Data & Insights: I'm Tarrified, Penguins Can't Fly

I’m Tarrified

• On Sunday night, February 2, 2025, the price of ETH fell by over -25% in the span of an hour, going from $2,840 to a low of $2,125.
  • Meanwhile, in the same period, the price of SOL had fallen by over -11% and BTC by just -5%, with BTC dominance reaching 64.3% at its peak of the day, its highest point since March 2021.
• From Sunday to the time of writing of Monday morning, there have been over $280 million worth of liquidations on Ethereum on-chain lending markets.
  • Aave saw the majority with over $183 million worth of collateral liquidated, marking its largest liquidation event since August 2024.
  • This was followed by Compound with over $85 million worth of liquidations.
• Within the same day-and-a-half period, there have been, at minimum, $1.7 billion worth of long liquidations on centralized exchange (CEX) futures.
  • Out of this total, at least $365 million of these liquidations came from BTC futures.
  • This means that, at minimum, $1.33 billion worth of long liquidations since Sunday, February 2nd came from altcoins.
  • Alongside this, at least $6 billion worth of ETH futures open interest (OI) have been wiped out.
  • It is important to note that due to API rate limitations for liquidation data on CEXs, it is estimated that current publicly displayed liquidation figures are inaccurate and underreported, as real liquidation figures can generally be at least 4 times larger than what is reported.
• The drastic decline in the market and the subsequent liquidation event was likely caused by President Donald Trump announcing on Friday, 31 January, 2025 that the US would impose a 25% additional tariff on imports from Canada and Mexico, as well as a 10% additional tariff on imports from China starting March 2025.
  • This announcement marked the beginning of the downturn in the crypto market, as BTC fell by over -13% since, while ETH fell by over -37% at its lowest point.
  • TOTAL3, which represents the total market cap of the top 125 cryptocurrencies excluding BTC and ETH, also fell by over -28% in this period.
  • It will be interesting to see how the wider market, both crypto and TradFi, is going to further react to the tariffs in this coming week, considering how traditional markets only had about 4 hours to react on Friday, as market participants had an entire weekend to process the news.
  • Though at the time of writing, the S&P 500 E-mini Futures has opened with a -1.3% gap down.

ETH bros can’t catch a break

• Multiple Solana DeFi protocols including pump.fun, Jito and Raydium, all saw record monthly revenues in January 2025 after a minor cool-off in December 2024.
  • Pump.fun generated over $121 million in revenue in January 2025, which is nearly 30% higher than its previous highest monthly revenue of $93.88 million in November 2024, and 51% higher than December 2024’s total of just $80.32 million.
  • Meanwhile, Jito generated over $290 million in January 2025, which is 45% higher than its previous monthly all-time high in November 2024 and 130% higher than December 2024’s total.
  • Raydium also generated over $295 million in revenue in January, which is nearly 40% higher than its monthly total in November 2024 and 120% higher than December 2024.
• On the other hand, Ethereum-based DeFi protocols such as Aave, Uniswap and Lido, failed to even surpass its December 2024’s monthly revenue figures.
  • The monthly revenue generated in January 2025 for Aave, Uniswap and Lido were 3%, 2% and 9% lower than their revenues generated in the month prior, respectively.
  • Both Uniswap and Lido’s January 2025 revenues were 40% and 30% lower than their respective record figures from May 2021 and March 2024.
  • Though Aave can be seen as a fairly consoling factor in comparison, as the revenue it generated in January 2025 was just 3% lower than its previous monthly record from October 2021.
• January 2025 also marked the first month where total monthly volume traded on Raydium surpassed that of Uniswap.
  • Raydium facilitated 24% higher trading volumes compared to Uniswap in January 2025, as it saw over $124 billion worth of trading volume compared to Uniswap’s $100 billion.
  • For comparison, Raydium saw just $61 billion worth of volume in December 2024, representing a 103% month-over-month (MoM) increase
  • Meanwhile, Uniswap’s $111 billion worth of volume in December meant it saw a -10% MoM decrease in the same period.
  • November 2024 was previously the closest month where Raydium volume nearly equalled that of Uniswap’s, with the former’s $83.6 billion compared to the latter’s $94.4 billion.
  • Alongside the DEX volume flippening, the share of new tokens appearing on Solana DEXes continues to make new all-time highs, recently reaching upwards of 96%, which is higher than the 93.4% recorded towards the end of 2024.
• This discrepancy of the revenues generated between Solana and Ethereum-based DeFi explains the fundamental shift in dynamics, user participation and adoption between the two blockchains, with many users now far preferring to Solana over Ethereum.
  • The 3 aforementioned Solana protocols generated a combined $706 million in January 2025, while the 3 Ethereum protocols generated a combined $303 million.
  • This further explains the contrasting price performances of SOL and ETH over the last 12 months, with SOL having doubled in price from this time last year, while the price of ETH is up a mere 8% in the same period.
  • For added context, the price of BTC has increased by 118% in this same period.
  • January 2025 marks yet another notable achievement for the Solana blockchain and DeFi sectors as a whole, while presenting an alarming wake-up call for the Ethereum side.

Penguins Cant Fly

• Pudgy Penguins' floor price has declined to 10.75 ETH on February 1st from its December peak of 29 ETH, marking a 63% decrease following several significant ecosystem developments.
  • The saga began after the December 5th announcement of $PENGU, the project's Solana-based memecoin, which initially sparked a rally in NFT prices.
  • Following the token generation event on December 17th, $PENGU reached a market cap of $2.7 billion before retracing to $940 million, with the token price dropping from 4.3c to 1.4c.
• The project's expansion continues with Abstract, a new Ethereum Layer 2 network developed by Igloo Inc., launching on January 27th.
  • Some holders who were hoping for a potential Abstract token airdrop were disappointed as the launch coincided with a 37.5% decrease in Pudgy Penguin floor prices, from 16.6 ETH to 10.7 ETH.
  • Trading volume of the NFT has maintained relative stability at approximately 15 million per week since the $PENGU TGE.
• The Pudgy Penguins' token launch has influenced broader NFT market strategies.
  • Other prominent collections like Azuki have followed suit with their own token launches, such as $ANIME.
  • ANIME launched with a market cap of roughly $500m before a consistent decline towards $250m where it sits at the time of writing. The Azuki NFTs suffered a similar fate.
• Looking ahead, Pudgy Penguin holders still have some catalysts in the coming weeks. 
• Abstract has the potential to implement additional holder benefits through its 'experience' (EXP) system. Holders currently earn a multiplier for exp, which will likely be used to determine their Abstract token allocation.
• Return of retail users to crypto ecosystems makes some holders hopeful of a 2021-esque NFT market run.

Dont Stop Clicking Buttons

• Despite the US elections being over, Polymarket reached a new milestone in January 2025 with 450,000 monthly active traders. This feat markets a 91% increase from October 2024's figure of 235,000 traders, signaling continued use of the app. 
  • The platform maintained steady growth through Q4 2024, with active traders increasing to 300,000 in November and 350,000 in December.
  • This growth persists despite trading volume declining from November's peak of $2.6 billion to $1.23 billion in January.
• The sustained increase in active traders following the U.S. election suggests potential for broader market interest beyond political events.
  • Open interest, which peaked at $500 million on November 5th during election-related trading, has stabilized around $100 million.
  • While political markets remain popular, particularly those centered around the Trump presidency, the platform has diversified into sports betting markets, including the Super Bowl, NBA Championship, and Champions League.
• The platform's growth comes amid regulatory developments in the prediction market space.
  • A CFTC probe into Polymarket led to a Coinbase subpoena for customer information, highlighting ongoing regulatory scrutiny in the sector.
  • These regulatory considerations may impact the platform's future development, particularly as speculation builds around a potential token launch.
• With the uptick in active addresses, some market participants are likely betting on a token drop by Polymarket. 
  • Though no official confirmation has been provided, changing US regulatory regime may be enough for the platform to issue a token of its own. 

Altcoin Annihilation

• As of February 1st, Bitcoin's market dominance has increased to 55% from its December low of 51%, while the total cryptocurrency market capitalization remains stable at $3.5 trillion.
  • The rise in dominance suggests a rotation of capital from altcoins to Bitcoin, with TOTAL2 (total crypto market cap excluding Bitcoin) declining from $1.6 trillion to $1.3 trillion.
  • Bitcoin's price has maintained relative stability between $90,000-$100,000 since November 2024, indicating the dominance increase stems from altcoin weakness rather than Bitcoin strength.
• Last cycle’s legacy coins are showing renewed market strength against Bitcoin.
  • XRP, Litecoin, and LEO have outperformed Bitcoin with monthly gains of 19%, 10%, and 7% respectively, compared to Bitcoin's 3.5% increase.
  • This trend suggests a potential shift in investor preference toward cryptocurrencies with longer market histories and established follower bases.
• Market fragmentation continues to increase as exchanges expand their offerings.
  • Major exchanges like Coinbase and Kraken have each added approximately 100 new spot trading pairs in the last 12 months.
  • The proliferation of token creation platforms, particularly pump.fun, has contributed to liquidity fragmentation across the market as its substantially cheaper to issue new speculative tokens. 
• Bitcoin's ability to maintain its market dominance without significant price appreciation remains a key consideration, particularly as legacy cryptocurrencies show renewed strength.
  • The trend of established coins outperforming newer tokens could signal that retail investors are returning and buying tokens they are familiar with. 
  • Meanwhile, the ongoing proliferation of new tokens through platforms like pump.fun continues to fragment liquidity across the market as tokens compete for mindshare.
  • The market's response to these evolving conditions, along with potential institutional capital flows, will likely determine whether current trends persist or shift in the coming weeks.