- Markets are slightly mixed today, with equities continuing their upward trend on the week as the S&P500 and Nasdaq trade 0.66% and 0.77% higher, respectively. BTC is up 0.57% and ETH is down slightly at -0.46%, trading at $23,989 and $1,717, respectively. Other alt-L1 tokens have continued their rally, with AVAX and BNB up 2.52% and 6.06%, respectively. An interesting trend to watch is the price action of various Ethereum Layer 2 networks and their ecosystems, as these names might serve as high beta plays on the proposed Merge. When looking at TVL growth over the past month, L2s Polygon (MATIC), Arbitrum, and Optimism (OP) have seen an average increase of 40% compared to just 7% average growth amongst Solana, Avalanche, and BSC ecosystems.
- The Arbitrum Network is an L2 scaling solution for the Ethereum Network. On Monday, it started testing its "Nitro" upgrade, which should increase the number of transactions the network can handle while decreasing transaction fees for users. In addition to benefitting end-users, Nitro will make it easier for Ethereum developers to be onboarded to the Arbitrum Network. If the testing goes well, Nitro is expected to be implemented within the next few weeks allowing for further Ethereum scaling potential heading into The Merge.
- Further details pertaining to the collapse of Babel Finance, a Hong Kong-based crypto lending company, were revealed in a leaked restructuring proposal. As a reminder, Babel was among the crypto lenders in hot water following the Luna/Terra collapse. According to the proposal, Babel reportedly traded with customers' funds and lost $280 million of their clients' money. The total losses amounted to over 8,000 BTC and 56,000 ETH, with reports indicating that they had little to no hedging of downside risk. These losses prevented Babel from meeting margin calls and consequently halted all withdrawals. Babel is now trying to convert hundreds of millions of debt into convertible loans to raise capital.
Crypto Daily Report – July 29
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