The Hottest Narratives of the Summer

None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product or financial instrument, to make any investment, or to participate in any particular trading strategy.

This Summer Narratives in Crypto: From Trading Bots to Cross-Chain Interoperability

Summer has always been a season of growth and transformation, and in the crypto world, this summer was no exception. As the sun blazed hotter, so did the crypto narratives. What were the top narratives this summer? Let's dive into some of the most compelling trends that shaped the crypto landscape over the last few months.

Trading Bots Take the Lead

https://twitter.com/BlockAnalitica/status/1706693323992571933?s=20

With the surge in activity around meme coins on-chain, trading bots emerged as the unsung heroes. These bots, integrated with platforms like Telegram, have revolutionized the user experience in the crypto trading world. They not only made trading more accessible but also highlighted the continuous evolution of crypto user experience (UX). 

While the market leader remains Unibot, numerous copy cats of all flavors have sprung up in the effort to ride the narrative wave. Now you can access telegram bots for all kinds of DeFi activities from trading, to airdrop farming, to new token sniping. The bot segment has a combined FDV of over $200m and it seems like the pattern will be a sticky one in the space.

Real-World Assets Meet DeFi

With interest rates soaring to multi-year highs, the DeFi community began exploring ways to bridge the gap between traditional finance and decentralized finance. MakerDAO was at the forefront, increasing their DAI savings rate and allowing users to tap into the lucrative yields from treasury bonds. But they weren't alone. The summer saw a plethora of projects bringing a variety of real-world assets on-chain, from standard treasury bills to more exotic bond offerings. MakerDAO is still leading the pack here, with a current initiative to allocate $100 million to on-chain tokenized ETF and bond funds.

https://twitter.com/BlockAnalitica/status/1706693323992571933?s=20

Other chains have taken notice as well, and foundations are getting in the game to incentivize real-world assets on their networks. Avalanche has launched a dedicated initiative to bring tokenized RWAs to their ecosystem, and the Mantle Foundation is looking at allocating over $50 million to a similar program.

Web3 Social's New Frontier

https://twitter.com/BlockAnalitica/status/1706693323992571933?s=20

Friend.Tech emerged as the new darling of the web3 social landscape. Its unique mechanism, allowing users to access gated chats by purchasing a 'key' on a bonding curve, became an instant hit. With direct profile links to Twitter, it wasn't long before crypto Twitter's influencers flocked to the platform. Some of these chat keys even traded hands for multiple ETH, underscoring the platform's instant appeal.

The activity is also driven by a points mechanism, where each week points towards a future airdrop are distributed to users. The platform’s TVL has surpassed $50 million, and continues to grow as users come up with innovative new ways to “farm” their friends. Strategies like self-buying and (3,3) — where users hold each other’s keys to prevent price decreases—have sprung up as people speculate on the platform’s future airdrop.

RFV Traders Take Profits:

The summer has seen a number of RFV (realized future value) trades play out in dramatic fashion. RFV trades refer to buying some assets that have a higher future value in the hopes of returning a profit. While a controversial practice in crypto, there have been a few high profile examples the last few months.

The largest was the Nouns DAO fork. Some traders bought up a large amount of Nouns on the secondary market and through auction, then pushed through a fork and quit mechanism. The result was that over 50% of the Nouns supply voted to fork and return treasury assets to users. This meant that some traders who purchased Nouns for under 30 ETH were able to get a final realized value redeemed from the treasury at almost 36 ETH per Noun.

Two more examples include the rage quit from Concave Finance and the shut down of Vesta Finance, both returning some parts of the protocol treasury to token holders above and beyond what their value was in the market. While these trades are controversial, their proponents see them as delivering value back to stakeholders and pushing unused funds back in to the ecosystem.

Cross-Chain Interoperability

As the crypto ecosystem grows, so does the need for different blockchains to communicate and collaborate. This summer, cross-chain interoperability became more than just a buzzword. It started off with a bang. The complete dissolution of a main cross-chain protocol Multichain. As an issuer for many project tokens on the Layer 2 networks and side chains, Multichain’s untimely demise left a lot of projects scrambling to find new options for managing their cross-chain tokens. The big winners in the space were messaging and cross-chain interoperability protocols like Layer Zero and Axelar. Both projects saw even more adoption in the wake of the Multichain issues. With ever more chains and connections, this narrative will continue to be an important one.

Despite tepid price action and volume, this summer had a lot for the crypto enthusiast. From trading bots making waves to the blending of DeFi with real-world assets, from the evolution of web3 social platforms to the push for cross-chain collaboration, the narratives of this summer have set the stage for an exciting future in the space.