Huobi Research Weekly (Vol.188) (2021.10.25–2021.10.31)

Abstract

This week, the overall market capitalization for the top 100 cryptocurrencies increased of 1.21%, with 67 projects increased in value to varying degrees. According to coinmarketcap, as of October 31, 2021, the total market cap of cryptocurrencies was 2594.9 billion U.S.dollars, increased of 1.21%, and the total market cap of the top 100 cryptocurrencies was 2554.9 billion U.S. dollars, increased by 3.22% from last week. 2 cryptocurrency projects entered the top 100 this week, namely ELON, AUDIO, SAND and SCRT. As of October 31, 2021, Bitcoin was traded at 61318.96USD, 0.67% higher than its price last week. Ethereum was traded at 4288.07USD, 4.98% higher than its price last week.

The hashrate of Bitcoin increased and Ethereum increased by this week. This week, the difficulty of mining Bitcoin increased and the difficulty of mining Ethereum increased. The average number of transactions per block decreased and the average block size of Bitcoin decreased. The average number of transactions per block increased but the average block size of Ethereum decreased this week. The average transaction fees of Bitcoin decreased but Ethereum increased. TWT was the most active project on GitHub this week.

The average bitcoin Hashrate for the entire network reached 158.4EH/s, increased by 6.10% from the previous week. Average Hashrate for the entire Ethereum network was 788.05TH/s this week, increased by 4.10%. Average difficulty for mining Bitcoin this week was 20.08T, increased by 0.40% from last week. The average difficulty of mining Ethereum this week was 10099.92TH, increased by 4.22% from that of previous week.

In network activity, the average size of each block was 1.09MB, decreased by 10.66% from last week; there were on average 1719 transactions recorded in each block, increased by 9.29% from the previous week. The average number of transactions per block in Ethereum this week was 215.4, increased by 11.90%. The average size of each block was 68037.14 bytes, decreased by 4.76% compared to last week. Average transaction fees of Bitcoin this week was $2.549, decreased by 16.18% from last week. Average transaction fees of Ethereum this week was $51.378, incresead by 130.88% from last week. The total number of Bitcoin addresses was 78091309, increased by 293041 (0.38%). Trust wallet token was the most active project on GitHub this week, with 95 commits submitted in the past week.

In terms of community activity, Tron, Bitcoin and Ethereum are the most popular communities on Facebook. On Twitter, the most popular communities are Bitcoin, Ripple and Ethereum.

According to public information statistics, there were 35 investment and financing in the past week, with a total amount of US $642 million, and the investment and financing market was active.

1. Weekly Market Review

1.1 Market overview

This week, the overall market capitalization for the top 100 cryptocurrencies increased of 1.21%, with 67 projects increased in value to varying degrees. According to coinmarketcap, as of October 31, 2021, the total market cap of cryptocurrencies was 2594.9 billion U.S.dollars, increased of 1.21%, and the total market cap of the top 100 cryptocurrencies was 2554.9 billion U.S. dollars, increased by 3.22% from last week, among which, ELON had the largest increased of 365.44%, bringing its market cap ranking from №259 to №92, STX had the largest decreased of -16.55%, bringing its market cap ranking from №57 to №64. In addition, there were 4 projects that entered TOP100, namely, AUDIO (Audius, increased 22.67%, Now №97), SCRT (Secret, increased 36.67%, Now №87), SAND (The Sandbox, increased 100.63%, Now №83), ELON (Dogelon Mars, increased 365.44%, Now №92). As of October 31, 2021, Bitcoin was traded at 61318.96USD, 0.67% higher than its price last week. Ethereum was traded at 4288.07USD, 4.98% higher than its price last week.

The overall 24h trading volume increased this week. Overall, the 24h trading volume increased by 37.39% compared with the same period of last week. In this week, 69 of the top 100 projects increased in 24h trading volume, led by MANA with a weekly increased of 23458.64%; there were 31 projects decreased in their 24h trading volume, there were 16 projects that saw over 20% decrease in their 24h trading volume, while 4 projects fell by more than 50%. The most decresed project led by RENBTC, with a decreased of -79.41%.

The top 10 cryptocurrencies’ market value increased, the market share distribution remained stable. On October 31, 2021, the overall market cap of the top 10 cryptocurrencies was 2115.7 billion USD, increased by 2.06% from last week, accounting for 81.53% of the total market capitalization of cryptocurrencies, increased by 0.67% from last week. The market value proportion of TOP10 project basically stable. BTC’s dominance was 44.57%, decreased by 0.24% from last week.

1.2 Segment Analysis

Among TOP 100 cryptocurrency project segments, the total market cap of Application project got the largest increase. The average market cap of Coin project got the largest increase. As of October 31, 2021, the total market cap of coin projects reached 1570.7 billion USD, increased by 2.44%. The average market cap of coin projects reached 29.6 billion USD, increased by 4.38%. The total market cap of platform projects reached 697.0 billion USD, increased by 3.47%. The average market cap of platform projects reached 30.3 billion USD, increased by 3.47%. The total market cap of application class projects reached 215.6 billion USD, increased by 9.28%. The average market cap of application class projects reached 9.80 billion USD, increased by 4.31%. The total market cap of asset-backed token projects reached 71.4 billion USD, increased by 0.85%. The average market cap of asset-backed token projects reached 35.7 billion USD, increased by 0.85%.

The market segment distribution of the top 100 cryptocurrencies remained stable. As of October 31, 2021, among the top 100 projects, the number of coin class projects decrease 1, platform class projects and asset-backed token class both remain the same, application class projects increse 1. The largest overall market cap by segment was still coin projects, accounting for 61.48% of the total market cap of top 100 projects.

Note: According to the different attributes of cryptocurrencies, Huobi Academy of Blockchain Application will divide them into four categories: Coin, Application Class, Platform Class and Asset-backed Token.

Coin Project: Refers to a type of asset developed based on blockchain technology that does not correspond to a specific use scenario and whose main function is only the transaction target. Its asset value is mainly reflected by liquidity.

Platform Class Project: A type of asset that is associated with the development of the underlying technology of the blockchain and is supported by the right to use or participate in the platform.

Application Class Project: Refers to a type of asset that is associated with a specific application scenario and is supported by a certain right of use, participation, or dividend.

Asset-backed Project: Refers to a class of assets that is linked to actual assets such as gold and US dollars and supported by the value of physical assets.

2. Technical Statistics

2.1 Cryptocurrency Mining Statistics

The hashrate of Bitcoin increased and Ethereum increased by this week. From October 25, 2021- October 31, 2021, the average bitcoin Hashrate for the entire network reached 158.4EH/s, increased by 6.10% from the previous week.

Average Hashrate for the entire Ethereum network was 788.05TH/s this week, increased by 4.10%.

This week, the difficulty of mining Bitcoin increased and Ethereum increased. As of October 31, 2021, average difficulty for mining Bitcoin this week was 20.08T, increased by 0.40% from last week. The average difficulty of mining Ethereum this week was 10099.92TH, increased by 4.22% from that of previous week.

The number of blocks in Bitcoin increased by 5.85%, Top 3 rankings had changed. The overall distribution of the Ethereum mining pools rankings not changed, the number of blocks decreased by 0.65%. In the past week, Bitcoin mined 1121 blocks, increased by 5.85% from the previous week. Among the top three pools were AntPool、F2Pool、Foundry USA, these 3 pools mined 214、190 and 131 blocks respectively, accounting for 19.09%、16.95% and 11.69% of all Bitcoins mined this week. The Hashrate was 30.51EH/s、27.09EH/s and 18.68EH/s, respectively.

In the past week, Ethereum’s entire network mined 47099 blocks, decreased by 0.65% in the previous week. The top five pools were Ethermine, F2pool Old, Hiveon Pool, Nanopool and Flexpool.io, each mined 12395、11453、4429、2246 and 1773 blocks respectively, accounting for 26.3169%、24.3169%、9.4036%、4.7687% and 3.7644% of all Ethereum mined this week, respectively.

2.2 Activity Statistics

The average number of transactions per block decreased and the average block size of Bitcoin decreased. The average number of transactions per block increased but the average block size of Ethereum decreased this week. According to blockchain.info, from October 25, 2021- October 31, 2021, the average size of each block was 1.09MB, decreased by 10.66% from last week; there were on average 1719 transactions recorded in each block, decreased by 9.29% from the previous week.

According to etherscan, the average number of transactions per block in Ethereum this week was 215.4, increased by 11.90%. The average size of each block was 68037.14 bytes, decreased by 4.76% compared to last week.

Number of unconfirmed transactions in Bitcoin decreased by 39.63%. Number of unconfirmed transactions in Ethereum increased by 7.89% from the previous week. As of October 31, 2021, the number of 7-day average unconfirmed transactions in Bitcoin network was 3300, decreased by 39.63% from last week. There were 180752.46 unconfirmed transactions in the Ethereum network, increased by 7.89% from last week, with the lowest amount of unconfirmed transactions in the week being 29900 and the highest amount being 212363.

Total transaction fees of Bitcoin decreased but Ethereum increased. As of October 31, 2021, average transaction fees of Bitcoin this week was $2.549, decreased by 16.18% from last week. Average transaction fees of Ethereum this week was $51.378, incresead by 130.88% from last week.

The average number of distinct miners per day in Ethereum decreased. From October 25, 2021- October 31, 2021, the average number of distinct miners per day in Ethereum this week was 47.4, decreased by 6.69% from last week.

The number of nodes in Bitcoin decreased by 9.53% ,The number of nodes in Ethereum decreased by 14.55% this week. As of October 31, 2021, there were 12796 Bitcoin nodes, decreased by 9.53% compared to last week, of which 1839 nodes were in U.S, 1816 nodes were in Germany, and 127 nodes were in China(№11), each accounting for 14.37%, 14.19% and 0.99% of the total number of Bitcoin nodes, respectively.

As of October 31, 2021, there were 3025 Ethereum nodes, decreased by 14.55% from the previous week. Specifically, there were 1007 nodes in the U.S, 463 nodes in Germany, and 221 nodes in China, each accounting for 33.29%, 15.31%, 7.31% of total number of nodes, respectively.

This week, the growth rate for new addresses of Bitcoin increased. According to the data on blockchain, as of October 31, 2021, the total number of Bitcoin addresses was 78091309, increased by 293041 (0.38%).

TWT was the most active project on GitHub this week. From October 25, 2021 — October 31, 2021, Trust wallet token was the active project repository on GitHub with a total of 95 commits.

2.3 Community Activity Statistics

The top three most popular cryptocurrencies on Facebook were Tron, Bitcoin and Ethereum in descending order, with 944k, 625k and 234k fans respectively. The top three most popular cryptocurrencies on Twitter were Bitcoin, Ripple(XRP) and Ethereum, with 3.5million , 2.1million, and 1.7million followers, respectively.

3. Weekly Blockchain Dynamics

3.1 Mainstream project dynamics

1. Vitalik buterin said that layer2 is the future of Ethereum expansion

Vitalik buterin said at the 7th blockchain global summit 2021 hosted by Wanxiang blockchain laboratory that capacity expansion is one of the biggest challenges facing the blockchain field. Using layer 2 to realize the capacity expansion of Ethereum is the only security method. At the same time, it can also ensure the decentralization of Ethereum, which is the core of the blockchain.

2. Uniswap has a total transaction volume of more than US $500 billion in the past three years

Uniswap official tweeted that since its launch in November 2018, the total transaction volume of uniswap agreement had exceeded US $500 billion by the end of last week, including US $2 billion on Ethereum layer 2 (arbitrum, optimization).

3. Wood said that the Polkat parallel chain will be technically available in December

Gavin wood, founder of Polkat, said at the 7th blockchain global summit that he was very confident that the parallel chain would be technically feasible in December. At present, the complete code audit has been completed. In addition, Gavin wood also shared the status progress of substrate and Polkadot. The second bridge audit is in progress. In addition, a bridge from the test network Rococo to the bridge test network wococo will be deployed to test the feasibility.

4. Mortgage lending platform cream finance was attacked by flash lending again

The attack cost its platform about $117 million. The hacker transferred the stolen funds into two addresses in two. Subsequently, yearn announced that it had recovered the $9.42 million invested in yusd vault by the hacker of the cream flash loan incident, and the recovered funds would be returned to Cream.

3.2 International industry dynamics

1. European Central Bank sets up digital euro market advisory group

The Advisory Group consists of 30 European banks and financial or economic institutions, including Societe Generale, Nordic bank, Intesa Sanpaolo bank, Bank of Sweden, Deutsche Bank and central banks of euro system countries. The committee will provide suggestions on the design and issuance of digital euro. Starting from November 2021, the group will meet at least once a quarter to discuss issues related to the digital euro.

2. Nigeria officially launched CBDC

Nigeria officially launched its central bank digital currency eNaira. Enaira is developed by bit, a financial technology company, and the digital currency management system behind it is also the previous digital currency management system of the Eastern Caribbean Central Bank. Nigeria has released two digital currency wallets. At present, it has cast about 500 million eNaira, worth about US $1.21 million.

3. ETF: ProShares applies to CME for exemption from bitcoin futures ETF position limit

ProShares applied to CME of the Chicago Mercantile Exchange for exemption from the position limit of bitcoin futures ETF because ProShares may reach the maximum position limit of monthly contracts and the maximum position limit of 5000 contracts. Its CEO said that if CME does not grant exemption, ProShares may convert assets into forward contracts, structured notes or swap contracts.

4. Facebook renamed meta

Zuckerberg said, “today, we are regarded as a social media company, but in our DNA, we are a company that uses technology to connect people, and the Metaverse is the next frontier, just like the social network we started with.” At this meeting, the company also released new tools to help build the metauniverse, including the presence platform that can realize the “mixed reality” experience on Quest 2 (VR headset). In addition, meta will invest US $150 million to cultivate the creators of the next generation of Metaverse.

3.3 Industry regulatory dynamics

1. The new draft of Biden’s spending bill will fill the tax loopholes that cryptocurrency investors may take advantage of

The new draft of US President Biden’s spending bill “build back better act” mentions that it will fill the tax loopholes that cryptocurrency investors may take advantage of. The draft incorporates cryptocurrency transactions into the constructive sale rule, which aims to prevent investors from locking in investment income without paying capital gains and restrict them from transferring income from one tax period to another.

2. The US Treasury Department pointed out that the SEC has significant power to stabilize currency regulation

The US Treasury Department will issue a report pointing out that the US Securities and Exchange Commission (SEC) has significant power to supervise and stabilize the currency. In addition, the report also urged Congress to pass legislation stipulating that the stable currency should be subject to supervision similar to bank deposits.

3. Rostin Behnam, acting chairman of the CFTC of the United States, said he planned to continue to actively monitor the cryptocurrency market and called on Congress to expand its institutional power

At the same time, Behnam also said that the U.S. Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) are working as a team to deal with issues related to cryptocurrency. However, in view of the rapid growth of the cryptocurrency industry and the potential risks of cryptocurrency to consumers and financial stability, Congress should consider expanding the power of CFTC to regulate the spot market of cryptocurrency.

4. Spanish central bank open registration application for encryption service provider

The Central Bank of Spain issued instructions on how to register to provide encryption related services in the country, opened registration applications for all encryption service providers, and all regulated entities must register, including regulated banks. After that, the Central Bank of Spain will consider their applications for up to three months.

4.Weekly Investment Activities

According to public information statistics, there were 35 investment and financing in the past week, with a total amount of US $642 million, and the investment and financing market was active. From the track point of view, investment and financing are mainly concentrated in infrastructure, tool application and NFT / GameFi / Metaverse. The highest amount is the Blockchain development platform Alchemy, which has completed a financing of US $250 million at a valuation of US $3.5 billion, a16z leading the investment; Secondly, CoinList completed round A financing of US $100 million, led by Accomplice and Agman.

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The Huobi Blockchain Application Research Institute (referred to as ‘Huobi Research’) was established in April 2016. Since March 2018, it has been committed to comprehensively expanding research and exploration in various fields of blockchain. The research institute takes the pan-blockchain field as the research object, aimed to accelerate the research and development of blockchain technology, promote the application of the blockchain industry, and promote the ecological optimization of the blockchain industry. The main research content of the institute includes industry trends, technology paths, application innovation, and model exploration in the field of blockchain. In line with the principles of public welfare, rigor and innovation, Huobi Research Institute will carry out extensive and in-depth cooperation with government, enterprises, universities and other institutions through various forms. We are building a research platform covering the complete industrial chain of the blockchain, providing a solid theoretical basis and trend judgment for the blockchain industry professionals, and promoting the healthy and sustainable development of the entire blockchain industry.

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