Home > Daily > 🥛Yesterday was a first for crypto 👀
November 3, 2022

🥛Yesterday was a first for crypto 👀

GM. This is the Milk Road. The daily crypto newsletter that's packed with more flavor than a jelly-filled doughnut. 

Here’s what we got today: 

  • JP Morgan makes its first DeFi trade

  • The Fed raises interest rates, again

  • Numbers of the Day: OpenSea volume dropping, Arbitrum on the rise, and more

  • Meme of the Day

JPMORGAN MAKES ITS FIRST CRYPTO TRADE 

Yesterday, history was made. 

It was the first time that traditional banks completed a DeFi trade on a public blockchain.

That's right, TradFi just lost its DeFi virginity. 

And it wasn't just any banks, it was some of the largest banks in the world – JPMorgan, DBS Bank, and SBI Digital.

Here's everything you need to know: 

  • JPMorgan successfully tokenized Singaporean dollar & Japanese yen deposits. This is the first-ever issuance of tokenized deposits by a bank

  • These tokenized assets were used in foreign exchange trade. It was all powered by a modified version of Aave (a liquidity protocol) and Uniswap (a decentralized exchange)

  • Next, DBS and SBI Digital successfully traded government bonds using the tokenized Singaporean dollars & Japanese yen

  • JPM used on-chain Verifiable Credentials (VC) to provide compliant access. This is big because it takes away the need for DeFi front ends to do "KYC checks" on users

  • Polygon was used to complete the trades. They wanted to use Ethereum and needed cheap gas fees – Polygon is the best of both worlds

This is interesting because the foreign exchange market is HUGE. 

How huge? The Forex market has more daily volume than the NY Stock Exchange, Tokyo Stock Exchange, and London Stock Exchange combined.

Now banks are tokenizing assets to use in these foreign exchange trades. These tests were all part of “Project Guardian”. No, that's not the next Marvel movie. 

Project Guardian is the Monetary Authority of Singapore’s (MAS = Singapore’s SEC) program to test out different parts of decentralized finance.

So what's next? Now, the MAS plans to launch 2 more pilots to see how DeFi can be used to make trade finance and wealth management better.

Looks like this is only Part 1 of TradFi Meets DeFi…stay tuned for the sequel 👀

THE FED RAISES INTEREST RATES, AGAIN 

Yesterday was FOMC day. 

The day the Fed announces interest rate hikes. And it's quickly becoming our least favorite day of the month…

So how'd it go this time? Well, the Fed announced interest rates will increase by 75 bps.

It's the 4th straight time rates have gone up that much and is the fastest hiking pace over the last 40 years🤬

How'd the markets react? It wasn't pretty. Stocks were looking like the Red Sea. 

The crypto market, on the other hand, wasn’t fazed.

  • Bitcoin is still holding strong at $20k (down <1%)

  • ETH is still holding strong at $1.5k (down ~1%)

  • Total crypto market cap is still >$1 trillion

TODAY'S EDITION IS BROUGHT TO YOU BY COMPOSER

How did this hedge fund return 66% per year?

If you invested $10,000 in Renaissance Technologies’ Medallion in 1988, you’d cash out in 2018 with a cool $200,000,000.

Their secret sauce? "Quantitative Investing."

Instead of hiring slick-talking Wall Street suits, Medallion is run by an army of computer scientists, mathematicians, and neural engineers that specialize in quantitative investing that eliminates human biases (fear, greed, FOMO).

Unless you are a PHD-wielding, Python-coding, Excel-Wizard…that type of quant-trading has been out of reach. Until now…

Composer gives you the financial firepower to easily drag, drop, edit and swap quant-investing strategies from scratch – no engineering degree required.

They even have a library of expertly vetted strategies to choose from like: Buy the Dips Nasdaq, The Buffett, and The Dalio.

Stop trading on impulse and start quant-investing with Composer today.*

NUMBERS OF THE DAY

$303m – OpenSea saw $303m in total sales volume during October

OpenSea is on a cold streak. Since May of this year, volume is down by 91% and each month has seen less volume than the previous month.

OpenSea might still be the king of NFT marketplaces for now.

But with more marketplaces like Blur and X2Y2 gaining traction, the race is heating up quicker than some 90-second rice.

63% – The top 50 Dogecoin whales hold 63% of the supply. 

Dogecoin has been the talk of crypto these last few weeks. But did you know 50 wallets hold the majority of the entire supply?

In fact, the biggest whale holds 36b Dogecoin (worth ~$500m). That's ~28% of the entire supply. 

To compare:

  • The Top 10 Bitcoin wallets only hold ~5% of the total circulation

  • The Top 10 Ethereum addresses hold ~25% of the supply (12.23% of that is locked up in the staking contract & can't be sold/traded)

62% – Arbitrum now makes up 62% of all trades on Ethereum.

Arbitrum is on fire. Since the Nitro upgrade back in August, weekly transactions are up 550%🤯

And Arbitrum just hit an all-time high of 282K weekly active users. They now have 1.66m+ unique wallet addresses. 

So why the sudden increase? Simple. Free money.

Many are speculating that Arbitrum could drop their token any day now and by using it, they'll be eligible for a free airdrop. 

MEME OF THE DAY

That's a wrap for today, ladies & gents. See ya tomorrow!

If you want more, be sure to follow our Twitter (@MilkRoadDaily)

A ROADERS REVIEW

VITALIK PIC OF THE DAY

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.