Zap: Bitcoin dominance

4 min readJun 7, 2022


by: Friktion Research Contributors

This week we cover crypto markets, correlations, crypto volatility , the Defi landscape, and Volt performance.

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Crypto Markets

The decline of assets further up the risk curve continues, amidst the broader macro narrative anticipating the tightening of money supply to reign in inflation. BTC dominance creeped up close to 1 year highs this week as alts continue to lag behind.


Breaking of correlations between BTC and US Tech that we highlighted last week still persists. This is the second week in a row where a weekend rally into the ~$31,400 BTC level was quickly sold back down to $29,500 on the following Monday.


SOL and other alts continue to underperform BTC and ETH this week. The Solana network experienced a 4-hour outage on Jun 1 caused by an issue with durable nonces that caused forks in portions of the network, breaking consensus.

Upcoming Macro events to keep an eye out for:

  • 10 Jun — US CPI
  • 13 Jun — UK industrial & manufacturing production
  • 14 Jun — US PPI
  • 15 Jun — FOMC meeting
  • 16 Jun — US housing starts

Crypto Volatility

We saw another week of muted volatility, with realized volatility lagging behind implied volatility.

High: 32280.0
Low: 29333.0
Close: 30716.0
Range: 9.59%
Realized Volatility: 51.782
High: 2007.7
Low: 1742.8
Close: 1927.0
Range: 13.7%
Realized Volatility: 67.519
High: 48.1125
Low: 35.9175
Close: 46.0
Range: 26.5%
Realized Volatility: 120.37
High: 29.0885
Low: 22.1885
Close: 27.144
Range: 25.4%
Realized Volatility: 126.33

BTC implied volatilities and skew (25d call IV — 25d put IV) have fallen back down to pre-Luna levels, as spot prices have been rangebound for the past 4 weeks.

BTC Skew (

This market environment has worked out quite well for Friktion’s Volt #03, a strategy to harvest yield in crab markets. Since inception, the Volt has generated 5.6% in returns for its depositors, a 31.9% APY.

DeFi Landscape

DeFi TVL (Defillama)

Defi TVL has remained roughly flat at $100B, with all of the top 10 projects seeing outflows week over week.

Daily Protocol Revenue

Protocol revenue has dropped dramatically across the board while their corresponding token values have traded roughly in line month over month, suggesting either the market thinking the downtick in protocol revenues as transitory or perhaps not purely valuing these governance tokens as a multiple of fee revenue generation.

Solana transaction volume has dramatically fallen in the past few months, suggesting a slowdown of activity on the chain.

Despite recent struggles with the network, Friktion remains committed in delivering best in class yield products across all market cycles.

Source: The Block

Volt Performance

Friktion’s Volts #01, #02, and #03 are well positioned this week to generate yield for its users in this rangebound market environment.

Some highlights of the week include:

  • 30–60% APY on SOL Puts
  • 35% APY on SOL High Voltage Calls
  • 52% APY on AVAX calls

Friktion’s Volt #04 Basis Strategy has done well in capturing delta-neutral yield in SOL during the persistent negative funding market regime on Mango.

The strategy has failed to find an entry point for long basis in the BTC Volts due to persistently positive funding rates on Mango.

About Friktion

Friktion is Solana’s leading protocol for risk-managed yield strategies. Friktion’s core products, known as Volts, are building blocks of DeFi portfolios that can perform across market cycles. The platform, launched in December 2021, has amassed over 15,000 users and done >$2bn in volume. The protocol’s mission is to enable access to long-term sustainable DeFi yields. Learn more at

Interested in joining Friktion’s Quantitative Research arm? Drop us a note in Discord or email us at


Originally published at on June 7, 2022.




Friktion brings high quality portfolio management to DeFi.