This week’s shocking collapse of the FTX empire was the most devastating episode for the fledgling cryptoeconomy.
It’s a “Mt. It’s a “Mt.
Many users of FTX could lose their entire savings if a complete rescue package is not put together.
We’ve witnessed a tsunami of uncertainty in the crypto space amid this chaos. The Bitcoin Fear & Greed Index tracks sentiments in large crypto communities and reached Extreme Fear today.
Bitcoin Fear and Greed Index
WETH Volume up as NFTers accept Bids
This is why on chain movements’ transparency is so powerful.
Because the data is openly available and easily accessible, you can get a direct view of the activity flows.
This capability is demonstrated by the recent boom of WETH volume on OpenSea, which shows how the FTX collapse has affected NFT markets.
Wrapped Ether (or WETH) is the ERC20 version. WETH transactions must be approved at the time of payment. However, they can be pre-authorized. This is why WETH can be used to bid on OpenSea or other NFT marketplaces.
OpenSea’s NFT collections will show you the “1.01 WETH Best Offer” message. This means that the highest pre-authorized bid for anyNFT is currently 1.01 WETH. The bidder is still waiting to see if anyone accepts that price.
These WETH offers, which are placed by deal hunters are lower than collection’s floor price, which is instead set by holders. They make up for the lack of price with immediate actionability. This means that listing your NFT at a Buy Now price doesn’t guarantee it will sell, like if there is further market drop — but an outstanding bid from WETH can be accepted immediately and converted into USD, ETH, stables or whatever currency you prefer.
All things considered, WETH trades on OpenSea since the FTX crash have risen to new heights. You can see the results yourself:
There are a few reasons why this is so. As I said earlier, WETH bids can be immediately executed, making them a good choice for those who want speed over getting the best price. The FTX drama has injected a lot of uncertainty and fear into the cryptoeconomy, so WETH’s greater liquidity and convertibility guarantees (and therefore ETH) are a welcome addition to the cryptoeconomy. Many people find them more appealing than holding NFTs that are in liquid state.
This WETH uptrend movement is based on the logic that “better to be liquid now considering all of the unknowns”. This is certainly fair given this historic week. However, I am not sure that this can be taken as a guarantee that sentiment analysis will be possible courtesy of WETH activity levels on-chain.
On-chainness has a certain aura. Part of that comes from transparency. The past few days have shown us just how awful things can get when there is no transparency.
Action steps
- Get the latest on-chain analysis from the FTX collapsing in bankless
- If you missed my earlier write-up Future of NFT royaltyties, it is still available.