Good morning. Here’s what’s happening:
Prices: Bitcoin was trading near $29,300, as momentum stalled after a rally in Thursday's (Singapore time) early morning hours.
Insights: ZkSync Era, a zero-knowledge scaling solution for Ethereum, leads layer 2 landscape in daily active addresses. Interest in its potential airdrop appears to be rising.
A Mini BTC Rally That Stalled Near $29.7K
As Thursday's trading day started in Asia, bitcoin was clinging to some of its small gains following the U.S. central bank's decision to raise the interest rate 25 basis points (bps).
The largest cryptocurrency by market capitalization was recently trading at $29,477, up 0.9% over the past 24 hours, but still well off its high earlier this month of $31,800. BTC briefly dropped below $29,000 on Monday amid fresh concerns about, separately, Binance and the Chinese economy, but has been largely rangebound between $29,000 and $32,000 since mid June.
In an email to CoinDesk, Stéphane W Ouellette, the CEO of crypto advisory platform FRNT Financial, noted the recent stunted volatility rates, including some BTC readings that have fallen below U.S. stock indices levels. "Implied volatility rates on options platforms such as Deribit are at or near all-time lows," Ouellette wrote."
But he added: "This type of environment historically has not persisted for long. Our data analysis suggests that some of the most significant volatility spikes have emerged out of such environments and historically, in albeit relatively short history of BTC, resolves more often than not in a directional move to the upside."
Ether was recently changing hands at $1,873, also up about 0.8%. Most other cryptos were in positive territory with OGN, the token of the DeFi and NFT platform Origin Protocol, up more than 15% and SOL, the native crypto of smart contracts platform Solana, rising more than 9%. After rising by double-digits on Wednesday (Singapore time) popular meme coin DOGE retrenched by nearly 4%.
Following the rate hike, Fed Chair Jerome Powell reiterated the bank's openness to raising interest rates again. In an email, Oliver Rust, head of product at inflation aggregator Truflation, wrote that this would be unwelcome news to markets, and also small and medium businesses that are struggling to access capital."
ZkSync Era's lead in daily active addresses is fueled by speculation about a potential airdrop.
ZkSync Era, a zero-knowledge (ZK) scaling solution for Ethereum, currently leads the layer 2 landscape in daily active addresses, continuing its year-to-date growth.
According to blockchain analytics firm Artemis.xyz, zkSync Era has grown more than 60% to roughly 305,000 daily active users from about 189,000 since the beginning of July, outpacing all other layer 2’s, except Polygon zkEVM which has grown 331% to more than 34,000 daily active users in the same period.
Despite recently launching only in February, zkSync Era has more daily active addresses than Arbitrum and Optimism, the two largest scaling solutions by total value locked, underscoring the rising interest in a potential airdrop from zkSync Era.
“A significant part of usage [on zkSync Era] is likely related to airdrop farming activity,” wrote Artemis Chief Operating Officer Jimmy Zheng to CoinDesk on Telegram. Matter Labs, the company behind zkSync Era, “has raised a meaningful amount of funding for the project and there’s huge speculation that there will be a potential airdrop to facilitate ecosystem growth,” Zheng noted.
Matter Labs hasn’t revealed any plans for token airdrop, and yet, the rise of daily active addresses for zkSync Era demonstrates how a potential airdrop can drive on-chain activity.
“ZkSync Era has benefited from the airdrop narrative. This has fuelled users bridging value [and] using applications in anticipation of a future token,” said Charles Storry, head of growth at Phuture, a crypto index platform.
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