Coinbase CEO’s Top 10 Crypto Opportunities Questioned by BlockTower Founder

On August 31, 2023, Ari Paul, the Chief Investment Officer and Founder of BlockTower Capital, engaged in a public critique of Coinbase CEO Brian Armstrong’s vision for the future of cryptocurrency. Armstrong had recently tweeted about ten key opportunities he believes are ripe for innovation in the crypto space. These areas include a decentralized cryptocurrency pegged to the Consumer Price Index (CPI), a blockchain-based reputation system akin to Google’s PageRank but for crypto addresses, decentralized advertising through smart contracts, a decentralized method for startups to raise funds globally, a marketplace for labor where tasks can be posted and paid for in cryptocurrency, optional privacy features for Layer 2 solutions, a fully decentralized on-chain peer-to-peer exchange, games with in-game items as NFTs, tokenizing real-world assets like debt and commodities, and software tools for managing small communities that could evolve into self-governing entities.

Paul, while acknowledging Armstrong’s significant contributions to the crypto industry, offered a nuanced critique of these ten opportunities. He argued that the concept of flatcoins, or cryptocurrencies pegged to stable values like the CPI, was not particularly novel and urged entrepreneurs to bring “an idea for something 10x better.”

He was more skeptical about on-chain reputation systems, labeling them a “dead-end for at least five years” and cautioning that they could lead to financial losses. On-chain advertising was interesting but fraught with “big tech stack & UX friction,” according to Paul.

He agreed with Armstrong on the subject of on-chain capital formation, calling it a “natural fit for cryptocurrency.” However, he dismissed the idea of a global job market paid in cryptocurrency as not inherently related to crypto, suggesting instead that adding crypto payments to existing platforms like Mechanical Turk would suffice.

Paul also emphasized the challenges in monetizing privacy-related features in Layer 2 solutions but noted the humanitarian benefits of such tools. He lamented the underfunding of peer-to-peer exchanges, calling them a “core and critical part of the cryptocurrency value proposition.”

On the topic of on-chain games and NFTs, Paul admitted to being overly optimistic in the past but remained excited about the sector’s potential. He was enthusiastic about tokenizing real-world assets, calling it his “favorite theme.” However, he was less bullish on the idea of tools for network states, although he acknowledged their potential for business coordination.

Paul concluded by admitting that he agreed with Armstrong on more points than he initially thought, stating, “My headline tweet [was] a little misleading.” His critique serves as a reminder that while the crypto industry is ripe for innovation, not all proposed paths hold equal promise. His comments underscore the need for critical evaluation and debate as the sector continues to evolve.

Image source: Shutterstock


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Maple Finance Targets Institutional DeFi Market With Permissioned Pool Launch

Key Takeaways

  • Maple Finance has partnered with BlockTower Capital and Genesis to launch a permissioned lending pool.
  • Institutions must complete KYC procedures to participate in the pool.
  • Maple Finance is hoping to become DeFi’s go-to institutional lending platform.

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Maple Finance has launched a new lending pool in partnership with BlockTower Capital and Genesis.

Maple Finance Launches Permissioned DeFi Pool

Maple Finance is taking big steps to onboard institutions into DeFi. 

The Ethereum-based DeFi protocol, which describes itself as a corporate lending platform, announced the launch of a new permissioned pool Monday. It’s the first example of a DeFi lending pool that restricts participation to regulated entities. 

The new pool is the result of a partnership with BlockTower Capital and Genesis, two institutions operating in the digital assets space. BlockTower Capital is a longstanding creditor of Genesis, and it plans to grow the pool to up to $20 million in its first month. Sidney Powell, the CEO and co-founder of Maple Finance, said of the update: 

“Fully permissioned institutional lending enables regulated entities to facilitate on-chain uncollateralized lending for the first time. By building on the public blockchain, Maple gives institutions access to credit markets that operate on a single layer of infrastructure that is transparent, scalable, and secure.” 

Maple launched in May 2021 and has quickly grown as the DeFi space has attracted interest. Of the $105 billion locked in DeFi protocols on Ethereum today, Maple accounts for about $265 million. Maple already hosts two pools overseen by Orthogonal Trading and Maven 11, though this is the first time lenders and borrowers must be whitelisted to participate.

The BlockTower pool is expected to onboard more institutions that have completed the required KYC process in the next few months. Maple is hoping that the pool will pave the way for institutions to take advantage of the transparency and security of DeFi on Ethereum. 

The new pool is the first to enable uncollateralized lending for regulated bodies, though Maple isn’t the only DeFi project to target the institutional market. Aave, one of DeFi’s largest lending protocols, recently launched a permissioned service for institutions called Aave Pro. Maker, meanwhile, saw the French multinational bank Société Générale apply for a $20 million loan in September. As decentralized finance continues to grow, its leading projects will be looking for ways to onboard the next wave of adopters, institutions included. 

Disclosure: At the time of writing, the author of this feature owned ETH and AAVE. They also had exposure to MKR in a cryptocurrency index. 

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