White Star Capital Digital Asset Fund - newsletter #99
Uniswap expanding to take on centralised exchanges
Uniswap expanding to take on centralised exchanges
White Star Capital Digital Asset Fund - newsletter #99
Uniswap Labs COO Mary-Catherine Lader shared in an interview that the team behind Uniswap protocol has its eye on “several new products” to continue the decentralised exchange’s market share.
What is Uniswap?
Uniswap protocol is the leading Decentralised exchange (DEX) with 24h trading volume ($972m) five times greater than its nearest DEX competitor Pancake Swap ($183m), and accounts for over half of 24h trading volume across all DEXes. Uniswap eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for safe, accessible, and efficient exchange activity.
Competing with the centralised players
Uniswap’s centralised competitors Binance ($22b), Coinbase ($2.2b) and FTX ($2.2b) still generate substantially higher 24h trading volumes. Uniswap Labs, the development team behind the Uniswap Protocol has prioritised gaining market share from the large centralised players. One way the team is doing this is through mergers and acquisitions. In June earlier this year, Uniswap Labs acquired Genie, an NFT aggregator. Adding NFTs to Uniswap reduces friction for users, reducing their need to use more platforms, and transforming the Uniswap experience into one where users can buy and sell any of their digital assets.
A community effort
In addition to Uniswap Lab’s efforts, the Uniswap community is aiming at supporting decentralised growth and long-term sustainability. Earlier this month community members voted to create the Uniswap Foundation, which will be an independent entity focusing on supporting the decentralised exchange’s protocol and ecosystem. The foundation already has a grants program which has just recently executed its first wave of grants, deploying $1.8m across 14 different grants. Uniswap Diamond one of the grant winners, is working on offering pro traders and liquidity providers features they would normally receive through centralised platforms. The foundation is particularly excited about Uniswap Diamond’s potential to increase market share and development of on-chain data analysis.
Implications of a fee switch
At present, trades on Uniswap incur a 0.3% fee which liquidity providers receive. A proposal to switch up fees imposed on the exchange has been debated and the implications could be great. The consideration would be to have 0.05% of fees accrue back to token holders. In such a scenario, Uniswap would over the past 90 days have been the 5th most revenue-generating protocol in Web3 behind dYdX, Synthetix, Opensea and Ethereum. Enabling holders of the token to share in the revenues generated could be a strong incentive to hold the token and consequently increase adoption. However, there could be negative impacts as it pertains to how liquidity providers decide to allocate their capital in response to a reduction in their earnings.
🔦 White Star & Portfolio Spotlight
Paraswap introduces sePSP, their new social escrow (se) system
Paraswap DAO introduces their new token as a way to give back PSP 2.0 fees to those that provide value to the ParaSwap DAO.
Spatial to host Christie’s Global Auction House, Christie’s first 3.0 virtual gallery
The first exhibition will launch Friday 9/30. featuring trailblazing artist Diana Sinclair’s incredible collection for all to experience.
🏦 Enterprises & Institutions
Disney hiring transaction laywer for ‘aggressive’ NFT and DeFi plans
Disney is looking for legal help as it expands into web3 territory. The media conglomerate is focused on ‘next generation storytelling’.
Nasdaq is preparing to launch an institutional crypto custody service
Nasdaq historically has opted to provide technology to crypto market participants versus operating a market itself.
⚖️ Government & Regulation
Draft stablecoin bill in Congress to require Fed, state regulator approval
Draft legislation to create a U.S. federal framework around stablecoins would temporarily ban the types of payment coins that are not backed by outside assets, similar to the now-defunct UST.
Crypto super PAC has spent more than $10 million in midterm primaries
GMI PAC says it has spent more than $10 million on congressional and senate races this cycle. It is now setting its sights on general elections this upcoming November and 2024.
Draft EU Law Could See NFTs Regulated as Securities
The European Union’s landmark and now-finalized Markets in Crypto Assets (MiCA) draft legislation asserts that NFTs sold as components of large collections possess little to no distinctively unique qualities or utility, and, therefore, would be subject to the same regulatory scrutiny as cryptocurrencies.
💰 Funding & Exits
Lit Protocol raises $13 million, announces new cloud wallet app platform
Open-source utility Lit Protocol announced raising $13 million in new funding, with support from OpenSea Ventures, A Capital and others.
Skip Raises $6.5 Million Seed Round to Build MEV Solutions
Skip’s platform allows users and traders to pay for transaction prioritization and privacy in a sealed-bid auction with the goal of democratizing access to MEV opportunities and profits.
DeFi Bug Bounty Platform Immunefi Raises $24M in Series A
Immunefi plans to use the fresh funding to build a new version of its platform and to increase reward payouts for ethical hackers.
Brevan Howard leads $35 million round for crypto platform Messari
Messari, a crypto data and analytics company, has raised $35 million in a Series B funding round.
Deribit raises funds from existing investors at $400 million valuation
Crypto derivatives exchange Deribit has raised funds from existing shareholders at a $400 million valuation, according to people familiar with the deal.
NFT gaming studio Vulcan Forged raises $8 million in Series A round
Vulcan Forged will use the funding to build out its online game VulcanVerse, expand its NFT-based gaming offering and to grow its team.
🚀 Project Launches & Updates
Banking giant Nomura launches crypto VC unit
The unit, named Laser Venture Capital, will invest in startup categories including DeFi and blockchain infrastructure.
Hong Kong billionaire's VC firm plans to raise a new $200 million fund to invest in crypto
Hong Kong billionaire Adrian Cheng’s VC firm C Ventures reportedly plans to raise a new $200 million crypto fund.
Spice VC to close second crypto venture fund with $250M
Spice VC’s second venture fund is expected to have its first close mid-fourth quarter as it works toward a $250 million target.
🔥 Other Bits We're Excited About
Italy's AC Milan Launches NFT Game With MonkeyLeague
The new partnership with an esports franchise signals the soccer champion’s latest step forward into the web3 world.
New England Patriots ink sponsorship deal with crypto firm Chain
Crypto firm Chain will be the New England Patriots' new "official blockchain and web3 sponsor."