Publications

Maven's Insights - November 2022

02 December 2022

After having undergone the transition from Proof-of-Work to Proof-of-Stake, the Ethereum network turned mostly deflationary in November, with only approximately a net 500 ETH having been added to the supply. In contrast, had the network not changed its consensus mechanism almost 1 million ETH would’ve been issued, underlining the drastically improved economics of the network since the upgrade. The new roadmap for the network, which aims to offload much of its computation to Layer 2 scaling solutions, is clearly taking hold with the amount of gas spent on L2’s being up 170% since the beginning of 2022.

November was a difficult month for the crypto industry with the far-reaching ripple effects of the Terra ecosystem collapse being felt after the bankruptcy of FTX and Alameda Research were declared. In turn, the downfall of these large actors in the industry caused their next wave of contagion, with household names from the industry finding themselves in dire financial straits. While the effects of the situation on our industry will undoubtedly be felt for some time to come, it also once more underlines the need for decentralized and trustless networks as opposed to the centralized, trusted, and opaque systems. In one clear illustration of this demand, the Uniswap DEX started doing more trading volume than Coinbase for some of its biggest trading pairs as users flocked to decentralized alternatives.

The Bank of Japan announced to be starting work on the launch of a digital yen coming spring in collaboration with the country’s three biggest banks. The pilot phase will run for two years, after which a decision on the issuance of a yen CBDC will be made in 2026. The announcement follows similar plans from other (supra)national financial regulators and governing entities. The MAS, Singapore’s central bank, executed its first trades in DeFi on Ethereum layer-2 network Polygon, with JPMorgan and others participating in the pilot. The program used a modified version of the Aave protocol to do its first forex and bond transactions on-chain.

Circle, the issuer of the USDC stablecoin, announced their integration with Apple Pay, making it possible to for instance buy crypto on an exchange using the widely used Apple Pay payment processing service. In an effort to maintain its transparency, Circle also announced that their Reserve Fund will be managed by BlackRock under the custody of BNY Mellon. Finally, Fidelity announced their new crypto offering, which will allow retail investors to buy and sell Bitcoin and ETH commission-free.

Instagram’s parent company Meta lined up multiple announcements this month, firstly announcing plans to soon start integrating the minting and trading of NFT’s on the Polygon and Solana blockchains into the app, after previously having announced its verification of Ethereum-based NFT’s. It later also announced the integration of decentralized data storage protocol Arweave to permanently store NFTs from the app. Sneaker giant Nike, who previously have been major forerunners in the adoption of Web3 technology, announced the launch of .Swoosh, their Web3 platform for virtual apparel and NFT-based products. The announcement comes after their acquisition of Web3 studio RTFKT in 2021. Finally, Uniswap also launched their NFT trading platform, which comes after the protocol acquired NFT marketplace aggregator Genie in June. The move underlines how Uniswap is aiming to become the most well-known decentralized venue that can act as a 1-stop shop for its community.

This month our colleagues over at Stratos released their research on the early stage venture market, which showed Maven 11 as having the highest hit rate in terms of follow-on investments. While the research should by no means be taken as conclusive on our relative performance in the industry, it is a nice acknowledgement of our efforts to date. We will remain passionate about and committed to supporting founders that are brave outliers.