Digital Assets: Recovery Revolution

May 10, 2024

Reading time: 5 minutes

Polkadot's price slumps but network activity hits an All-Time High

Key points:

  • May has seen a decline in daily active addresses and transactions on the Polkadot network.

  • Fees, revenue, and TVL in DeFi on the blockchain are also falling.

News - Polkadot's DOT token faced a harsh April, with its value plummeting over 22%. This price slump coincided with a decline in social media buzz, as evidenced by low-weighted sentiment and a slight drop in social volume. Surprisingly, development activity on Polkadot also dipped during this time.

Any good news? However, April presented a different story for Polkadot's network usage. The blockchain celebrated a record high mark in monthly active accounts, surpassing the previous peak set in 2022 when parachains were first introduced. Moonbeam, a prominent parachain, played a leading role in this achievement.

What about May? Unfortunately, May seems to be painting a contrasting picture. Data analysis by AMBCrypto suggests a significant decrease in Polkadot's daily active addresses over the past week. This decline has translated into a drop in daily transactions as well. As of press time, daily active addresses stood at 5.4k, facilitating roughly 40k daily transactions.

The situation appears bleak when considering captured value. Both fees and revenue for the Polkadot network have fallen. Additionally, the Total Value Locked (TVL) in DeFi applications built on Polkadot has also taken a hit after a brief surge on 6 May.

BlockFi shuts down its web platform, turns to Coinbase for asset management

Key points:

  • BlockFi to shut down its web platform and partner with Coinbase for asset distribution.

  • The specific shutdown date is yet to be announced.

News - Crypto lending platform BlockFi announced a major shift on 9 May, revealing the closure of its web platform. Partnering with US-based cryptocurrency exchange Coinbase, BlockFi will leverage their platform to manage and distribute client assets.

While a specific shutdown date remains undisclosed, the move signifies a significant change for BlockFi, which has been grappling with financial complexities since filing for bankruptcy in late 2022.

Benefits of the partnership - This partnership opens doors for future distributions through Coinbase, potentially including recovered funds from FTX. The announcement follows the updated repayment plan revealed by FTX, with BlockFi identified as a "key stakeholder."

The plan references a previously approved settlement, where FTX pledged to prioritize a $250 million initial payment to BlockFi. This forms part of a larger $874 million settlement aimed at compensating BlockFi for assets held on the FTX exchange and loans issued to Alameda Research.

Ripple teams up with Algorand and Hedera for digital asset recovery innovation

Key points:

  • Ripple, Algorand, and Hedera form DeRec Alliance to revolutionize digital asset recovery.

  • DeRec utilizes an open-source protocol for the secure and confidential recovery of digital secrets.

News - In a major development for cryptocurrency security, Ripple, Algorand, and Hedera have joined forces to create the DeRec Alliance. This alliance, which also includes Swirlds Labs and XRPL Labs, aims to revolutionize how users recover lost digital assets.

How will it work? The DeRec Alliance will focus on an open-source protocol that would leverage secret sharing for secure and confidential recovery of digital secrets like passwords and keys.

Basically, the DeRec protocol offers a solution by distributing a user's digital secret among a network of trusted "helpers," such as friends or businesses. If a user loses access, these helpers can collaborate to reconstruct the secret.

This ensures no single helper has complete access, maintaining high security and redundancy without compromising privacy.

Furthermore, the system automatically adapts to changes within the user's helper network, like a helper joining or leaving. This ensures the continued integrity and security of the user's digital assets.

Solana NFT trader count hits multi-month high despite sales volume decline

Key points:

  • The decline in sales volume is likely linked to the recent drop in Solana's price.

  • The Solana NFT market trend reflects a broader decline in the overall NFT ecosystem.

News - Solana's NFT market experienced a puzzling situation on 8 May. While the number of NFT traders skyrocketed by 111% to a multi-month high of 123,426, the total sales volume for Solana-based NFTs dropped by 16%. This means that despite a significant increase in trading activity, the overall spending on NFTs went down.

What was the reason behind this? Analysts attribute this discrepancy to the recent decline in Solana's (SOL) price. CoinMarketCap data shows a 7% drop in SOL value between 7 and 8 May. While a cheaper SOL might make minting and buying NFTs more accessible, it doesn't necessarily translate to higher spending.

Additionally, investors who purchased Solana-based NFTs with hopes of price appreciation in SOL might be reluctant to sell due to the current downtrend. It could lead to fewer high-value NFT transactions, impacting the overall sales volume.

Well, this trend appears to be part of a broader market correction. The general NFT ecosystem has also experienced a decline in the past 30 days, mirroring the slump in the wider cryptocurrency market. NFT sales volume during the last month has dropped by 29% to $488 million according to NFTGo.

Crypto Scams Uncovered

  • In January 2018, Japanese exchange Coincheck experienced a massive hack where approximately 523 million NEM tokens were stolen, worth around $530 million at the time. This hack remains one of the largest in terms of the value of the stolen assets.

  • In September 2020, Singapore-based exchange KuCoin suffered a security breach where hackers stole approximately $281 million worth of various cryptocurrencies. KuCoin pledged to cover the losses from its insurance fund.

  • An Italian cryptocurrency exchange, Bitgrail, faced a hack in 2018 that resulted in the loss of approximately $170 million worth of Nano tokens (then known as RaiBlocks). The aftermath was contentious, with accusations and legal battles between the exchange and the Nano development team.

Top 3 coins of the day

Solana (SOL)

Key points:

  • After touching a peak of $210, SOL has been on a downtrend.

  • At press time, it was trading at $153 with a 6% increase over the last day.

What you should know - After 31 October, SOL initiated a steady uptrend, which sustained for a total of four months. However, on 19 March, the bulls were challenged by short-term selling pressure. Following which, the coin succumbed to a support level of $116. But soon, selling pressure was ousted by bullish forces and SOL climbed up to its strong resistance of $160. Unfortunately, the strength of the bulls wasn’t strong enough to break past this zone. Hence, the prices fell subsequently. At the press time trading level, $112-$94 appeared to be the support zone with good liquidity. The RSI at 53 mark denoted that SOL could move further north before it begins retracing.

Render (RNDR)

Key points:

  • RNDR increased by 45.49% in the past week, leaving many traders elated.

  • The token hit its all-time-high at $13.53 on 17 March 2024.

What you should know - From 1 May to the time of writing, RNDR delivered a gain of 65.22% to its investors. This steep rise saw many traders buying at the top of the market momentum. With the current bullish pressure, RNDR’s resistance zone ($11.937- $12.886) stands quite close to its all-time-high price. At the time of writing, the token was trading above its 50 and 200 Moving Averages. This means investors are likely more confident in the token's future, thus, pushing the price higher. However, RSI at 69-mark gave a warning signal - It highlighted that the token was overbought and a trend reversal could be on the cards soon.

Arweave (AR)

  • The decentralized storage platform has been getting quite a lot of traction of late.

  • It was trading at $43.97, at press time, with bulls in charge.

What you should know - After trading in a sideways pattern for almost a year, AR saw its trajectory reversing. Post 15 February 2024, the token witnessed an unprecedented level of demand entering into its market. This bullish force took the alt up to a level of $47.87 on 9 March. Since then, the coin has faced selling pressure at irregular intervals, but it has continued to maintain its support at the $22 mark. Interestingly, after 8 April, AR has been trading within an upward channel with $46 acting as a strong supply level. At the time of writing, MACD and signal line, both were moving northward. This signifies that the upward momentum might continue in the next few days.

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