Author: Kristen Moran

Frax Finance has taken a step forward in reinstating its protocol fee switch by presenting a new proposal on Thursday.

The proposal outlines the reintroduction of the protocol fee switch, with 50% of the yield directed towards veFXS and the remaining 50% utilized to purchase other Frax assets for pairing in the FXS Liquidity Engine (FLE), according to the proposal put forth by Frax Finance on Thursday. The implementation of FLE aims to bolster Frax’s balance sheet while significantly enhancing liquidity for FXS and paired Frax assets.

Furthermore, the proposal elaborates on a new tokenomics system designed to fully collateralize the decentralized stablecoin FRAX, along with suggesting enhancements to yield structures. Concerning the non-liquid staking reward veFXS, the proposal states, “veFXS stakers will receive total protocol fees upon the passage of this proposal, added to the veFXS yield distributor on the Ethereum mainnet and subsequently to the veFXS yield distributor contract on Fraxtal.”

Frax Finance had initially proposed activating the protocol fee switch on February 26, reversing an earlier decision to suspend rewards, as reported by The Block previously. Sam Kazemian, the protocol’s founder, remarked at the time that Frax felt “it is the right time to turn on the huge switch. It will be a ton of revenue.”

Frax Finance is responsible for developing and overseeing the FRAX USD-pegged decentralized stablecoin, the protocol’s native token FXS, and the veFXS token distributed to users upon staking FXS. As of 5:32 p.m. on March 21, FXS was trading at $7.48, showing a 1.13% increase over the past 24 hours, according to The Block’s FXS price page.

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In a quick turn of events, Bitcoin dipped below the $65,000 mark, despite major stock indices reaching record highs driven by expectations of rate cuts.

The correction in Bitcoin’s price over the past day resulted in significant liquidation of long positions on centralized exchanges.

Despite major stock indices hitting record highs, with the Dow gaining about 0.7% and the S&P 500 and Nasdaq Composite adding roughly 0.3% and 0.2% respectively on Thursday, Bitcoin witnessed a downturn, slipping below the $64,000 mark during Friday’s trading session.

This dip in Bitcoin’s price comes amidst positive macroeconomic sentiment fueled by signals of rate cuts from the U.S. Federal Reserve and a surprise rate cut by the Swiss National Bank.

The surprise reduction in Switzerland’s key interest rate to 1.5%, following a decrease in Swiss inflation to 1.2% in February, marked the first such action by one of the world’s major central banks since the onset of efforts to counter post-pandemic price surges.

As of 8:46 a.m. Eastern Time, Bitcoin, the leading cryptocurrency by market capitalization, witnessed a decline of more than 4% over the previous 24 hours, with its value resting at $63,990. This decrease reflects ongoing market volatility and liquidations.

Market Volatility and Liquidations

The correction in Bitcoin’s price over the past day triggered significant liquidation of long positions on centralized exchanges, with over $54 million in Bitcoin positions being liquidated, the majority of which—over $40 million—were long positions, as per CoinGlass data.

The second-largest cryptocurrency, Ether, also experienced a 3.4% downturn in the past day, trading at $3,417 at 8:46 a.m. ET. SOL, the native coin of the Solana network, saw a sharper decline of over 8% during the same period, according to The Block’s Prices Page.

The overall cryptocurrency market witnessed over $134 million in liquidated long positions in the last 24 hours, contributing to a total of $192 million in liquidations across various centralized exchanges, according to data.

Declining Bitcoin Exchange Reserves

Bitcoin exchange reserves have reached a multi-week low, indicating a trend of investors withdrawing their coins for long-term holding.

Data from CryptoQuant shows an outflow of over 44,600 bitcoins in the past month, resulting in exchange reserves hitting a multi-week low of just over 2 million bitcoins.

This outflow from exchanges to cold storage has been a consistent trend since the beginning of the year, possibly influenced by the increase in Bitcoin’s price and inflows into spot Bitcoin ETFs.

Over the last 24 hours, the GM 30 Index, which tracks the performance of the top 30 cryptocurrencies, has dipped by 3.98% to reach 141.78.

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BlackRock (NYSE:BLK), the world’s largest asset manager, demonstrates its commitment to the digital asset space by launching its inaugural tokenized fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This move comes on the heels of its recent introduction of a spot Bitcoin (BTC) exchange-traded fund (ETF).

In collaboration with Securitize Markets, LLC, BlackRock aims to offer qualified investors the opportunity to earn U.S. dollar yields through the BUIDL fund, which will be tokenized on the Ethereum (ETH) blockchain as an ERC-20 token.

Robert Mitchnick, Head of Digital Assets at BlackRock, sees this as a natural progression of their digital assets strategy, emphasizing their focus on providing solutions that address real client needs.

Securitize is set to serve as a pivotal transfer agent and tokenization platform, overseeing tokenized shares and facilitating processes such as Fund subscriptions, redemptions, and distributions. BlackRock has structured the fund under the jurisdiction of the British Virgin Islands, with a minimum investment requirement of $100,000.

Tokenization remains central to BlackRock’s digital asset strategy, with CEO Larry Fink highlighting its potential to revolutionize capital markets. Carlos Domingo, co-founder and CEO of Securitize, views this development as a significant step towards making traditional financial products more accessible through digitization.

The BUIDL token offers various benefits, including enabling ownership issuance and trading on a blockchain, expanding investor access, ensuring instantaneous and transparent settlement, and facilitating transfers across platforms. BNY Mellon will facilitate interoperability between digital and traditional markets.

Designed to maintain a stable value of $1 per token and provide daily accrued dividends, BUIDL invests 100% of its assets in cash, U.S. Treasury bills, and repurchase agreements, offering investors yield while holding tokens on the blockchain.

Investors will have the flexibility to transfer tokens to pre-approved counterparts at any time and choose their preferred custody options. Anchorage Digital Bank NA, BitGo, Coinbase, Fireblocks, and other market participants and infrastructure providers in the crypto industry support the launch of BUIDL.

In a testament to community engagement, anonymous donors have sent various tokens and NFTs to the fund’s public Ethereum address, reflecting growing interest and support for BlackRock’s venture into digital assets.

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The market cap of real-world assets (RWA) has surged to $5.54 billion, marking a remarkable increase of over 31% in the last 24 hours. Similarly, the memecoin market cap has also witnessed a notable uptick, rising by over 16% during the same period. Among the top five memecoins, excluding Shiba Inu, all have recorded double-digit gains.

The RWA token market cap’s significant surge is evident across the top performers in the sub-sector. Notably, the native token of the Polymesh blockchain experienced a staggering 86.5% surge, followed by Centrifuge with a rise of 46.5%, and Ondo with a notable increase of 33% within the past 24 hours. Polymesh, a blockchain project tailored for security tokens, is one of the many protocols engaged in the tokenization of real-world assets, facilitating the conversion of asset rights into digital tokens on a blockchain.

Real-world assets span a broad spectrum, encompassing tangible and intangible items ranging from physical properties to patents and copyrights. The tokenization of these assets holds the promise of revolutionizing their handling and trading, potentially leading to increased liquidity, accessibility, and efficiency in asset management.

In the realm of memecoins, the market cap has also surged by 16.0% over the past day. Notably, all of the top five memecoins by market capitalization have witnessed significant gains, except for Shiba Inu, which saw a more modest 7% increase within the same period.

Among the top five memecoins, Floki has displayed the most remarkable rally, surging by over 38% within the past 24 hours, as per data from The Block’s Price Page at 6:19 a.m. ET.

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CoinGecko Research has identified the Solana network as the leading blockchain ecosystem of the year thus far. According to their report published on Wednesday, the layer 1 blockchain now commands 49.3% of global crypto investor interest in chain-specific narratives.

The report attributes Solana’s dominant mindshare to its resurgence back to 2021 highs, coupled with the impressive performance of key ecosystem project tokens such as Pyth and native meme coins like dogwifhat.

Thursday’s Coinbase market update further underscores Solana’s significance, revealing approximately $11 billion in transactions conducted on the Solana blockchain in just 24 hours on Monday. This surge in activity was driven by a plethora of smaller tokens, notably meme coins.

Memecoin Craze Fuels Solana Network Activity

Solana’s recent surge in activity has been primarily observed on decentralized exchanges (DEXs) like Jupiter and Raydium, where traders have been actively engaging with meme coins such as Bonk and Slerf. For close to four months, decentralized exchanges (DEXs) built on Solana have been consistently capturing a larger portion of the market compared to Ethereum-based DEXs such as Uniswap.

Tristan Frizza, Founder of Zeta Markets, commented on the spike in onchain meme coin speculation, highlighting coins like Slerf achieving staggering market caps of over $500 million within hours. This frenzy has largely been facilitated by automated market makers like Raydium, Orca, and the Jupiter aggregator, which enable token creators to swiftly establish new liquidity pools and trade these tokens.

In the past week, Solana’s onchain volumes have witnessed a significant surge, accompanied by a notable increase in network fees. As per The Block’s Data Dashboard, the daily transaction fees on the Solana network have been steadily increasing since the start of March, culminating in a record high of $5.08 million on Monday.

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