Research Summary
The report discusses two significant upcoming events in the cryptocurrency market: the end of Blur’s Season 2 Airdrop and CoW Swap’s fee switch. It estimates that 300 million BLUR tokens, worth $53 million, will be airdropped to users of the platform at the end of Blur’s Season 2. The report also highlights a proposal by CoW Swap’s core team to test fee models for six months to generate additional revenue.
Key Takeaways
Blur’s Season 2 Airdrop
- End of Blur’s Season 2: The report notes that Blur’s Season 2, which started in February 2023, is set to conclude on November 20, 2023. An estimated 300 million BLUR tokens, worth $53 million, will be airdropped to users of the platform. This is slightly less than the airdrop in Blur Season 1, where 360 million BLUR tokens were airdropped.
- Impact on BLUR’s Price: The report suggests that such a large unlock should result in a price fall. However, it also notes that recent unlocks have been positive for price action. The report suggests a potential trade idea of going long on BLUR if the price falls on airdropping.
- Future Developments: The report expects Blur to announce Season 3 and other feature launches as Season 2 comes to an end.
CoW Swap’s Fee Switch
- Proposal for Fee Switch: CoW Swap’s core team has proposed to start testing fee models for six months. The primary rationale for turning on the fee switch is to generate additional revenue, which can be used to accelerate the development of CoW Protocol, acquire new users, fund token utility, and more.
- Impact on CoW Swap’s Revenue: The report notes that CoW Swap processed $1 billion in volumes in October 2023 and is processing a run rate of $1.9 billion in volumes in November 2023. Assuming fees are around 0.05%, the report estimates Fees/MCap APY of 17% based on October 2023 volumes and 32% based on November 2023 run-rate volumes.
- Potential Trade Idea: The report suggests a potential trade idea of going medium-term long on COW as it tests different variations of fee switches.
Actionable Insights
- Monitor BLUR’s Price: Investors should closely watch the price of BLUR as the end of Season 2 approaches. If the price falls on airdropping, it may present an opportunity to go long on BLUR.
- Watch Out for Blur’s Future Announcements: Investors should keep an eye on Blur’s future announcements, especially regarding the launch of Season 3 and other feature launches.
- Track CoW Swap’s Fee Switch: Investors should closely monitor the impact of CoW Swap’s fee switch on its revenue. If the fee switch results in significant additional revenue, it may present an opportunity to go medium-term long on COW.
