Publications

Maven’s Insights November

07 December 2021

Another update regarding one of the main pillars of the crypto economy, Ethereum. This month, the amount of ETH that was burned by the new economic policy of the Ethereum network reached 1M ETH (~4.8B USD). SEC filings also showed that institutional interest in the Grayscale Ethereum Trust continued to grow in Q3 by 20%. As a result, Ethereum has shown impressive strength in the market compared to an otherwise temporarily weaker Bitcoin.

The Bitcoin network also received a significant upgrade called Taproot. The protocol changes some technical features of the network to improve transaction privacy and enables the implementation of lightweight smart contracts. The technical upgrade also improves transaction efficiency, which may lead to lower transaction fees and increased utility of the network.

This month was also marked by some positive developments regarding the regulation of our industry. The ECB announced the expansion of PISA, their electronic payment regulatory framework, to cover digital payments and infrastructure relating to crypto. Similarly, an important piece of regulation of cryptocurrencies was proposed by the European Parliament. The proposal was overall very positive for our industry, and it seems the EU has struck the right balance between furthering the maturity of the industry while allowing innovation to flourish. We will share a more detailed overview and interpretation of this regulatory framework soon.

NFT’s and the metaverse also continued to be at the forefront of our industry in terms of mainstream adoption. World leading auction house Christie’s announced a partnership with prime NFT trading platform OpenSea to host a fully on-chain NFT auction. The auction, called ‘Christie’s X OpenSea’, will also feature payments using Ethereum. Sneaker giant Adidas also announced their foray into the metaverse, purchasing digital property in virtual gaming world The Sandbox, and collaborating with popular NFT collection Bored Ape Yacht Club and major exchange Coinbase.

Twitter and their CEO Jack Dorsey were also in the news this month regarding their involvement in our industry. Firstly, the firm revealed plans to form a new crypto team to incorporate decentralized technology into the platform, which includes more support for dApps and digital currencies for the current platform, and also further development of Blue Sky, the decentralized social networking project from Twitter. Second, Dorsey announced his resignation as CEO, handing the reins to Parag Agrawal who is seen as more of a broadly pro-crypto figure where Dorsey was seen as mostly focused on Bitcoin. We expect Twitter to follow the broader crypto alignment of their new CEO. Ultimately Dorsey left to focus his time on payment platform Square, which announced their rebranding to Block in an effort to more prominently signal their association with and support of the crypto industry.

DAO’s were in the spotlight this month. A rare copy of the US Constitution was on auction, and enthusiasts formed a DAO called ConstitutionDAO to pool funds and bid on the item. If successful, the DAO intended to create an NFT of the item, which would then be fractionalized and tokenized. Holders of the DAO’s governance token called PEOPLE, a nod to the US constitution’s opening phrase “we the people”, would then receive a pro-rata share of the item. They ended up raising nearly 48 million USD, although they ended up losing the auction to Citadel founder and CEO Kenneth Griffin. Though unsuccessful, the initiative demonstrates the power of decentralized organizations.

This month our venture investments in Spectral Finance, Anoma Network, and NFTFi were announced. Spectral Finance is building a protocol for programmable creditworthiness, offering a credit score for users based on their accounts on-chain activity. We see these types of solutions further facilitating and supporting  undercollateralized lending in the DeFi sector. Anoma is building a new blockchain that will allow users to privately and asset-agnostically perform bartering transactions. It is being built by an extremely strong group of founders that have previously built extremely valuable technology relating to asset staking and also the Tendermint consensus mechanism that currently secures $30B of value on the Cosmos blockchain. NFTfi has created a platform for NFT-collateralized loans, ‘financializing’ NFTs to deal with their otherwise inherent illiquidity.

Finally, we are excited to announce once more the closing of our second venture fund. The fund has closed at 120 million USD, and will allow us to further support founders and builders working on the most innovative DeFi and Web 3.0 applications out there.We want to thank all our investors for their trust, and welcome you on board - we are looking forward to seeing where our second fund will take us over the coming 8 years!