White Star Capital Digital Asset Fund - newsletter #40
Continued funding strength, and government / enterprise adoption despite broader market volatility
With the growth of Decentralized Autonomous Organizations (DAOs) comes unprecedented complexity
Despite broader market volatility this week due to announcements of additional crypto restrictions coming out of China, we’re seeing strong fundamentals and continued adoption from governments and enterprises alike. In the past week, there has been a flurry of CBDC news (Bank of France, Bank of England, and Bank of Israel to name a few) as well as adoption from major brands and institutions such as CNN, BlackRock, Sotheby’s, and more.
Moving away from the enterprise and government front towards the more crypto native frontiers of the ecosystem, we’ve been fascinated over recent weeks with the rapid maturing of the DAO ecosystem (decentralized autonomous organizations, which in many ways can be thoughts of as digital LLCs). More recently, one DAO-related piece of news we’d like to go deeper on is a proposal one Curve governance member has submitted suggesting that the project should try to enforce its IP through lawsuits and the traditional legal system. The proposal received thousands of views from the Curve community and several responses both in favor and against the proposal.
Not only does the proposal consider whether the IP should be enforced more broadly, but it considers a specific example of Saddle Finance, which the proposer claims have been accused of copying Curve’s code:
I propose Curve engage competent counsel both in the USA and (to the extent Saddle or other infringers or their VC’s have identifiable assets abroad) other relevant jurisdictions.
The key questions are whether Curve can enforce its IP — since the organization itself is largely decentralized — and also whether it should, something that would be new to the largely open-source and unregulated DeFi industry. Should legal action be taken, this would set an important precedent with DAOs going forward given it would be the first lawsuit of its kind.
DAOs have seen explosive growth in the last 12 months. Without much fanfare from mainstream media outlets, DAO treasuries have grown to billions of dollars. A few examples of the larger and more prominent DAOs today, MakerDAO and Uniswap are each generating over $100m of annualized revenue.
Monthly DeFi / DAO Revenue
🔦 White Star & Portfolio Spotlight
Announcing our first successful exit: Blockchain indexing firm The Graph acquires dfuse/Streaming Fast in a $60m grant deal
The Graph Foundation awarded a $60m grant to dfuse/Streaming Fast to bring dfuse into The Graph’s ecosystem. The proceeds were split between investors and the dfuse team.
Under the deal, Streaming Fast will join as a core developer in The Graph’s ecosystem. Streaming Fast will retain ownership over its brand and personnel, and it will become a core protocol developer and open source contributor in The Graph’s ecosystem.
The Aave V2 collateral swap feature was upgraded by integrating with
Paraswap
🏦 Enterprises & Institutions
McLaren to Build NFT Platform on Tezos
The platform will list NFTs illustrating McLaren Racing's history, heritage, and famous drivers.
CNN selling historic news ‘moments’ as NFTs
CNN’s NFT project is dubbed “Vault by CNN: Moments That Changed Us” and includes a series of tokenized iconic moments from its 41-year history, along with a vault to purchase, store and display the NFTs.
Banking giant BBVA opens bitcoin trading and custody services in Switzerland
BBVA Switzerland said the services are available to all of its private banking clients since Monday, June 21. The launch comes six months after the bank began trialing the services in Switzerland.
Crypto miner Hive Blockchain to list shares on Nasdaq
The Vancouver-based company went public in 2017 and said it will retain its listing on the TSX Venture Exchange, trading under the ticker symbol “HIVE.”
Galaxy Digital is now serving as Goldman Sachs' liquidity provider for bitcoin futures trades
Goldman Sachs has been ramping up its cryptocurrency services in recent months. Goldman's crypto offering dates back to 2018, but it has gained steam since the start of the year on the back of institutional interest in the market.
BlackRock Wants a Blockchain Strategy for Its ‘Aladdin’ Investments Engine
Aladdin (short for “Asset, Liability, Debt and Derivative Investment Network”) is the $9tr manager’s tech suite for measuring risk and making trades – basically an operating system (OS) for asset managers. According to the job post, Aladdin’s new director will investigate how blockchain could fit into the OS.
Sotheby's to accept crypto payments for rare diamond auction
The sale, hosted by Sotheby’s Hong Kong, will go live on July 9. Buyers have the option of paying in ether or bitcoin. The price is estimated to be around $15m.
VanEck files prospectus for a new bitcoin futures mutual fund
The fund, managed by Gregory Krenzer, will invest in bitcoin futures and exchange-traded products with bitcoin exposure.
⚖️ Government & Regulation
The SEC delays not one, but two, bitcoin ETF proposals this week
A slew of other firms, including Fidelity, have also proposed bitcoin ETFs before the SEC.
Chinese banks roll out 3,000 ATMs that can convert digital yuan to cash
The Beijing branch of the Industrial and Commercial Bank of China (ICBC) has now activated the feature across its 3,000 ATMs in the Chinese capital city. It's yet another sign that China is widening its ongoing e-CNY tests towards a full roll-out.
CBDCs would be 'the safest type of money available,' says Bank of England exec
Tom Mutton, the director of fintech at the Bank of England, spoke on the outlook for central bank digital currencies at FStech's "Future of Fintech" conference on June 17.
UK regulator commits more resources to assess crypto firms, says HM Treasury
Both the Treasury and the FCA have come under pressure over the handling of the registration process for crypto firms. The longest an applicant has been made to wait for an answer from the regulator is 527 days.
Bank of France completes CBDC settlement experiment with SEBA Bank
The experiment tested CBDC issuance and settlements on a public blockchain through a smart contract simulation.
Bank of Israel has already tested a digital Shekel
The Bank of Israel has already carried out a pilot test on a central bank digital currency (CBDC), Deputy Governor Andrew Abir revealed.
💰 Funding & Exits
Solana Foundation leads $3m investment in blockchain data platform PARSIQ
The suite of smart tools offered by PARSIQ includes notifications for token transfers, price fluctuations, and other blockchain-related movements.
DeFi project Goldfinch, which aims to reshape lending, raises $11m from a16z
The firm, which has grown by 2.5x over the last few months, provides borrowers the ability to take out an under-collateralized loan — a unique offering in a market where borrowers typically have to post more collateral than they want to borrow.
Yield Guild Games doubles down on play-to-earn model with $4m funding round
The Series A funding round was led by BITKRAFT Ventures, an esports-focused venture capital firm. A.Capital Ventures, IDEO, CoLab, Mechanism Capital and ParaFi Capital also participated in the raise.
Decentralized derivatives platform SynFutures raises $14m in Series A
After raising $1.4m earlier this year, SynFutures has netted an additional $14m in a Series A round led by Polychain Capital.
Blockchain privacy firm Integritee raises $2m ahead of Kusama parachain auction
The seed round was led by investment firm LD Capital, and included AU21, DFG, FBG and OKEx Blockdream Ventures.
Blockchain analytics firm TRM Labs raises $14m Series A
The round was led by Bessemer Venture Partners with participation from several other existing and new investors including PayPal Ventures, Initialized Capital, Jump Capital, Salesforce Ventures, Y Combinator, unnamed executives from Google and Plaid, and several others.
Security audit firm raises $5.3m from funds investing in Polkadot, Cardano blockchains
Runtime Verification checks smart contracts for errors, perhaps most famously with Uniswap.
Finnish crypto lender Tesseract bags $25m Series A
Augmentum Fintech, the London Stock Exchange-listed investment firm, led the $25m round.
Daniel Loeb’s Third Point leads $27m investment in crypto compliance startup CipherTrace
CipherTrace, a security firm that tracks crypto crimes, has closed a $27.1m Series B round of funding led by Dan Loeb’s Third Point Ventures with participation from early investors Neotribe, Acrew Capital, and Seraph Group.
Morgan Stanley backs blockchain with an investment in Securitize
Securitize, which is developing a blockchain platform for investors to buy and sell shares in closely held companies and other assets, gathered $48m in a fundraising round co-led by Morgan Stanley & Blockchain Capital.
BitDAO raises $230m for decentralized crypto investment fund
The fundraising round was led by Peter Thiel, Founders Fund, Pantera Capital and Dragonfly Capital. Other participants included Alan Howard, Jump Capital and Spartan Group.
Thailand’s XSpring Capital raises $225m to build an integrated financial marketplace
Thai companies and millionaires have funded the firm which aims to bridge traditional and digital finance.
Amber Group valued at $1bn in $100m funding round
With operations in Hong Kong, Taipei, Seoul and Vancouver, Amber Group said it plans to use the funding to expand its global operations. Participants in the Series B include China Renaissance, Tiger Brokers, Tiger Global Management & others.
Real estate mogul to spend $100m on Decentralized Social Networking Protocol
Project Liberty will utilize blockchain technology to build a new type of internet infrastructure aiming to democratize social media data.
Bitcoin mining company that repurposes waste coal raises $105m in funding
Stronghold’s Scrubgrass Generating Plant uses waste coal, an environmentally toxic byproduct of coal mining, first to fuel its electricity generation. The company later brought crypto mining hardware into the power mining facility, creating “an economic incentive to continue cleaning up waste coal piles and land.”
Visa, PayPal join crypto VC Blockchain Capital’s new $300m fund
PayPal said it's the first time the company has invested as an LP in a fund focused on blockchain and digital assets.
Coinbase acqui-hires Meemo team
The team brings deep expertise in the processing and analysis of large-scale data, from infrastructure to ML-powered ranking, with a fintech background and mindset.
🚀 Project Launches & Updates
Ethereum’s ‘London’ hardfork set to go live on testnets starting June 24th
The London hardfork upgrade includes five Ethereum Improvement Proposal (EIP) upgrades, but the star of the show is EIP-1559. An overhaul of Ethereum’s existing fee structure, EIP-1559 is expected to reduce gas costs for users significantly.
🔥 Other Bits We're Excited About
Venture capital makes a record $17bn bet on crypto world
That’s by far the most in any single year and nearly equal to the total amount raised in all previous years combined.
Keep, NuCypher communities back protocol merger plan on Ethereum
Successful votes in hand, the merger projected, dubbed KEaNU, now moves toward implementation, specifically the development of the "staking contract for KEaNU and the associated adapters to grandfather in existing NU and KEEP stakes."
An estate in virtual world Decentraland just sold for nearly $1m
An NFT of a set of land in virtual world Decentraland has sold for a record-breaking $913,808 worth of MANA, the game’s native token. Real estate investment firm Republic Realm acquired the digital estate for nearly 1.3m MANA.