The Hyperledger Besu team released Besu v21.7.1 on Jul. 15, 2021.
On Jul. 15, 2021, THORChain MCCN was exploited and approximately $4.9M were lost.
Haven Protocol developers announced that they would issue two hard forks to restart the chain and patch the initial vulnerability.
A proposal to establish a liquidity incentives program (Uniswap Liquidity Program, ULP) has been drafted.
As part of the Maker foundation dissolution, Rune Christensen, CEO of the Maker Foundation, opted to step down from his role.
Following the MCCN exploit, THORChain team released a plan to deal with the liability.
Sector Performance Overview
The week ending on July 22nd was dominated by the Smart Contract Platform sector posting a weekly return of 2.87%. Within the sector, platforms like Ethereum (+5.31%), Polkadot (+0.93%), and Ethereum Classic (+0.41%) were the main drivers of the sector’s 7D performance.
On the opposite side, the Web3 sector didn’t experience the same rebound as the rest of the sectors, finishing the week with a -3.47% loss. Although most assets in the sector had negative-to-muted weekly returns, the vast majority of the sector’s underperformance can be attributed to four assets: Filecoin (-2.30%), The Graph (-7.43%), BitTorrent (-5.70%), Stacks (-15.28%).
Sector Portfolio Methodology
The market-weighted “sector portfolios” for this week’s report were created by selecting the top assets (ranked by market capitalization) from each sector covered in this report. The sector portfolio allocations are the following using market capitalization data as of July 22nd.
Sector Drill Down
Performance during the week ending on July 22nd was a bit of a rollercoaster. All sector portfolios started the week with disappointing performance with some reaching lows of -10% to -20% in the first five days of the week. However, performance across the board improved starting on July 20th gaining back some of the previous day’s losses. On July 21st, the overall market was boosted by comments from Elon Musk saying that his companies (Tesla and SpaceX) hold Bitcoin, while his personal holdings include a good amount of Ethereum and (of course) Dogecoin.
The Smart Contract sector portfolio ended the week with the least losses across all sector portfolios. Despite Ethereum’s positive benefit, the sector portfolio’s overall performance was dragged down by assets like Cardano and Solana. The runner-up was the Top Assets portfolio which ended the week with a -1.7% mostly driven by Bitcoin’s performance over the week.
The Web3 portfolio suffered the most losses ending the week with a -8% return. The biggest losers within the sector include Arweave (-15.5%), Storj (-15.8%), and LivePeer (-18.2%).
Volatility, defined as the rolling standard deviation of daily log returns, had been on a steady decline since the beginning of July. However, in the past two days, there was a small uptick as a consequence of the recent rally. Compared to levels in mid-May, volatility is relatively low.
The DEX and DeFi portfolios are currently the ones with the highest risk both running 10-day rolling volatility of ~7%. The volatility of the Top Asset and Currency portfolios has been moving in the 4-6% due to their higher allocation to Bitcoin which has been one of the least volatile assets relative to the rest of the tokens covered in the report.
The correlation between sector portfolios and Bitcoin saw a sudden jump over the week as a result of the market upswing. Aside from the portfolios that are heavily allocated to Bitcoin (Top Assets and Currency portfolios), all sector portfolios have a correlation with Bitcoin greater than 80%.
On the contrary, the correlation with Ethereum has been on a steady decline. Particularly, the Web3 portfolio went from having a correlation of over 95% in the early days of June to ~85% currently. DEXs and DeFi also saw a decline of roughly 7% over the same period.
