Markets reacted in opposite directions this month, as regulating the cryptoasset industry is still in talks in the U.S. New developments in the Ripple case spurred some optimism, with the hope that the long tail of cryptoassets may not be considered crypto-securities. Bitcoin and Ethereum fell by almost 4% each over the past month. However, the market cap of the decentralized finance (DeFi) industry alone has increased by 8%. As shown below, the biggest winners of July were Maker, which increased by 50% in returns, Solana (+28%) came in second, and thirdly Optimism (+ 21.8%). These jumps in price movements can be attributed to fundamental improvements and developments in both the application and infrastructure layers, which we will elaborate on later in this monthly review.
Figure 1: Price and TVL Development of Major Crypto Sectors
Source: 21shares, CoinGecko, DeFi Llama. Data as of July 30 close.
5 Trends to Remember from July
• XRP by itself may not be a security, according to a U.S. court decision.
On July 13, U.S. District Court Judge Analisa Torres issued a summary judgment order that was partly in favor of the Securities and Exchange Commission (SEC) and partly in favor of Ripple. Specifically, Judge Torres distinguished between the target of an investment contract (e.g., XRP as a token) versus the sale and marketing of that asset (e.g., the investment contract around the sale or offer of XRP). The former was not held to be a security, but the latter was in certain circumstances. Judge Torres’ decision also held that there were disputes of material fact that were not appropriate to resolve on summary judgment, so there could be a trial relating to a few additional issues (including whether Ripple’s founders aided and abetted Ripple’s securities law violations). Although not conclusive, the court’s decision spurred short-lived optimism across the cryptoassets market. On July 13, Bitcoin reached $31.45K, the highest since May 2022. Ethereum, on the other hand, surpassed the $2K, a level last seen in April following the Shanghai upgrade. As for the industry’s long tail of tokens, especially those labeled in previous SEC lawsuits (against Coinbase and Binance) as securities, Solana, Polygon, and Cardano all enjoyed roughly 30% increase in returns for the two days following the verdict.
Hoping it would mean the same for the collapsed Terra Luna, Terraform Labs filed a motion to dismiss their case based on Judge Torres’ “programmatic sales” argument. On July 21, the lawyers for the SEC filed a response against Terraform’s motion, vaguely suggesting that they’re considering an appeal against the Ripple court decision. Judge Jed Rakoff rejected Terraform’s motion at the end of the month, saying that the court rejected the approach adopted by Judge Torres in the Ripple case. While this may not change XRP’s ruling, it may affect the market sentiment of the token, which has persevered as of writing this report, still enjoying the 40% increase over the past month.
• MakerDAO: A Return to Fundamentals
Maker also implemented the enhanced DAI savings rate (eDSR), first increasing the yield to 3.49% in June, while a subsequently approved proposal in late July switched the interest rate into a dynamic model that could potentially see the yield reach 8%. Thus, eDSR could catalyze the adoption of DAI as the deposit rewards could surpass the risk-free benchmark of traditional finance, represented by the US treasury at 4%, and help to establish an attractive savings rate that could improve the liquidity of DeFi. This isn’t to argue that Maker’s deposit rewards would be considered a safe investment compared to the risk-free rate of the US Treasury, as the US government is the sole lender of last resort, but it does show the measures DeFi protocols are adopting in order to compete and build a sustainable treasury leveraging the current macro environment. Although temporary, elevated interest rates present a valuable window for projects to capitalize on, fostering lasting treasury growth. Finally, Maker’s shift towards real-world assets (RWA) is proving fruitful, generating around $90M in annual revenue, with more than 50% exposure.
Figure 2: Revenues per Type
Source: Steakhouse on Dune
This growth is significant as it provides a practical revenue generation approach without relying solely on token emissions. It also showcases the benefits of bridging with the TradFi, encouraging other protocols to build sustainable treasuries for runway protection during times of volatility. Furthermore, the increase in DAI’s savings rate elevates DeFi’s stablecoin yield benchmark, incentivizing protocols to become more competitive and driving further user adoption. It is worth noting that DeFi tokens outperformed the market in July, potentially forming a bottom for the first time in almost two years. So, we’ll be closely observing Maker’s impact on the broader sector and how it could influence their decision to further integrate with TradFi.
Figure 3: Price Indices Performance of the Different Ethereum Industries
Source: Glassnode
• The Evolution of Polygon 2.0 as an Infrastructure Power House
The Polygon Foundation has revealed plans for the infrastructure of Polygon 2.0. This new network aims to unify various scaling services under a Layer 2 framework that uses Zero Knowledge technology for interoperability. The architecture has four main categories: Staking, Interoperability, Execution, and Proving, with emphasis on the first two. The staking layer will offer shared security like Polkadot and Cosmos, while interoperability focuses on native asset transfers across networks. Polygon will also upgrade its POS chain to a zkEVM network, using existing validators for submitting routing data to Ethereum.
Further, The MATIC token will transition to POL at a 1:1 ratio with uncapped supply and 2% yearly emissions to support staking and the ecosystem’s growth. Finally, Governance will be categorized into three branches to establish clear responsibilities for the stakeholders and form a treasury to help drive the growth of Polygon. The announcement, culminating Polygon’s 6-week program to unveil its new network design, saw a steady growth in total number of users and an increase of close to 100% in AuM on the new scaling solution, climbing from ~$23M to ~$55M, as shown below.
Figure 4: Polygon zkEVM scaling solution AuM
Source: 21shares on Dune
• A Rise in Institutional Adoption
With Europe’s first comprehensive legislation regulating cryptoassets (Markets in Crypto Assets) going into effect in 2024, the following instances speak volumes of the dire need for legal clarity to streamline the adoption of this asset class along with its underlying technology, especially for institutions.
• Societe Generale became the first company to receive a digital asset service provider (DASP) license in France. The license allows Forge, the bank’s cryptoasset division, to operate digital asset custody, sell and purchase digital assets for legal tender, and trade digital assets. In April, Forge launched CoinVertible (EURCV), an institutional-grade, euro-pegged stablecoin so far only built on the Ethereum blockchain, with plans to become blockchain-agnostic.
• Bank of Italy partnered with Polygon for a limited environment for trading securities on DeFi, tailored especially for institutions. Milano Hub, the bank’s innovation center, selected the “Institutional DeFi for Security Token Ecosystem Project”, an ecosystem project promoted by Cetif Advisory to research opportunities offered by DeFi and experiment with security tokens. This project is anticipated to act as a catalyst to onboard Italian banks, asset management companies, and other financial institutions into a DeFi platform that is fully compliant with regulatory requirements, which is the main obstacle to institutional adoption.
Figure 5: Breakdown of the RWA-backed assets issued by Institutions on the Polygon network
Source: Polygon Analytics on Dune
• Ethereum’s Scaling Solutions are Transitioning Towards Customizable Scalability
Allowing projects to deploy tailored applications as standalone networks enables customization of fee payments, permissions, and application development using various programming languages. Initiating this trend in early 2023, Arbitrum and Optimism introduced Orbit and OpStack, respectively, to bootstrap the creation of custom networks. OpStack emerged as the preferred solution, as it was adopted by major players like Coinbase, Binance, WorldCoin, and Zora, leveraging Optimism’s law of chains to promote seamless interoperability among OP-stack-based chains and addressing a crucial gap in crypto’s infrastructure. For context, Coinbase’s base network launched on July 13, securing close to $85M in total deposits in less than two weeks. Although the hype around meme coins drove the activity, the trend still demonstrates users’ excitement for Ethereum’s scaling future.
Figure 6: Gas Used by Scaling Solutions to Settle Transactions on Ethereum
Source: @msiib7 on Dune
That said, ZkSync and Starkware entered the competition with ZKStack and Stark Net Stacks in July, offering customizable frameworks for embryonic networks to address their unique business needs. This development brings exciting prospects for programmable scalability and resolves privacy issues that are not easily achievable on Ethereum or its scaling solutions alone. Finally, the trend of embracing the Ethereum ecosystem was evident with Celo’s announced intent to pivot from an Ethereum competitor into an L2 anchored to Ethereum’s security. A decision that is driven by the need to benefit from the deep liquidity and vibrant developer ecosystem
What to Expect
• A Breakthrough in Resolving Cryptocurrency Infrastructure Challenges
Chainlink’s highly anticipated interoperability product finally launched on Mainnet. CCIP is an inter-blockchain communication standard that enables data and value transfer across four incompatible networks at the start. The solution incorporates four features to improve bridging: Active Risk Management (ARM) Network to detect and pause the malicious activity, programmatic transfers to automatically execute predefined instructions, rate limits for preventing unauthorized token transfers beyond a certain threshold, and smart execution to enable seamless cross-chain activities without extra payments using a pre-funded account. Check out our State of Crypto Issue 8 for a deeper dive into the technology.
CCIP is crucial in addressing weak security in cross-chain bridges, which have been exploited for nearly $2.5B in value over time. Thus, it’s a pivotal milestone to have an internet of contracts, similar to how the TCP/IP unified the global internet, facilitating liquidity to be globally accessible and the value of applications to flow across networks to be established on a battle-tested infrastructure that has enabled more than $8T in transactional value.
Further, CCIP may become Chainlink’s most significant product due to the wide need for interoperability. For context, applications using Chainlink’s CCIP can pay in LINK or ERC20 tokens, with a 10% premium on ERC20 to encourage LINK usage. This makes LINK a universal gas currency across chains, removing the need for token sales by node operators and phasing out the foundation’s subsidies. Finally, with a fee-based model in place, CCIP can generate sustainable earnings for DONs, the backbone of Chainlink’s security. That said, despite initial modest earnings of $35K over the past months, partnerships with Synthetic and Aave using CCIP for token transfers and cross-chain governance suggest significant growth potential. Integration with SWIFT also solidifies CCIP’s position as a cross-chain solution for both crypto and traditional finance.
Figure 7: Total Revenue Accrued by CCIP
Source: @Ericwallach on Dune
• Solana Attempting to Claw Back
Although Solana faced a challenging start to the year due to FTX’s collapse, then the SEC’s legal actions against Coinbase and Binance, recent developments have hinted at a potential recovery. First, Solana Labs introduced Solang, enabling Ethereum developers to use Solidity (Ethereum’s programming language) on Solana, and GameShift, a web3 game development API streamlining the game development process. Then, Neon EVM went live, offering Ethereum-compatible smart contracts on Solana without significant code modifications.
Overall, Solana’s activity is showing signs of hopeful recovery, with active addresses rising 25% in the past seven weeks and total AuM hitting a year-high. Catalysts like Jump Crypto’s Firedancer, diversifying node software and combating outages, and demanding apps like Hiver and Teleport could drive excitement. Further, Saga, Solana’s phone device, might boost adoption as it abstracts the complexity of web3. Nonetheless, there’s still a lot of work to do to encourage users to move their capital back to Solana, especially as the total value transferred on the network remains at relatively muted levels.
Figure 8: Monthly Value moved on Solana
Source: TheBlock
• Ramifications of the Ripple Case
Although the court decision is inconclusive, we may see foundations and developers rethinking their strategies when bootstrapping their services and products to accommodate regulatory expectations, primarily concerning how their protocols achieve decentralization. It took Uniswap two years to launch its token after it had dedicated this time to focus on the fundamentals of the decentralized app, which is a tactic that has proved to pay off, building Uniswap to become the world’s largest decentralized exchange with more than $3B in assets under management and a market cap of almost $5B. More projects at the application layer could postpone token launches until they establish alignment between their product’s core services and market demand. Established projects may overhaul their entire business models to enhance token value capture. As discussed earlier in this report, we are already witnessing this shift with Polygon’s new tokenomics. Following Uniswap’s steps, entrepreneurs will focus their efforts on scoring investments from traditional players in venture capital and private equity instead of launching their tokens from the very start to raise funds.
Bookmarks
Research Analyst Tom Wan’s insights were featured on Forkast News.
Digging Into Ethereum Withdrawals and Future Improvements.
Want to learn more about Ripple? Read our investment thesis.
Celsius has been selling its assets as part of its bankruptcy proceedings.
Learn more about Ethereum’s Liquid Staking Derivatives, which now constitute the largest DeFi sector by AUM and are expected to continue proliferating as the ETH staking ratio grows.
Next Month’s Calendar
These are the top events we’re closely monitoring in August.
Each week the 21Shares Research team will publish our data-driven insights into the crypto asset world through this newsletter. Please direct any comments, questions, and words of feedback to research@21shares.com
Disclaimer
The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction. Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors. The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.
iShares Metaverse UCITSETF USD (Acc) (CBUV ETF) med ISIN IE000RN58M26, försöker följa STOXX Global Metaverse-index. STOXX Global Metaverse-index spårar företag från hela världen som har affärsverksamhet i metaverse-ekosystemet. Aktierna som ingår filtreras enligt ESG-kriterier (miljö, social och bolagsstyrning).
Den börshandlade fondens TER (total cost ratio) uppgår till 0,50 % p.a. iShares Metaverse UCITSETF USD (Acc) är den enda ETF som följer STOXX Global Metaverse-index. ETF:n replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna ackumuleras och återinvesteras.
iShares Metaverse UCITSETF USD (Acc) är en liten ETF med tillgångar på 88 miljoner euro under förvaltning. Denna ETF anserades den 7 december 2022 och har sin hemvist i Irland.
Investeringsmål
Fonden strävar efter att uppnå en avkastning, genom en kombination av kapitaltillväxt och inkomst, som återspeglar avkastningen från STOXX Global Metaverse Index.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.
Jane Edmondson, Head of Index Product Strategy på TMXVettaFi, träffade Steve Darling från Proactive för att diskutera det snabbt utvecklande globala försvarslandskapet och de investeringsimplikationer som en europeisk försvarsutgiftsboom medför. Med geopolitiska spänningar på uppgång och skiftande försvarsprioriteringar måste investerare navigera efter nya möjligheter och risker i sektorn.
Edmondson lyfte fram Europas oöverträffade ökning av försvarsutgifterna, ett direkt svar på USA:s beslut att minska militärt bistånd till Ukraina. Centralt i denna förändring är EUs initiativ ”Rearm Europe Readiness 2030” på 800 miljarder euro, som syftar till att stärka den militära beredskapen. Detta inkluderar betydande investeringar i nyckelförsvarstekniker och en dedikerad kreditfacilitet på 150 miljarder euro för att förbättra militär kapacitet.
”Det kommer att bli mycket utgifter framöver,” noterade Edmondson och betonade stora tillväxtområden som artificiell intelligens, cyberförsvar, drönarteknik och avancerade artillerisystem.
Hon påpekade att ledande europeiska försvarsföretag – inklusive Rheinmetall, BAE Systems, Thales, Dassault och Leonardo SPA – kommer att dra stor nytta av denna expansion. Dessutom framträder Sydkoreas Hanwha Aerospace som en nyckelspelare i globala försvarskontrakt. Däremot upplever amerikanska försvarsföretag motvind på grund av budgetnedskärningar och inställda upphandlingsavtal, vilket leder till en relativ nedgång i sektorn.
En annan kritisk förändring av global försvarsupphandling håller på att utvecklas när traditionella amerikanska allierade omprövar sina försvarsinköp. Kanada och Portugal, till exempel, omvärderar beställningar på USA-tillverkade F-35 stridsflygplan till förmån för alternativa alternativ, som flygplan från Dassault Aviation.
Edmondson betonade att dessa geopolitiska omställningar skapar stark ekonomisk medvind, särskilt för Tyskland, som kommer att investera uppskattningsvis 500 miljarder euro i försvar under de kommande åren. Hon citerade en nyligen gjord rapport från Goldman Sachs, som förutspår att hälften av dessa utgifter direkt kommer att underblåsa BNP-tillväxten – en effekt som redan återspeglas på finansmarknaderna. Medan europeiska aktier, särskilt Euro Stoxx 50-index, tar fart, har stora amerikanska aktieindex kämpat för att hålla jämna steg.
”Detta är en kraftfull påminnelse för investerare att hålla sig diversifierade, behålla exponering utanför amerikanska marknader och allokera kapital till framväxande globala försvarsteman,” rådde Edmondson.
När globala militära strategier fortsätter att utvecklas kan investerare som positionerar sig tidigt i viktiga internationella försvarssektorer dra nytta av denna historiska förändring.
HanETF planerar en ny försvarsfond med fokus på europeiska företag som kommer att börja handlas i nästa vecka. Vi har ännu inte namnet på denna, men kortnamnet på tyska Xetra är 8RMY medan det i London blir tickern ARMY.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.
WisdomTree Uranium and Nuclear Energy UCITSETF USD Unhedged Acc (WNUC ETF) med ISIN IE0003BJ2JS4, försöker spåra WisdomTree Uranium and Nuclear Energy UCITS-index. WisdomTree Uranium and Nuclear Energy UCITS-index spårar företag över hela världen som är engagerade inom uran- eller kärnenergiindustrin.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,45 % p.a. WisdomTree Uranium and Nuclear Energy UCITSETF USD Unhedged Acc är den enda ETF som följer WisdomTree Uranium and Nuclear Energy UCITS-index. ETFen replikerar det underliggande indexets prestanda genom full replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Denna ETF lanserades den 5 mars 2025 och har sin hemvist i Irland.
WisdomTree Uranium and Nuclear Energy UCITSETF (”Fonden”) strävar efter att spåra pris- och avkastningsutvecklingen, före avgifter och utgifter, för WisdomTree Uranium and Nuclear Energy UCITS Index (”Indexet”). Indexet är utformat för att följa resultatet för företag som är involverade i uran- och kärnenergiindustrin.
Varför investera?
Få en unik strategi med hög övertygelse för investeringar i uran- och kärnenergiföretag.
Kärnenergi är avgörande för den framtida hållbara energimixen, eftersom kraven på energi ökar, kommer det att bli nödvändigt att skala upp tillförlitliga källor för ren energi.
Denna ETF erbjuder exponering mot en diversifierad korg av företag som är involverade i uran- och kärnenergimarknaden, såsom uranbrytning, byggande av kärnkraftsinfrastruktur eller bedriver avancerad forskning om framtida kärnteknik.
Analysen för urval och viktning av företag i indexet utförs av WisdomTree med betydande expertis i att konstruera tematiska index, vilket säkerställer att portföljkorgen förblir fokuserad och relevant.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel Nordnet, SAVR, DEGIRO och Avanza.