In the context of Cryptocurrency, “Open Interest” commonly abbreviated as OI is a renowned terminology that depicts the number of derivative contracts that are outstanding and unregulated. A purchase implies a seller, as does a sale implies a buyer, for every futures contract. The contract is ‘ongoing’ until the counterparty so desires to close a particular contract. It grows as new contracts are established and declines when existing contacts are exercised, making it a more consistent source of data than trading volume.
Recently, people have been paying particular attention to meme coins that have appeared in the stock market recently. These decentralized digital coins initially launched as internet memes last year but have gained widespread adoption and market capitalization. Such a promising start in the market is well illustrated by the fact that the aforementioned Pepe (PEPE) and WIF have already entered the TOP 20 cryptocurrencies in terms of market capitalization in just a year since the start of their existence.
Four meme coins have secured spots in the top 10 cryptocurrencies by Open Interest:
Pepe (PEPE): At the front line, a staggering $812.6 million was spent on mergers and acquisitions around the globe in OI.
Dogecoin (DOGE): A meme coin is a type of cryptocurrency that has emerged from social media and gained significant popularity.
Bonk (BONK): Another groundbreaking meme coin that has garnered significant attention in the market.
Dogwifhat (WIF): Also featured in the top tier list.
Meanwhile, Solana (SOL), which is one of the most well-known cryptocurrencies, has $1. 7 billion USD. According to the figures highlighting the consolidated statement of the companies’ OI, TPG while the OI of Pepe is nearly 3 half of it.
Nevertheless, with $11, Bitcoin (BTC) is still in front, leaving memecoin behind. The largest OI was reported to be $1 billion, while Ethereum emerged as the second most liquid with $9. 15 billion. This is evident by the difference in the highest level of open interest of $61 billion for Bitcoin and the tenth-supported Near Protocol with a value of $230 million.
The Rise of Memecoins
This recent increase in the OI for meme coins is on the back of a bullish run observed in bullish run over the last few weeks. Pepe continues to rise, with a new record at 0.07 BTC per piece whereas the WIF price went above $3.30 and reached a multi-week high. This bar shows that more traders are expecting an upsurge in the prices if they invest in gold or silver coins.
Understanding Open Interest
Open Interest reflects the total number of outstanding contracts that have not been explicitly closed on a specific date. When the open interest is on the rise, it points to increased demand or the flow of many traders opening up contracts regarding directional movements of prices. However, alpha, OI, and prices for memecoins kept on rising, while funding rates became negative in all crypto exchanges.
Funding Rates Explained
Funding rates are the price of rolling or buying a swap or forward contract perpetuity relative to the cost of an asset’s spot price. Funding rates above the midline are indicative of a funding market that would reflect a bull market while ones below the midline mean there is a funding market reflecting a bear market. It is worth emphasizing that almost all meme coins have negative funding rates, which means that, despite the growing popularity of these assets, users are still suspicious of them.
In conclusion, it can be seen that meme coins have shielded the crypto market by becoming the market leader in the Open Interest diagrams. Still, it has been an impressive increase but with some controversy in the market, it has its limits and concerns traders.
Who Got Rich? Mt. Gox Moves $2.9 Billion in Bitcoin – But Why?
This is the first time Mt. Gox has transferred a large amount of bitcoin in the past five years since ceasing operations in 2014. A report by Arkham Intelligence reveals that by exchanging at least 42,830 BTC, which is equivalent to about $2. 9 billion, to an unknown address on Tuesday morning in Asia.
Significant Transfer Details
The transfer occurred at 11:00 AM Hong Kong time which is a significant activity because it is the first transfer of funds from Mt. Gox wallets after 2018. The company stated that it holds $9.42 billion worth of bitcoins in its known wallets.
Background on Mt. Gox
Established in 2010, Mt. Gox dominated the market such that, by 2013, it dealt with 70 percent of all the bitcoin transactions globally. However, in early 2014, it decided to stop all the withdrawals and later ceased trading. Mt. Gox ceased operation and declared bankruptcy when it lost over 800,000 bitcoins – the main reason for its collapse.
Recent Developments
On September 25, 2023, the trustee of the Mt. Gox case stated that the repayment to creditors had been postponed to October 31, 2024, for one more year. Although this transfer might be in some way connected to the ongoing process of paying off debts, the trustee has not made any statements connected to the move.
This significant transfer underlines the further story of Mt. Gox and attempts to address the problems that arose after one of the largest hacking attacks a decade ago. With the ongoing saga, the interests of stakeholders, as well as the broader Bitcoin community, remain focused on the remaining bulk of bitcoins stored at Mt. Gox.
Goodbye Gas Fees? Ethereum Name Service Eyes Move to Layer 2
Ethereum Name Service, a platform that allows users to manage their Ethereum addresses easily through domain names, is set to launch a new version called ENSv2 that will operate on Layer 2 infrastructure. It is hoped that with this upgrade, the costs of using gas fees will be greatly scaled down and the size of the service will increase.
It is important for users of the ENSv2 to understand the following goals of the upgrade:
In this proposal, ENS Labs, the group dedicated to the development of ENS, plans on migrating core features from Ethereum’s mainnet to the Layer 2 network. It will also help reduce the transaction costs for each transaction and therefore make the service more efficient in terms of usage for the users.
Benefits of the Migration
As highlighted above, if the ENSv2 proposal is adopted, users shall encounter lower transaction charges. This is because Layer 2 networks are somehow optimized to process transactions more efficiently and at less cost as compared to the mainnet.
New Features and Enhancements
Gradual enhancements in the more recent version, ENSv2, will bring a revolutionary feature known as the ‘hierarchical registry system’ for managing .eth domain names. This system will help users perform the management of subdomains as well as oversee the resolvers in a much more efficient manner. An interview with Nick Johnson, Lead Developer and Founder of ENS Labs, disclosed that this system would offer the name holder a registry that is singular to manage the domains.
Status and Possible Plan
The migration of a Layer 2 network is still being discussed at ENS Labs, and as such, it has not selected a particular one to implement. However, as the network of choice for all user interactions with ENS has been selected, this network will indeed ensure consistency.
Background on ENS
They offer the .ETH option as an improved solution to the standard, lengthy Ethereum addresses of the traditional format. So far the .eth has reached over two million meanings. The number of ETH names has been 224730 and are currently listed on the mainnet of Ethereum.
Motivation Behind the Upgrade
Released in April 2020, Ethereum Improvement Proposal 4844, or EIP 4844 is another major reason for this upgrade. This proposal has democratized the usage of Layer 2 networks based on Ethereum, making blob transactions more achievable and increasing scalability. Eskender Abebe, Head of Product and Strategy ENS Labs, explained that in its work on ENSv2, ENS decided to rely on EIP4844.
Multi-Chain Interoperability
Another potential benefit of the ENSv2 upgrade is improved multi-chain interoperability. This means that ENS could work more seamlessly across different blockchain ecosystems, expanding its utility and reach.
In summary, the proposed ENSv2 upgrade aims to migrate the Ethereum Name Service to a Layer 2 network, significantly reducing gas fees and enhancing scalability. If implemented, this upgrade will bring new features and improvements, benefiting all users of the .eth name service.
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