Altcoin Market Flourishes Following Spot ETH ETFs Approval and Anticipated Airdrops
Summary:
The recent approval of spot ETH ETFs in the U.S. has sparked growth in the altcoin market, with anticipations for major airdrops later this year further fuelling the excitement. Interest in liquid restaking has been advantageous for Pendle Finance, a multichain protocol that allows users to separate yield-bearing token assets, achieving significant growth in price and TVL. The introduction of point multipliers has attracted airdrop farmers, while the rise of NOT, a native token of the Telegram Mini DApp, demonstrates the ongoing innovation and shifts within the market.
The recent endorsement of spot ETH ETFs in the United States has breathed new life into the altcoin market, leading to a 20% boost to the total altcoin market cap in May. Of this rise, Ethereum carried half the weight. The upcoming dispersals of project tokens worth billions to DeFi users - or airdrops - bode well for further stimulation in the altcoin sector, with anticipated airdrops from behemoth projects like LayerZero, Etherfi, Blast, and zkSync by Q2 2024 end.
Pendle Finance, an interest derivatives multichain protocol that allows users to disentangle yield-bearing token assets into principal and yield parts, has felt the impact of the escalating buzz around liquid restaking. In May, Pendle saw a rise of 58.6% and 50.5% in its price and TVL. This led to the protocol outshining other big-name DeFi projects. As of June 3rd, Pendle's TVL stood at $6.28 billion, even surpassing Uniswap’s TVL of 6.12 billion. It currently seats itself as the 6th largest DeFi protocol. Liquid staking tokens makeup most of the deposits on Pendle, with Etherfi’s weETH pool alone contributing to $1.4 billion in TVL.
On Pendle, yield-bearing assets like Renzo’s ezETH can be divided to yield a yield token (YT ezETH) and a principal token (PT ezETH). Your PT represents the underlying asset's original investment, and YT gives you a claim on future yields. Each PT and YT has a maturation date. PTs, typically trading at a lower price, can be exchanged for the underlying asset post this date. On the other end of the spectrum, YTs continue to accumulate yields until the maturation date, rendering it valueless thereafter. However, YT holders are entitled to airdrop allocations from the underlying asset while PT holders don’t enjoy any privileges for airdrops. It is worth noting that both YTs and PTs can be bought, sold, and owned.
The introduction of point multipliers by liquid staking protocols to incentivize airdrop farmers has led to a surge in Pendle deposits. This model amplifies airdrop allocations when an asset is held in DeFi protocol, in contrast to it lying dormant in a wallet. This method, known as leveraged point farming, boosts future airdrop allocations. All major LRT protocols have integrated a point multiplier for Pendle, which range from 2x to 4.5x.
It's essential to remember that Pendle’s reliance on the LRTs for its locked value signifies a high single-risk exposure. Due to Etherfi, Ethena, and Renzo's airdrop allocations arrival, Pendle's TVL experienced a sharp 25% drop to the tune of $1 billion in late April. Once an eagerly-anticipated airdrop takes place, users often withdraw their funds due to a reduced incentive. To counter this, the aforementioned projects have planned a second round of airdrops.
An exception in the present market scenario is NOT, Notcoin's native token, designed by Open the Builders. The token has seen a substantial price hike of more than 400% from May 27 to June 3. Owing to a 78% distribution at launch and a simple earnings model, Notcoin attracted over 35 million users with six million daily active users before listing. The widespread distribution allows the community to treat NOT as a meme coin within the TON ecosystem. As of May 30, NOT has more on-chain holders (1.6 million) than other large-cap meme coins like Shiba Inu, Bonk, and Pepe.
The apparent price hike of Notcoin remains speculative but could be attributed to increased awareness due to new applications within the TON ecosystem. Notably, there is a collaborative effort underway between Notcoin and a cat-raising game, 'Catizen', which accepts in-game purchases via $NOT. Some noteworthy points include Catizen becoming a top-ranked application during The Open League Season 3, an event hosted by the TON Foundation to stimulate TON users. In addition to this, Notcoin also incinerated 6.9 million NOT on May 30. Please note this article doesn’t endorse investments or recommendations and encourages readers to undertake independent research due to investment and trading risks.
Published At
6/6/2024 9:14:43 PM
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