Research Summary
The report discusses three key catalysts in the crypto market: Solana’s price performance leading up to its annual Breakpoint conference, Lido’s decision to sunset Solana staking, and the unlocking of Polkadot parachain crowdloans. The report provides potential trade ideas and factors to watch out for each catalyst.
Key Takeaways
Solana’s Breakpoint Conference
- Historical Performance: Solana (SOL) has historically outperformed leading up to its annual Breakpoint conference and underperformed following the start of the conference. As of seven days before the conference, SOL has already risen more than 30% from a month ago.
- Potential Trade Idea: The report suggests going long on SOL into Breakpoint and shorting SOL at the start of Breakpoint.
- Factors to Consider: The FTX estate sales, managed by Galaxy Digital, which holds 56m SOL (worth $1.7b) with ~30% vested, could continue to impact SOL’s price.
Lido Sunsets Solana Staking
- Staking Sunset: A Lido vote to sunset Solana staking passed on October 6, 2023. Starting October 16, 2023, users can only unstake Solana, and the UI will be available until February 4, 2024.
- Potential Trade Idea: The report suggests going long on Marinade Finance (MNDE) due to potential market share gains.
- Factors to Consider: Market share changes in other liquid staking token (LST) projects and follow-up actions from unstaked SOL should be monitored.
Polkadot Crowdloan Unlocks
- Crowdloan Unlocks: Approximately $390m of DOT from Parachain crowdloans will become accessible to users on October 24, 2023, after a two-year lockup period.
- Potential Trade Idea: The report suggests shorting DOT into crowdloan unlocks and watching liquid DOT crowdloan derivatives redemptions.
- Factors to Consider: While the unlocks are large, some of the DOT locked is already liquid. However, these DOT derivatives have low liquidity, and exiting these derivatives in size is not feasible.
Actionable Insights
- Monitor Solana’s Performance: Keep an eye on Solana’s price performance leading up to and following its annual Breakpoint conference. Also, watch out for potential announcements during the event.
- Track Staking Changes: Follow the changes in the staking market after Lido’s decision to sunset Solana staking. This could potentially benefit competitors like Marinade Finance.
- Watch Polkadot Unlocks: Pay attention to the unlocking of Polkadot’s crowdloans and its impact on the market. Consider the liquidity of DOT derivatives when making trading decisions.
