💸 What do billion dollar crypto wallets look like?

Tron founder Justin Sun has nearly all of the TVL for some projects, FTM is trading at half AVAXs multiple, Arbitrum had a 10 hour outage, and drone racing is coming to ALGO.

Does One Chinese Whale Dominate dYdX, TrueFi, and Ellipsis?
Source: Unsplash

Does One Chinese Whale Dominate dYdX, TrueFi, and Ellipsis?

Chinese tech entrepreneur and Tron (TRON) founder Justin Sun was in the news late last year after he transferred almost $600M in Ethereum from a wallet to Binance. Sun's publicly known wallets are proven market movers. In May 2021, ETH dropped from $2,500 to below $2,000 on news that a $1B ETH position opened by Sun and Tron could be liquidated.

Sun's alleged Ethereum address is very active in decentralized finance (DeFi), with roughly 95% of its assets invested in farming, staking, or lending.

Sun holds over $2B on Ethereum, $609M on Binance Smart Chain, and $1M on Polygon. We can track Binance and Polygon transactions for this wallet because they are Ethereum Virtual Machine (EVM) compatible blockchains using the same address as the Ethereum wallet.

Many investors use a DeFi project's total value locked (TVL) as an indicator of the project's health. Sun's investment represents a high proportion of some projects' TVL:

Project Sun's Investments Project TVL Sun Dominance
TrueFi (TRU) $824M $882M 93%
Ellipsis (EPS) $416M $536M 77%
dYdX (DYDX) $440M $1,000M 44%
Wault (WEX) $4M $9M 44%
TVL data source: DeFi Llama

These projects are heavily exposed to Sun's investments, and it's easy to see the price of each token dropping or collapsing if Sun pulled his money.

FTM is Trading at Half AVAX's Multiple
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FTM is Trading at Half AVAX's Multiple

The Fantom (FTM) team released a 2021 recap – it’s been an impressive year for the blockchain.  We’re going to be comparing Fantom’s performance to similar competing L1’s like Ethereum (ETH) and Avalanche (AVAX).  Comparisons to Solana (SOL) are not ultimately useful, as the extremely low cost of transactions on Solana inflates its numbers across the board.

*As a point of clarification: most of these numbers are representative of the end of December ‘21 or the first week of January ‘22; given the market crash over the past week, expect everything to have traced back a bit.

DeFi:  Two Fantom dApps hit over $1.5B in total value locked (TVL): SpookySwap and Tomb Finance (these are down now from their peak).  DeFi is an integral part of comparing L1 blockchains, so this is a big deal for the Fantom ecosystem despite recent troubles.

Daily Transactions: Daily transactions went from 4,000 to 750,000 throughout 2021.  Avalanche is averaging around 650,000 daily transactions and Ethereum averages ~1.2M.

Unique Addresses: This is how many addresses actually exist in the ecosystem.  Fantom’s number of unique addresses increased from 5,040 to 1.5M over the course of the year.  Ethereum has 183M unique addresses and Avalanche has 1.5M.

Active Addresses: This is how many of the existing addresses actually performed transactions.  Fantom had 341,000 active addresses, while Ethereum had 566,000 and Avalanche had 798,000.

Total Value Locked:  As of writing this article, Fantom’s entire DeFi ecosystem has a TVL of $5.2B.  For comparison, Avalanche has $10.7B and Ethereum has $145B.

Market Cap: Here is where the rubber meets the road: Fantom’s market cap is only at $6.2B.  Close competitor Avalanche is sitting at $22.3B and market leader Ethereum is up at $369B.  This puts FTM at a 1.2x market cap to TVL multiple, AVAX at a 2.1x multiple, and ETH at a 2.5x multiple.

Ethereum Layer-2 Arbitrum One Went Down for 10 Hours on Sunday
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Ethereum Layer-2 Arbitrum One Went Down for 10 Hours on Sunday

Arbitrum One, an Ethereum Layer-2 (L2) optimistic rollup, experienced an outage on January 9, 2022 for about 10 hours, starting around 5:30 AM Eastern. Arbitrum is Ethereum's largest L2, with over $2.5B in total value locked (TVL) in its ecosystem.

Offchain Labs, makers of Arbitrum, said "the core issue was a hardware failure in our main Sequencer node," and that the issue is now "fully resolved, and the Arbitrum Sequencer as well as all public RPC nodes are fully operational."

This is not the first time the Arbitrum One sequencer has failed, bringing the entire project offline. The project went down for almost an hour in September 2021 following a similar sequencer failure. The Arbitrum One sequencer is centralized, which makes it vulnerable to hackers and large spikes in traffic.

When an L2 blockchain like Arbitrum One has an outage, the consequences are less severe than when an L1, like Ethereum, goes down. This is because Arbitrum One supports "force exiting" assets back the Ethereum's L1 blockchain. Most rollup L2s support this approach, but sidechain L2s like Polygon do not. So, while an L1 outage completely locks up investors’ funds, an L2 outage can be circumvented. Arbitrum One notoriously makes force exits difficult for retail users, but it's still possible.

Ethereum gas fees remain high and applications, such as Arbitrum One, dominate block purchases. Popular crypto investors have declared 2022 to be the "year of the Ethereum L2s," and according to L2 Beat, Arbitrum One enters the year with over 2.5x more TVL than the 2nd richest Ethereum L2: dYdX.

Ethereum L2's by TVL: Arbitrum, dYdX, and Loopring lead
Ethereum L2's by TVL

Drone Racing is Coming to Algorand (ALGO)
Photo by Jonathan Lampel / Unsplash

Drone Racing is Coming to Algorand (ALGO)

The past few months have featured buzz about Play to Earn games and the Metaverse.  This week, the Drone Racing League announced that they’ve partnered with Playground Labs, a web 3 game developer, to create a Play to Earn drone game on the Algorand (ALGO) blockchain.  The pair are still working with the community to flush out details on what they’d want to see out of a drone racing game.  They did say that players will race Drone Racing League drones to earn some form of crypto token and Algorand-based non-fungible tokens (NFTs).  Drones built by the league are valued upward of $2,000 and can travel up to 90 miles per hour.  Given the price tag, it makes sense that a virtual version would make the sport accessible to a much larger audience.

The Drone Racing League has already shown their willingness to experiment in order to stay ahead of the curve.  For example, they’ve added virtual reality goggles to their competitions, so that racers can operate from “within” their drones.  The Drone Racing League is also in the process of adding sports betting to their platform, something with which most major sports leagues were slow to engage with.

The president of the league, Rachel Jacobson, has said “We’re building a roadmap of so many different things in the next several years. We have to know blockchain because we always want to be 10 steps ahead and first to market. We’re going to be Playground Labs’ crown jewel.”

This isn’t Drone Racing’s first interaction with the crypto world; the league announced a five-year, $100m sponsorship deal with Algorand last September.  The news of the game came right after the finals of the Drone Racing League Algorand World Championship’s sixth season.

The Drone Racing League was founded in 2015 and is valued at an estimated $200m.