The Week Ahead - W/C 25th September 2023

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TLDR;

• Yield Guild Games ($YGG) unlocks 6.71% of the circulating supply, equal to $2.63m.

• Optimism ($OP) unlocks 3.03% of the circulating supply, equal to $31.17m.

• dYdX V4 is scheduled to go live by the end of September. We await confirmation from the team on the chain migration date.

• $IDEX public testnet and mainnet launch dates edge closer into the end of the month.

• LeverFi ($LEVER), a decentralized perpetual exchange, is scheduled to launch its staking program by the end of September.

Unlocks

Given prevailing weak price action, tokens with significant unlocks have traded heavily throughout 2023 due to the imbalance between supply and demand being accentuated. These environments are characterized by the lack of a "next marginal buyer," and therefore the increased supply from unlocks tends to have a large relative impact on prices.

There are a couple of large unlocks coming up this week which could bring activity. In order of event, $YGG and $OP both release a significant amount of tokens. This is likely to increase volatility and action within these names.

26th September - 15:00UTC

Yield Guild Games ($YGG) unlocks 6.71% of the circulating supply, worth $2.63 million. The last major unlock of 6.6% of the circulating supply occurred on August 27, and since then, YGG has remained in a tight range. This month's unlock could create increased volatility, as YGG's unlocks are set to increase in the coming months, and large holders may use this opportunity to lock in prices given wider uncertainty.

30th September - 05:00UTC

Optimism ($OP) will unlock 3.03% of its circulating supply, worth $31.17 million, on September 30th. This is the same percentage of supply that was unlocked on August 30th, and since then, OP has fallen over 7% on a relative basis. As a result, the upcoming unlock is likely to be closely watched and could cause volatility into month-end.

dYdX V4 launch date

dYdX V4 is a major upgrade to the dYdX decentralized exchange. It introduces a number of new features, including:

The new order book is based on the 0x protocol, which is a popular open-source protocol for decentralized trading. This makes the order book more efficient and scalable, as it can handle more orders and trades.

The margin trading feature allows users to trade with borrowed funds, which can magnify their profits or losses. The maximum leverage of 10x means that a user can control a position worth 10 times their initial investment.

The new staking system rewards users for providing liquidity to the dYdX exchange. Liquidity providers are those who deposit funds into the exchange's trading pools. This allows other users to trade quickly and easily, without having to worry about slippage.

The new API makes it easier for developers to build dApps on top of dYdX. dApps are decentralized applications that run on the blockchain. They can be used for a variety of purposes, such as trading, lending, and borrowing.

dYdX V4 is a significant upgrade that makes the exchange more powerful and versatile. It is a major step forward for the dYdX project and the DeFi ecosystem as a whole. The latest estimation of the V4 launch is the end of this month, however, any confirmed date is likely to see some short-medium term outperformance of the DYDX token, as the upgrade is seen to be a major update and many participants have been watching its progress and development.

IDEX Mainnet Launch

IDEX is a decentralized exchange (DEX) that offers a hybrid liquidity model, combining the best of both centralized and decentralized exchanges. IDEX is currently in a Beta testnet phase, with the mainnet launch initially scheduled for Q4 2023.

The current testnet has been well-received by the community. A small number of users have been able to test out all of the features of IDEX, including its real limit and stop-loss orders, cross-chain trading/margin trading, and rewards.

The next stage is for the project to expand the Beta testnet to a public rollout, before launching fully on the mainnet shortly after. On August 23rd, the team confirmed that the public test net launch is imminent. This is a major step forward for IDEX, and is likely to generate significant excitement and anticipation for the mainnet launch.

Since the announcement of the public testnet launch, the IDEX token ($IDEX) has shown strength against the wider market, outperforming Ethereum by nearly 15%. This suggests that traders are becoming aware of the impending catalyst and are positioning themselves for the mainnet launch.

As we get closer to this event, we expect to see increased volatility in the IDEX token. We will be closely monitoring newsflow from the team and other large publications for any updates on the launch date.

LeverFi ($LEVER) Staking Launch

Staking programs allow cryptocurrency holders to earn rewards by locking up their tokens for a period of time. This helps to support the security and operation of a blockchain network.

To stake tokens, users typically need to buy and transfer their tokens to a staking pool. Staking pools are managed by validators, who are responsible for verifying transactions and adding new blocks to the blockchain. Stakers earn rewards in the form of cryptocurrency tokens, which are typically distributed based on the amount staked and the length of time they are staked.

LeverFi, a decentralized perpetual exchange, is scheduled to launch its staking program by the end of September. Holders will be able to stake assets to help secure the network and earn rewards in the form of $LEVER tokens. In the past, similar program roll-outs have proven to be solid catalysts, and we expect this to be no different.

Implementing staking mechanisms can have a significant impact on value capture by increasing the utility of a cryptocurrency. For example, the LeverFi staking program, which is scheduled to launch by the end of September, will allow holders to earn rewards in the form of $LEVER tokens for helping to secure the network.

Since the announcement of the staking program on Twitter, the price of $LEVER has outperformed the market significantly. This suggests that traders are anticipating the increased utility and potential rewards associated with staking. However, this type of front-running price action often mean reverts once the event actually occurs. Therefore, we will be closely watching the launch of the staking program and expect to see large volume during that time.

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