Apes go Bananas
Weekly Wrap
Bitcoin and Ethereum continue to slowly bleed as the rest of the market follows suit. Despite this downturn, there was a lot of activity in the DeFi and NFT space. Let’s get into it.
Many developments with projects that are working on improving the NFT infrastructure, coupled with this we see more traditional institutions continue to enter the crypto space, many venture capital firms raised funds to continue to invest in the rapidly growing crypto space. Yet again, we saw many exploits take place, but to end the week, Yuga Labs stole the show with interesting additions to the Ape ecosystem.
VC Funds Inject new capital
Joe McCann formerly worked at Passport Capital and Microsoft. Recently he announced the creation of his new venture firm called Asymmetric. He is on his way to raising $1 billion from the likes of Marc Andersen from A16z, Anatoly Yakovenko & Raj Gokal from Solana, Katie Haun, and Paradigm amongst other reputable names. He states that his firm is looking at crypto from a strictly technological viewpoint and is looking to invest in companies that are solving the various technological bottlenecks. The fund will be split into two vehicles. One is the venture fund looking for early token allocation and the other is the liquid vehicle that will operate akin to a wall street hedge fund.
https://www.theblockcrypto.com/post/143448/founders-from-a16z-solana-and-more-back-new-billion-dollar-crypto-fund
Dragonfly Capital is a well-reputed venture firm that has been in the crypto space for many years led by the talented founder Haseeb Qureshi. They recently announced the launch of their 3rd fund which is set to raise $650m. This will take the value of total assets managed by the fund to around $3 billion. This new fund is going to focus on companies at all stages that are working on creating "new digital economics". Their partners for this raise include companies such as Tiger Global, KKR, and Sequoia China.
https://www.coindesk.com/business/2022/04/27/dragonfly-capital-raises-650m-for-third-crypto-fund/
Gate Ventures is the VC arm of the crypto exchange Gate.io. They are on track to raise $200m by Q3 2022. The thesis that the fund operates with is having a strong belief in a multi-chain future, hence they will primarily be investing in layer 1 and layer 2 platforms. Coupled with this multi-chain thesis, they will also be investing in projects making innovative cross-chain technology. Their aim is to invest in all the base layers that facilitate the development of a multi-chain future.
https://www.coindesk.com/business/2022/04/29/gate-ventures-on-track-to-close-200m-crypto-fund-by-q3/
Traditional Finance entering crypto
Goldman Sachs is one of the largest wall street firms. They have slowly been entering the crypto space with their new digital asset team. Recently, they announced a new offering. They created a lending service where a borrower can collateralize their Bitcoin holdings to take out a cash loan. This service marks a big step forward in terms of wall street’s acceptance of crypto despite years of pushback.
https://www.bloomberg.com/news/articles/2022-04-28/goldman-offers-its-first-bitcoin-backed-loan-in-crypto-push
Stripe is a global payment service provider. They have previously announced their interest in entering the crypto space and this week announced the launch of crypto-payment services through Connect. Connect is already used by Twitter for monetization services but now Connect will also offer crypto payments so users can monetize their services and get paid in Crypto. They will initially be integrating with polygon to facilitate these crypto payments and the only coin that will be used is USDC. Depending on how the service progresses, more coins will likely be added to the list of accepted coins.
https://stripe.com/blog/expanding-global-payouts-with-crypto
NFT infrastructure
Opensea is the leading NFT marketplace. They recently announced the acquisition of Gem.xyz. Gem is the leading NFT aggregator which has saved users a lot of money in gas fees and overall improved the general user experience. With this acquisition, Gem will continue to operate independently and it won’t change from what it is now, the main reason of the acquisition is for Gem to continuously build products and services that further improve the user experience on Opensea. The aim is to make buying, selling, and viewing a much more seamless experience for users.
https://opensea.io/blog/announcements/opensea-acquires-gem-to-invest-in-pro-experience/
MoonPay is a popular crypto exchange and NFT marketplace that makes it easy for users to transact between fiat and crypto, as well as purchase NFTs. To drive their company forward, they announced the launch of a new service called HyperMint which they dubbed the "AWS for NFTs". The purpose is to enable brands, creators, and companies to create their own NFTs very seamlessly by abstracting away all the developmental complexities with an intuitive UI. This implies that they are trying to enter the minting-as-a-service market to capture a whole new set of users.
https://www.theblockcrypto.com/post/143237/moonpays-new-minting-as-a-service-tool-bills-itself-as-aws-for-nfts
Celer is a cross-chain protocol that facilitates the seamless bridging of assets across different blockchains. They initially only facilitated the transfer of fungible assets across different chains and have been very successful in doing so signified by the $6.8 billion in transaction volume. Now, they are taking their protocol a step forward by launching an NFT bridge. This facilitates the creation of cross-chain NFT projects and also enables the seamless transfer of NFTs from one-chain to another. This creates a much needed interoperability layer to the otherwise siloed NFT ecosystem.
https://blog.celer.network/2022/04/27/celer-launches-cross-chain-nft-solution-on-mainnet/
With the increasing attention and legitimacy that NFTs are receiving as an asset, there comes the need for a layer that enables the financialization of these asset. Enter JPEG’d protocol. Through JPEG’d users can use their NFTs such as cryptopunks as collateral to borrow the native stablecoin pUSD which will be pegged 1:1 to the US dollar. JPEG’d announced the full launch of their protocol this week. This marks a big step forward in the creation of the underlying financial infrastructure for the growing NFT market.
Exploits
Deus Finance is a marketplace for decentralized financial services. They provide the infrastructure for others to build financial services on top of. In march, they lost $3 million to an oracle manipulation attack. As a sequel, earlier in this week they fell victim to an exploit where they lost $13 million. This attack was similar to the first one. The attacker manipulated the oracle to inflate the $DEI collateral value and as a result they were able to get away with $13 million. The team reassured users that their funds are safe but the $DEI lending feature has been halted until the issue is fixed.
https://rekt.news/deus-dao-rekt-2/
Rari Capital is a DeFi application that allows users to lend, borrow, and earn yield on their assets through something called fuse pools. Rari fell victim to a reentrancy attack where FEI pools were mainly affected. FEI is a stablecoin made by the Fei Protocol and is used across many different Rari Fuse pools. Using this reentrancy function the attacker was able to get away with $80m.
Ape ecosystem steals the show
Bored Ape Yacht Club (BAYC) is the most popular NFT on the market. They have amassed a huge community and have become an NFT cultural phenomenon. Some of the NFTs have been sold for multiple million dollars. To further the growth of their project, the team at Yuga labs launched a fungible token called $APE. This $APE token was airdropped to all BAYC holders and has seen a major surge in its price over the last couple of weeks. To end this week, they launched their Otherside virtual Land sale teasing the potential of full-fledged Ape metaverse. This launch was very successful. Over $250m worth of land was sold driving Ethereum gas fees to as much as $8k per transaction at one point. Over $100m was spent on gas fees within one day due to the Otherisde virtual land launch. Seeing the effect that the launch had on the Ethereum network, the team at Yuga Labs said that there may be a potential Ape chain coming soon. This would allow them to create and run an ecosystem through their own layer 1 chain which would make $APE the native currency of that blockchain. This would be the first time that an NFT project would launch its very own chain.
This is all for another action packed week in the crypto space, stay tuned for another edition of the newsletter covering all the major events in crypto next week.