Memory lane for some, history lesson for others… Have you heard this song?
Maybe you remember hearing it whilst you jumped up and down in a club, “chugging” a cold one. Maybe on the radio. Either way, the significance of this video?
When punk went mainstream.
From basement shows & lo-fi budget recordings to major labels & MTV, punk rock migrated from a mix-tape niche to le mainstream… and zooming out, that’s more or less where crypto is today. The journey from ‘counter-culture fringe-tech niche’ to ‘widespread awareness’ is well underway. There are still some arena tours to go, although FTX and Crypto.com have got us covered for that… It’s been another week of raises, tradcorp NFT launches, GameFi articles and even a DeFi exploit and we’re here to walk you through it all.
Welcome back to DeFi Insights.
1. Raise & Launch
This week, there’s been about a billion dollars raised, from institution-grade custodian Fireblocks securing $400 million at an $8 billion valuation [!?] to DeFi aggregators 1inch closing $175 million. 1inch aims to serve institutional capital. Which makes those both significant raises to pursue institutional capital. There was also an $80 million raise from auditor CertiK, $50 million for BTC investment firm NYDIG … Seriously too many to mention.
Speaking of which, on that note, another $1.5bn crypto fund is launching!
*Cue miniature firework display* 🎆
*Miniature* because after the recent launches of a16z’s $2.2bn crypto fund and Paradigm’s $2.5bn crypto fund, this number somehow feels.. less impactful. Said no one. Ever. *Cue Olympics EPIC firework display*.
Welcome to the new $1.5 billion crypto investment fund led by an ex-Citigroup executive along with an ex-Goldman’s analyst, both defecting from Wall St to join the digital asset ecosystem. TradFi & Co raising funds to invest in crypto? Get onboard the hype train. Four main strategies: staking and yield management [i.e. yield farming on Abracadabra/Curve/Convex], VC investment [i.e. incubators], crypto trading [+/-] and “play-to-earn” [GameFi - click that to learn more]. So, sounds like a solid strategy. What about an NFT strategy? Ah they’re just Adidas collabs, Budweiser flexes and Matrix drops these days… Which all sold out by the way.
Did you read Jason Choi’s tweet last week about what a bear market might look like? Worth a glance, because whilst the rising tide may lift all boats, the ocean will be.. bifurcated. Digital asset de-correlation is already upon us, so when bigger assets top out, capital will be re-deployed into whatever smart money thinks will trend. With bigger pools of capital allocating to new projects, we can anticipate even bigger moves. This is why Discord communities, platforms like Nansen and conferences/meetups all serve an important purpose. Alpha is everywhere. It’s just hard to break through the ‘noise’ to find it.
2. Applied Use Cases | Building out the Ecosystem
Did you read the mainstream press article about the Scorsese producer aiming to make Hollywood’s first feature film funded entirely by non-fungible tokens (NFTs)? The idea is that those who invest will get a share of any profits and meet the stars of the production, so… NFTs unlocking future value via royalties and opening doors to parties etc via proof-of-patronage. Crowdfunding harnessing the power of crypto, which has now reached such a critical mass [via the voyage to the mainstream] that it can unlock traditional funds more easily than ever. Big wins or big lessons, as Jason remarked above… except bear in mind Packy’s comments about ‘Idea Legos’, exploring composability and how each of these ventures is potentially a building block in the exploration of applied use cases for Web3.
3. DAOs are the future
We have commented upon DAOs and their importance within the digital asset ecosystem before. Sal Qadir of Galaxy Digital just wrote an institution-grade paper on decentralized autonomous organizations to provide some additional explanation and updated context, touching on ConstitutionDAO’s recent forays into trying to buy one of the physical copies of the American Constitution. Although the DAO wasn’t successful in actually purchasing the constitution, it was successful in spinning up in a matter of 10 days, amassing $49 million dollars of Ether.
This is the power of DAO [like Eckart Tolle’s The Power of Now, but different]. Note: part of the speed of growth was down to CT high profile players raising awareness [Coinbase, Packy, Ajit, et al], CT profile memes like this (📜,📜) [a play on Olympus DAO meme (3,3)] and these:
Wherever you look in the Web3 narrative, DAOs are becoming a major part of the conversation.
As with all nascent technology innovations, however, there will be winners and there will be losers. In addition, there is always the risk of a smart contract exploit - with the latest victim being Badger DAO, which has just been exploited to the tune of $10 million - $120 million.
We have mentioned this before as well, but it’s maybe worth adding again here, this is the reason why KYC/AML verification and allow-listing to create a trusted-counterparty liquidity environment can be so valuable in terms of risk profiling. In case you missed it, Alkemi Network Head of Ecosystem, Engin Erdogan spoke at length about DeFi, NFTs, and the Future of Regulated Decentralized Finance at the DACOM Summit yesterday alongside OG DEX Uniswap and on-chain fin-crime prevention platform, Elliptic.
And now for a TradFi sandwich.
This week, we wanted to provide additional entertainment. Have a listen to Bloomberg interview w/ Draper at 2x speed, talking about $BTC etc, re-read Choi’s tweetstorm above, then watch The Defiant’s vid about DeFi 2.0. All you’ll need for your next dinner party. Enjoy!
… brought to you by Alkemi Network
Alkemi Network is building an on-chain liquidity network with a suite of tools and products that serve as onramps for everyone to participate in decentralized finance.