Weekly Market Wrap – 26 July, 2022
Market Update
This week, the crypto space is a mixed bag as many protocols continue to suffer extreme market conditions. On the flip side, projects continue to build and achieve success bringing essential solutions and pushing the ecosystem to new frontiers.
Several projects have announced massive advancements in Ethereum scaling. Polygon has uncloaked zkEVM, a new Ethereum-compatible Layer 2 network. The name stands for zero-knowledge Ethereum Virtual Machine. This technology will result in significantly lower gas fees and higher throughput while remaining secure. Meanwhile, Lido Finance plans to expand its services across various Ethereum L2 scaling solutions. What does this all mean? The Ethereum network is currently plagued with issues like congestion and high fees. L2 solutions are designed to move some of the processing off the main chain to optimize transaction speed and reduce transaction fees. As projects continue to build, the whole ecosystem will enjoy the benefits of lower fees and expanded use cases.
TESLA DUMPED 75% OF ITS BITCOIN HOLDINGS
The electric car maker sold 75% of its Bitcoin. With Bitcoin’s value plunging over 50% this year, the company is now backing away, adding $936 million in cash to its balance sheet. Tesla CEO Elon Musk has been one of the most high-profile advocates for cryptocurrency after making a major investment last year which hyped up demand for the cryptocurrency. At the end of Q2 this year, profit dropped as the electric car firm struggled to meet demand due to a shutdown at its Shanghai factory. Mr. Musk announced that the Bitcoin sale was due to the need for cash.
SKYBRIDGE CAPITAL AND ZIMPEX SUSPENDED CLIENT WITHDRAWALS
Adding to the list of crypto companies suffering from current market conditions are Anthony Scaramucci’s SkyBridge Capital and Singapore-based Zimpex Exchange. The sharp decline in stock and cryptocurrency values has caused SkyBridge Capital to suspend client withdrawals from Legion Strategies, one of its hedge funds. On Twitter, Zimpex announced a withdrawal halt, which was met with concerns from many accounts.
PREMINT HACK: OVER 300 NFTS AND $400K WORTH OF ETHEREUM STOLEN
One of the biggest hacks this year took place last Sunday on Premint. The attack was carried out using malicious JavaScript code, which created a pop-up asking users for their wallet information. Though many have realized the pop-up was malicious, a large number of users fell for the scam. The NFT platform later announced its intention to compensate hack victims for their losses. Further, the platform is also heightening security to prevent such things from happening again.
HOP PROTOCOL MAKES MOVING CRYPTO ACROSS L2 SOLUTIONS EASIER
On the brighter side, a new project has emerged to make moving cryptocurrencies between Ethereum and layer-2 solutions much simpler. Gone are the days when moving funds between different L2 solutions requires users to bend over backwards and face high gas fees. Not to mention moving back funds to Ethereum takes a week before being transferred. The more users participate in Hop Protocol, the better the liquidity of these solutions, ultimately resulting in low-cost and lightning-fast asset swaps.
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