December’s crypto market downturn turned into an all-out recession in January. DeFi activity slowed while BTC and ETH prices fell. However, one asset grew faster than ever.
According to Footprint Analytics, DeFi’s TVL did not exceed $300 billion, but fell to $204.79 billion, a 22% month-on-month decrease. BTC and ETH crashed again, while NFT market volume soared to a new high in January of 239%.
BTC, ETH Crash Again, Top Protocols Liquidated $425M
The price of BTC fell by 17.3% from $46,472 to $38,430 in January. ETH fell 27.4% from $3,695.6 to $2,684.75, with the highest daily transaction volume for the month at $29.31 billion. On the 22nd, BTC and ETH eclipsed their September 2021 low.
The collapse was mainly influenced by policy announcements from various countries. Examples include the Federal Reserve’s tightening of monetary policy, the Bank of Russia’s proposal to ban the use of cryptocurrencies, the cryptocurrency ban in Pakistan, and the strict regulation of BTC in other countries, from mining and trading to online marketing.
Footprint Analytics: BTC price and trading volumeFootprint Analytics: ETH price and trading volume
As BTC and ETH prices fell, major lending protocols like AAVE, Compound, and MakerDAO triggered massive liquidations around January 7 and 21, with $425 million liquidated.
Footprint Analytics – BTC settlement amount by protocolsFootprint Analytics – ETH settlement amount by protocols
DeFi TVL decreased 22% MoM
Due to the general decline in the cryptocurrency market, TVLs fell by 22% in January, from $264.22 billion to $204.79 billion MoM. Footprint Analytics data shows that the TVL of bridge projects increased by 30%, which did not contribute much to the overall DeFi TVL increase due to its small percentage.
Footprint Analytics – DeFi TVLFootprint Analytics – TVL Market Share by Category
Fantom’s TVL Hits Blockchain Record
Blockchains are competitive and each has its own way of capturing the market. By January, Terra’s TVL had overtaken BSC multiple times for second place. But at the end of the month, BSC overtook him to retake second place.
Footprint Analysis: TVL for Binance, Terra and Fantom
Fantom’s TVL reached an all-time high on January 25, securing $8.9 billion at a 93% growth rate, beating Avalanche ($8.62 billion), Solana ($8.07 billion), and Polygon ($4.67 billion) to the top 4.
Footprint Analysis: TVL Market Share for Networks
Fantom’s TVL reached an all-time high for the following reasons:
Fantom is a faster (1-2 seconds per transaction) and much less expensive (around $1 per 10 million transactions) alternative to the Ethereum network. Fantom has a rich ecosystem with yield, dex, and loan projects making up over 23% of the ecosystem. with Scream and SpookySwap contributing the most growth in TVL. Scream supports WBTC, WETH, WFTM, DAI, USDC, fUSDT deposits and loans, providing more liquidity. SpookySwap offers APY above 100% to attract more users.
The curve is still far ahead
Curve is TVL’s number one DeFi platform and is focused on stablecoin trading. The drop in the price of BTC has pushed down other cryptocurrencies like ETH, but has had relatively little impact on the prices of stablecoins like USDT and USDC.
The top 5 positions continue to be held by popular projects like Maker DAO, AAVE, and Convex Finance.
Footprint Analysis – TVL by Protocols
Monthly NFT Volume Hits Record $8.52 Billion, Up 239%
With token prices falling due to the regulatory environment, speculative capital flowed into the NFT market for collectibles, games, and art. This led to unprecedented activity in the NFT space, with trading volume hitting a new high of $8.52 billion.
Footprint Analysis: NFT Monthly Trading Volume
According to Footprint Analytics, Meebits saw a spike in transactions between January 11 and 21, with volume reaching $200 million to $350 million. Meebits is a 3D virtual world game from Larva Labs, the development team behind Cryptopunks. The second most traded NFT project was Terraforms, and the third was Loot.
Footprint Analysis: Top 10 NFT Trading Volumes in JanuaryScreenshot Sourcemeebits website
Veteran NFT collections like Bored Ape Yacht Club, Cryptopunks, Art Blocks, and Axie Infinity had relatively stable daily trading volume.
Monthly trading volume decreased 38% MoM
The number of investments in January decreased by 55% MoM and the amount invested decreased by 38%. In terms of investment sectors, the DeFi sector had the smallest decrease compared to December, while the NFT and Web3 sectors had the largest decreases, 66% and 70%.
Footprint Analytics: Monthly Investment Funding TrendFootprint Analytics: Monthly Investment Funding by Category
Summary
Influenced by new policy and regulatory proposals, the crypto market entered a recession in January. Mainstream cryptocurrency prices fell, with BTC and ETH hitting lows. DeFi’s TVL fell 21% MoM, implying a strong correlation with larger tokens.
However, the drop in ETH prices has contributed to NFT trading, causing speculative capital to flow into the NFT markets for collectibles, art, and games.
January Event Review
nations
Pakistan FIA Freezes 1,064 Bank Accounts Used to Trade Cryptocurrencies Israel Defense Minister Seizes Over $800,000 in Crypto to Fund Military Activities BTCS Becomes First Nasdaq-Listed Company to Pay Dividends in Bitcoin State Bank of Pakistan decides to ban cryptocurrencies Pakistan Telecommunications Authority ordered to block more than 1600 encrypted websites White House wants to make crypto rules a national security issueUruguay installs its first cryptocurrency ATMBanca Generali of Italy to allow BTC purchases to early this year
fundraising
British Digital Bank Monzo completes a $600 million financing at a $4.5 billion valuation. Tencent and others participate in investment Solana’s horse racing chain game DarleyGo completes seed round funding, Jump Capital leads investment valuation A subsidiary of Navier Group is launching a $100 million fund for creators of MetaverseFootprint Analytics raises $1.5 million to build an accessible cross-chain analytics tool, led by IOSG
block chain
Polygon (MATIC) Schedules Long-Awaited EIP-1559 Update Next Week Nyan Heroes, a Solana-Based Game Project, Has Partnered with YGG Addresses Since Launch
DeFi
Convex Finance’s TVL exceeds $20 billion. The total market value of cryptocurrencies fell to $1.8 trillion, with BTC once dipping below $36,550. The Multichain cross-chain bridging protocol joins the SkyLaunch alliance. Bitcoin Nouveau Riche is flocking to Puerto Rico to save big taxes. B.
NFT
Samsung to provide ‘NFT Aggregation Platform’ on its smart TV YGG has raised $1.4M to help typhoon victims in the Philippines. The Pudgy Penguins NFT project kicks out the founders when the mood turns icy. A day after launch, OpenSea competitor LooksRare sells over $100M worth of NFTs. in the NFT market exceeds $1 billion Monthly NFT transaction volume in January reached a new high of $6 billion
Security
Solana network encounters short-term failure resulting in performance degradationLCX loses $6.8M in hot wallet compromise over Ethereum blockchainAnimoca Brands Lympo NFT platform hacked for $18.7Maricapital suffered serious price manipulation; Paidun said the stolen funds are now $250,000DEX Crosswise was hacked for $879,000 Qubit decentralized lending protocol hacked, losing about $80 million
february 2022, [email protected] — Data source: Footprint analysis –Report Dashboard January 2022
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This post As Bitcoin Falls, NFTs Soar: Footprint Analytics Monthly Report
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