Welcome to RelayNode NYC Area edition! The NYC blockchain ecosystem is growing. My goal is to harness its energy and provide a weekly curated list of personal thoughts, interesting content, upcoming events, and local jobs.
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RelayNode NYC is curated by:
David Gogel: Growth Lead @dYdX, Advisor/Investor, Advisor @Paperchain.io, Wharton MBA/BS/BA, fmr Associate @Techstars' Blockchain Accelerator, Co-president @Wharton FinTech, Corp Dev @LinkedIn @AIG
Follow me on: Twitter | LinkedIn | Definancier
Market Stats
Last week, the Dow, S&P 500, and NASDAQ gained 1.8%, 0.6%, and 18.2%, respectively. Equities markets continued to melt-up as companies release better than expected earnings in Q2. Tech led the recovery from March lows, pushing the NASDAQ to new highs. The Dow, which is largely composed of traditional businesses, lagged and remains ~5% below February highs. The S&P 500 has had a middling performance. At 121 days since its latest record, the S&P 500 is on pace for the fastest recovery ever—measured as the time it takes from the previous bull market high to setting a record in a new bull market.
Gloomy outlook and market disconnect from real economy: We still have 5M COVID cases, 170K fatalities, double-digit unemployment, and a historic drop in GDP. Overall, the feeling is that the recovery has stalled. Meanwhile, a new fiscal stimulus bill has reached an impasse, President Trump announced executive orders banning Chinese apps and listings, a looming contentious election, and questions around election infrastructure are creating an uncertain environment. The USD is caught between concerns about the lagging recovery and support from rising bond yields and safe-harbor demand. Gold, traditionally a safe haven, broke below its 20 daily EMA to $1,864, retracing 9 sessions of gains in 3 days after achieving its all-time high of $2K.
The total market cap of crypto-assets sits at ~$374B, up 3% WoW. After breaking out of a multi-year triangle and through the resistance at $10.5K, BTC has consolidated in the $11.2-12K range. According to Skew, the prices of bitcoin and gold have reached a monthly average correlation of 70%, an all-time high. ETH continues to outperform as DeFi Yield Farming continues to drive usage of the Ethereum blockchain, driving ETH to a 2-year high. Open interest on Ether futures grew by 250% over 3 months, reaching $1.7B.
Some stats on DeFi token returns, courtesy of CoinGecko:
1 Big Thing: Joining dYdX
I’m excited to announce that I’ve joined dYdX, a leading decentralized platform for advanced financial products, including margin trading and derivatives, as their Growth Lead. I am very excited about the opportunity to join Antonio and the team to scale the decentralized exchange 10x. I am energized by the opportunity to build an open trading platform for cryptoassets and help build out the decentralized finance ecosystem. DMs always open!
I will do my best to continue to write RelayNode.
Go Deeper:
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What To Read
🌐 MACRO / WHY BITCOIN?
🌐 Fidelity Digital Assets’ Bitcoin Investment Thesis: Ria Bhutoria explains why bitcoin is expected to increase in value over the long term: 1) it's an "aspirational store of value" 2) its volatility will attract new attention and investment 3) its properties of verifiable digital scarcity are unique and may gain value in a time of global economic change 4) wealth transfer to a new generation that looks favorably on bitcoin.
🌐 Genesis's lending business surges: According to the 2Q Genesis Global Trading report, the total number of loans outstanding hit $1.4B in Q2, up 118% QoQ. Genesis added $2.3B in new originations. BTC loans increased as a result of the flattened futures curve enticing traders to long basis by borrowing BTC, selling it spot while buying short-dated futures.
💰 FUNDING, M&A, EXITS
Seed
💰 1inch, a DEX aggregator with aggregate volumes of $1B+, raised a $2.8M led by Binance Labs, with participation from Galaxy Digital, Greenfield One, Libertus Capital, Dragonfly Capital, FTX, IOSG, LAUNCHub Ventures, Divergence Ventures, Loi Luu, and Illia Polosukhin. 1inch is working on several products, including what the startup called a “game-changing” algorithm that would utilize 1inch APl to respond in “less than a second” to find the best trading paths. 1inch said it also plans to release its own token, as well as introduce liquidity mining or yield farming on specific Mooniswap pools.
💰 Injective Protocol, a decentralized derivatives exchange, raised a $2.6M seed led by Pantera Capital, with participation from QCP Soteria, Axia8 Ventures, and Boxone Ventures. It expects to launch on mainnet in the third or fourth quarter of 2020.
💰 IDEX, a decentralized exchange for trading Ethereum ERC-20 tokens, raised $2.5M from G1 Ventures and Borderless Capital, with participation from Gnosis and Collider Ventures. Funds will be used to relaunch as a trading platform accessible to market makers and algorithmic traders. IDEX's creator, Panama-based Aurora Labs, raised a $6M ICO in early 2018.
💰 Hedget, an Ethereum Layer 2 solutions for decentralized options trading, raised a $500K seed from FBG Capital and NGC Ventures.
💰 Reflexer Labs, a DeFi project building a new asset called RAI meant to gradually follow the price movements of ETH, raised $1.7M from Paradigm, Standard Crypto, Variant Fund, and Robert Leshner.
💰 Chia Network, a company building a layer 1 blockchain led by BitTorrent creator Bram Cohen, raised $5M in an equity round led by Slow Ventures with participation from Collab Crypto, IDEO and returning investors like Naval Ravikant. Funds will be used to grow the team.
💰 MenaPay, a blockchain-based, fully backed cryptocurrency providing a secure and transparent payment gateway focused on the Middle East and North Africa, raised an undisclosed amount from CoinShares Ventures. Financial terms were not disclosed.
Token Sales
💰 Pixelmatic, an online gaming company building “Infinite Fleet”, a humans vs. aliens space MMO game using a digital token to drive its in-game economy, raised $3.1M via private security token offering led by Litecoin creator Charlie Lee, Blockstream CEO Adam Back, Heisenberg Capital founder Max Keiser and others. The round was broken into two parts, with $2.75M raised via a SAFTs and $250K raised through the investment platform BnkToTheFuture.
💰 DeversiFi, a decentralized crypto exchange spun out of Bitfinex that leverages StarkWare’s batching technology, raised $450K from D1 Ventures and ParaFi. The funds invested $450K in Tether tokens, in return for the exchange’s NEC governance token.
Series A
💰 Uniswap, the leading automated market-making platform, raised $11M in a Series A led by Andreessen Horowitz, with participation from USV, Paradigm, Version One, Parafi Capital, Variant, SV Angel and A. Capital. Funds will be used to build Uniswap V3, which will increase the flexibility and capital efficiency of the protocol.
💰 Audius, a streaming service that connects 250,000 monthly fans directly with 40,000 artists, raised a $3.1M Series A co-led by Multicoin Capital (investment thesis here) and Blockchange Ventures, with participation from Pantera Capital and Coinbase Ventures. The Audius P2P network allows artists to be paid in full by their fans, directly and instantly for every stream with the ability to cash out daily or hourly if they want.
💰 Dapper Labs, a platform for blockchain games and collectibles, creators of CryptoKitties, and developers behind the Flow blockchain, raised a $12M round with participation from USV, A16Z, Coinbase Ventures and NBA players Spencer Dinwiddie, JaVale McGee, Aaron Gordon, and Garrett Temple. To date, Dapper Labs has sold $1.2M worth of digital NBA cards on Flow. The cards were sold through NBA Top Shop, a beta app developed by the company.
Growth
💰 Wyre, a cryptocurrency payments processing company, raised a Series B1 led by Pantera Capital with participation from Boost VC, Fifth Era, Nice Capital, Kraken, and OKGroup. Funds will be used to focus on its API, tune-up products, bug fixes, and improvements to conversion rate optimization. Financial terms were not disclosed.
💰 Circle, a crypto asset financial services company behind the USDC stablecoin, announced a strategic partnership with Digital Currency Group. Circle and Genesis, a leading digital asset prime brokerage firm owned by DCG, entered into a strategic partnership that will add new USDC yield and lending services to Circle's suite of products for businesses and developers.
Public Markets
💰 Square announced an unexpected surge in 2Q revenue. The Cash App generated $875M (up from $306M in Q1) in bitcoin revenue during Q2, posting $17M (up from $7M in Q1) in gross profit.
💰 Microstrategy, a $1.2B market cap software company focused on mobile and cloud-based services, announced it invested $250M from its balance sheet to purchase 21,454 bitcoins. “This investment reflects our belief that Bitcoin, as the world’s most widely-adopted cryptocurrency, is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.”
💰 Diginex, a Hong Kong-based digital financial services and blockchain solutions company, announced a $300M reverse merger with the Nasdaq listed SPAC, 8i Enterprises Acquisition Corp. The merger is expected to occur in September and would make Diginex’s digital currency exchange, EQUOS.io, the first digital currency exchange company to list on a public US exchange.
💰 Galaxy Digital Holdings, the diversified crypto financial services company, released 2Q 2020 financial results. Galaxy reported $38M in comprehensive income in Q2 2020 vs. $113M in Q2 2019. The firm said it saw an uptick in trading in its OTC business, reporting $1B in volume.
Acquisitions
💰 Sablier, a protocol for continuous payments on the Ethereum blockchain, was acquired by Mainframe, a decentralized messaging platform repositioning itself as a DeFi service provider. Mainframe is working on a zero-coupon bond system, enabling borrowers to tokenize debt by depositing collateral to mint tokens with minimal latency. Financial terms were not disclosed.
💰 Summar, best known for making wrapped Ethereum tokens that can represent locked amounts of bitcoin, was acquired by Celo’s cLabs. The acquihire bolsters cLabs’ multifaceted engineering team, which specializes in Bitcoin, Zcash, and Cosmos projects in addition to Celo software projects. Financial terms were not disclosed.
Crypto Funds
💰 Electric Capital closed its second venture fund, a $110M Seed and Series A funds, focused on cryptonetworks and blockchain-enabled businesses. The firm said it raised money from a number of undisclosed institutional investors, including university endowments.
🔓 DEFI / CEFI / OPFI
🔓 YAM Rise & Fall: YAM, described as an “experimental protocol mashing up some of the most exciting innovations in programmable money and governance” launched on Tuesday and then collapsed within a couple of days. Liquidity providers piled into YAM, locking up $500M in total value locked, seeking to capitalize on YAM’s elastic supply schedule. Unfortunately, the code was unaudited and the protocol contained a bug, disabling the on-chain governance feature. YAM has said in a blog post that it is planning to launch a new version of the protocol. Excellent post mortem here.
🔓 FTX to Launch ‘Scalable’ Decentralized Exchange: FTX and Alameda Research created the Serum Foundation and announced Serum, a high-speed, non-custodial DEX built on Solana. Serum is a complete, non-custodial spot and derivatives exchange running on an on-chain central limit order book on Solana’s mainnet. Serum will support cross-chain asset swaps, decentralized stablecoins, decentralized oracles, and non-custodial wrapped BTC, BCH, BSV, LTC, ZEC, ETH, and ERC-20s. The company raised $660K via an Initial Exchange Offering on FTX. The $SRM token can be staked and used to pay trading fees.
🔓 Augur v2 launches: Augur, a decentralized prediction market and one of the first ICOs and projects built on Ethereum, launched its v2 protocol. The upgrade includes changes to improve the user experience: markets can be denominated in Dai to remove the volatility of ETH, “invalid” is now an outcome to solve for the case of poorly worded markets, and 0x is integrated to improve liquidity.
🔓 Exploring the design space of Liquidity Mining: Tushar Jain from Multicoin Capital explains the goal of liquidity mining campaigns is to bootstrap network effects. In order to retain users and drive real network effects, teams must consider the structure of their incentives and finetune the variables of their campaigns.
🔓 Aave v2 and delegated credit: Aave launched v2 of the protocol featuring new lending use cases like credit delegation, gas optimizations, and governance parameters in preparation for their upcoming Aavenomics migration. Credit Delegation is a simple transaction where an Aave Protocol depositor delegates a credit line to someone they trust. Aave announced that DeversiFi, a decentralized exchange, was the first one to experiment with Credit Delegation by drawing a credit line from a Credit Delegation Vault.
🔓 Curve launches native governance token: An anonymous account deployed the highly anticipated Curve governance smart contracts.
🔓Fred Ehrsam explains why crypto-native insurance, on-chain insurance covering protocols and DAOs, has the potential to be a DeFi financial primitive.
🌉 INFRASTRUCTURE
🌉 Filecoin Accelerator: ConsenSys’s Tachyon opened applications for the Filecoin Launchpad Accelerator in support of companies building on IPFS, Filecoin, and across the distributed web. I'll be participating as a mentor and excited to work with the teams.
🌉 Coinbase Cash Loans: Coinbase will allow U.S. retail customers to borrow fiat loans up to 30% of customers' bitcoin holdings or a maximum of up to $20,000. As for interest rates, the exchange would charge a fixed annual rate of 8%, for the maximum repayment period of one year, without filling out an application or going through a credit check.
🌉 BitMEX will instate mandatory identification protocols: The changes are set to remove barriers to entry for some of its target users, improve the security of the platform, and “get ahead of evolving regulation.” Easy registration, high leverage, and bitcoin-only account balances helped BitMEX bootstrap liquidity from all directions.
🍰 LAYER 1
🍰 Ethereum 2.0's multi-client Medalla testnet goes live: Medalla is the final testnet before the launch of the Eth 2.0 network, which is tentatively expected by year’s end.
⚖️ LEGAL
⚖️ Crypto Mom’s second term: Hester Peirce was formally nominated for a second SEC term in June. The nomination has now been officially confirmed by the Senate.
⚖️ US DoJ Seizes Millions in Crypto Funds From Al-Qaeda and ISIS Networks: Per an Aug. 13 announcement from the US Department of Justice, the authorities have seized millions of dollars worth of cryptocurrency from over 300 accounts.
🎥 PODCASTS / VIDEOS OF THE WEEK
📅 Upcoming Events
If you would like to highlight events in future editions, please submit here.
August 22-23: Dystopia Labs / Blockstack: FuturePROOF (Virtual)
🎓 Highlighted Industry Jobs (non-exhaustive list for NY)
If you would like to highlight jobs or internships in future editions, please submit links here.
Paperchain - Data Architect (new)
Symbiont - Marketing Manager (new)
Multicoin Capital - Analyst
Chainalysis - Product Marketing Manager
Nothing written in RelayNode NYC is legal or investment advice and should not be taken as such. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence.