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Dear country without banks
of The Shocking Collapse of the FTX Empire This week was the darkest episode yet for the fledgling crypto economy.
It is a “mountain”. Gox 2.0 moments.
Many users of FTX are in a position to lose everything if a full rescue package is not put together, and such a package may never happen.
Amidst these historic levels of chaos, we have seen huge waves of uncertainty sweep over the sector. The Bitcoin Fear and Greed Index, which tracks the sentiment of the large cryptocurrency community, extreme fear today.
Unsurprisingly, this sophistication has spilled over into the NFT market as evidenced by the fact that WETH has seen a spike in trading in the largest NFT market, OpenSea.
But what does this mean? Why are we talking about an uptrend for WETH here?
Let me explain today’s article ⬇️
-WMP
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As a “CeFi” crypto exchange without proof of reserves, FTX was opaque to off-chain operations, masking wild transactions until it was too late for users.
That is why transparency on-chain Movement is very powerful.
On-chain data gives you a real, direct view of the state of your activity flow (good, bad, ugly). All data is publicly available and readily available.
A great example of this feature in action is the recent surge in WETH volume on OpenSea showing how the impact of the FTX explosion has impacted the NFT market.
Wrapped Ether (WETH) is the ERC20 version of Ether. ETH must be approved at time of payment, but WETH transactions can be pre-authorized. As such, WETH will be used for offers and auction bidding on OpenSea and other his NFT marketplaces.
For example, if you go to OpenSea’s NFT collection and see “1.01 WETH Best Offer”, it means Any The NFT for that collection is currently 1.01 WETH and bidders are waiting for the first person to accept that price.
These WETH offers, set by deal hunters, are lower than the floor price of collections set by owners instead. What WETH lacks in price, it makes up for in immediate utility. In other words, listing an NFT at a “Buy Now” price does not guarantee a sale, as if the market were to drop further, but his unpaid WETH bid was immediately accepted and ETH, stables , USD, etc. there is you
However, since the demise of FTX, WETH trading on OpenSea has soared to new heights. See for yourself:
Why is this important?
OpenSea is the NFT marketplace juggernaut where the majority of NFT trading takes place. Percentage of WETH trades reaching over 50% of OpenSea’s daily trading volume for the first time, how a significant flow of NFT traders accepted bids lower than the floor since the FTX turmoil erupted can have a direct glimpse of
There are several reasons for this. As mentioned earlier, WETH bidding is quick to act, so it makes sense for those who prefer speed at the expense of getting the best price. Having injected so much fear and uncertainty into WETH (hence ETH, other ERC20s, etc.) the greater liquidity and convertibility guarantees are simply more attractive than holding illiquid NFTs. . Many people at the moment.
“Given all the unknowns, it is better to be in flux now” is the rationale behind this WETH uptrend move. Given this historic week, it’s certainly fair, and given all that has happened, I don’t think sentiment can be analyzed in this way thanks to on-chain WETH activity levels.
There is certainly an aura of sorts on-chain, and part of that comes from transparency. The last few days have reminded us all of how much worse things can get when opacity reigns instead.
William M. Peester is a professional writer and creator of metaversal— Bankless newsletter focused on the emergence of NFTs in the crypto economy. Recently, we also provide content to Bankless, JPG, etc.
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It is not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. This newsletter is not tax advice. Please consult your accountant. Please do your own research.
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