Another Ecosystem Fund! $150M Fund for a $180 Market Cap Coin?
ATTN READER: Our Newsletter is Going Through Changes!
Theo Delarosa
January 25, 2023
Daily Bullets - Wednesday, January 25th
Is the recent crypto rally coming to an end? It looks like it could be running out of steam. ETH is leading the drop however there’s still plenty of activity. Aptos has shattered a new all time high and is in price discovery. In the past few months, many questioned whether new shiny L1s on the scene such as Aptos, Sui or Sei would be able to recreate some of the magic of Solana’s meteoric price rise. It looks like we’re finally getting our answer. Aptos fans are eating.
Top Stories of the Day
Injective: $150M ecosystem fund for a $180 Market Cap Coin? Does the math math?
The gist: Injective, a layer-1 blockchain platform focused on building financial applications has become the latest project to launch a 9 figure ecosystem fund initiative - this one coming in at $150M.
Who are the investors involved? Pantera, Jump, Kraken Ventures, Kucoin Ventures, Delphi Labs, Flow Traders, Gate Labs, and IDG Capital. Big names!
What is the point? The fund aims to support projects building on Injective or Cosmos in the interoperability, DeFi, trading, proof-of-stake infrastructure, and scalability solutions sectors. The fund will be deployed over a few years as it aims to back early-stage projects then slowly move from seed to later stages as the ecosystem grows as a whole..
Analysis: There has been a plethora of 9 figure ecosystem funds related to projects such as Avalanche, Algorand, Oasis, Dapper Labs, Ripple, Polygon, etc etc etc. The core idea is that many early stage projects struggle to get off the ground without the proper resources and by investing those resources and capital in early stage projects, they stand a much better chance at getting off the ground and succeeding. By providing this type of support to developers, founders and teams - it increases the chance that we might find the next “gem” coming out of the Injective ecosystem. This begs the question of an old quote - “if they build it, will they come?”
Cardano Stablecoin: ADA tends to be the butt of crypto jokes - Will Djed change anything?
The gist: Cardano-based decentralized stablecoin Djed is set to launch next week. Djed has been jointly developed by Cardano code maintainer IOG and Coti, a layer 1 blockchain.
How does it work? The stablecoin will be backed by other tokens and requires more than 400% in collateral value to be posted before it is issued to a user. This overcollateralized mechanism is designed to allow Djed's value to hold stable during market stress and prevent a repeat of TerraUSD. Djed is expected to go live on over 40 Cardano-based dApps on launch. Developers have also simultaneously developed DjedPay, a payments application that uses Djed, that would allow users to transfer the tokens to merchants and businesses
Analysis: There is literally no shortage of stablecoins in the crypto space… Everyone and their grandmother has released their own or plans to release one. Why should we care? Well, besides the obvious of trying to solve the problems that have plagued the crypto space such as the collapse of Terra, stablecoins are a vital part of attracting liquidity to an ecosystem/protocol and liquidity is the lifeblood of crypto. From an investor’s viewpoint: you want to look for early stage opportunities. Will this inflow of liquidity be enough to incentivize activity in the Cardano ecosystem? It’s hard to say with such a saturated market. Other upcoming stablecoins include: Curve, Aave, Waves.
Are you a Celsius Customer Who Lost Funds? Relief May Be on the Horizon
The gist: Celsius, the crypto lending firm that filed for bankruptcy protection in July, has told a bankruptcy court that its Earn account customers will be “entitled to a significant return” as they close in on finalizing a plan to return value to its Celsius Earn customers. There are also plans for a recovery corporation concept, a proposal for the company to tokenize and distribute to account holders an “asset share token that would reflect the value of the assets managed by the Recovery Corporation.” That token would also entitle holders to dividends from the recovery corporation over time.
Why does it matter? Earlier this month, a chief judge for the U.S. Bankruptcy Court for the Southern District of New York, ruled that assets in Celsius Earn accounts belong to the company, not customers… They did such a great job in their disclosures and terms of use (that unfortunately very few people read) that they are essentially getting away with claiming their customer’s money as their own. What’s especially egregious about this entire debacle is that the main demographic targeted by simple and consumer friendly platforms like Celsius are normies. Everyday average people deposited their hard earned money into these services thinking they could earn some yield and now they’re going through hell to get back what they lost. This is just another leg in that journey but at least customers have something to look forward to..
Daily Bullet Highlights
- Bankrupt crypto lending firm BlockFi has $1.2B in assets tied up with bankrupt exchange FTX and Alameda Research
- Duncan and Griffin Cock Foster, twin brothers and co-founders of Gemini-owned NFT platform Nifty Gateway, are leaving Gemini amid troubles at the company
- Circle’s Cross-Chain Transfer Protocol (CCTP) will be launched soon. This infrastructure helps build more scalable, efficient, secure, and user-friendly applications based on USDC
- Luno, the crypto exchange owned by Digital Currency Group, reduced its workforce by 35%
- The Lido team has submitted its design for withdrawals of ether on the protocol once the Ethereum Shanghai upgrade happens
- Maple Finance unveiled a new $100M liquidity pool of trade receivables with 10% Yield, the first step in a new strategy to bring traditional financial investments onto the blockchain
- Liquid staking project Marinade Finance released an incentive program on Solana that will reward users with a total of 160M marinade tokens for depositing SOL over the next 12 months
- Porsche is halting the mint of its first NFT collection after receiving negative feedback from its community
- Doodles 2 is arriving at the end of the month and will launch on the Flow blockchain with new personalization options
- Web3 gaming studio Mythical Games is rolling out Mythical Marketplace 2.0, its new digital game asset marketplace and is considering raising an additional $50M
Research/Reads
- a16z - Regulate Web3 Apps, Not Protocols Part III: The Web3 DAO Dilemma - source: Third in a series outlining a regulatory framework for web3 technology that focuses on regulating businesses, not decentralized software
- The Unknown Hedge Fund That Got $400 Million From Sam Bankman-Fried - source: Examines the suspicious $400M investment made by SBF into Modulo Capital, a cryptocurrency trading firm, shortly before FTX collapsed.
- What does it mean that China's tax authorities are speeding up efforts to tax cryptocurrency companies and individuals? - source: Audits and real name registration in order to prevent tax risks and illegal activities
- DeFi Insurance - source: DeFi insurance, which covers blockchain-related activities and uses the same basic principles as traditional insurance, is slowly gaining momentum after less than 1% of all assets in the $47B DeFi ecosystem were covered by a policy that'll help replace them after a hack or code error
- L2 report vol. 14 - source: Biweekly update on Layer 2 protocols
Tweets of the Day
Pantera put out a great 2023 Crypto outlook report. Don’t have time to read it? Check this out:
Pantera Capital just released their 2023 outlook report: "The Year Ahead".
It's packed full of alpha.
I read through its 10,000 words so you don't have to.
🧵: Here are the top 10 takeaways. 👇
— Miles Deutscher (@milesdeutscher)
Jan 24, 2023
Real World Assets are shaping up to be another exciting evolution of crypto. Stay up the date with the state of all things RWAs:
1/ The Real-World Asset revolution in #DeFi is already here — but many aren't paying enough attention yet.
Here's the current state of RWAs to help you catch the wave 🌊
— Ignas | DeFi Research (@DefiIgnas)
Jan 24, 2023