Artemis Weekly Wrap-up (10/27/2023)

your go-to source for weekly fundamental updates

This week, Citadel Securities says it had nothing to do with the depeg of Terra’s UST, dYdX officially launches its mainnet as a standalone Cosmos blockchain, and lawmakers call on DOJ to further investigate Binance and Tether over possible involvement in illicit finance.

let’s jump right in 👇

🌞 JP Morgan Sees $1bn of Daily Transaction Volume of its native digital token, JPM Coin

💫 Artemis Data Insights:

• RabbitX gains Perp Trading Market Share as Trading Volumes Rebound

• Bot vs. Human User Filter on the Blockchain Activity Monitor!

The crypto ecosystem saw huge momentum upwards as L1 / L2 market prices realized average and median WoW increases of 15.5% and 14.6%, respectively, continuing to be led by positive news around bellwether BTC. BTC saw a ~14% WoW price increase and YTD highs on news that BlackRock has obtained a CUSIP in advance of a launch and that it may be looking to seed its BTC ETF with cash this month. Institutional volumes for BTC and ETH skyrocketed within the week and the CME stated that Q3 open interest for BTC, ETH derivatives hit all time highs. APT led the pack in price movement with a ~29% WoW gain, followed by other alt L1s including FTM and NEAR with ~23% and 22% WoW gains, respectively. Meanwhile, the S&P 500 and Nasdaq Index continued to churn lower with ~2% and ~2% WoW declines, respectively.

🌞 JP Morgan Sees $1bn of Daily Transaction Volume of its native digital token, JPM Coin

JPMorgan Chase & Co. has broadened its blockchain project, one of the most prominent efforts to incorporate blockchain into traditional banking. The bank introduced euro-denominated payments for its corporate clients using its JPM Coin, which was initially launched in 2019 to facilitate dollar transactions. Recently, Germany's Siemens AG conducted the inaugural euro transaction on this platform, marking a significant move in cross-border transactions using blockchain technology. The bank now handles $1 billion worth of transactions daily and plans to continue widening its usage, said Global Head of Payments Takis Georgakopoulos.

In terms of transaction volume, JPM Coin's usage is still quite small compared to JPMorgan's core payments business. Since its inception, the bank has utilized JPM Coin to process around $300 billion in transactions. However, when put in perspective, JPMorgan's daily transaction volume for its entire payments business is close to a staggering $10 trillion. Despite this disparity, JPM Coin offers numerous advantages to institutional clients such as continuous operation without being restricted to business hours, faster transaction speeds, and efficient liquidity management for treasurers.

The trajectory of blockchain in traditional banking continues to appear promising, with JPM Coin being a prime example of the practical application of blockchain technology. JPM’s native coin's features, such as timely payments leading to potential interest income benefits, position it as an attractive option for large, multinational corporates. Meanwhile, other financial giants like Goldman Sachs, Banco Santander, and Societe Generale continue to progress with their blockchain and digital-asset initiatives, signaling the continuation of a broader industry trend towards the adoption of this technology.

💫 Artemis Data Insights: RabbitX gains Perp Trading Market Share as Trading Volumes Rebound

Perpetual Trading Volumes have increased over the past few weeks as Bitcoin prices have climbed. As Bitcoin broke $33k over the past week, perpetual trading volumes across the top trading applications have moved in lockstep.

RabbitX has already seen $1.2bn in weekly trading volume 5 days into the week of October 23rd

The top perpetual trading protocols saw meaningful WoW growth in trading volumes over past two weeks

• dYdX saw WoW growth of ~37% and ~19% for the week Oct 16 and (unfinished) week of Oct 23, respectively. dYdX has seen ~$6.7bn of trading volume week to date

• GMX saw WoW growth of ~94% and ~120% and for the week Oct 16 and (unfinished) week of Oct 23, respectively. GMX has seen ~$1.4bn of trading volume week to date

• RabbitX saw WoW growth of ~459% and ~112% and for the week Oct 16 and (unfinished) week of Oct 23, respectively. RabbitX has seen ~$1.2bn of trading volume week to date, placing it as the third largest perpetual exchange by volume after dYdX and GMX

Token price heavily inflected after trading volumes spiked

Interestingly, the token price did not react until RabbitX saw trading volumes shoot up on October 23rd and 24th. The market started reacting to the news after Oct 23rd, and the circulating market cap of RabbitX shot up from $5.7mm on October 23rd to ~$12.6mm on October 26 (~120% increase). In this case, the fundamental metric of trading volumes appears to have been a leading indicator to price.

💫 Artemis Data Insights: Bot vs. Human User Filter on the Blockchain Activity Monitor!

A key question of blockchain activity today is how many active addresses actually denote real activity (i.e. human interacting with each other and/or on-chain applications). As on-chain applications continue to proliferate, a key metric to measure real world adoption is the number of human users getting onboarded and ultimately staying on blockchain networks.

In an attempt to begin answering this critical question, Artemis recently added a new filter on the activity monitor that distinguishes between active addresses that initiated transactions more than 16 straight hours a day (i.e. potential bot activity) vs. active addresses that did take an 8 hour break (i.e. more likely to be human).

While this is just an initial heuristic to start to filter out bot-like activity, we believe that there could be other interesting tells that could provide more depth to the analysis (i.e. wallets sending the same balance back and forth between each other, an address repeatedly executing the same transaction).

Planet IX on Polygon sees ~2k users per day that never take more than an 8 hour break from initiating transactions on-chain

What other filters do you think would help distinguish between human users and bots? We’d love to hear your feedback below!

Detailed dashboard for people who love more numbers in smaller font:

Note: Revenue represents fees that go to the protocol’s treasury or are returned to tokenholders via a burn mechanism (source: Token Terminal). Weekly commits and weekly dev activity as of 10/6/23.

The content is for informational purposes. None of the content is meant to be investment advice. Use your own discretion and independent decision regarding investments.