Maven's Insights October

01 November 2021

Maven 11 Global Blockchain Venture Fund (Fund II) will have its second and final close on 30th November 2021.

In a major milestone in the history of Bitcoin, the month of October finally saw the SEC approve two futures-based Bitcoin ETFs, the ProShares Bitcoin Strategy ETF (BITO) and the Valkyrie ETF (BTFD). These ETFs now allow a new segment of (institutional) investors to invest in Bitcoin through regulated financial products. As Chairman Gensler of the SEC signaled his support for ETFs that track the price of Bitcoin through Bitcoin futures contracts, it was expected that some of the ETF applications for futures-based ETFs like these two would be approved. We suspect that the next step will be the approval of a spot-based Bitcoin ETF, which would arguably give investors better exposure to Bitcoin,  although this will likely be taking shape over a longer timeframe.

Facebook has announced that its new name will be Meta. The name change of the Facebook parent company to Meta, an abbreviation of the word ‘metaverse’, shows that they are embracing this new social and digital dimension. CEO Mark Zuckerberg said that “from now on, we’re going to be metaverse first, not Facebook first” and that he hoped they would be seen as a metaverse company.

The previous month of September was marked by regulatory scrutiny of the crypto space, with the majority of both positive and discouraging comments originating in US regulatory bodies. This month saw more encouraging regulatory outings: the White House was reported to be preparing an executive order on crypto oversight. This order would require multiple federal agencies like the Treasury Department, the Commerce Department, the CFTC and the SEC, and many more to study the crypto industry and provide recommendations for their oversight.

An example of a more concrete regulatory entanglement: the saga surrounding Tether has seemingly come to a composed ending, with the CFTC filing and settling charges against sister companies Tether and Bitfinex. Both Bitfinex and Tether, issuer of the  USDT stablecoin, admitted no wrongdoing in terms of communication and provision of evidence surrounding the dollar-backing of USDT, and as as result the case settled relatively gently, finally marking the end of an obstructive narrative that had kept the crypto space in its grip. Finally, news came out that the US FDIC is studying whether certain stablecoins might be eligible for its deposit insurance coverage. In practical terms, the agency is looking at what regular direct deposit insurance might look like for US banks that want to issue stablecoins, although insiders also mentioned that stablecoin issuers like Tether and Circle could also fall under this type of insurance.

Société Générale has proposed to borrow stablecoin DAI in MakerDAO using bonds it issued on the Ethereum blockchain as collateral. The proposal, made by SG investment subsidiary SG-Forge, proposes MakerDAO to accept tokens issued by SG that represent covered bonds backed by home loans. If this proposal passes it would be the first time a major bank has deposited collateral in MakerDAO, which many consider the first DeFi protocol.
NFTs also remained a hot topic during this month, with a flurry of new NFT marketplaces opening up in an effort to piggyback on the success and dominance of OpenSea. Sotheby’s launched their own NFT platform called Sotheby’s Metaverse, and Coinbase started a waitlist (a queue that is over 2 million places long) for their NFT platform that is sure to bring NFTs to a broader audience. 

This month we celebrated having achieved the milestone of 100 million USDC deposits in our Maple Finance pool. We have funded 23 loans so far, of which 8 were issued this month at a cumulative value close to 40 million USD. While we have already overshot our 2021 EOY target, having targeted to finish the end of the year with 100 million in liquidity, we now move our sight to the next goal: 250 million USD in TVL in our pool. For more information on our role as Pool Delegate in the Maple Finance ecosystem, have a look at our previous monthly update. If you would like to learn more about being a lender on Maple Finance, you can reach out to us directly.

This month our venture investment in Merit Circle was announced. Merit Circle is positioning themselves as DAO-of-DAOs for anything gaming and metaverse-related. This setup allows them to provide an index fund-like exposure to the NFTs and revenue streams from any play-to-earn games. We remain confident that growth of the Web 3.0, play-to-earn gaming and the metaverse in the broadest sense are here to stay.