Cryptocurrency daily summary:
Arbitrum Uniswap’s trading volume exceeds $150 billion;
MetaMask Launches “Smart Transactions” to Fight Ethereum Front-Running
Let’s first look at the trading activities of Bitcoin ETFs. According to Farside Investor data, on May 6, Grayscale Bitcoin Spot ETF (GBTC) received an inflow of US$3.9 million; at the same time, Fidelity Bitcoin Spot ETF (FBTC) received an inflow of US$99.2 million, Bitwise Bitcoin Spot ETF (BITB) received an inflow of US$2.1 million, and ARK 21Shares Bitcoin Spot ETF (ARKB) received an inflow of US$75.6 million.
Arbitrum’s total trading volume on Uniswap has exceeded $150 billion, becoming the first Layer 2 protocol to break the DEX threshold. Uniswap Labs announced in a social media post on Monday that Arbitrum’s cumulative trading volume reached $150.2 billion as of early May.
According to blockchain data from DeFiLlama, Arbitrum has a total locked value (TVL) of $2.64 billion, making it the Layer 2 protocol with the largest TVL, second only to Layer 1’s Solana, BSC, Tron, and Ethereum. Uniswap is the largest decentralized exchange by TVL, with a value of $5.54 billion as of May 6, according to DeFiLlama data.
Offchain Labs, a core contributor to Arbitrum, released the latest upgrade of Layer 2, called Atlas, in March this year. As previously reported by The Block, the upgrade adds support for block transactions to help reduce the cost of Ethereum Layer 2 transactions.
Ethereum’s most popular crypto wallet, MetaMask, this week launched a new feature designed to help users avoid the effects of Maximum Extractable Value (MEV).
MEV refers to the extra profit blockchain operators extract from users by previewing or reordering transactions before they are written to the network, sometimes similar to the unsavory practice of front-running trade orders in traditional financial markets. MEV has significant impacts on how Ethereum operates, including increasing prices for users, slowing down transactions, and even causing transactions to fail under certain network conditions.
The new feature, called “Smart Transactions,” allows users to submit transactions to a “virtual memory pool” before they are officially on-chain. According to Consensys, the company behind MetaMask, the virtual memory pool will protect against certain types of MEV strategies and will run behind-the-scenes simulations of transactions to help users get lower fees.
MetaMask’s solution has some similarities to private memory pools, which have become an increasingly popular strategy for ensuring transaction privacy and protecting against MEV, but may have centralization risks. Linehan, director of the Special Mechanisms Group at Consensys, sees smart transactions as a “concrete first step” toward MetaMask’s grander vision.
At the same time, the Ethereum community's EIP-3074 proposal to improve wallets is also attracting attention. This proposal is a code change aimed at improving the usability of encrypted wallets.
Currently on Ethereum, there are two types of wallet accounts: the most common are externally owned accounts (EOA), such as MetaMask, and smart contract accounts, such as Argent and Safe. Users of EOA accounts own a pair of keys (public and private keys), while smart contract accounts are controlled by code. The main problem with EOA is human error; if you lose the private key of your EOA account, there is no help desk or key recovery process to help you regain your funds.
EIP-3074 is another step towards such innovation, delegating transaction functionality to smart contracts. A key component of the proposal is to allow users to batch transactions and sign them all at once. Other features include letting third parties sponsor users’ transaction fees, so decentralized applications (Dapps) can pay gas fees for users.
Market Analysis: BTC fluctuates widely, while Solana ecosystem performs well
Market trend:
BTC rose to a high of $65,500 in intraday trading yesterday, but then fell back to around $64,000, showing a wide range of market fluctuations. At the same time, Ethereum performed poorly due to a one-year low in on-chain gas fees, reflecting low network utilization. At the macroeconomic level, U.S. stocks rose, and the market's anticipation of interest rate cuts continued to bring optimism.
Market hot spots:
1. Performance of the public chain Solana (SOL): The rise in the price of SOL has driven the rise of multiple projects in the Solana ecosystem, including Jupiter ($JUP ）、Wifey（$WIF ) and Bomberman ($BOME ). In particular, in Solana’s recently announced hackathon, after the mining project ORE won the championship, its price doubled in one day. ORE adopts a linear mining strategy, and it is estimated that it will take 40 years to mine 21 million tokens. This long-term mining strategy may have a lasting impact on its market price.
2. Significant increase in ENA: ENA price surged by 15%. The market speculates that the reason behind this may be that several major trading platforms - as the main investors of ENA - may introduce USDe trading pairs to increase the usage scenarios of USDe. This move will directly enhance the liquidity and utility of ENA.
3. The general rise of AI concept tokens: With ChatGPT 5 expected to be released in June and the Apple Developer Conference also scheduled to be held in June, AI concept tokens have generally risen recently. This series of major events in the technology field has stimulated the market's interest in AI-related tokens, and the market may frequently hype these AI concept tokens during this period.
The current cryptocurrency market is in a dynamic state, especially with active projects in the AI and Solana ecosystems. Investors should pay attention to upcoming technology products and developer activities, which will drive market sentiment and price changes in the short term. At the same time, paying attention to macroeconomic indicators and policy changes, such as the Fed's interest rate cut decision, is also key to developing an investment strategy. Investors are advised to remain cautious and appropriately diversify high-volatility assets to manage potential risks.
Macro: Wall Street closes higher, Asian markets hit highs, global markets boosted
U.S. stock indexes closed higher on Monday, rising for the third straight session as investors continued to hold out hope that the Federal Reserve is more likely to cut interest rates this year. The Dow Jones Industrial Average rose 0.46%, the S&P rose 1.03% and the Nasdaq rose 1.19%.
Markets moved lower in April as inflation proved more thorny and some investors began to worry that a rate cut might not materialize at all.
However, data on Friday showed U.S. job growth slowed more than expected in April, easing pressure on the Federal Reserve to keep interest rates higher for longer. That, combined with a surprise uptick in U.S. corporate earnings season, has given investors a fresh round of positive moments in recent trading sessions.
Meanwhile, the Fed said last week it favors eventually lowering borrowing costs but wants "greater confidence" that inflation will continue to fall before cutting rates, a message policymakers reiterated on Monday.
Most sectors in the S&P 500 rose. The energy index was one of the biggest gainers, thanks in part to U.S. natural gas futures hitting their highest level in 14 weeks.
Asian markets were also optimistic. On May 7, Asian stocks hit a 15-month high on Tuesday as confidence in a U.S. interest rate cut was rekindled, while traders awaited a policy meeting in Australia later in the day and kept a close eye on the depreciation of the yen.
MSCI's index of Asia-Pacific shares rose 0.3% in early trade. Hong Kong stocks edged lower as heavy buying by mainland investors boosted the Hang Seng, snapping a 10-day winning streak of more than 14%, its longest since 2018. Japan's Nikkei spot index rose 1% overnight.
RBA could turn hawkish: The Reserve Bank of Australia (RBA) is widely expected to keep interest rates unchanged at its policy meeting later on Tuesday, but the focus will be on whether the outlook shifts to explicitly include the possibility of a rate hike following the inflation surprise.
In commodity trading, oil prices were slightly firmer, with Brent crude futures up 0.3% at $83.58 a barrel, as a ceasefire in the Middle East proved elusive.
Gold rose overnight and was steady at $2,325 an ounce on Tuesday.
