Hillstone Finance Weekly Update (Feb 27~ Mar 3)

Hillstone Finance
7 min readMar 3, 2023

Welcome to the weekly update from Hillstone Finance. We have brought two news for this week:
1. Rayol Hwang participated in the NBN news
2. Duk-hyun Hong participated in the NBN news

NBN News (Feb 27, 2023)

Q. What is the current Bitcoin movement?

A. It’s a situation where it’s more of a bearish rise than a horizontal step, and it can be seen as a prelude to a number of positive indicators coming out in March.

Many altcoins have increased in transaction volume in the OTC markets, and among the coins listed on overseas exchanges, there is a form of trading in which low liquidity is taken in the form of block deals.

Large forces are buying altcoins, and it can be judged that pumping is going to benefit from altcoins that came when the fire broke out.

Q. Possibility of U.S. Fed Tightening… Can Bitcoin Rise Further?

A. It was essentially a financial system crisis because it was a very long time ago that we had a recession like this, and it wasn’t really a recession in production, manufacturing, and equipment at the time.

But the current economic recession has come to the manufacturing side.

Therefore, export-led countries are also suffering a major blow to various facilities and infrastructure related to the manufacturing industry.

Right now, Japan is also considering raising interest rates, raising the possibility of a large outflow of domestic foreign exchange.

The U.S. has the most initiative, but it will be least affected by the economic downturn, and although the domestic economy is gloomy, overall expectations are likely to draw an upward curve in the coin market.

Q. Gensler said, “All coins except Bitcoin are securities.”

A. If prices are controlled by certain forces and artificial price adjustments are possible, they can be securities.

However, the securities side is not happy that the coin market already threatens the stock market and can be shared by following the securities law and applying the securities law itself.

And as I said earlier, when such negative issues continued to emerge, the coin market went upward.

In the United States, there is an opinion that all coins except Bitcoin fall under the securities law, while it is concluded that domestic coins do not fall under the securities law.

It is going to a completely different trend from major exchanges abroad, and is trying to create a cryptocurrency flow in its own area.

As STO-related parts emerge, the Korean cryptocurrency market is expected to go completely different from the global situation.

However, this trend is ultimately a bad trend because it is contrary to the world situation.

In the case of Bitcoin, it is always said that the problematic direction is difficult to use in payment or real life, and the same is true of gold.

As Bitcoin plays the role of gold in the cryptocurrency market itself, Ethereum and other altcoins that can be utilized in real life can play the rest of the role.

Despite the development of cryptocurrency and DeFi, it is always aiming for the same direction, which is heading toward eliminating the owner who is the subject.

In the case of DAO, it is also moving toward collecting and executing funds in a way that cannot be found through decentralization in a situation where funds are collected rather than legal or illegal.

With these issues and directions, it is expected that good results will be obtained if you invest in AI coins or coins in which the foundation’s subject is fading in the future.

NBN News (Mar 3, 2023)

Q. I heard that Euro-based Stable Coin will be released.

A. Eurocoin, a euro-based stable coin, is a project jointly operated by Circle Limited and BitGo Limited and provides stable coins that maintain stable values.

Currently, it is issued as an ERC-20 token and can receive various support from the Ethereum ecosystem, and can be traded on various exchanges and digital asset wallets.

It is also likely to be used in the DiFi ecosystem in the future.

Q. I heard that the compensation will begin on March 10th to the creditors of Mt. Gox.

A. Mt. Gox lost Bitcoin due to massive hacking.

However, the recent announcement of Mt. Gox wealth distribution plan brought good news to creditors.

Compensation payments are made in crypto and stablecoins, and creditors can designate exchanges to receive.

The distribution targets are Mt. Gox creditors, who are expected to recover some losses due to the compensation.

The final payment period is from March 10 to October 30, 2023.

This compensation is a method of calculating the value of the coin based on the previous legal document and paying it at the current asset price.

Some creditors may lose more than 70–80%, but others hope the compensation plan will be made quickly.

Q. How is the NFT market?

A. The NFT market is showing active trading activities due to the recent increase in NFT trading volume issued by Ethereum network.

The biggest issue is Blur Airdrop, which contributes to revitalizing the NFT market.

However, some argue that these airdrops are temporary, raising concerns about whether they can maintain continuous activation.

In order for the NFT market to achieve continuous growth, it is necessary to ensure that various NFT projects are continuously published so that users can be interested.

The trading volume of the NFT market in March is expected to be a very important indicator.

Expectations and concerns about whether the NFT market can achieve continuous growth will be accompanied by this month’s trading volume.

Q. I heard that the future of the sandbox platform lies with individual creators, not partnership companies.

A. Sandbox COO said the future of the metaverse platform lies with individual creators, not with corporate partnerships.

However, he noted that it should be considered that corporate deals mainly led to growth, and predicted that individual creators will lead Metaverse in the next 12 to 24 months.

He also noted that the Saudi Arabia partnership should focus on the region in the gaming sector.

He also expressed his opinion that he thinks growth led by individual creators can lead to healthier growth.

Q. Tell me about LSD and Ethereum Shanghai Upgrade

A. Ethereum was successfully merged with the beacon chain and converted to the PoS protocol on 15 September 2022.

However, due to the launch of Merge, existing stakers were unable to withdraw locked tokens, causing capital inefficiency.

Unlike general staking, the verifier’s staked Ethereum had a problem that it could not be unstacked until the Shanghai upgrade, which meant that the verifier’s Ethereum was non-synchronized.

Liquidity staking is a way to solve the problem of non-fluidizing coins while receiving staking compensation, and stakers can use capital flexibly by receiving corresponding coins while staking.

Derivatives (LSDs) are basically determined by changes in the value of the underlying asset. For example, staking $ETH to LIDO will result in a corresponding $stETH, which can be traded and participated, and can be used for loans, transactions, and collateral in DeFi.

This staking certificate token is called the Liquidity Staking Derivatives (LSD), which allows the staker to benefit from derivatives while increasing liquidity.

Lido DAO, Frax Finance, Rocket Pool, and Ankr are all blockchain-based projects with different focus points.

Lido DAO is a decentralized staking protocol that allows users to gain rewards by staking Ethereum tokens.

Frax Finance, on the other hand, is a stable coin project aimed at providing a stable and decentralized alternative to nominal money.

Rocket Pool is a distributed platform that provides users with additional benefits such as increased rewards and reduced risk while staking Ethereum tokens in pools.

Ankr is a blockchain infrastructure platform that provides cloud-based solutions for blockchain nodes, allowing developers to quickly and easily deploy their nodes.

These projects focus on various aspects of the blockchain ecosystem, from decentralized finance to infrastructure, but all aim to contribute to the growth and adoption of blockchain technology.

Some of the ETHs staked through the aforementioned protocols such as Lido DAO, Frax Finance, Rocket Pool, and Ankr are already fluid, accounting for 43% of all staked ETHs.

The value of staked ETH can be indirectly confirmed through the premium of liquid stETH, and the MVRV Ratio value is good at 1.12, even in the recent small rise.

The current price remains between the Staked ETH realization price and the ETH realization price, and it can be seen that staking users are still enduring significant unrealized losses.

Recently, the market has been affected by factors outside the ecosystem.

Kraken’s SEC fines, the termination of the Staking service, and Coinbase CEO’s remarks of concern are cited as reasons, which are feared to cause a sharp drop in prices and large-scale unstaking.

Up to 4.4M $ETH is likely to be unstacked. As a scenario for this, there is a possibility of mass shipment and the existence of a sharp drop defense buffer, and the possibility of market reflection through LSD and withdrawal of initial staking volume is also considered.

Staked realized price is a loss section, and there is a possibility of survival rather than loss.

Ethereum’s Shanghai upgrade is scheduled for March 2023, and includes several enhancements, including the ability to withdraw staked ETH.

Currently, the total number of ETHs staked reaches 16.6 million, and staking continues to increase.

The process of unstaking $ETH requires a limited number of withdrawal applications per hour and a waiting time.

That is all for this weekly update.

Thank you.

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