Maven’s Insights - February 2022

01 March 2022

February was an eventful month in regards to exploits in the industry. Firstly, the US government was able to seize 3.6 billion USD in Bitcoin that was missing since the massive 2016 hack of crypto exchange Bitfinex after having arrested two individuals. Secondly, the popular Wormhole bridge protocol was hacked for 320 million USD in ETH. Perhaps most notable about this hack was the fact that Jump Crypto, the crypto division of household proprietary trading firm Jump Trading and incubator of the Wormhole platform, replaced all the stolen Ethereum to make community members whole. Their actions underline the commitment of these relatively new yet massive entrants to the crypto ecosystem.

The end of February was marked by the Russian - Ukraine situation, which has altered the financial markets while they were trying to recover from the tumultuous trend that characterized January. On Thursday, 24th of February, crypto and the broader financial markets faced an unexpected downturn as a result of the escalation of the armed conflict. The general direction of the financial markets will be influenced strongly by the successive macro events for the foreseeable future. Notable among the fundraising efforts aimed at supporting the Ukrainian army and people were those involving crypto donations. Multiple grassroots initiatives came from the wider crypto community, after which the Ukrainian government also publicly solicited donations through cryptocurrencies.

With the portfolio of the exclusive NFT collective FlamingoDAO reaching a cumulative value of over 1 billion USD, the NFT market signaled its continued strength. Signs of mainstream adoption of NFTs also came from gaming giant Zynga, which announced their plans to launch a first NFT-based game later this year. Additionally, the Premier League has been entertaining bids from NFT platforms for the NFT rights of England’s football competition, in a deal that would value the rights between 300 million USD and almost 600 million USD. Online media giant YouTube also shared a positive view of Web3 technologies like NFTs, describing the opportunities the platform envisioned for creators and hinting  towards potential use cases for the popular video platform.

On the front of institutional adoption, auditor and professional services firm KPMG in Canada announced to have allocated Bitcoin and Ethereum to its corporate treasury. The firm was quoted saying that crypto-assets are a maturing asset class and that their belief was that institutional adoption will continue to grow. Sources also announced that BlackRock, the 10 trillion USD and thereby largest asset manager in the world, is preparing to offer cryptocurrency trading services to its investor clients. Crypto exchange Coinbase also shared their Q4 results in their earnings release, which showed they had earned 2.5 billion USD in net revenue during the last quarter of 2021 and that trading volumes were also at an all-time high having reached almost 550 billion USD. Particularly noticeable of their strong quarter was the strength shown by their OTC trading and prime brokerage operations, which shows a steady march of new institutional entrants to the crypto market.

This month our venture investment in Brahma Finance was announced. Brahma is building a protocol for on-chain structured products that allows users to reap the benefits of sustainable yield, while abstracting complexity away from the user. Furthermore, portfolio company Nym held their CoinList sale, which saw over 30 million USD worth of NYM tokens sold in the most popular token sale in the history of the platform. More than a million unique hopeful registrants tried to participate in the token sale. Finally, the Luna Foundation Guard, the non-profit organization backing the Terra ecosystem, announced that they had raised 1 billion USD through OTC sales of LUNA, the native token of the Terra ecosystem. We also participated in this large-scale fundraising round. The capital injection will be used as a reserve for the UST, Terra’s native algorithmic stablecoin.

Our portfolio company, Maple Finance, has surpassed the $800 million of loans originated. We have contributed to its growth by managing the second capital pool of the platform, which has reached a new all-time high by having underwritten more than $70 million to borrowers in February. We are also launching a new pool denominated in Ethereum on the 3rd of March, which will represent a unique lending opportunity for investors looking to generate a return on their idle ETH. Whitelist spots are closing soon, so if you would like to learn more about being a lender on Maple Finance, you can reach out to us directly. Otherwise, an allocation to the DeFi public will be open on a first-come, first-served basis.