Noelle is the Head of Market Insights at Genesis Global Trading. She was previously Managing Director of Research at CoinDesk, where she led a team of analysts in the production of crypto asset market insights in the form of reports, webinars and newsletters.
Please feel free to use with attribution:
On Evergrande and the crypto slump:
“The crash we’ve seen over the past 24 hours has two key components. First, there is a marketwide move to risk off sentiment triggered by concerns around the Evergrande collapse and the implications it could have on Chinese markets, other debt markets and supply chains. Whenever there are market wobbles, Bitcoin is hit because it’s a risk off market.
The second component to this slump is specific to the crypto market, and it comes down to Evergrade’s role in Tether reserves. An Evergrande collapse would likely take other companies down with it, which could impact the commercial paper that Tether holds in a disastrous ripple effect.”
On stablecoin regulation:
“With the U.S. Treasury’s upcoming report on stablecoins, which will likely lay out their position on what regulation of these coins should look like, we are looking out for some kind of disclosure requirements, which would be extremely relevant for the industry 一 while Tether, for example, is disclosing more than they used to, it is still not enough.”
On what the recent Solana outage demonstrates:
“Last week’s Solana outage demonstrated that blockchain assets’ transparency is their greatest strength, because the framework allowed the outage to be caught and rectified quickly, with developers around the world able to jump in and work on it. This is not something you see in traditional financial services, where a breach may go undetected for a longer period of time, and where information about it may not be so publicly available. Things went wrong last week with Solana, but they did so transparently, collectively and fairly.”
On "Ethereum killers"
"With Ethereum transaction costs soaring over the past few weeks, attention has focused on the evolution of so-called “Ethereum killers”, alternative smart contract platforms that offer higher throughput, faster settlement times and lower fees. While some of these, such as Solana and Avalanche, are seeing strong activity and soaring token prices, they are not so much Ethereum competitors as Ethereum complements. Each offers the user advantages such as speed and cost savings, and some are gaining significant traction with users. Solana, for example, has traded almost $39 million of NFTs over the past seven days, according to Solanalysis. The network has over $11 billion in value locked in smart contracts, more than double what it had a week ago, according to DeFi Llama.
However, none have the breadth of the Ethereum ecosystem. What’s more, recent developments hint that Ethereum will be able to maintain its lead as scaling solutions are rolled out. Arbitrum is one such layer 2 solution, so-called because it executes transactions off the main chain, bypassing high fees and relatively slow settlement, but settles periodically to benefit from Ethereum’s blockchain security. It launched less than two weeks ago, and already has over $1.5 billion-worth of value locked in smart contracts on the platform. Other layer 2 solutions are gearing up to launch in the coming weeks.
The potential for decentralized applications is enormous, and the more participants developing user-friendly solutions, the stronger the ecosystem will be. Blockchain is not, unlike other network technologies, about winner-takes-all, something the “Ethereum killer” conversation overlooks. These are relatively agile platforms that evolve according to experience and demand. It’s probable that not all will thrive, but given the development of bridges and other connective functionalities, there does not need to be one dominant solution. Smart contract networks can support each other, allowing the market to choose acceptable trade-offs, and leaving the deciding factor of success to the end users."22 September 2021