Author: Kristen Moran

Chainage, a decentralized finance (DeFi) hub with approximately $100 million in total value locked, is pursuing a $13 million capital raise for protocol expansion, subject to approval from its tokenholders within its native decentralized autonomous organization (DAO).

In a snapshot proposal dated April 1, Chainage outlined plans for the $13 million raise, led by an undisclosed venture capital firm. This raise would involve the issuance of 50 million additional XCHNG protocol tokens, constituting roughly 10% of Chainage’s circulating supply. The issuance price of $0.26 aligns closely with XCHNG’s token price at the time of publication.

Tokenholders can participate in the proposal by staking their native XCHNG tokens to receive “vXCHNG,” granting them voting rights. Chainage aims to implement various strategies to enhance usage and profitability, committing to generating a minimum of $1 million in profit for Q2, with 80% of profits allocated to vXCHNG holders through a profit-sharing mechanism.

The primary objectives of the $13 million raise include global expansion, increased visibility, and the recruitment of top-tier talent to integrate AI with cutting-edge technology, positioning Chainage as a leader in AI-powered crypto innovation. The capital would also be utilized to incentivize liquidity, establish new partnerships, undertake marketing initiatives, and reward tokenholders.

As of the time of publication, the proposal has garnered 186 million XCHNG votes in favor and 7.2 million XCHNG votes against, with a circulating XCHNG balance of 474 million.

This move represents a departure from traditional venture capital fundraising methods, with Chainage opting for tokenholder approval within its DAO. This approach aligns with the growing trend among Web3 startups to leverage decentralized governance structures, particularly as the crypto industry experiences a surge in investment amid a bullish market.

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According to a note from TD Cowen, House Republicans’ efforts to pass an anti-central bank digital currency (CBDC) bill could disrupt bipartisan backing for a stablecoin bill. The CBDC Anti-Surveillance State Act, introduced by House Majority Whip Tom Emmer, aims to prevent the Federal Reserve from directly issuing a CBDC to individuals. Despite the bill’s advancement from the House Financial Services Committee in September, it faced significant criticism from Democrats.

House conservatives are reportedly considering voting for the CBDC bill alongside a long-awaited stablecoin bill, although this strategy isn’t led by Rep. Emmer. TD Cowen’s Washington Research Group, led by Jaret Seiberg, expressed concerns that tying a ban on a digital dollar to stablecoin legislation could jeopardize bipartisan support. Democrats generally see value in exploring a central bank cryptocurrency.

Maxine Waters, the top Democrat on the House Financial Services Committee, and its chair, Patrick McHenry, have engaged in lengthy discussions to find common ground on regulating stablecoins. Although the bill cleared the committee, disagreements persist, particularly regarding the primary regulator for stablecoin issuers.

TD Cowen emphasized that while it’s premature to declare the stablecoin bill in jeopardy, passing any legislation remains challenging. Any developments complicating the stablecoin bill further narrow the path to enactment.

While the central bank has explored the idea of issuing a CBDC, Fed Chair Powell clarified that the Fed is far from making recommendations or adopting a CBDC without congressional approval.

Additionally, the Heritage Foundation has pressed for the passage of a CBDC bill, warning lawmakers that their score on the Heritage Action Scorecard could suffer if they don’t cosponsor the legislation. Sen. Ted Cruz has introduced a bill to ban CBDCs, supported by the Heritage Foundation and the Blockchain Association, among others.

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After experiencing record outflows of nearly $1 billion just a week prior, crypto-based investment products made a significant turnaround, with approximately $900 million in net inflows reported, according to data from CoinShares.

CoinShares analyst James Butterfill disclosed that crypto-based investment vehicles collectively saw a remarkable rebound last week, accumulating $862 million in net inflows. This resurgence follows a challenging period when funds managed by prominent asset managers like BlackRock, Fidelity, and Grayscale witnessed record outflows totaling $942 million.

Driven by bitcoin’s price surging above $70,000 for a significant portion of last week, the combined assets under management for all crypto funds tracked by CoinShares soared to $97.9 billion.

Bitcoin-Related Funds Remain Dominant

Bitcoin-related funds continue to attract the bulk of investor activity. Both BlackRock and Fidelity’s spot bitcoin ETFs recorded inflows exceeding $600 million each during the past week. However, Grayscale’s spot bitcoin ETF experienced outflows amounting to $960 million, reducing its assets under management to approximately $35 billion.

An Exceptional Performance by Ark Invest 21 Shares

One standout performer last week was the Ark Invest 21 Shares spot bitcoin fund, which witnessed over $300 million in net inflows. This marks a substantial increase compared to the previous week when the fund attracted only $30 million in capital inflow. With its assets under management now exceeding $3 billion, the fund demonstrated exceptional growth.

Overall, the rebound in net inflows suggests renewed investor confidence in crypto-based investment products, particularly amidst the backdrop of Bitcoin’s impressive price performance.

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BNB experienced a notable 12% rise in value over the past week, reaching a nearly two-week high of $620 by March 29. This surge, while impressive, prompts speculation about whether BNB has hit its peak or if it’s poised for further growth. Compared to its competitor Ether, which saw a 5% increase over the same period, BNB’s surge narrowed the valuation gap between the two. However, insights from on-chain BNB Chain data suggest that the recent rally might have pushed the limits too far.

Factors Influencing BNB’s Price

Market analysts observe a correlation between the crypto market’s upward trajectory and inflows into spot Bitcoin exchange-traded funds (ETFs). However, the week ending March 23 marked a setback as these ETFs experienced a net outflow of $890 million for the first time since their introduction in January. Despite this, recent data indicates a reduction in outflows from the Grayscale GBTC fund, with only $104 million exiting the fund by March 28.

In early March, BNB’s price surged by 61.7%, reaching a peak of $645 and a market capitalization of $96.4 billion. Yet, momentum slowed afterward. For context, BNB reached an all-time high valuation of $116 billion in November 2021. Notably, the total value locked (TVL) on BNB Chain, representing deposits in the network’s smart contracts, peaked at $15.7 billion but has since fallen to $7.1 billion, marking a 55% decrease.

Contextualizing BNB Chain’s Performance

Considering the overall decline in the crypto market, particularly in decentralized finance (DeFi) since late 2021, it’s important to contextualize BNB Chain’s TVL decline. The total market data for all tracked blockchains has decreased from nearly $205 billion to $155 billion, indicating a 25% drop. Hence, a thorough analysis of BNB Chain’s TVL, especially concerning competitors like Ethereum and Solana, is necessary.

Activity on BNB Chain

TVL isn’t the sole indicator of a blockchain’s success. Numerous decentralized applications (DApps) on the BNB Chain, spanning nonfungible token (NFT) marketplaces, gaming platforms, decentralized betting systems, collectible platforms, and social networks, operate without necessitating significant deposits. In the past week, nearly 2 million active addresses engaged with DApps on the BNB Chain, showcasing significant activity levels comparable to Ethereum’s most active layer-2 networks.

Forecasting Future Trends

Predicting cryptocurrency trends is challenging, but examining derivative metrics such as the demand for leverage in BNB perpetual futures contracts provides insights into market sentiment. While the demand for leveraged long positions has stabilized, with the 8-hour funding rate holding around 0.03%, optimism remains despite BNB’s price struggle with the $620 level. Typically, a positive funding rate above 1.2% per week indicates bullish market sentiment.

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During a panel discussion at the recent BUIDL Asia summit in Seoul, the issue of racist meme coins and how to handle them was debated among panelists. These meme coins, containing offensive terms and themes, have become increasingly prevalent in the crypto space in recent months, raising concerns within the community.

Austin Federa, the head of strategy at the Solana Foundation, offered his perspective on the matter. He argued that while users should have the ability to reveal content if they choose to, the core network should remain permissionless. Federa likened the situation to the internet, where it’s impractical to expect internet service providers (ISPs) to filter out offensive content. Similarly, in the crypto space, wallet developers can implement block lists to filter out certain tokens, but the core network should remain decentralized and permissionless.

On the other hand, Marc Zeller, founder of the Aave Chan Initiative, highlighted the legal obligations in some jurisdictions, such as France, where ISPs are required to block certain content. Zeller acknowledged the cultural differences in approaches to censorship and emphasized the importance of censorship resistance in the blockchain ethos.

Federa also mentioned the legal obligations faced by validators and nodes, citing instances where the U.S. Office of Foreign Assets Control (OFAC) imposed sanctions on certain crypto transactions. However, he noted that addressing racist meme coins should be kept in perspective, as they represent a small fraction of the overall crypto market.

In summary, while there are differing views on how to address offensive meme coins, the discussion at the BUIDL Asia summit highlighted the complexities involved and the importance of balancing censorship resistance with legal obligations and community standards.

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