Welcome back to DV Chain's Weekly Market Commentary! In this edition, we'll be focusing on recent market activity, latest airdrops, latest ETF flows, as well as additional upcoming catalysts / trade ideas. Let's dive right in:

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Market Recap

• ETF Flows continued to be positive last week
  

                                                          (Source: Farside Investors)

• Retail volumes have been trending down slightly from early March peaks but still healthy and higher than January even with the ETF launch
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• Gold and BTC have maintained a positive correlation over the last 42 days, marking the longest such stretch of the past yearsome text
  • GC has made a new all time high 5 out of the last 6 trading days. BTC also seems well setup for a run higher
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• ETH caught a bid this AM after approaching the 6 month lows in ETH/BTC and .05 psychological levelsome text
  • ETH’s biggest catalyst is the Eigenlayer launch estimated to be sometime this month or next. It’s arguably the most anticipated innovation this cycle
  • The ETH ETF deadline is also late May, but at this point the market has largely priced in the expectation of rejection or delay. Polymarket odds are trading at 17% chance of approval

• Ethena is now sitting at 2B in TVL and accounts for a significant portion of the global open interestsome text
  • They’re adding BTC basis positions now after originally only having ETH basis positions
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• Solana has been having congestion issues, lots of transactions not going through, as chain activity remains high with memecoins, new token launches and airdrop claimssome text
  • The good UI and cheap transactions is what won people over to solana, so it will be interesting to see if this narrative changes as the congestion continues
  • Jito seems to be the big beneficiary as the only reliable way to push transactions through are to hike up priority fees (validator bribes)
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• Wormhole (W) started trading last weeksome text
  • Opened up around $1.4, putting it at about 14B FDV and over 2B circulating, one of the richest new launches this year, but it quickly traded down to $1
  • SYN caught a bid on W launch day as the valuation became very attractive comparably
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• AAVE contemplates a fee switch proposalsome text
  • This has been a notable trend in Defi this cycle, starting with MKR and then UNI recently
  • It’s probably worth studying forgotten DeFi tokens that have large treasuries and revenues but currently have no value accrual
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• April is a big month for highly anticipated airdrops such as Tensor, Parcl, Kamino, Drift, and Eigenlayer

Upcoming Catalysts / Trade Ideas

• TNSR airdrop, 4/8
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• BTC Halving, 4/20some text
  • Lots of excitement around new L2s – exciting in theory but we have yet to see any strong execution with good UI/UX
  • Bitcoin ordinal NFTs have rallied the last week as NFT owners speculate on launch of Runes (a UTXO based BRC-20 alternative) that will be dropped to many ordinal NFT holders
  • Depending heavily on the UX of trading runes, this is an area to watch for potential meme coin frenzies that we’ve seen lately on other chains
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• Doge Day, 4/20
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• SUI Conference, 4/10some text
  • Any outsize conference pumps may potentially be a good short setup, or can serve as a good hedge leg for longs
  • SUI has unlocks coming up this May/June, one of the largest cliff unlocks this year
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• STX Nakamoto Upgrade, 4/15some text
  • “first SEC-compliant blockchain”
  • we think it’s worth being early users/testers of the chain post upgrade, as there’s tremendous interest in defi on Bitcoin and Bitcoin L2s, as shown by Merlin chain’s 3Bn TVL amassed shortly after launch
  • the limiting factor at the moment is UI/UX, stacks (pre upgrade) and Ordinal ecosystem leaving a lot to be desired
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• STRK Unlock, 4/16some text
  • 64m tokens unlock, and will continue monthly thereafter
  • We think emissions in high FDV products will be very impactful in this market and that the sell pressure from monthly unlocks will be impactful
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• $PARCL announced 7-8% supply airdropped this monthsome text
  • AEVO pre market futures implies 1.8B FDV
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• Eigen Launch, widely expected to be this month
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• $LDOsome text
  • We think $LDO is poised to outperform as it should benefit from a re-staking narrative that’s heating up into the Eigenlayer airdrop
  • Having a whopping $30B in TVL, LDO is one of the biggest and fundamentally strong Defi Protocols that exists, and has a first mover advantage in the liquid staking spacesome text
    • With the imminent launch of re-staking, we believe attention and excitement will return this sector and LDO will be one of the main beneficiaries
    • The trend of DeFi protocols turning on Fee switches is also bullish for LDO

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