On-chain Review of Level Finance (LVL)

  • avatar
    Name
    The Datafi
    Published on
    · 10 min read

    • After rumors of Arthur Hayes (former CEO and founder of BitMEX) investing in LVL on February 15th, 2023, the price of LVL increased sharply. Following this, other KOLs also reported on it, prompting our DataFi team to conduct an on-chain review combined with LVL token analysis. The results yielded many useful insights for LVL holders/traders.

    Additional information on Arthur Hayes' investment history:

    • Wallet address: 0x534a0076fb7c2b1f83fa21497429ad7ad3bd7587
    • Purchased 47,000 LVL with 10 BTC at a price of $4.7.
    • Bought ~30,000 GMX from 03/2022 - 04/2022 at a price range of ~$22-$30. Currently, there is a ROI of 200%.

    I. Overview of Level Finance

    1. About the Project

    Level Finance is a derivative DEX on the BNB chain that provides swap mechanisms and perpetual contracts. Alongside trend groups such as Real Yield like GNS and GMX, will LVL attract market attention? DataFi is unsure, so the team analyzed it from a neutral perspective (like GMX and GNS in the past).

    2. Notable Figures

    LVL PRICE

    The current price of LVL is $7, which has increased more than 30 times since its mainnet launch and more than 100 times from its bottom price.

    Image name: LVL Price

    Source: Coinmarketcap

    TRADING VOLUME

    Within two months of its mainnet launch, the total trading volume on the exchange has reached over $1.2 billion, generating more than $1.4 million in fees. Compared to GNS and GMX after their first month of mainnet launch, LVL's growth rate is:

    Faster than GMX by 76 times, but with only 18% of its volume.

    Faster than GNS by 16 times, but with only 23% of its volume.

    This can be explained by the fact that GMX and GNS are two projects with greater potential that have already attracted a significant user base, resulting in a large trading volume.

    Image name: TVL

    Source: DeFiLlama

    TOTAL VALUE LOCKED (TVL)

    Within two months of its mainnet launch on December 26, 2022, the TVL of Level Finance is currently $15 million, which has increased by about 42 times. This is a positive figure because the TVL increase is due to staking and not just because of the increase in LVL price. The TVL of LVL mainly comes from trading pools that have added LPs such as BTC, ETH, USDT, and CAKE.

    APR

    Around January 2023, the APR of the pools was very high, with some pools exceeding 700%, leading to a 10-fold increase in the amount of money staked in the trading pools compared to the previous month. Although the APR of the pools has decreased, having an APR ranging from 100% to 200% during the downtrend season is still considered high.

    Therefore, when looking back at the recent increase in the price of LVL, we can understand that it is due to:

    1. The real yield trend.

    2. Secondly, the high APR, which has led to an increased demand for LVL ownership (for staking purposes). As LVL is a utility token (rewarding users), its APR is high, and users can only receive LGO (platform governance token) by staking LVL.

    II. REVIEW ON-CHAIN LVL

    1. GENERAL METRICS

    Supply

    • The total supply of LVL tokens is 50,000,000.
    • The current circulating supply is 3,644,398 (7%).

    Tokenomics of LVL

    The table above shows that the tokens allocated to the project team will be fully paid out over a relatively long period of 4 years. Therefore, selling pressure in the short and medium term will mainly come from the rewards for stakers and whales.

    DEX and Smart Contract: 46,149,896 LVL (92.3% of total supply)

    • Most of the tokens are currently held in LVL's staking smart contract (accounting for 29.8% of circulating supply).
    • Meanwhile, LVL's main trading volume is also on DEX, specifically on Pancakeswap (4.3% of circulating supply), which accounts for 99% of the daily volume with a current trading volume of about $2.2 million.

    Note: Usually, if a token's supply is mainly on centralized exchanges (CEX), tracking on-chain data is almost meaningless, whereas if it is mainly on decentralized exchanges (DEX), monitoring trading on DEX will provide more insight.

    2. WALLET ANALYSIS

    2.1. DataFi Records

    DataFi records the top wallets holding a significant amount of LVL and their special roles/functions in the table below for you to continue tracking. Later, we will analyze these wallet groups. These wallets have special functions for the project, including incentives pool, governance, staking, and liquidity provision.

    Note: Level Finance does not lock tokens in the staking contract, so there may be selling pressure if whales staking in the contract release their tokens.

    2.2. Analysis of project's wallets with special functions

    LVL sale wallets and wallets relating to fundraising

    The project has announced the wallets of investors. Note that the amount of tokens will be locked in the DAO Treasury for about 6-12 months before being allocated to the wallets of investors.

    Details of the investment rounds:

    • Round 1: Raise $100K at $0.1/LVL → 1,000,000 LVL will be staked in Level DAO for 12 months.

    Investor Wallet: 0x72D76C1582400f076c2cC2f03c101709715DFF00

    • Round 2: Raise $500K at $2.5/LVL → 200,000 LVL will be locked for the first 6 months and gradually released in the following 6 months.
    • Round 3: Raise $400K at $3.3/LVL → 121,212 LVL will be locked for the first 6 months and gradually released in the following 6 months.
    • Round 4: Raise 10 BTC at $4.7/LVL → 47,000 LVL will be locked for the first 6 months and gradually released in the following 6 months.

    Investor Wallet: 0xEEe58C37658070F9aF55A14d9F479Db5742f9f95

    Currently, the wallets of investors that the project has announced have not yet received their tokens. You can observe the activities of these wallets when it is time to receive the tokens.

    There is an interesting point that the project introduced "an experienced exchange operator" as the first round investor, who will support and advise the project in the future. This could also be Arthur Hayes. If this is true, his holding position is $0.1 instead of just $4.7 as many people know.

    Source: Level-Finance.Medium

    Pool Dev Reserve

    Transferred 1M LVL to the Governance Stake pool to increase the project's governance position. There is nothing unusual yet.

    Pool Partnership Reserve

    This wallet has just reduced ~1M LVL by transferring it to the LVL Incentives Pool to reward users due to a sudden increase in staking demand.

    Image name: LVL Top Balance Changes

    Source: Nansen

    Summary: There is nothing unusual in the project's functional wallets.

    2.3. Analysis of Top Individual Wallets (EOA)

    A large amount of tokens are in staking pools, and most of the top EOA wallets are still increasing their balances. In particular, current liquidity is mainly focused on DEX, with the largest pool on Pancakeswap having only $2.4M (165.864 LVL) LP, so selling pressure from whales at this time is not enough liquidity.

    2.4. Analysis of Smart Money wallets

    DataFi has identified 2 Smart Money wallets with high profits and good sensitivity to investments that you can refer to, including:

    Smart Money wallet

    - Wallet address: *** (retweet this post and tag 2 friends, and then send us a message to receive this address)

    - Accumulated 119k LVL at the price range of $1-$1.5 and then staked. Recently, the wallet has withdrawn ~21k LVL from the pool to the wallet, sold 16.7k LVL at ~$8 with ROI of ~600%.

    - Currently still staking 98k LVL ($1M)

    In terms of investment history, we see that this wallet has had profitable XMON transactions:

    - Accumulated XMON at ~$120 - $130 and sold at ~$3,000 (ROI ~ 2,300%)

    - Accumulated XMON at ~$3,000 and sold at ~$8,000 (ROI ~ 167%)

    - The wallet then continued to accumulate XMON at ~$15,000-$20,000.

    - Recently, on February 17, 2023, the wallet locked 20 XMON ($440,859) to receive 200,000 SUDO ($618,149) to help the wallet earn ~$177,290 in profits.

    - So, from the beginning of 2023 until now, the wallet has had a large profit with XMON: ROI ~ 900% with the old holding amount of XMON, ROI ~ 100% with the newly accumulated XMON, ... Currently, the wallet has started to sell some XMON.

    XMON transactions of the wallet. Source: Debank

    Smart Dex Trader wallet

    - Wallet address: *** (retweet this post and tag 2 friends, and then send us a message to receive this address)

    - Accumulated $LVL at the price of $1.56, ROI ~ 600% and this wallet has not yet taken any selling action.

    Here's some more information for you: DataFi has found that this wallet has been sensitive in its strategy of buying XMON and locking it to receive SUDO. With the SUDO transaction, the wallet has made a profit of $13,000 from the Airdrop (at the current price level), not to mention that XMON has increased by 65% since the purchase (profit of $5,500). So, with an initial investment of 5ETH (~$8,500), the wallet has earned a profit of $18,500, ROI ~ 218%.

    XMON transactions of the wallet. Source: Debank

    III. BONUS: TECHNICAL ANALYSIS OF $LVL

    In terms of liquidity, it seems that there is not enough to cause the top holders to sell off their holdings, because the liquidity is mainly on decentralized exchanges (DEX) with the largest pool on Pancakeswap with LP $2.4M (168,098 LVL), which is only 4.5% of the circulating supply (3.6M LVL).

    However, large selling pressure has started to appear at the peak, so it is necessary to continue to observe whether the price will re-test the $5-$6 range or not if you are planning to speculate or enter the market. DataFi also shares some information at the time of writing when considering orders with volume >$50K on DEX:

    • There were 15 sell orders with a total volume of $985K
    • There were 12 buy orders with a total volume of $640K
    • The price reaction was a long wick candle.

    Overall technical analysis of LVL: there will be an update in this article in 1-2 days.

    IV. CONCLUSION

    At the time of writing, with the data that DataFi has found, we have some important insights as follows:

    Regarding on-chain activity

    • There are signs of speculative capital inflows in the past two weeks.
    • The top 10 whales only hold or increase their balances, which is also a good sign for short-term prices.
    • Large wallets still have confidence in the project and have not taken any action to withdraw tokens from the pool to realize profits, and the current liquidity on DEX is not enough for them to sell.
    • The current float is very low (~7%), and user demand to participate in the platform is still increasing, so although there may be large sell orders at the peak, the potential for growth is still strong.
    • Some smart money has already had high ROI and has taken some profits, so their strategies can be referred to.
    • The number of new holders is only 2.3k.

    From a technical analysis perspective

    Large sell orders have started to appear at the peak and the price has started to react with long wick candles, so the price may test the support range of $5-$6.

    ... (updating).

    Regarding the potential of the project

    • Level Finance is a recent project that has made it to the top gainer on the BNB chain ecosystem, backed by Arthur Hayes - founder of BitMEX, so the financial potential and the relationship of this backer are significant.
    • The market cap of LVL is currently $32M, which is still quite small compared to the group of projects that focus on Real Yield (GMX and GNS's market caps are currently $677M and $328M, respectively).

    Above are DataFi's on-chain analysis and technical analysis perspective, and there is no financial investment advice. To develop with the community, DataFi hopes that readers will contribute more content and updates from the wallets that DataFi has shared.