Welcome to Gryphsis Academy’s weekly Crypto Digest. We bring you pivotal market trends, insights into emerging protocols, and fresh industry updates, all designed to enhance your crypto and Web3 expertise.

Market and Sector Snapshot:

Layer 2 Overview:

Last week, most Layer 2s, except for Starknet, were in a downtrend, with Base and zkSync experiencing significant declines of 5.18% and 6.97%, respectively. Starknet, as the only growing Layer 2, saw a slight increase of 0.27%. Protocols like Lighter, Idle, and Yearn Finance showed notable TVL growth percentages.

LSD Sector Overview:

In the LSD (Liquid Staking Derivatives) field, Ethereum staking has maintained a slight growth, but the extent is not substantial, with no significant changes in indicators. In terms of market share, wstETH has seen growth, while the rest remain stable.

RWA Sector Overview:

Last week, the total market capitalization of real-world assets (RWAs) remained above $10 billion and continued to show a growth trend. Additionally, the value of active private credit in RWAs and tokenized treasuries both experienced growth. Notable tokens with significant growth include $TRADE, $IXS, and $DEXTF. Tokens such as $WECO, $TOKEN, and $CFG experienced considerable losses.

Main Topics

Macro Overview:

Big Story:

Protocol Spotlight:

VC Funding Highlight:

Alpha Threads:

Macro Overview

This week, the stock market and cryptocurrency market showed opposing trends. The S&P 500 and NASDAQ rose by 2.2%, while $BTC and $ETH experienced a slight decline, falling by 1.6% and 4.6% respectively. In the coming week, key events to watch include the FOMC meeting, initial jobless claims, PMI, and others.

Story of the Week

SEC Delayed Bitcoin Spot ETF Application

The U.S. Securities and Exchange Commission (SEC) has delayed the decision on Hashdex’s application to convert its existing Bitcoin futures ETF into a spot ETF and has also delayed Grayscale’s move to launch a new futures-based Ethereum ETF. Both entities applied for Bitcoin ETF and Ethereum ETF respectively in the same month, but both faced delays.

This delay comes amidst high market anticipation for the federal regulatory body to approve a spot Bitcoin ETF. So far, the regulatory body has rejected every attempt to list blockchain assets for the general investing public. Many companies have applied and even developed such offerings, but all have been rejected.

However, this rejection did not dampen market enthusiasm; the price of BTC rose over 5% on the afternoon of the 16th, reaching $37,500.

Despite the SEC’s repeated postponement of spot ETF applications, the market expects a batch of spot Bitcoin ETFs to be approved by next January, making it easier for institutional and retail investors to access Bitcoin. Coupled with the ongoing heat in the crypto industry, the sentiment is increasingly bullish. Bitcoin’s price has risen 129% so far.

However, investors face a question: whether the significant rise in Bitcoin’s price this year has already factored in the approval of a spot Bitcoin ETF.

Sui Chung, CEO of digital asset index provider CF Benchmarks, noted that the approval of a spot Bitcoin ETF might have been priced in, but the question is how much capital inflow the spot Bitcoin ETF will attract. He mentioned that considering the lack of correlation between Bitcoin and assets like stocks over a longer period, the benefits of diversification are driving discussions about investing in Bitcoin.

Weekly Protocol Pick

Welcome to our “Weekly Protocol Pick” — where we spotlight a protocol that’s making waves in the crypto space. This week, we’ve picked Match Finance, an aggregator yielder built on Lybra Finance.

Match Finance was launched in October this year and has been audited by Beosin. To understand its product mechanism, one should first get an idea of its serving protocol, Lybra Finance. Lybra Finance is an LSDfi stablecoin protocol, where users obtain eUSD (a stablecoin) through over-collateralizing stETH.

Additionally, there is LBR as a governance token, used to incentivize holding eUSD, or for the eUSD-USDC/LBR-ETH LP. esLBR, as a third-party custodian token, is exchanged at a 1:1 ratio with LBR. All mining rewards of the protocol are distributed in this form. esLBR is non-tradable and non-transferable, but holders of esLBR enjoy the protocol’s income sources and governance rights. esLBR can also be converted to LBR through linear unlocking.

Overview of Match Finance workflow:

As a yield platform, what incentives does Match Finance offer to attract users?

1. Lowering the threshold for acquiring esLBR

In Lybra Finance, users must maintain 5% of the total value of eUSC in LBR/ETH liquidity to normally receive esLBR rewards. Failure to maintain this results in potential esLBR rewards turning into a bounty. However, in Match Finance, users can obtain esLBR simply by depositing eUSD or dLP (LBR/ETH pool), significantly lowering the threshold and risk for acquiring esLBR.

2. Increasing rewards for dLP

3. Instant rewards for the mesLBR/esLBR pool.

4. Serving as a bribery platform for the Lybra War.

In summary, Match Finance attracts users to participate in dLP or stake eUSDC through these mechanisms, thus incentivizing high returns in esLBR.

Our Insights

The allure of esLBR is such that all of Match’s incentives revolve around it, primarily due to the governance power it wields, triggering the Lybra War.

Lybra Finance launched a DAO organization in October this year, where all holders of esLBR and LBR can participate in Lybra’s decision-making by submitting and voting on governance proposals. However, one must hold at least 10,000 esLBR to initiate a proposal. Those holding LBR/esLBR have voting rights, but LBR is automatically converted to esLBR during voting.

As a result, esLBR holds both proposal and governance rights, as well as enjoying the protocol’s income sources. Holders can decide the issuance rate of esLBR in the LST Vault. Therefore, these LSTs, to attract users to use their issued tokens as collateral for mining stablecoins (eUSDC & peUDC) and additional esLBR rewards, may find inherent value in the bribery of governance tokens.

Lybra allows the use of Lido’s stETH as collateral to mint eUSDC, and this Lybra War also received support from Lido. Match, being the first support platform for bribery in the LSDfi track and a leader in this space, holds an optimistic value expectation.

Data shows that in the current LSDfi track, Lybra holds a 25.6% share, and its ecosystem stablecoin eUSD accounts for 35.6% of the total track, both ranking in the top three.

Due to the liquidity value of the pledged assets over-collateralizing the stablecoin eUSD, and the protocol charging a service fee of 1.5% on the annual circulation of eUSDC as its primary income source, esLBR holders simultaneously enjoying protocol income and governance rights will bring high reciprocal value to them.

Since esLBR is non-transferable and non-tradable, it can only be obtained through mining as an LP in Lybra. Therefore, compared to Lybra with its higher barriers, Match might be the most efficient portal for ordinary users in this war.

VC Highlights: Top Funded Crypto Protocols This Week

Welcome to our weekly Investment Spotlight, where we shine a light on the most significant venture capital moves in the crypto space. Each week, we’ll focus on protocols that have attracted the most funding.

Blockchain.com

Cryptocurrency exchange Blockchain.com has completed a $110 million Series E funding round led by British investment management company Kingsway Capital, with participation from Baillie Gifford, Lakestar, Lightspeed Venture Partners, Coinbase Ventures, and others. According to Bloomberg, Blockchain.com’s valuation is “less than” half of its valuation during the Series D funding round (less than $7 billion).

https://www.theblock.co/post/263079/blockchain-com-raises-110-million-in-series-e-funding

Civitai

Content creation platform Civitai has completed a $5.1 million funding round led by a16z. The current total valuation of Civitai is $20 million. It is a generative AI content marketplace that surpassed one million registered users within three months of its establishment. Currently, the number of registered users is about 3 million, with monthly unique visitor counts between 12 and 13 million. In the future, the startup aims to expand beyond AI image models to other modes.

https://www.cointime.ai/flash-news/content-platform-civitai-completed-us-14038

Protocol Updates

OKX launches new ZK Layer 2 network ‘X1’ with Polygon CDK

DyDx chain trading goes live beta mainnet stage

Reddit admins reduce moons supply then token surges

Cboe launches margined bitcoin and ether futures

Aave launches social graph Lens V2 on Polygon

Bithumb eyes IPO in second half of 2025

Industry News

Crypto fund inflows break $1 billion for 2023, led by Bitcoin, Ether and Solana

South Korea’s national pension fund buys $19.9 million worth of Coinbase shares

Bitcoin ETP exposure hits all-time highs as approval window for spot ETFs nears end

XREX obtains in-principle approval for Major Payment Institution license in Singapore

Monetary Authority of Singapore to start ‘live’ wholesale CBDC pilot

New York financial watchdog releases guidance to strengthen crypto listing

Alpha Threads

Alpha is abundant on Crypto Twitter, but navigating thousands of threads in Twitter can be hard. Each week, we spend several hours researching, handpick threads packed with insights, and curate a list of weekly selection for you. Let’s dive in!

https://x.com/defiinfant/status/1725420547763249564?s=20

https://x.com/hmalviya9/status/1725043901957111898?s=20

https://x.com/milesdeutscher/status/1725268373184086523?s=20

https://x.com/poopmandefi/status/1725094175979548991?s=20

https://x.com/zerokn0wledge_/status/1725070163752649059?s=20

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