welcome back Chain reaction.
Last week we talked about getting fired և Winklvos rock gods. This week we are looking at a new layer of crypto destruction: gloom.
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We’ve talked about crypto crashes several times in the short life of this newsletter, but this week’s sale scared the crypto insiders in a completely different way. Things are moving so fast right now that even experienced crypto investors seem to be worried about this one.
As crypto winters have been before, they have never coincided with the wider, longer warning signs of decline. Things have already fallen so fast that insiders fear that the long bear market could hit the crypto more severely than expected, well below the 2017 bull run.
This means harsh things for signs, but also harsher realities for the whole ecosystem.
This week we saw the correlation of large institutions as the crypto lending protocol stagnated Celsius և cut Ethereum prices as investors feared a price collapse that was reportedly over-leveraged by players such as 3 Arrows Capital : Despite the ethos of decentralization of crypto, the probability of cascading failures for the crypto world seems to be as high as it is in traditional financial markets.
If all else fails, get ideas from others, and the question is how quickly young startups and crypto communities can adapt to changing fortunes. Few companies have to deal with both crypto and public market stress, such as Coinbase, which laid off more than 1,100 people this week, but many startups raised mega-rounds in 2021 to theoretically protect their companies’ futures. For the DAO նստ’s treasury protocols, many have seen their budgets for community-funded projects shattered, threatening their survival.
Where would consumer demand go without a promise of wealth or a lesser interest in blockchain-based exclusivity? Will governing communities become more self-motivated, more concerned with short-term goals, when their groups turn from being millionaires to losing their profits? How much will everything get worse?
the last capsule
Someone is calling 911. Crypto lending protocol Celsius is not fire, but it is burning. freeze all customer withdrawals this past weekend, citing its own liquidity concerns in the face of “extreme market conditions”. Since then, the company, which claimed to have 1.7 million users before the shutdown, has seen its own mark decline (then “rebuilt” and “declined again” – and the already struggling crypto markets have declined. We talked about what went wrong in the Celsius network, how it’s surprisingly intertwined with the rest of the crypto.
Regulators are taking advantage of this downturn, while web3 already looks pretty shady, և investors are furious about losing money to push certain companies into space. From BlockFi to Binance.US, some big cryptocurrencies face lawsuits and / or fines for their activities.
The tech billionaires are still good, good or bad. Block Jack Dorsey announced this week that he was ready to shut down web3 and switch to his internet vision, which he called “web5”. Elon Musk also considered the creative proposal we discussed in this week’s episode.
Our guest, Aaron L., has set up a successful SaaS business at Box, and now he’s on a beef mission, respectfully, with 3 web panels on Twitter. Lee explained to us how he manages to cross the fine line of being a cryptic critic without falling into the bad books of bulls.
Look for the money!
Where is the newly created money moving in the crypto world?
- Indonesian fintech platform Turn around raised $ 55 million for the B Series expansion, led by Tencent with Block (formerly known as Square) և existing Insight Partners.
- Launch of NFT infrastructure NFTPport: collected $ 26 million worth of A Series A round led by Atomico.
- ScienceMagic.Studios:The digital studio focused on digital assets invested $ 10.3 million in initial investments by investors, including Liberty City Ventures, Digital Currency Group և Coinbase Ventures.
- The co-founder of Words With Friends raised $ 46 million during A Series A, led by Paradigm, for their web3 gaming startup. WildCard Alliance:.
- Molecule:A platform where DAOs can support medical research projects provided $ 13 million in seed funding, led by Northpond Ventures.
- Metaverse play և earn company Atmos Labs: Led by Sfermion brought in $ 11 million.
- Creator-centric web site 3 creator Telli Received $ 10 million in A Series funding from investors, including Malibu Point Capital, Galaxy Digital և Dapper Labs.
- Crypto payment platform For raised $ 2 million in a preliminary round led by Sequoia India.
- Dutch fintech Shares:which offers crypto rewards, raised 4.2 million euros from Keen Venture Partners, Yellow Accelerator, etc.
- Launch of decentralized commercial infrastructure Regular network has raised $ 20 million in A Series funding from investors, including Three Arrows Capital, Pantera Capital and Dragonfly Capital.
week on web3
Crypto markets declined quite badly last week (though, it is true, they have only declined since then). But in Austin, Texas, the temperature rose as 20,000 people in the crypto community gathered to discuss how to navigate their industry as if it were about to explode. Anita had the opportunity to participate in the conference, so she returned from the field with some thoughts.
I have a lot of friends և acquaintances who are not as deep in crypto as I am և a question I’ve heard over and over again over the last few weeks is whether this decline in digital asset markets is a death knell. : web 3. In other worlds, now that the music has stopped, is the party really over?
I shared my two cents / two satoshi on Los Angeles Public Radio this week (check it out), but I want to use this space to highlight some of the thoughts I have in Consensus after hearing from people in the industry. In short, I do not think this is the end of crypto, but of course it will be a difficult time for space.
On the board about investing in the volatile Web3 market, Arca CEO Jeff Dorman made an interesting point about how web3 is so different from other industries, at least because it is defined by the financial markets.
“I do not even think about digital assets [are] asset class. “I think it’s a technology that now covers all classes of assets,” Dorman said. Investors in Tradfi can specialize in commodities (such as debt, equity, derivatives) or sectors (such as industry, retail, real estate). But in Web3, these categories are not clearly defined, as blockchain technology has been used in many different ways, from storing files, selling digital art, to backing up money transfers.
This is why I think we can not group “crypto” or “web 3” or “blockchain technologies” in the same bucket. even those three terms all have slightly different meanings. The reason for this is that the atmosphere in the Consensus was surprisingly positive, despite the market turmoil. Every project is so different և every builder is convinced why their own case of using blockchain makes sense չէ is not like all other projects that lose value or seem like a scam. In the face of so much uncertainty, the most important thing journalists and analysts can do is look at the field in detail, evaluating each project on a case-by-case basis. It’s going to be a wild walk, but I’m sure at least some parts of the web3 will stay here. understand why?
TC + analysis
Here are some of this week’s cryptocurrencies that you can read about in our TC + (written by TC Jacqueline Melinek).
As Celsius accelerates the sale of crypto, who pays for it?
This week, global crypto market capitalization fell below $ 1 trillion for the first time since January 2021 after one of the largest centralized crypto lenders, Celsius, found itself in hot water after it stopped all user withdrawals, exchanges and transfers. With the freeze, the driver is still unclear, but this has led to another banking scenario, similar to last month’s situation with UST և LUNA, which is causing another crypto-market downturn.
Hedge funds plan to buy more cryptocurrencies amid potentially regulating market downturns
What seemed to be a rare field is now gaining in popularity as the number of specialized crypto hedge funds in the world has grown to 300, according to a report by PwC’s Global Crypto Hedge Fund. “These funds are ‘looking for the alpha’ to surpass the standards; they are ready to try something new, something different,” John Garvin, head of PwC global financial services, told TechCrunch. While markets are highly volatile, two-thirds of the hedge funds surveyed are currently investing in space to have more capital in the market by the end of 2022.
As DAOs continue to flourish, here’s how to keep them from withering
Last year was a big increase for DAOs, but not everyone in the area is convinced that they are being formed properly or that it is a success. But what happens when the noise goes out? People stop voting, treasuries can wither, abandoned, dead communities can be turned into “DAO graves”. To prevent this from happening, some say that it is necessary to rebuild the DAO egg.
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Lucas և Anita