPs, I can see more experimentation in this space. The most compelling short-term incentive these competitors can offer is airdrops. DRIFT already has a token and while Polymarket is valued in the billions, it is not launching a token anytime soon. After the election season is over and Polymarket’s biggest markets expire, competition will heat up.

🤑 Notable Raises - Story

• Story - $140M Series B. Sector: L1. Lead investor is a16z, co-lead is Polychain. Notable investors include Paris Hilton & Balaji.

• Corn - $6.7M. Sector: BTC. Lead investor is Polychain Capital. Notable investors include Binance Labs & Framework.

• zkMe- $6M. Sector: zk/Privacy. Lead investor is Multicoin. Notable investors include OKX & Robot Ventures.

• YeagerAI - $7.5M Seed. Sector: AI. Lead investor is North Island Ventures. Notable investors include Arrington Capital & Maelstrom.

• Sorella Labs - $7.5M Seed. Sector: MEV. Lead investor is Paradigm. Notable investors include Uniswap & Bankless

• Fabric Cryptography - $33M Series A. Sector: Infra. Lead Investor is Blockchain Capital & 1kx.

👊 Quick Hits

• Base: launches its unique base.eth marketplace called Basename

• zkSync: launches zkfest, an 11 day campaign highlighting various DeFi projects

• Zerion: announces its points program

• Spark: launches an incentive program

• Nillion: High profile project is live on Arbitrum

• UXD: Stablecoin project shutsdown

• Paraswap: introduces its intent-based trading protocol, Delta

• Solana ETF: Recently filed Solana ETF has been denied.

• Vitalik: Rare shill post from Vitalik.

🫡 Another week in crypto

Would you like fries with that rug?

See you next week,

Mid-Curve Team

The Mid-Curve newsletter is intended purely for educational and informational purposes and should not be construed as financial advice. We encourage all our readers to conduct their own research or seek advice from a certified financial advisor before making any investment decisions. Please note that members of the Mid-Curve team may hold positions in some of the investments discussed in our newsletter.