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NFTs explode and Binance Smart Chain overtakes Ethereum

Posted by
Ilya Abugov

Week in Review | Week #9, 2021

This was a turbulent week for the crypto markets. Prices have been on a rollercoaster ride with BTC and ETH spending time below $45K and $1400 respectively. There were more hacks, but also new launches and developments. The new DappRadar Dapp Industry Report is out, with a deep dive into the growing competition between Ethereum and BSC. NFTs seem to be taking over the conversation with impressive sales for artists and collectibles capturing attention. The industry is full of excitement.

Source: DappRadar

Another hack signals a concerning trend

Furucombo was exploited for $14M, as the latest victim in a series of “evil contract” attacks. As noted in the Cointelegraph article, a similar concept was used earlier to attack Pickle Finance and Alpha Homora. The malicious actor creates a smart contract and makes the protocol believe that it is part of a permissioned entity, which grants it access to funds.

This is a concerning trend, as it now appears to be a general attack vector in DeFi and not a project-specific issue. It is unclear how audit firms are planning to address this, or how the sector plans to mitigate the risk. The current perceived lack of security in DeFi may become a barrier to further growth as both institutional and retail users may hesitate to risk their funds.

Launches and expectations

Cordano has finally deployed the Mary hard fork and is now experiencing the rapid growth of new tokens launching on its network. There are already more than 450 tokens, but the quality of the underlying projects may vary.

Source: https://pool.pm/tokens

The arrival of Cardano’s dapp ecosystem has been expected for some time, and with the recent launch of FD7 Ventures’ $250M fund focused on Polkadot and Cardano, it looks like there may be capital to help foster development.

Ethereum’s Berlin hard fork is on the horizon, scheduled for April, and it will be interesting to see whether it helps with the current gas issues on the network. At the moment, Ethereum rivals are enjoying a bit of a revival as chains like Flow, BSC, and Polkadot are drawing users and developers to their platforms.

Compound announced Gateway, its own blockchain for a cross-chain interest rate market. While the initial whitepaper was met with some confusion by the market, the growing attention placed on cross-chain connectivity for DeFi may mean that there are a legitimate need and place for Gateway.

Others like Elrond and Reef Finance are also approaching the subject, and no surprise Andre Cronje has also been delving into the issue. With Ethereum seemingly losing its status as the only viable chain, interoperability is becoming a more important subject unlocking greater possibilities for the industry.

Source: Twitter

If at first you don’t succeed…

Dan Larimer has announced Clarion OS, a project focused on decentralized communication and social networks. This will be his fourth project in the blockchain space, but it is only in the beginning stages right now.

Some of his previous projects, include Steem and EOS and had mixed results. While met with initial enthusiasm, they hit roadblocks and have fallen off as key platforms in the industry. It remains to be seen whether Clarion will be any different, and if the market can get excited about this endeavor given the state of the previous projects of the founder.

Impressive sales for NFT items continue

The month of February closed with some incredible sales across both collectibles and art and music segments, highlighted by the sale of Beeple’s Crossroad for $6.6M. That week also had impressive sales for Euler Beats, foreshadowing the growing interest in music NFTs.

Source: DappRadar

This week 3LAU sold 33 NFTs for $11.6M, making it one of the largest sales for artists in the NFT space. These particular NFTs are redeemable, exemplifying another angle for their use for artists. Digital artists have been finding commercial success in the blockchain space, and now music artists may also start to take that route.

Social media awareness and general popularity may play a big role in the success of a given auction as it is a potential indicator of demand. Recently Grimes sold 10 NFTs for around $5.8M. With more artists and celebrities giving NFTs a try, retail adoption might grow quicker, as their massive fan bases start to interact with the technology.

Enjin is tackling gas issues

Gas fees have been hurting the gaming and collectibles sector on Ethereum since last year, prompting many teams to look for alternative solutions and either migrate their projects to an L2 or other chains.

Enjin is looking to alleviate some of the pain. The project has announced Jumpent, with gass-less transactions for ERC-1155. The solution is expected on April 6, while the earlier announced Efinity is also expected to arrive at some point this year.

It is important to note that many of the top projects and artists utilizing NFTs are using the ERC-721 standard. So, while gas-less NFT transactions sound great, the immediate impact on the ecosystem might be limited. However, it will be interesting to see if Jumpnet pushes teams to explore ERC-1155 more.

Brave expanding its blockchain footprint

It appears that the browser project is looking to become a more integrated part of the ecosystem. Last week came the news of the DEX, and this week came the news of the collaboration with Splinterlands. While there are not a lot of details, and the scope of this collaboration may be limited, there is potentially a trend forming.

The Brave browser is a platform with many crypto-aware users, it is only natural that Brave starts to leverage that to try to expand. Perhaps that leads to new product lines, or perhaps it will mean more integrations. For projects that have been able to deliver successful retail user-facing user-facing applications, there should be many opportunities, as blockchain projects try to reach a mass audience.

The information provided here is for informational purposes only. This is not investment advice and should not be treated as such. Strategic Round Capital and/or the author of this article holds a position in BTC, ETH, YFI, COMP, Hashmasks, NCT.

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