White Star Capital Digital Assets Fund - Newsletter #132
Streamlining Crypto Payments: Why We Invested In BoomFi
Streamlining Crypto Payments: Why We Invested In BoomFi
We’re proud to announce BoomFi’s $3.8m seed funding round led by White Star Capital. BoomFi is a next-generation payments company that helps merchants accept multi-chain crypto payments for any pricing model in minutes.
Stablecoin adoption has continued to grow despite the market downturn of 2022, with over $7tnsettled last year in dollar-pegged coins like USDT and USDC, surpassing even the settlement value of Mastercard which processed around $2.2tn in value. Worldpay and Crypto.com’s survey reveals 60% of 1.5 million merchants are primed to accept crypto, yet only 4% are currently offering this option.
With crypto’s benefits of lower fees, instant settlement, and reduced fraud rates, demand for robust, user-friendly crypto payment solutions is surging. Yet, payment technology supporting this new currency has not taken off. The success of day-to-day payments in crypto will require not just the evident demand from consumers, but also the willingness and ability to accept cryptocurrencies from merchants.
So, what are the benefits of accepting crypto payments for merchants?
1. Cost-savings
When accepting fiat payments, merchants need to pay a host of intermediaries, meaning their cost of acceptance includes interchange, scheme, acquirer, and sometimes even chargeback fees (the total cost of which exceeds $30bn per year). When adding up to 2–10% of a transaction, this can make a huge difference to merchants’ bottom line.
Meanwhile, blockchain payments cannot be reversed, so chargebacks are impossible. They have a fixed transaction-fee model for settling transactions on-chain, which are usually insignificant, and there are no intermediaries to negotiate fees with, everything is open and accessible.
2. Instant settlement
Traditional online payments don’t instantly clear. Typically, it will do so the following day but can take longer depending on the nature of the transaction, customer, merchant, and goods sold.
With cryptocurrency transactions, the settlement of funds is instantaneous. Cryptocurrency payments enable instant, ‘always-on’ money, rather than waiting for funds to settle through SWIFT. This instant settlement means instant cash flow for merchants.
3. Customer growth
Expensive payment processors and acquirers, like Amex, manage to onboard merchants because they promise to bring wealthier clientele to their business, presumably increasing average basket size with them. Buy Now Pay Later also increases the size of the customer pool, by allowing users with lower or variable income to access credit at the point of sale.
Similarly, enabling crypto purchases will increase the size of a merchant’s customer pool, encouraging crypto-native users to choose their store over other exclusively fiat-based stores.
Other crypto payment solutions have come about in the last couple of years, but have not managed to take a meaningful share of the payment volume of traditional payment gateways. Their massive lack of flexibility and innovation makes them an unattractive alternative.
Enter, BoomFi.
The team behind BoomFi are erasing the complexities traditionally associated with accepting as a method of customer payment for both web3-native companies and traditional merchants.
It’s an all-in-one solution to address all aspects of the payment stack. The goal is to offer merchants a wide range of options to accept payments via one-time checkout, recurring payments, invoicing, and usage-based models.
Customers can pay in any major cryptocurrency on any major blockchain, while the merchant is paid out directly in fiat or a cryptocurrency of their choice. The fiat off-ramp is a crucial feature for Web2 merchants, allowing them to accept payments in cryptocurrency without having to worry about issues such as settlement, volatility and custody. Web3-native merchants can choose to get paid out directly in stablecoins.
BoomFi will make use of LayerZero’s omni-chain bridge called Stargate Protocol, which allows them to transfer native assets across blockchains. Additionally, they have already been onboarded with the liquidity provider Aquanow, which is a strategic investor in this round.
The team
Co-founded by serial tech entrepreneur Jack Tang and fintech product executive Michael Si, we were super impressed with the clarity of their vision and track record. They have spent the past couple of months on intensive product development with a strategic group of partners to streamline the product.
This round, which included backing from exceptional investors such as Passion Capital, Blockchain Founders Fund, Kraken Ventures, GSR and a strong circle of strategic advisors, will provide BoomFi with the capital necessary to accelerate product development, build strategic partnerships and expand the merchant base.
We’re really excited to see where Jack and Michael take BoomFi in the coming years. Check out BoomFi’s website here or reach out to jack@boomfi.xyz to learn more about adopting crypto payments for your business.
🔦 White Star & Portfolio Spotlight
Atlendis Labs has concluded an Audit of the Atlendis Protocol V2
Atlendis Labs successfully audited their Atlendis Protocol V2 with Nethermind, addressing minor issues found in the smart contracts. The audit report instilled confidence in deploying the V2 contracts while ensuring ongoing development, testing, and monitoring for enhanced security, fostering a long-term relationship with Nethermind.
Thala's advancements in transparency and development for V2 launch
Thala enhances transparency by providing monthly engineering recaps, showcasing their developmental efforts. They have upgraded the UI, integrated with external platforms, contributed to Aptos Network's public goods, and are developing exciting features like Vote-escrow tokenomics, DAO governance, batch auction support, and more for their upcoming V2 launch.
Paraswap enhances gas efficiency and fee capture with PSP-IPΔ32 upgrade
ParaSwap has implemented PSP-IPΔ32, an upgrade that enhances gas efficiency and fee capture. The proposal aims to address limitations in the current fee system, simplify on-chain checks, and optimize smart contracts for increased volume and revenue.
Superfluid and Lens Protocol introduce Fluidsense, an advertising protocol
Fluidsense is an innovative decentralized advertising protocol that leverages Superfluid and Lens Protocol. It introduces a novel method to amplify content on Web3 social platforms by offering continuous money streams as incentives to users who actively engage with posts through activities such as sharing, liking, and following.
Safello is introducing cards payments
Safello has introduced a new feature that allows users to shop crypto instantly using card payments. Whether it's a debit or credit card, Safello provides a convenient and secure option to pay for crypto orders, ensuring that the purchased cryptocurrency is delivered directly to the user's Safello wallet.
🏦 Enterprises & Institutions
Deutsche Bank seeks crypto custodian License in Germany as part of Digital Asset expansion plans
Deutsche Bank has applied for regulatory permission to become a crypto custodian in Germany, as part of its plans to offer institutional-grade cryptocurrency storage solutions. The bank intends to provide various services such as digital asset trading, taxation, valuation, fund administration, lending, staking, and voting, while exploring opportunities in the crypto market through its asset management division, DWS.
Finance giants expanding their crypto horizons with exchange launch
EDX Markets, a crypto exchange for institutional investors, has launched with support from major finance players like Citadel Securities, Fidelity Digital Assets, and Charles Schwab. Differentiating itself from other exchanges, EDX takes a cautious approach, offering a limited selection of cryptocurrencies and operating as a non-custodial exchange with trades facilitated through retail brokerages.
Meta's new AI speech tool is ready - made for Deepfakes - so it's not being released
Meta unveils Voicebox, an AI tool capable of generating realistic speech for multiple applications. However, citing concerns about misuse, Meta has chosen not to release Voicebox to the public currently, given its potential for creating deceptive deepfake dialogue.
BlackRock’s Bitcoin ETF would be a big deal
Meta has filed with the U.S. Securities and Exchange Commission (SEC) for the creation of iShares Bitcoin Trust, a spot bitcoin exchange-traded fund (ETF). This development raises questions about its classification as an ETF or a trust, but if approved, the involvement of BlackRock could have a significant impact on bitcoin liquidity, prices, and the expansion of paper bitcoin in the market.
⚖️ Government & Regulation
EU Commission’s Digital Euro Bill back on track for June 28, Lead Official says
The European Commission plans to publish legislation on a digital euro on June 28, covering privacy, distribution, and offline transactions. The European Central Bank will decide on the project's future after evaluating technical details, following its removal from the agenda earlier.
IMF advisor sees power in global ledger that works with CBDCs
Tobias Adrian, a financial counselor at the IMF, explored the revolutionary potential of a global central bank digital currency (CBDC) system in enhancing cross-border and domestic payments. He proposed the use of trusted ledgers to create a secure and efficient platform, allowing for seamless multicurrency transactions without the need for a new settlement token. This approach aims to transform financial transactions by providing interoperability between fiat currencies and promoting transparency and automation through smart contracts.
Former SEC advisor: Legal doctrine could end Gensler’s crypto crackdown
The major questions doctrine, a legal principle challenging regulatory authority, could halt SEC Chairman Gary Gensler's crypto crackdown by requiring agencies to obtain explicit authorization from Congress for significant matters. This doctrine has implications for the SEC's regulation of decentralized digital assets and may be invoked by Coinbase and Binance in response to the SEC's lawsuits.
UK Crypto, Stablecoin laws approved by Parliament's Upper House
The U.K. Parliament has approved the Financial Services and Markets Bill (FSMB), paving the way for potential regulation of cryptocurrencies in the country. The bill aims to give regulators more power and address crypto-related matters, with specific rules for the crypto sector expected to be set within a year after final approval.
Bank of England-Backed Project: CBDCs could enable 'Programmability' for Money
The Bank of England (BoE) and the Bank for International Settlements (BIS) Innovation Hub London Centre conducted Project Rosalind, a trial exploring the potential uses of central bank digital currencies (CBDCs). The findings suggest that a well-designed CBDC could enhance payment experiences, enable programmability through smart contract-like features, and contribute to a more digitalized society. The project aligns with the U.K.'s consideration of a digital pound ('Britcoin') as the BoE seeks feedback on a consultation paper.
💰 Funding & Exits
Bit2Me secures €14 million funding to expand cryptocurrency exchange operations
Digital asset firm Bit2Me has closed a €14m funding round led by Investcorp, joined by Telefónica Ventures, Stratminds VC, Adaverse, YGG fund, and CEO Gabby Dizon. The funding will fuel Bit2Me's efforts to become a leading exchange in Spain, expand into Latin America, and establish a prominent presence in the international Web3 sector, providing cryptocurrency exchange and custody services recognized by the Bank of Spain.
Connext Labs raises $7.5M to build Web3 communication layer for blockchain interoperability
Blockchain interoperability protocol Connext Labs has raised $7.5 million in funding, valuing the startup at $250 million. They are building a communication layer, likened to the HTTP of Web3, to enable applications to interact with funds and data across multiple blockchain networks simultaneously, addressing congestion and high fee concerns.
Tapioca DAO raises $6M to develop user-friendly DeFi Apps on Ethereum
Tapioca DAO develops user-friendly DeFi apps on Ethereum, governed by token holders. Their goals are to build a decentralized exchange and lending platform, enhancing efficiency and security in Ethereum. They raised $6M in seed funding from Layer Zero Labs, Parc Capital, Magnus Fund, Capy Capital, and others.
ResearchHub raises $5M to help scientists monetize their research
ResearchHub has raised a seed round led by OSS Capital and notable investors, including Boost VC, RedHat's Bob Young, and Y Combinator’s Garry Tan. Their tokenized social network rewards scientists for sharing scholarly content, aiming to create a collaborative platform where valuable contributions are recognized and rewarded. With the funding, ResearchHub plans to expand the platform, develop new features, and empower scientists worldwide.
Mnemonic raises $6M Seed Funding to power AI-driven NFT Data and Analytics for Web3 development
Mnemonic, an AI-powered NFT data provider, raised $6 million in a seed extension round led by Salesforce Ventures. Their APIs offer real-time NFT data and analytics, empowering developers and enterprises in creating Web3 products. Salesforce plans to integrate Mnemonic's insights into its Web3 CRM products for improved decision-making.
Poko raises $4.5m to reduce Web3 payments friction
Poko, a Web3 payments startup, was created after Shoppa pivoted its business model. It aims to simplify fiat-to-crypto on-ramping by enabling seamless asset transfers to Web3 infrastructure, and recently raised $4.5 million in a seed round led by investors including Y Combinator and Goodwater Capital. The platform significantly reduces NFT and crypto purchasing costs, improves transaction success rates, and enhances user conversion rates.
Concordia raises $4M to streamline cross-chain risk and collateral management for digital assets
Concordia, a multi-chain risk and collateral management protocol for digital assets, raised $4 million in a seed funding round led by Tribe Capital and Kraken Ventures. The protocol simplifies cross-chain liquidity and collateral management, allowing users to transfer assets between blockchains without wrapped tokens or bridges, and aims to bridge DeFi and TradFi.
Intuition raises $4 Million to launch Decentralized Knowledge Sharing Protocol
Intuition, a decentralized infrastructure provider, raised $4 million in a seed round led by Superscrypt. They aim to launch a protocol and applications that enable users to freely share opinions and information, improving access to consolidated and trustworthy data.
TaxNodes raises $1.6 Million in Seed Funding to simplify Crypto Taxation
TaxNodes, a crypto tax computation platform, has raised $1.6 million in a seed funding round. The funding will be used to develop AI-assisted tax advisory solutions and provide end-to-end services for individuals and businesses navigating crypto taxation complexities.
🚀 Project Launches & Updates
Teddy DAO introduces perpetual NFT collection donating to charity via JustGiving
Lucky Friday's web3 software company, Teddy DAO, is introducing Teddy Bears, a collection of perpetual NFTs that donate sales proceeds to charity. In partnership with JustGiving, Teddy DAO holds daily auctions for these NFTs, allowing winners to donate proceeds to one of the 400 supported charities, with a goal to expand to a larger network of 450,000 charities.
Nike and Epic Games collaborate on "Airphoria" in Fortnite
Nike and Epic Games have partnered for "Airphoria," a Nike-branded experience in Fortnite's Creative Mode, which does not include in-game NFTs but involves ties to Nike's .Swoosh NFT platform. The collaboration hints at the incorporation of crypto elements without integrating NFTs directly into Fortnite.
Mercedes-Benz Is adding ChatGPT to cars for AI Voice commands
Mercedes-Benz plans to integrate OpenAI's ChatGPT chatbot into its cars for a three-month beta program in the United States. This integration will bring AI-powered voice commands and additional features to the MBUX system, enhancing the existing voice assistant. The primary goals are to improve response intuitiveness, ensure data protection, and monitor potential risks.
🔥 Other Bits We're Excited About
Gary Gensler memecoin outperforms the entire crypto market
Good Gensler (GENSLR), a memecoin inspired by SEC Chair Gary Gensler, has experienced a rally while the crypto market faced losses following the SEC's lawsuits against Binance and Coinbase. The project humorously portrays a fictional story of a good Gary Gensler fighting against an evil counterpart in parallel universes, highlighting the importance of a crypto-friendly regulatory framework.
The Weeknd and Binance enter the Metaverse
Binance and The Weeknd have launched the "Metaverse Dimension," offering a web-based treasure hunt game where users can unlock exclusive content and rewards. The partnership includes virtual outfits, AR experiences, and the chance to win concert tickets and exclusive merchandise through integrated puzzles.
Meet PassGPT, the AI trained on millions of leaked passwords
PassGPT, a password-guessing model created by researchers from ETH Zürich, Swiss Data Science Center, and SRI International, utilizes OpenAI's GPT-2 architecture and is trained on leaked passwords. It employs progressive sampling to generate complex passwords and has the ability to guess unseen passwords while analyzing password vulnerabilities.