Finance Redefined: Axie Infinity creator raises $150M, DApp daily users surge to 2.4M and more

April 8, 2022 Coin Telegraph

Finance Redefined: Axie Infinity creator raises 0M, DApp daily users surge to 2.4M and more

Axie Infinity's Ronin Bridge hackers have started moving their funds despite early hopes of a dialogue between the creators and the hackers.

The decentralized finance (DeFi) world saw another week of increased on-chain and developer activity even when the overall market cap took a slight dip amid overall market retrace. The creators of the popular play-to-earn nonfungible token (NFT) game Axie Infinity raised $150 million to reimburse hack victims of the Ronin bridge exploit.

The decantralized application, o daily user count surged to 2.4 million in the first quarter of 2022, while SushiSwap (SUSHI) and Synthetix (SNX) were booted out of Grayscale’s popular Decentralized Finance Fund. The widely-popular DeFi protocol Yearn.finance announced its support for the newly-passed ERC-4626 tokenized vault standard.

The price momentum of the majority of DeFi tokens remained in red over the past week, as the overall crypto market registered a retrace from new highs last week.

Axie Infinity creator raises $150M led by Binance to reimburse stolen funds

Sky Mavis, the creator of the popular play-to-earn nonfungible token game Axie Infinity has raised $150 million in a new funding round led by Binance.

The fundraiser is aimed at reimbursing lost funds from the recent exploit on Axie Infinity’s Ronin Bridge, which resulted in the loss of over $600 million. The funding round also saw participation from Animoca Brands, Andreessen Horowitz, Dialectic, Paradigm and Accel.

Apart from the $150 million raised funds, the remaining amount would be reimbursed from Sky Mavis and Axie Infinity’s balance sheet.

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DApp daily users surge to 2.4M in Q1 2022 despite headwinds

According to a new industry report published by DappRadar, the number of users engaging in decentralized applications, or DApps, every day surged 396% year-over-year to 2.4 million. This is only 5.8% below the same user activity level witnessed in Q4 2021.

The overall growth was impressive, considering that the cryptocurrency sector saw a short-lived bear market during the quarter and experienced $1.19 billion in DeFi hacks and exploits.

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Sushi and Synthetix get the boot in Grayscale DeFi Fund rebalancing

Digital asset management firm Grayscale has added three new cryptocurrency assets across three main investment funds while removing two other assets from its Decentralized Finance Fund as part of this year’s first quarterly rebalance.

Grayscale removed tokens from crypto-derivatives decentralized exchange Synthetix and decentralized exchange SushiSwap, as well as from its decentralized finance (DeFi) fund after the two crypto assets failed to meet the required minimum market capitalization. No other cryptocurrencies were removed during the rebalancing.

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Yearn.finance advocates for the adoption of ERC-4626 tokenized vault standard

Following the successful deployment of 25 previous Ethereum Request for Comments (ERC) standards — including the industry-recognized ERC-20 for fungible tokens, ERC-721 for nonfungible tokens and the single smart contract multitoken ERC-1155 — the newly passed ERC-4626 is gaining traction within the Ethereum community due to its purported yield-bearing benefits.

Referred to as the “tokenized vault standard,” ERC-4626 is set to be implemented at the next Ethereum fork upgrade following approval by the developers within Ethereum’s governance procedure.

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DeFi market overview

Analytical data reveals that DeFi’s total value locked has registered a $10 billion dip over the last week, reaching $130 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization bled in red over the past week, along with the rest of the crypto market.

The weekly performance of the majority of the tokens remained on the bearish side, barring a few tokens that showed resistance against the trend. In the top-100 DeFi list, only Convex Finance (CVX) and Secret (SCRT) tokens traded in green, with CVX registering a 16% surge while SCRT rose by 4% over the past week.

Before you go!

The Ronin bridge hacker has started to move funds to coin mixers in a bid to launder the stolen Ether (ETH) and USD Coin (USDC). As per the latest report, the hacker account has sent out nearly $7 million to coin mixer services while moving another 2,018 ETH to a different wallet. While the creators of Axie Infinity have already raised $150 million and plan to utilize an additional $400 million from their balance sheet to reimburse users, the chances of getting back the stolen funds look thin at the moment.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

Grayscale CEO pleads Bitcoin spot ETF as SEC backs third BTC Futures ETF

April 7, 2022 Coin Telegraph

bitcoin regulation

U.S. Securities and Exchange Commission has approved another Bitcoin futures ETF; could this mean a spot ETF is on its way?

Institutional investors rejoice, there is one more way to gain exposure to Bitcoin (BTC). The United States Securities and Exchange Commission (SEC) announced overnight the approval of a fourth Bitcoin futures exchange-traded fund (ETF).

Fund group Teucrium is behind the most recently approved Bitcoin Futures ETF. The ETF joins a growing number of approved futures ETFs, complementing ProShares, Valkyrie, and VanEck Bitcoin Futures ETFs.

The SEC filing for the Teucrium ETF. Source: SEC.gov

Every Bitcoin spot ETF has been rejected to date, however, for one invested observer, the way in which the approval was made could be a boon for expectant spot investors.

The plot thickens on the path to $GBTC’s spot #Bitcoin #ETF conversion…
— Sonnenshein (@Sonnenshein) April 7, 2022

In a Tweet thread, Grayscale CEO Michael Sonnenshein once again banged the drum for a Bitcoin spot ETF. 71st on the list of Cointelegraph’s Top 100, Sonnenshein manages the Grayscale Bitcoin Trust (GBTC) Trust, one of the main avenues for buying Bitcoin in the traditional world.

Grayscale CEO Michael Sonnensheinin tweeted that “if the SEC is comfortable with a Bitcoin futures ETF, they must also be comfortable with a spot Bitcoin ETF.”

His argument surmises that as “all Bitcoin futures ETFs are created equal,” and that the Teucrium falls under a 1933 act, not the 1940 act which the other three ETFs fall under, then the argument for filing a Bitcoin spot ETF becomes “stronger.”

Therefore, if the SEC is comfortable with a #Bitcoin futures #ETF, they must also be comfortable with a spot Bitcoin ETF. And they can no longer justifiably cite the ‘40 Act as being the differentiating factor.
— Sonnenshein (@Sonnenshein) April 7, 2022

Sonnenshein has been a proponent and protagonist for the creation of a Bitcoin spot ETF for some time; the company shared plans to convert the GBTC Trust into an ETF in October 2021. With over $35 billion in assets under management, the GBTC Trust is the largest in the legacy finance world–the conversion to a spot ETF would be consequential.

A Bloomberg analyst, Eric Balchunas shares his view that it's a "good sign for spot", meaning a Bitcoin spot ETF.

JUST IN: SEC Approves Teucrium Bitcoin Futures ETF. Notable bc it was filed under the 33 Act, which Genz has said doesn't have enough inv protections vs 40 Act. So poss this is good sign for spot, altho we still think exchanges need regs bf he will green light. h/t @CoinDesk pic.twitter.com/SZMkuMrASc
— Eric Balchunas (@EricBalchunas) April 6, 2022

However, while investors wait with bated breath for a Bitcoin Spot ETF, analyst Doomberg suggests that the issue may not relate to different acts but due to the fact that futures contracts are “settled in cash.”

Gary Gensler, the Chairperson for the SEC may in fact be blocking the spot ETFs because “as long as funds flow into spot ETFs faster than they are redeemed, the net effect provides US dollar exit liquidity to those looking to cash out their Bitcoin.”

In the meantime, ProShares recently filed with the SEC for its Short Bitcoin Strategy ETF. The Bitcoin spot ETF saga continues.

Sushi and Synthetix get the boot in Grayscale DeFi fund rebalancing

April 7, 2022 Coin Telegraph

Asset Management

Crypto asset management firm Grayscale has added three new crypto assets to its funds and has kicked SushiSwap and Synthetix from its DeFi Fund following its first quarterly rebalance.

Digital asset management firm Grayscale, has added three new cryptocurrency assets across three main investment funds, while removing two other assets from its Decentralized Finance Fund as part of this year’s first quarterly rebalance.

Grayscale removed tokens from crypto-derivatives decentralized exchange Synthetix (SNX), and decentralized exchange SushiSwap (SUSHI), from its DeFi fund after the two crypto assets failed to meet the required minimum market capitalization. No other cryptocurrencies were removed during the rebalancing.

Grayscale’s DeFi fund, which was launched in July last year, currently holds approximately $8 million in assets. The digital assets remaining in the DeFi fund after the quarterly rebalance include Uniswap (UNI), Aave (AAVE), Curve (CRV), MakerDAO (MKR), Amp (AMP), Yearn Finance (YFI) and Compound (COMP).

The crypto asset manager added Avalanche (AVAX) and Polkadot (DOT) to its Digital Large Cap Fund, alongside adding Cosmos (ATOM) to its Smart Contract Platform Ex-Ethereum Fund (GSCPxE Fund).

The GSCPxE Fund, which was launched on March 22nd, offers investors the ability to bet on an index of Ethereum’s largest competitors. The GSCPxE Fund’s current holdings listed by the total amount held are ADA, SOL, AVAX, DOT, MATIC, ALGO, XLM and ATOM.

Grayscale remains the world’s leading crypto asset manager, reporting that it held $43.5 billion in assets under management as of Jan. 3rd, this year. The Grayscale Bitcoin Trust (GBTC) remains the largest fund with just over $30 billion in AUM, but has traded at an increasing discount to its net-asset-value for the past year. GBTC is followed in size by the Grayscale Ethereum Trust (ETCG) which currently holds approximately $11.8 billion in AUM.

01/03/22 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.

Total AUM: $43.5 billion$BTC $BAT $BCH $LINK $MANA $ETH $ETC $FIL $ZEN $LTC $LPT $XLM $ZEC $UNI $AAVE $COMP $CRV $MKR $SUSHI $SNX $YFI $ADA $SOL $AMP pic.twitter.com/67Pb7xneoQ
— Grayscale (@Grayscale) January 4, 2022

In 2021, cryptocurrency investment funds generated over $9.3 billion in inflows as institutional adoption rose to new highs. Grayscale is gearing up to offer a Bitcoin Spot exchange-traded fund (ETF) and said it was willing to pursue legal action if the investment product remains barred by the SEC.

Grayscale Rebalances to Avalanche, Polkadot, Cosmos

April 6, 2022 The Crypto Briefing

Ethereum is like the best and worst parts of New York: Grayscale

March 31, 2022 Coin Telegraph

Avalance

“Ethereum is like New York City: it is vast, expensive, and congested in certain areas. However, it also features the richest application ecosystem,” Grayscale wrote.

Digital asset manager Grayscale has published a report on smart contract platforms in which it likens the Ethereum (ETH) blockchain to the best and worst parts of New York City.

The report examines the granddaddy smart contract network Ethereum in comparison to newer competing blockchains such as Solana (SOL), Avalanche (AVAX), Polkadot (DOT), Cardano (ADA) and Stellar (XLM). The report comes in the wake of the firm launching a crypto fund dedicated to smart contract platforms excluding Ethereum.

In a section titled “digital cities,” Grayscale analyzed Ethereum, Avalanche and Solana. The firm compared Ethereum to the Big Apple, noting that they both share similarities with issues that arise from their stature:

“Ethereum is like New York City: it is vast, expensive, and congested in certain areas. However, it also features the richest application ecosystem, with over 500 apps that command a total value of over $100 billion—more than 10x larger than any other competing network.”

“Users and developers take comfort that Ethereum will likely continue to be the center of gravity for application innovation and liquidity due to the size of its community and the amount of capital locked into the network’s smart contracts. An L2 solution like Polygon is comparable to a skyscraper in NYC: it scales by building upwards,” the report added.

The firm went on to suggest that users moving to competing blockchains is like moving to a cheaper city due to the high gas fees and network congestion on Ethereum caused by overwhelming demand for decentralized finance (DeFi) services and nonfungbile tokens (NFTs) over the past two years.

“As Ethereum fees began to eclipse $10 per transaction, smart contract platforms like Stellar, Algorand, Solana, and Avalanche experienced strong growth in daily on-chain transaction counts,” the report read.

Grayscale described Solana as like Los Angeles, noting that it is a “structurally distinct network that is speedier and focuses on different use cases” such as on-chain order books such as Mango Markets, which requires fast transaction speeds and low fees to operate.

“Solana’s architecture relies on a different consensus mechanism that prioritizes speed and lower fees though at the cost of more centralization — rather than scaling through L2 chains Solana runs transactions through a speedy L1 chain. Running roughly 2300 transactions per second as of March 15, 2022,” the report reads.

Avalanche was compared to Chicago in that its economy is similar to NYC, but has a smaller network, “transactions are cheaper and less congested, and development is more centralized.”

“Game-specific subnets like Crabada, and partnerships with firms like Deloitte should offer more differentiation compared to apps on other chains, helping Avalanche craft a distinct identity moving forward,” Grayscale wrote.

Regardless of the comparisons, Grayscale emphasized the bullish use cases for smart contract platforms moving forward, with the firm pointing towards DeFi and the up and coming Metaverse sector in particular:

"The market opportunity for DeFi and Metaverse applications combined, in our opinion, is likely larger than the $2 trillion market cap of the entire digital assets market today.”

“Smart contract platforms are the operating layer that DeFi and Metaverse applications build on and leverage for transactions, ultimately driving value to the base chain as users accumulate native tokens for fees," the report added.

Grayscale Could Consider Lawsuit Against SEC Should Regulator Reject Crypto Giant’s Bitcoin ETF Bid

March 30, 2022 The Daily Hodl

Wisdomtree Launches 3 Crypto ETPs Offering Exposure to Solana, Cardano, Polkadot

March 30, 2022 Bitcoin.com

Grayscale May Sue the SEC If Its ETF Application Is Denied

March 28, 2022 The Crypto Briefing

Crypto Biz: Do you believe in Ethereum killers? Put your money where your mouth is, March 18–24

March 25, 2022 Coin Telegraph

Coin Telegraph

Grayscale Investments is giving accredited investors an easy path to investing in alternative smart contract platforms, including Cardano and Solana.

While crypto markets are still in a state of “fear,” as evidenced by Bitcoin’s Fear & Greed Index, the industry as a whole is giving us reasons to be bullish. Large venture funding rounds, growing adoption of decentralized governance models and new institutional-grade product offerings suggest that crypto is more than just daily chart patterns.

This week’s Crypto Biz newsletter looks at a new Grayscale product that’s giving accredited investors more ways to bet on the so-called “Ethereum killers.” We also document two funding stories and draw your attention to the latest developments surrounding El Salvador’s Bitcoin (BTC) bond.

Grayscale launches smart contract fund for Ethereum competitors

Grayscale Investments, the world’s largest digital asset manager, has officially launched its 18th investment product focused on Ethereum competitors. The Grayscale Smart Contract Platform Ex-Ethereum Fund, also known as GSCPxE, will provide exposure to seven smart contract platforms: Cardano, Solana, Avalanche, Polkadot, Polygon, Algorand and Stellar. These high-profile Ethereum competitors can now be accessed by accredited investors via GSCPxE. While Ethereum remains king of the decentralized application (DApp) market, decentralized finance (DeFi) has become a much more level playing field. Only time will tell whether the aforementioned “Ethereum killers” will become popular among institutional investors.

Here’s a snapshot of Grayscale investment products as of March 21, 2022.
Visit our product tracker for daily updates: https://t.co/XOE44lKFHm $AAVE $ADA $AMP $BTC $BAT $BCH $COMP $CRV $ETH $ETC $FIL $LINK $LPT $LTC $MANA $MKR $SNX $SOL $SUSHI $UNI $XLM $YFI $ZEC $ZEN pic.twitter.com/Nal3Qg5Mm7
— Grayscale (@Grayscale) March 21, 2022

Former Polychain GP unveils $125M crypto fund with DAO governance ambitions

Former Polychain Capital general partner Tekin Salimi has taken a novel approach to fund crypto startups. His new fund, dubbed “dao5,” will provide governance tokens to crypto project founders that represent an ownership stake in a future decentralized autonomous organization, better known as DAO. Salimi plans to convert the fund, which is currently valued at $125 million, into a founder-owned DAO around the year 2025. In other words, every grant recipient will have exposure to all other projects in the portfolio — a feature Salimi says will strengthen the collaboration among project founders. Crypto investors are going to hear a lot more about DAOs in the coming years as more industry leaders look to advance new models of corporate governance.

DAOs have multiplied in the last two years empowered by the potential to move the world through democracy. But are they a feasible alternative to the traditional governance models?
(Via @CointelegraphZN)https://t.co/w0vdIh0c9n
— Cointelegraph (@Cointelegraph) March 4, 2022

Chip giant Qualcomm launches $100M Metaverse fund

Semiconductor giant Qualcomm has made a foray into the Metaverse sector by launching a $100 million fund that will back projects at the intersection of extended reality (XR), artificial intelligence (AI) and augmented reality (AR). The new fund, dubbed “SnapDragon Metaverse Fund,” aims to support developers who are pushing the boundaries of spatial computing. Qualcomm is positioning itself as the “ticket to the metaverse” through its wireless and AI technologies. After Facebook rebranded to Meta and shifted its focus to the metaverse economy, it was only a matter of time before other major technology plays started following suit.

El Salvador postpones Bitcoin bonds to September: Report

The government of El Salvador is reportedly delaying the issuance of its Bitcoin-backed bonds due to unfavorable market conditions brought about by the geopolitical crisis in Eastern Europe. Finance Minister Alejandro Zelaya told local news that the so-called “Volcano Bond,” which will be used to fund El Salvador’s Bitcoin City, will be pushed back to September at the latest. If you’re thinking: What does the war in Ukraine have to do with Bitcoin demand? Consider that legacy finance still views crypto as a risk-on asset and traditional investors are more likely to reduce their holdings of such assets during periods of uncertainty. That being said, Bitcoin and the broader crypto markets have held up fairly well amid the geopolitical crisis. Bitcoin’s price breached $43,000 this week, having recovered more than 30% from its bottom in January.

Before you go!

Is crypto in a bear market? It depends on how you define it. If digital assets were any other market, we would classify the past four months as a major downtrend. On The Market Report this week, I sat down with fellow analysts Jordan Finneseth, Marcel Pechman and Benton Yuan to discuss the top crypto projects to buy and hold during a bear market. You can check out the full replay below.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto delivered directly to your inbox every Thursday.

ProShares ETF’s Bitcoin stash hits $1.27B as BTC eyes $50K by mid-April

March 25, 2022 Coin Telegraph

Bitcoin

Grayscale Investments' trust fund GBTC still trades at a 25% discount compared to Bitcoin's price.

Strong inflows into the ProShares Bitcoin Strategy exchange-traded fund (ETF) (BITO) in the past two weeks pushed its Bitcoin (BTC) exposure to a new record high.

No Bitcoin outflows despite 'rollover' risks

The fund, which uses futures contracts to gain exposure to Bitcoin's price movements, had a record 28,450 BTC under its management — worth about $1.27 billion at the current price — as of March 24, compared to nearly 26,000 BTC a month before, according to official data from ProShares.

*ProShares Bitcoin ETF holdings as of March 24, 2022. Source: Official Website*

Interestingly, the inflows appeared in the days leading up to the "rollover" of BITO's 3,846 March future contracts in the week ending March 25.

To recap, a rollover involves traders moving their futures contracts as their expiry nears to a longer-dated contract, so to maintain the same position.

BITO's rolling periods typically follows up with an increase in Bitcoin net outflows, noted Arcane Research in its latest report, while citing the last rolling period due to the market uncertainty caused by the Russia-Ukraine conflict.

*ProShares BITO AUM. Source: Arcane Research*

But on March 21, it also witnessed an inflow of 225 BTC to its coffers just as BITO rolled its 437 March contracts to April. That prompted Arcane to see a growing institutional demand for the fund. It wrote in its report:

"The strong inflows to BITO suggest that Bitcoin appetite through traditional investment vehicles is increasing."

BITO witnessed consistent net inflows for the remainder of this week, according to further data provided by Glassnode.

*Purpose Bitcoin ETF flows. Source: Glassnode*

Bitcoin to $50K next month?

The inflows to the ProShares Bitcoin ETF increase coincided with a rally in the spot BTC market on March 25.

*BTC/USD daily price chart. Source: TradingView*

On March 25, Bitcoin climbed another 2.5% to over $45,000, its highest levels in over three weeks. Alexander Mamasidikov, a co-founder of crypto wallet service MinePlex, noted that BTC's price could jump to $50,000 next.

"The growth seen in the ProShares BTC ETF to a new all-time high of 28,000 BTC is proof that the clamor for a Bitcoin-linked exchange-traded fund product is backed by an active demand," he told Cointelegraph, adding:

"These positive price trend activities have impacted BTC thus far and a sustained accumulation or investment from both retail and institutional investors is poised to push the coin to form strong support above $50,000 towards mid-April."

No love for Grayscale?

Interestingly, institutions have been picking ProShares Bitcoin EFT over its rival Grayscale Bitcoin Trust (GBTC), a fund that has been trading at a 25% discount to spot BTC.

*Grayscale Discount to NAV chart. Source: YCharts*

The issue with picking GBTC over BITO is that its discount continues to grow, which means investors would remain at the risk of underperforming spot Bitcoin, at a much higher rate than the risk with BITO, which trades around 2% lower than the current BTC prices.

Nonetheless, there is still a slim chance of GBTC emerging as a winner. Namely, Grayscale Investments, the New York-based investment firm backing GBTC, has expressed interest in converting the trust fund into a spot Bitcoin-backed ETF. If it happens, GBTC's 25% discount should return to zero.

*Grayscale Investments BTC holding. Source: Coinglass*

"Buying BITO shares guarantees you will underperform Bitcoin," said Ryan Wilday, a veteran financial analyst in an analysis published in February, adding:

"And buying GBTC shares likely results in similar or worse underperformance compared to BITO, with a very slim chance of outsized performance in the event GBTC is turned into a spot ETF."

The U.S. Securities and Exchange Commission has never approved a spot Bitcoin ETF application, believing BTC is vulnerable to price manipulation.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Grayscale

Grayscale launches smart contract fund for Ethereum competitors

Former Polychain GP unveils $125M crypto fund with DAO governance ambitions

Chip giant Qualcomm launches $100M Metaverse fund

El Salvador postpones Bitcoin bonds to September: Report

Before you go!

No Bitcoin outflows despite 'rollover' risks

Bitcoin to $50K next month?

No love for Grayscale?

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