On-chain indicators look bullish for Ethereum as the whale activity around the asset declines.
Ethereum (ETH) declined by 3.8% in the past 24 hours and is trading at $2,620 at the time of writing. The asset’s market cap is currently sitting at $315 billion. ETH’s daily trading volume, however, increased by 3%, reaching $15.6 billion.
ETH price, funding rate, open interest, RSI and whale activity – Aug. 15 | Source: Santiment
According to data provided by Santiment, the Ethereum total open interest decreased from $5.28 billion on Aug. 12 to $5.05 billion at the reporting time. Usually, lower price volatility would be expected with the decline in an asset’s open interest due to a lower amount of liquidations.
Data from the market intelligence platform shows that the total funding rates aggregated by ETH plunged below the zero market for the first time since October 2023 — currently sitting at negative 0.0002%.
Historically, a negative funding rate has triggered a short-term bullish momentum for Ethereum despite traders expecting a price fall.
Per Santiment, the number of whale transactions consisting of at least $100,000 worth of ETH has been constantly decreasing over the past three days — falling from 5,371 on Aug. 12 to 4,346 unique transactions over the past day.
Moreover, the Ethereum Relative Strength Index is also showing that the asset is slightly oversold — currently hovering at the 42 mark. It’s important to note that a further selloff could trigger FUD and take the ETH price further below.
One of the main reasons behind the recent decline in the ETH price is the Jump Trading selloff. The company has already accumulated over $64 million ETH tokens from different platforms and looks ready for sale.
Will Bitcoin’s price hold above critical support levels as the market digests cooling inflation and yen trade risks?
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A brief look at inflation figures
Inflation is like the temperature in a room — too hot, and it’s uncomfortable; too cold, and it’s just as bad. For the past few months, the U.S. economy has been trying to find that ‘just right’ spot and all eyes are on the latest numbers to see where we’re headed next.
The Producer Price Index data for July 2024 just came in, showing inflation is cooling off. PPI inflation fell to 2.2%, slightly below expectations, marking the lowest level since March 2024.
BREAKING: July PPI inflation falls to 2.2%, below expectations of 2.3%.
Core PPI inflation falls to 2.4%, below expectations of 2.7%.
In another constructive sign, PPI inflation is now at its lowest level since March 2024.
Core PPI inflation also dropped to 2.4%, surprising many who expected it to be higher. With numbers like these, a rate cut in September seems almost certain.
But the story doesn’t end there. The bigger headline everyone’s waiting for is the Consumer Price Index (CPI) data, set to be released on August 14.
This data is crucial because it gives a clearer picture of how much everyday prices are rising or falling, affecting everyone from the average consumer to big investors.
Wall Street is predicting a 2.9% rise, but there’s still a 37% chance it could be higher than expected. If it goes above 3.0%, it could signal that inflation is back on the rise, which would be the third time in five months. That could change everything, from interest rates to market expectations.
Tomorrow’s CPI inflation data is crucial:
Wall Street is currently showing 2.9% as the consensus expectation.
However, there is a 37% chance of inflation coming in ABOVE 2.9%, according to @Kalshi.
But inflation isn’t the only concern. Just a few days ago, on August 5, the financial markets were rattled by the unwinding of the yen carry trade.
For those unfamiliar, the yen carry trade involves borrowing in Japan’s low-interest-rate environment and investing in higher-yielding assets elsewhere.
This strategy worked smoothly until Japan’s interest rates started rising, as they did recently for the second time since 2007 — the first being in March 2024. The result was a market shake-up, and the risk from this trade hasn’t fully dissipated.
As we await the CPI data and grapple with the ongoing risks from the yen carry trade, the question remains: could these global financial uncertainties pull the rug out from under crypto? Let’s find out.
Yen carry trade uncertainty continues to cloud the market
While recent inflation data suggests cooling in the U.S., the risks associated with the yen carry trade remain a looming threat that could heavily impact global markets, including the crypto space.
The unraveling of this massive trade, estimated by Reuters to involve up to $4 trillion, has already sent shockwaves through global financial markets, triggering a sharp sell-off in risk assets like Bitcoin (BTC), which plummeted to as low as $49,000 on August 5.
Since then, BTC has regained its footing and is trading at around $61,000 as of August 13, marking a rise of about 24%.
BTC 6-months price chart | Source: TradingView
Richard Kelly, head of global strategy at TD Securities, told CNBC that he would be ‘very hesitant’ to declare the end of the carry trade unwind.
He believes that the undervaluation of the yen and potential changes in interest rate differentials could lead to further market disruptions over the next one to two years.
Moreover, as Barclays analysts have indicated, the selling pressure from the carry trade unwind does not appear to have been fully exhausted. They warn that it’s ‘too early’ to call an all-clear on the unwinding and that volatility is likely to remain elevated.
For the crypto market, these lingering risks pose twofold challenges: a strong yen could drive investors away from high-yielding but risky assets, while at the same time, a sharp market correction could erode the confidence of crypto investors.
What’s happening in the market?
As the crypto market faces turbulent times, Bitcoin is encountering its own set of challenges. According to Copper Research’s “Opening Bell” report, Bitcoin’s recent performance has been lackluster.
Despite showing resilience against the German government’s sale of 40,000 coins, Bitcoin has struggled to regain the momentum it had in March when it reached its all-time high.
The report highlights that overall market conditions have been tough, largely due to a series of global events, including the U.S. election, UK riots, Middle East tensions, and shifts in Japanese central bank policy.
What’s particularly noteworthy is the lack of buying activity in Bitcoin. Initially, when the German sell-off occurred, some market participants bought the dip, seeing it as an opportunity.
However, recent market volatility has scared off many investors, resulting in minimal buying activity for Bitcoin.
Yet, there is a silver lining. Recent data shows a noticeable uptick in inflows into Bitcoin and Ethereum ETFs (ETH) over the last two days.
And after dust settled on the downturn in btc last 2wks (altho it came back a bit) the YTD net total flows are at an ATH of +$19b which is surprisingly strong all things considered (again this number is most imp metric to measure success IMO bc net price moves and GBTC unlock). pic.twitter.com/AuJ189ttVw
On August 13, the 12 spot Bitcoin ETFs recorded total inflows of $38.94 million, a nearly 40% increase from the $27.87 million recorded the previous day.
Leading the charge was BlackRock’s IBIT fund, which saw $34.6 million in inflows, bringing its total to a staggering $20.36 billion since its launch.
Ethereum also saw a surge in interest. The nine spot Ethereum ETFs recorded net inflows of $24.3 million on August 13, a jump from the modest $5 million recorded the previous day. BlackRock’s ETHA fund was at the forefront, with $49.1 million in inflows following a day of no activity.
What to expect next?
The current data suggests that the market is at a critical juncture, raising the question: where do we go from here? One thing is certain: Bitcoin’s next move could define the direction of the entire crypto market in the coming weeks.
Michaël van de Poppe, a well-known crypto analyst, recently noted that Bitcoin is in a choppy phase, with its immediate future hinging on whether it can hold above the $56,000 to $57,500 range.
It’s a big macroeconomic week as we’ve got PPI, CPI, and more data.#Bitcoin is relatively choppy; from a lower timeframe TA perspective, I’d want to see #Bitcoin stay above $56-57.5K and rally from there toward the other side of the range.
He suggests that if Bitcoin manages to stay within this zone, there’s potential for a rally toward the upper end of the range, possibly leading to a new all-time high.
Meanwhile, the increase in inflows to Bitcoin and Ethereum ETFs indicates that institutional investors are still interested, albeit cautiously. However, if volatility continues, we might see more sideways movement or, worse, another dip.
For now, it’s a waiting game. If the macroeconomic environment stabilizes, Bitcoin could break out of its current range and make a run for new highs. Therefore, stay cautious, trade wisely, and never invest more than you can afford to lose.
Blockchain startup Parfin has secured $10 million in its Series A round, aiming to drive global expansion and bridge traditional finance with blockchain.
Mastercard-incubated Blockchain infrastructure firm Parfin has successfully closed the first tranche of its Series A funding, raising $10 million.
In a press release shared with crypto.news, the startup revealed that the round, led by ParaFi Capital, also saw contributions from Framework Ventures, L4 Venture Builder, and Núclea, with total funding projected to reach $16 million by the end of the second closing.
The proceeds from the funding are expected to help Parfin further develop its enterprise-grade blockchain platform, Rayls, increase its workforce, and accelerate its global expansion efforts throughout 2024. Parfin co-founder Marcos Viriato highlighted the strategic impact of the funding, noting that it will allow the firm to “help more banks and financial institutions realize new sources of revenue and stay relevant by leveraging the efficiency, security, and transparency of digital assets.”
Synchronizing defi with tradfi in Latin America
Founded in 2019 by Marcos Viriato, Alex Buelau, and Cristian Bohn, Parfin aims to bridge the gap between decentralized finance and traditional finance, offering financial institutions the regulatory compliance and privacy they need while capitalizing on blockchain technology.
In May, Parfin was selected for Mastercard’s Start Path program, which supports blockchain and digital asset startups with tailored training, collaboration opportunities, and access to Mastercard’s network and customers. To date, the company has raised a total of $38 million and serves clients including Banco BV, Núclea, and B3 Digitas, the digital asset services subsidiary of the Brazilian Stock Exchange.
Additionally, Parfin’s Rayls platform is now part of a pilot program with Brazil’s central bank, testing Ethereum‘s virtual machine privacy and scalability solutions for central bank digital currency initiatives.
Ethereum price continued its recovery even as Jump Trading resumed offloading its tokens this week.
Ethereum (ETH) rose to a high of $2,753 on Wednesday, its highest point since Aug. 4 and 30% above its lowest point this month.
Jump Trading is selling Ether
This rebound coincided with that of other coins. Bitcoin (BTC), which sets the tone in the crypto industry, rose to $61,000 while the combined market cap of all coins increased to $2.15 trillion.
Ethereum rallied even after Jump Trading resumed selling its Ether holdings. According to LookOnChain, the company claimed 17,049 Ether tokens worth $46.4 million from Lido and sold them.
Jump Trading has been selling its tokens over the past few weeks, which partially explains why Ethereum’s drop during the crypto Black Mondaywas worse than that of Bitcoin and other coins.
Data from Arkham shows that the company still holds 24,919 Ether tokens, 28,735 stETH tokens, and 675 wETH coins. In total, Jump Trading holds assets worth over $423 million.
A likely reason for Ethereum’s price rebound is that investors have started moving back to spot Ethereum ETFs. Data from SoSoValue showed that spot Ether ETFs recorded net inflows of over $24.3 million.
Most of these inflows were directed to BlackRock’s Ethereum ETF, which saw $49.1 million in assets, bringing the total assets under management to $843 million. If this trend continues, the fund is likely to hit the $1 billion mark in the coming months.
Fidelity’s FETH fund also had $5.4 million in assets, while Invesco’s QETH held $813,000. Other ETFs from companies like Bitwise, VanEck, and Franklin Templeton had no inflows on Tuesday, while Grayscale’s Ethereum Trust saw over $31 million in outflows. Its mini trust has accumulated over $981 million in assets, thanks to its lower fees.
Still, Ethereum is at risk of further downside because it has formed a death cross pattern on the daily chart. The 50-day and 200-day Simple Moving Averages crossed each other on Aug. 7. In most cases, this pattern leads to more downside.
Therefore, Ethereum’s upside will be confirmed if the coin flips the important resistance at $2,833 into a support level. This is a crucial level since it was its lowest swing in April, May, and July, and the neckline of the slanted triple-top pattern.
On the flip side, a drop below last week’s low of $2,114 would indicate more downside, signaling that bears have prevailed.
Singaporean financial giant DBS has launched a treasury token pilot with Ant International to improve cross-border treasury and liquidity management.
DBS Group has initiated a blockchain-based pilot in collaboration with Ant International in a bid to streamline cross-border treasury and liquidity management.
In an Aug. 13 press release, DBS said that the so-called DBS Treasury Tokens project will leverage its permissioned blockchain — which is compatible with Ethereum‘s EVM — to facilitate multi-currency treasury operations for Ant International, which operates mobile payment service Alipay+.
“This new capability comes at a time when the treasury needs of businesses are evolving to meet the rise of e-commerce and on-demand services on a 24/7 basis.”
Lim Soon Chong, DBS Bank’s group head of global transaction services
Kelvin Li, Ant International’s head of platform technology, noted that the partnership with DBS addresses key challenges, including cost reduction and mitigation of transaction risks in cross-border payments.
The treasury token is expected to enable Ant International, which is an affiliate of Alibaba Group, to optimize its liquidity management across various global markets as DBS says the pilot can reduce the settlement of intra-group transactions “from potentially days to seconds.”
In addition to its tokenization initiatives, DBS is also making strides in the crypto space. In July, the bank became a custodial partner for Paxos, a New York-based stablecoin issuer, while in February, DBS also expanded its services to include crypto offerings for clients in Hong Kong.
Ethereum layer-2 networks recorded an unprecedented 12.52 million transactions, setting a new all-time high.
According to data from growthepie, this peak, recorded on Aug. 13, surpasses the previous record of 11.5 million transactions set on April 4. After a dip in activity between late April and early June, the transaction count rebounded in mid-June, sustaining a high volume despite market uncertainties.
Leading the charge among Ethereum (ETH) L2s is Coinbase’s Base, which accounted for a substantial 3.98 million transactions on the ATH day. Base’s performance is impressive, given that it is relatively new, having launched just over a year ago.
Meanwhile, Arbitrum One followed closely, with 1.79 million transactions on Aug. 13. Notably, Base and Arbitrum One were the only networks to record transactions above the 1 million mark yesterday. OP Mainnet, the third on the list, saw 487,820 transactions, while Linea witnessed 409,520 transactions, securing the fourth spot.
In addition to the surge in transaction counts, the stablecoin market cap on Ethereum L2s has grown significantly, reaching $9.69 billion.
However, despite the increase in transactions and stablecoin market cap, the fees paid by users have seen a dramatic decline. On Aug. 13, users paid only $171,514 in fees, a slump from the $4.2 million peak recorded on March 5.
Data shows that the 96% drop suggests that while activity on L2 networks is increasing, the cost to users is decreasing, particularly during periods of market volatility. Cumulative active addresses on these L2 networks have also declined 16.23% over the past week to 5.29 million unique wallets.
Moreover, the six leading Ethereum L2 networks — Base, Arbitrum One, Linea, OP Mainnet, Scroll, and zkSync Era — saw varying performance metrics regarding active wallet addresses and cross-chain activity.
As the current front-runner, Base recorded 3.25 million weekly active addresses though only 9.1% of its activity was cross-chain. Despite being nearly three years old, Arbitrum One maintained its strong position with 1.11 million weekly active addresses.
Linea, a one-year-old ZK Rollup, saw solid growth with 493,570 weekly active addresses. Notably, 43.6% of its activity involved multi-chain transactions. Meanwhile, Optimistic Rollup OP Mainnet witnessed 315.32K weekly active addresses.
Although still in its infancy at nine months, Scroll attracted 272,290 weekly active addresses, with 61.4% of its transactions involving multi-chain activities, the highest among the top six L2s. zkSync Era, another ZK Rollup, recorded 261,260 weekly active addresses.
Spot Bitcoin and Ethereum exchange-traded funds in the United States continue their streak with a second consecutive day of positive inflows this week.
According to data from SoSoValue, the 12 spot Bitcoin ETFs recorded a total inflow of $38.94 million on Aug. 13, representing a nearly 40% increase from the $27.87 million recorded the previous day.
BlackRock’s IBIT fund led with $34.6 million in inflows, bringing its total since launch to $20.36 billion. It was the only Bitcoin ETF to see inflows for two consecutive days.
Other notable inflows included $22.6 million into Fidelity’s FBTC and $16.5 million into Bitwise’s BITB. These gains helped to counterbalance a $28.6 million outflow from Grayscale’s GBTC, which has seen total outflows of $19.49 billion since its inception.
The remaining Bitcoin ETFs did not record any activity on that day.
Trading volumes for Bitcoin ETFs were slightly lower at $1.18 billion, down from $1.3 billion on Aug. 12. The cumulative net inflows into spot Bitcoin ETFs stood at $17.4 billion.
In contrast, the nine spot Ethereum ETFs saw a significant uptick in investor interest, with net inflows reaching $24.3 million on Aug. 13, a notable increase from the modest $5 million recorded the previous day.
According to data from SoSoValue, BlackRock’s ETHA led the charge once again, with $49.1 million in inflows following a day of no flows.
Fidelity’s FETH and Invesco Galaxy’s QETH also saw inflows of $5.4 million and $0.8 million, respectively. This was the first day of inflows for Invesco’s Ethereum ETF since its launch.
Grayscale’s ETHE fund saw an outflow of $31 million, bringing its total outflows to $2.32 billion since launch.
Despite the inflows, the trading volume for Ethereum ETFs dropped significantly to $190.76 million. Overall, these funds have experienced cumulative net outflows of $376.67 million to date.
At the time of writing, Bitcoin (BTC) was exchanging hands at $60,786, while Ethereum (ETH) stood at $2,726.
Jupiter DEX is facing increasing scrutiny as users have observed a nearly 50% transaction failure rate, prompting concerns and questions about the platform’s performance. Many are looking for explanations and wondering what measures are being taken to address this issue. In this article, the situation will be explored in detail, examining the factors contributing to the high failure rate and what actions are being taken to improve the user experience on the platform.
Table of Contents
Source: Hacken
High failure rate: causes and concerns
Over the last 30 days, excluding the missing data from August 2 and 3, the average failure rate on Jupiter stands at 42.89%. This has led to an increasing number of users questioning the underlying causes of these failures and seeking clarity on what measures are being taken to improve the platform’s performance.
A particular point of frustration for many users is that they are still charged fees for failed transactions. While this might seem unfair at first glance, it is an inherent aspect of blockchain technology. Each transaction, successful or not, uses network resources like computational power and block space. Even if a transaction fails, the validator still processes it until an issue causes it to error out. Since the network is still utilized to process the request, the fee compensates for those computing resources.
Increased slippage tolerance is a risky solution
To avoid repeated charges, users often increase their slippage tolerance to ensure their transactions go through. The increase makes the transaction more likely to succeed because it gives the network permission to complete the swap even if the price changes slightly from the original quote.
However, increasing slippage opens the door to another risk: front-running by bots. These bots can detect transactions with high slippage and execute their trades just before the user’s transaction, buying assets at the lower price and selling them back at the higher price set by the user’s slippage. This results in users getting less favorable rates on their swaps, effectively costing them more than just the transaction fees.
How front-running works on smart contract blockchain networks
The diagram from Hacken shows how front-running works on Ethereum, but the concept also applies to Solana and other smart contract blockchains.
Step 1: The user initiates a transaction on the network, intending to interact with a smart contract.
Step 2: A front-runner (usually a bot) monitors the network and detects the user’s transaction.
Step 3: The front-runner creates a new transaction with a higher gas price. The higher gas price incentivizes validators to prioritize processing the front-runner’s transaction over the user’s original transaction.
Step 4: The blockchain network prioritizes transactions based on the gas price. Since the front-runner’s transaction offers a higher gas price than the user’s, it gets processed first.
Step 5: The user’s transaction gets less favorable terms or even fails, which leads to financial losses or missed opportunities.
Majority of these failed transactions come from arbitrage bots that route using the program when an arb opportunity is near, hoping to land a transaction when the opportunity takes place — this leads to the higher failure rate. For our users on Jupiter UI, the transaction success rates are actually over 90%!
Nonetheless, front-running heavily depends on the trustworthiness of the RPC (Remote Procedure Call) providers used to interact with the network. The RPC provider is an intermediary between the user and the blockchain and transmits transaction data to the network. If an RPC provider is not reputable, it could potentially enable or even participate in front-running by sharing transaction details with bots or manipulating the order in which transactions are submitted. Reputable RPC providers, on the other hand, are expected to uphold ethical standards and ensure that they do not exploit users or allow such behavior to occur.
Another reason for the high rate of failed transactions is the ongoing memecoin frenzy, where tens of thousands of new tokens are being created every day. Many of these memecoins lack sufficient liquidity, meaning there aren’t enough tokens available in the market to complete trades. When users attempt to buy or sell these low-liquidity tokens, the transactions can fail because the trade can’t be fulfilled.
Throughput limitations and delays in order processing
While the memecoin surge contributes to the failure rate, Jupiter’s automated slippage and gas calculation features also play a role. These features, which generally work well in stable market conditions, struggle during periods of high volatility. Additionally, the platform is grappling with issues related to its free tier quote API, which has been exploited by users bypassing rate limits by spinning up new machines. This exploitation has resulted in increased operational costs and the risk of service degradation for legitimate users.
Furthermore, Jupiter’s throughput is currently insufficient, particularly as it is handling an overwhelming volume of orders, causing its retry logic to slow down to more than 25 seconds.
Conclusion
Jupiter DEX is facing some tough challenges, including a high rate of transaction failures, front-running risks, and infrastructure bottlenecks. These aren’t just minor issues—they directly affect user trust and the platform’s ability to perform well. The team is working hard to fix these problems, but there’s a key question that remains: Can Jupiter not only solve these immediate issues but also keep up with the growing demands of the DeFi space?
The CEO of a South Korean technology firm, Wacon, has been arrested for allegedly masterminding a large-scale crypto scam that defrauded over 500 investors.
CEO Byun Young-oh, along with an accomplice identified as Yeom, orchestrated a Ponzi-style scheme through a platform called MainEthernet.
Wakon, which reportedly has about 12,000 members, is suspected of operating as a Ponzi scheme or multi-level marketing campaign. The firm offers virtual currency staking products, including tipping and mainnet businesses, without registering with financial authorities. It has branches throughout South Korea.
Crypto Chaos: Wacon CEO Nabbed for $366M Rug Pull!
Big news from Seoul as the Wacon CEO, Byun Young-oh, faces charges for running an epic Ethereum-themed scam worth $366 million.
The fraud reportedly ensnared 500+ investors, mostly boomers, promising 45% gains in a classic… pic.twitter.com/JEaxgo2DPs
— Mario Nawfal’s Roundtable (@RoundtableSpace) August 12, 2024
The scam, which allegedly amassed $366 million, primrly targeted elderly citizens. Many of them were promised interest rates between 45% and 50% on their Ethereum (ETH) deposits.
Scam details
The platform, which functioned as a digital wallet service, lured investors with promises of secure and lucrative returns. However, by mid-2023, reports emerged that investors were unable to withdraw their funds.
Despite these concerns, Byun assured investors that the issues would be resolved within months. By November 2023, signs of the company’s collapse became apparent as MainEthernet’s office in Seoul removed its signage.
The Seoul Central District Prosecutors’ Office has charged Byun and Yeom with fraud, and the case is expected to go to trial soon.
Prosecutors are continuing to investigate the extent of the scheme, seeking to identify additional victims and potential accomplices. Byun has denied involvement in any Ponzi scheme, claiming ignorance of such structures. The investigation remains ongoing.
