Round Tripping

a weekly recap of the crypto ecosystem

May 21, 2022

as always, thanks for reading and you can follow/reach me here

tl;dr: LUNA fallout updates, wallets race to innovate, Tether FUD & operating as intended, ETH merge hopes for August, and gamefi/NFTs as a release valve

BTC dominance 45% | ETH dominance 19% | DeFi TVL $110B |

Total Crypto Market Cap $1.26T | Stablecoin Supply $155B |

funding:

a16z launches $600M gaming fund
Elwood Technologies, crypto trading infrastructure, raises $70M series A
Travis Kling led Ikigai raises $30M fund for “x to earn”, NFTs, DAOs & web3
N3TWORK Studios, blockchain gaming startup, raises $46M series A
Certora, contract security, raises $36M; currently secures ~$50B in DeFi assets
TipTop, stealth crypto startup led by Postmates founder, raises $23M
SingularityNET and DAO raise $25M for scaling AI enabled DeFi
Metatheory, web3 gaming studio, raises $24M
FreshCut, Polygon based gaming platform, raises $15M
Azra, blockchain RPG and combat gaming, raises $15M
CyberConnect, web3 social graph/data ownership, raises $15M

news:

Coinbase launches in-app/browser direct web3 connections, Coinbase Pay SDK for easy on-ramps, and liquid token staking collaboration with Alluvial
Nomura, Japan’s largest investment bank, launching crypto subsidiary
Revoult details upcoming wallet and token that will “reward customer loyalty”
Cloudfare announces release of public Ethereum and IPFS gateways
Ledger building “Ledger Connect” direct web3 browser extension
Meta files 5 trademarks for MetaPay with a crypto & digital assets focus
Nansen acquires Ape Board, DeFi portfolio tracker, for “eight-figures”
Robinhood releasing web3 wallet EOY; SBF purchased 7.5% of HOOD last week
OpenSea announces SeaPort; looks to increase NFT liquidity & seller optionality
AAVE releases Lens Protocol, decentralized social media, on Polygon

thoughts & notes:

Wallet Race

MetaMask is the obvious ETH giant with Phantom controlling the SOL ecosystem. Wallets are one of the most sought after infrastructure plays in the space, as they contain the web3 version of web2 user data. This vertical is difficult to build upon but the implications of what wallets can enable are just begging to be theorized and explored. Robinhood, Meta, Coinbase, Ledger join the arms race of current wallet builders I highlighted in the April Recap.
I previously wrote Think Bigger: Wallets as Profiles exploring the possibilities that wallets provide. Packy’s Not Boring newsletter released “Tokengated Commerce” on May 2nd where Alex Danco of Shopify explained “NFTs and How Shopify is Becoming Wallet-Aware”. Wallets and what they enable to users and protocols will drastically change for the better over the coming years, allowing unique, curated experiences across inter-twinning communities of things you own (ideally, eventually shielded by ZK tech).

GameFi & NFTs

To avoid sounding like a broken record this will be brief. NFT and gamefi investments continue accelerating and are increasingly garnering the meta narrative that they’ll fuel the next run (shocking). High quality games deploying NFTs and sustainable token mechanisms that fuel their own economy and create flywheels throughout the crypto ecosystem have unseen potential. As the crypto ecosystem chops down waiting to find a bottom, the highest r/r with is not in new liquid, ERC-20 tokens, but in small bets throughout the NFT and gamefi ecosystem (for retail and funds alike).

Tether & Stablecoins

Tether has long been one of largest outlets of FUD directed at the crypto ecosystem. On the back of UST’s collapse (obviously entirely different, non-comparable mechanisms) Tether is once again making headlines. The market cap of Tether has gone from ~$84B to ~$74B this week as holders have tapped the redemption mechanism. This is good, and signals that the stability and redemption mechanisms of exchanging Tether for fiat equivalents operated seamlessly on the scale of $10B over the past ~10 days.
Tether also released a detailed breakdown of their holdings which you can find here. Finally, as linked below, until the biggest market makers and exchanges in crypto no longer buy hundreds of millions of USDT when it “breaks peg”, signaling confidence and skin in the game trust of the redemption mechanism at $1, Tether will be fine.

Sam Trabucco @AlamedaTrabucco

Kidding, of course, but it has been nice to once again confirm the existence and efficacy of USDT's redemption mechanism! Alameda did a ton of 'em today.

token roundup:

Polygon Nightfall, launches zk powered L2 live on mainnet
Inter Protocol, over-collateralized stablecoin for ATOM IBC, announced
Aztec Network, ZK shielded DeFi, will launch on mainnet June 6th
Optimism outlines their Bedrock rollup architecture with EVM equivalence
ETH merge in August if “everything goes to plan”

LUNA updates & Fallout

Do Kwon 🌕 @stablekwon

@jackdx16 @FatManTerra @Sarahparker45 @gregosuri We are down $30 billion this year

Latest Terra Ecosystem Revival plan outlined here, currently passing vote
Delphi Labs proposal to shut down Mars Protocol and return all deposits
The Block’s data dashboard shows $1.5 billion in Anchor liquidations
ATOM Ecosystem — last week the tokens within this chart were down 45-65%
- UST was integrated throughout the Cosmos ecosystem which caused (along with majors falling) a significant repricing of several tokens. While the Terra chain tries to recover, what we’ve seen this week is several protocols previously on Terra with ongoing discussions to port their ecosystems to Cosmos.
- Terra previously enabled IBC on its blockchain in October of last year, giving them the ability to communicate across the IBC network. The current fallout seems likely to benefit the Cosmos ecosystem as the tech, code, and developers are compatible with IBC, something to monitor in the coming weeks as protocols and devs find a new home.

Fund Exposure & Losses

Hashed — publicly they’ve said they’re “financially sounds”, but on-chain data shows that they had collectively staked ~50M LUNA which would result in losses of over $3.5 billion dollars
Pantera Capital — exited “80%+” of position before the crash and turned several initial investments into Terra Ecosystem from $1.7M to $170M
Galaxy Digital — Mike Novogratz released an update to investors
Delphi Digital — admitted they “were wrong” and detailed losses & learnings here as one of the core builders and most active participants in the ecosystem

around the ecosystem: