Decentral Block Post

A week after the fallout from the FTX and Alameda chaos some on-chain data points are interesting to observe. Although record amounts of Bitcoin (BTC) and Ethereum (ETH) volume are leaving the exchanges, not all decentralized applications (DApps) and protocols have shown growth, mainly due to reliance on FTX and Alameda. 

DeFi earnings highlight positive revenue for some protocols

According to Token Terminal’s earnings leaderboard, in the last 7-days, three protocols had revenue above $1 million. Ethereum led the on-chain earnings with over $8.5 million total, a sign of strong post-Merge fundamentals.

OpenSea was a distant second place to Ethereum, earning $1.5 million, while nine protocols and DeFi platforms earned more than $100,000.

Decentralized perpetual exchanges see increased trading volume

Combined with the migration away from centralized exchanges, the volatile crypto market has users trading in record numbers.

According to data from Token Terminal, the daily trading volume of perpetual exchanges reached $5 billion which is the highest daily trading volume since the UST meltdown in May 2022.

The collapse of FTX cryptocurrency exchange has created a liquidity crisis in the crypto space, which could extend the crypto winter through the end of 2023, according to a research report by Coinbase.

According to analysts, the FTX implosion could keep the institutional investors at bay because they are even more likely to tread cautiously for some time.

The crisis has negatively impacted several crypto-focused companies who have assets stuck on FTX following the company's bankruptcy filing on Nov. 11. Investors also fear the contagion could spread, causing further damage to the cryptocurrency ecosystem.

Although several investors were rattled by the collapse of FTX, billionaire venture capitalist and serial blockchain investor Tim Draper remains bullish on Bitcoin (BTC). In a Nov.15 interview with Cointelegraph, Draper doubled down on his $250,000 target for Bitcoin in 2023.

However, investors should take the price projection with a pinch of salt because it is unlikely that Bitcoin will start a roaring bull market in the near future.

Ether (ETH) has been stuck between $1,170 to $1,350 from Nov. 10 to Nov. 15, which represents a relatively tight 15% range. During this time, investors are continuing to digest the negative impact of the Nov. 11 Chapter 11 bankruptcy filing of FTX exchange. 

Meanwhile, Ether’s total market volume was 57% higher than the previous week, at $4.04 billion per day. This data is even more relevant considering the collapse of Alameda Research, the arbitrage and market-making firm controlled by FTX's founder Sam Bankman-Fried.

On a monthly basis, Ether's current $1,250 level presents a modest 4.4% decline, so traders can hardly blame FTX and Alameda Research for the 74% fall from the $4,811 all-time high reached in November 2021.

While contagion risks have caused investors to drain centralized exchanges wallets, the movement led to an uptick in decentralized exchanges (DEX) activity. Uniswap, 1inch Network, and SushiSwap saw a 22% increase in the number of active addresses since Nov. 8.

Let's take a look at derivatives metrics to better understand how professional traders are positioned in the current market conditions.

Bitcoin (BTC) fell to intraday lows after the Nov. 16 Wall Street open as the FTX scandal appeared to claim another victim.

Genesis Trading liquidity “exceeded”

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD trading around $16,400 at the time of writing.

Downside had entered again for the pair amid news that Genesis Global Capital, the crypto lending arm of Genesis Trading, had paused withdrawals over liquidity problems.

In a series of tweets on the day, Digital Currency Group (DCG), the parent company that counts Genesis Trading among its subsidiaries, directly attributed the decision to the FTX debacle.

“Today Genesis Global Capital, Genesis Trading’s lending business, made the difficult decision to temporarily suspend redemptions and new loan originations,” part of the thread stated.

If FTX is sparking new Bitcoin (BTC) bear market lows, BTC price action has further to fall to match Mt. Gox.

Data from on-chain analytics firm Glassnode confirms that the “Mt. Gox bear market” almost a decade ago still beats the 2022 lows.

FTX vs. Mt. Gox: Same, same but different

With the fallout from the FTX bankruptcy scandal still unfolding, questions remain over how many major crypto entities will be affected and how big industry losses will be.

BTC/USD fell over 25% last week as the ramifications became known and has failed to recover much lost ground.

At the same time, multiple comparisons to Mt. Gox have emerged: alleged mismanagement, poor security and insider trading activity have all been cited as examples.