Luno, a digital currency platform owned by the Digital Currency Group (DCG), has launched Luno Expeditions, its Venture Capital (VC) outfit.
As reported by TechCrunch, the new VC offshoot will engraft itself as a funding outfit for cryptocurrencies or Web3.0 startups and those in the Fintech space.
Luno Expeditions is expected to fund as many as 250 startups annually, complementing the investment strategies that have long been defined by its grandparent company, DCG. According to Emily Cheng, the named Chief Executive Officer of the new offshoot leading a team of five, the decision to focus on both crypto and fintech firms is hinged on the fact that the entire outlook of the digital currency ecosystem is still being built. Some fintech firms fill in the bridge or gap that crypto startups are yet to fill.
“There is still a lot of work to be done in building the infrastructure that crypto will rely on. So our aim is to be supportive of this broader ecosystem. So what this practically means is we will invest in fintech companies that we feel match that long-term thesis, not just any fintech company,” she said.
As much as $50,000 to $250,000 will be invested in startups while at their seeds or pre-seed stages. It comes in at about $15 million to $75 million annually.
“We are likely to invest at the upper end of that range. Also, we have some flexibility, including writing larger cheques as we scale,” the CEO said. “The reason we didn’t go with a fund structure is that we don’t need any external funding to be able to build this business, both from a capital and management fee perspective. It also allows us to finance investments with evergreen capital, which we believe is more valuable to founders building companies in the fintech space and aligns all of our long-term interests better.”
The emergence of Luno Expeditions trails attempts by established companies, including Paradigm Capital, Coinbase Ventures, and Andreessen Horowitz (a16z), to pump into the fast-growing digital currency ecosystem.
Digital Currency Group (DCG), the parent company of Grayscale Investments, has announced a new share buyback program projected to be worth $250 million.
As revealed by the company, the buyback program will feature a wide range of the company’s trust products with the first buyback covering up to $50 million in total for shares of Grayscale Litecoin Trust ($30 million), Grayscale Horizen Trust, and Grayscale Zcash Trust.
According to Grayscale, as much as $200 million will also be invested in buyback programs for its other six publicly quoted Grayscale products. These include the Grayscale Bitcoin Cash Trust, the Grayscale Bitcoin Trust, Grayscale Large Cap Fund, Grayscale Ethereum Classic Trust, Grayscale Ethereum Trust, and Grayscale Stellar Lumen Trust.
While the timeline for the share buyback is yet unknown, the company said the move will complement the earlier approvals it has received to purchase shares of GBTC and ETCG, of which DCG respectively has $301.3 million and $4.5 million in authorized share repurchases remaining. The company said the share buyback will be carried out using cash on hand as the company’s management will decide based on its discretion.
The decision to buy back the six core products is perhaps influenced by the valuation plunge of the premium of these products as showcased from the data from otcnode. While the negative premium is all-encompassing, the Grayscale Ethereum Classic Trust is recording the worst plunge at -59.46% at the time of writing.
Amidst the business modifications, Grayscale has considered thus far the plan to convert the Bitcoin Trust into a full-fledged spot Exchange Traded Fund (ETF) product. While the application has been filed with the United States Securities and Exchange Commission (SEC), no feedback has been received yet.
That the SEC continues to reject other competitors’ applications for a spot Bitcoin ETF has casted doubts on the chances of Grayscale succeeding, however, time is the main determining factor to get the needed closure in relation to the company’s ambition in attracting institutional investors.
New Year’s Eve Party is a glitzy affair in NYC, as with most parts of the world. The celebration in Times Square, for one, generally accommodates around 58,000 people in viewing areas. However, due to the pandemic, the figures will be scaled down among other prohibitions. But visitors can also enjoy New Year’s Eve ball drop from the comfort of their homes – in the metaverse.
New Year’s Eve on Metaverse
The global real estate firm and the owner of One Times Square in Manhattan, Jamestown, and the cryptocurrency giant Digital Currency Group (DCG) have partnered to recreate the iconic tower of the New Year’s Eve ball drop in the popular blockchain-based virtual world – Decentraland.
Interestingly, DCG is a long-time backer as well as one of the largest owners of digital real estate (“LAND”) in Decentraland.
The virtual space of One Times Square will be unveiled with the global party dubbed “MetaFest 2022 NYE Party” on December 31st. The virtual guests will be able to take part in immersive games, as well as enjoy music and entertainment acts, rooftop VIP lounges, NFT art galleries, and more.
According to the official announcement, official programming will commence at 11:00 PM. EST and will extend to the early hours of 2022.
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The Construction of Virtual 26-story Tower and MetaFest’22
New Year’s Eve celebrations focused on Times Square have a century-long history. The MetaFest 2022 NYE Party contains a modern twist that depicts the need of the hour, especially with the rising COVID-19 cases. To construct and operate the iconic celebration on Decentraland, two metaverse firms – GrowYourBase and MetaVenture Studios – have joined forces.
Besides, the virtual One Times Square tower, which covers around 170 LAND parcels, will have five buildings, each with distinct exteriors and activated interiors.
Following the development, Michael Phillips, President of Jamestown, underscored the importance of metaverse with respect to the real estate evolution.
He spoke about the limitation of “physical real estate” constricted mainly to individuals with “geographic proximity.” According to Phillips, metaverse, on the other hand, can offer meaningful access to people to different places across the world with the help of “immersive virtual experiences.”
“Recreating One Times Square in the Decentraland metaverse is part of a larger digital asset strategy to evolve and enhance our physical real estate for Web 3.0 and open new pathways for our assets to existing in multiple metaverses in the future.” – he added.
Featured Image Courtesy of BillBoard
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SPACE Metaverse has raised $7 million to bring its vision of the Metaverse to life.
The project focuses on creating an environment where socializing and virtual commerce can thrive within the Metaverse.
Capital has poured into Metaverse-related ventures since Facebook announced its rebrand to Meta.
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SPACE Metaverse will use the funds to help build out the Metaverse.
SPACE Metaverse Announces $7M Raise
Capital keeps flooding into the Metaverse.
SPACE Metaverse is one of the latest projects to benefit from the boom after closing a $7 million funding round. The raise saw participation from some of the most prominent teams in the space, including Coinfund, Digital Currency Group, Animoca Brands, Polygon Studios, and NBA Top Shot creator Dapper Labs.
SPACE Metaverse aims to create a virtual world that allows anyone to explore and interact with others. It’s focusing on what it calls “social commerce experiences” in the Metaverse, where users can earn rewards and benefit from economic opportunities in a way that was never possible in Web2. Batis Samadian, the project’s founder, explained that it’s hoping to provide the infrastructure for the decentralized economy evolving within the Metaverse in a press release. He said:
“As the Metaverse continues to gain mass adoption and becomes a place where a lot of people meet up to socialize, a natural evolution is commerce, which is what Space is focused on. Users will want to be able to view shows, buy items, sell items, and engage with digital goods within the Metaverse. Space is building the Shopify for the Metaverse to enable creators to sell their digital items in a turn-key fashion and allowing users to purchase it.”
Coinfund’s Vanessa Grellet added that SPACED Metaverse could become “the leader in building the commerce virtual world.” She said that SPACED Metaverse is poised to become a leader in the space as projects rush to create the future of events and commerce. Sandeep Nailwal, a co-founder of Polygon, also described it as “one of the most promising” projects focusing on virtual commerce.
“The Metaverse” has become something of a crypto buzz word in recent weeks, not least since Facebook announced its rebrand to Meta to focus on “bringing the Metaverse to life.” The likes of Solana Ventures, Enjin, and KuCoin have all announced nine-figure Metaverse-focused funds, while the tokens for Metaverse gaming projects have soared. With new capital raised, SPACE Metaverse will be hoping that the excitement surrounding the concept continues into 2022.
Disclosure: At the time of writing, the author of this feature owned ETH, MATIC, and several other cryptocurrencies.
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Digital Currency Group CEO and founder Barry Silbert has purchased more ZCash to add to his company’s coffers as the price of the token moved above $240 for the first time in days.
In a Wednesday tweet to his more than 678,000 followers, Silbert announced the purchase of $85 million in Zcash (ZEC), or roughly 376,106 tokens assuming an average price of $226. The buy is just the latest for Silbert, who seems to be portraying himself as a contrarian in the crypto market — responding to negative comments on ZEC by purchasing millions more.
Alright, you asked for it. We bought $85 million more Zcash $ZEC
Pray for us… https://t.co/Pv6i0LO789
— Barry Silbert (@BarrySilbert) December 1, 2021
According to data from Cointelegraph Markets Pro, the price of ZEC surged more than 7% following Silbert’s announcement, from $226.08 to $243.84. However, it has fallen more than 20% since reaching a six-month high of more than $300 on Thursday, shortly after its core protocol’s transition from proof-of-work to proof-of-stake.
Related:ZEC price jumps 20% in one day as Zcash devs unveil transition to proof-of-stake
Crypto whales like Silbert may be buying ZEC in anticipation of more of the project’s tokens going out of circulation due to lockup periods. Zcash’s main developer, Electric Coin Company, announced on Friday that users would be able to stake a portion of their holdings into a dedicated ZEC smart contract to become validators on its blockchain.
Source: TradingView
Digital Currency Group operates Grayscale, a $53.5 billion AUM digital asset manager th offers investors exposure to cryptocurrencies through its trusts. The firm first listed its Grayscale Zcash Trust on the OTCQX Best Market in October. Silbert has also hinted that the company is making plans to convert its Bitcoin Trust into a spot-settled Bitcoin exchange-traded fund.
Digital Currency Group (DCG) is moving to Connecticut, and with this relocation, the company aims to generate over 300 jobs over the next five years. Barry Silbert cited the proximity to major metropolitan areas, infrastructure, talent, business-friendly environment, and facilities as the reasons behind the move.
Cryptocurrency behemoth Digital Currency Group (DCG) announced relocating to Stamford, Connecticut, from its New York headquarters. Founded by Barry Silbert in 2015, DCG has emerged as a prominent investment company in the crypto sector, having invested in over 200 blockchain platforms.
Digital Currency Group’s (DCG) Objectives
Going forward, Digital Currency Group plans on attracting new investment and creating job opportunities in Connecticut. For this purpose, it will reportedly get more than $5 million from the state contingent or the Connecticut Department of Economic and Community Development (DECD).
The official reports also stated that DCG won’t be the only one relocating. Four of its subsidiaries, such as the leading asset manager – Grayscale Investment, institutional trading platform TradeBlock, DSG Real Estate, and DSG’s new wealth management business, are also following along.
Elucidating more on why DCG chose Stamford as the new base, the CEO of the Bitcoin and blockchain tech company, Barry Silbert, stated,
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“Its proximity to major metropolitan areas combined with its infrastructure, talent, business-friendly environment, and world-class facilities to house our rapidly-growing organization made it an easy choice. We are committed to making our new home in Stamford a hub for the next generation of fintech and blockchain entrepreneurs.”
DCG’s Various Tryst
The latest news comes almost a month after Digital Currency Group managed to push its valuation to $10 billion after selling shares to SoftBank and CapitalG, which happens to be Alphabet’s venture capital arm in a recent deal. With this development, DCG joined the list of the most valuable privately held companies in the crypto space alongside Brad Garlinghouse-led Ripple, crypto exchange Kraken, and stablecoin operator Circle.
While discussing a potential IPO, Silbert had said that no talks had been held over the subject. The exec had also predicted that DCG is profitable and is on course to hit a massive $1 billion mark in revenue for the year.
Shortly thereafter, the company announced the completion of a debt capital raise that offered a credit facility of almost $600 million.
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Crypto data aggregation startup, Staking Rewards says it has raised $3.2 million from the biggest fund managers in the cryptocurrency ecosystem.
The funding round was led by Galaxy Digital, CoinShares, and Digital Currency Group with participation from 1kx Capital and Sygnal Ventures, along with angel investors including early CoinMarketCap team members, and the crypto asset advisory firm NxGen.
Staking Rewards currently offers more than 400,000 users all over the world comprehensive data about Proof-of-Stake (PoS) platforms or other yield-generating protocols in the digital currency ecosystem. While there are prominent market research and aggregation protocols, Staking Rewards comes off as a pioneer in the PoS ecosystem.
According to the startup’s founder and Chief Executive Officer, Mirko Schmiedl, the new funding will be deployed to power the protocol’s innovative product development.
“The new investment will fuel our growth and positioning as the trusted data hub for the $40 billion staking industry. The capital will allow us to develop a new suite of products and services catering to the staking space, including the development of investable staking index products,” he said in the official statement.
As unveiled by the firm, the staking products that will be developed are on track to be integrated by its core investors, some of which offer index funds already, giving the products a ready market.
Modelling a growing trend in the cryptocurrency industry, the funding round was oversubscribed 6x as investors are notably impressed with the growth of the startup which has grown its staff strength from a team of 4 to 15. CEO Mirko also detailed plans to deploy the funds into hiring new staff by Q1 2022. The pioneering role in offering profitable earning options to investors has been highlighted as one of the key factors that have endeared investors to the platform.
“One of crypto’s strongest adoption drivers will be passive income opportunities and Staking Rewards is perfectly positioned to capture a large market of those,” said Christopher Heyman, Partner, 1kx Capital.
Zcash (ZEC) surged by nearly 20% in the past 24 hours, helped by the euphoria surrounding its core protocol’s decisive transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
The ZEC price logged an intraday high at $188.80 on Binance after rising two days in a row by more than 27%. The cryptocurrency’s move upside also wiped out a big portion of the losses it had faced earlier this week, in the wake of a downside retracement across the crypto market.
ZEC price jumped after the cryptocurrency’s main developer, Electric Coin Company (ECC), announced that it would move Zcash’s protocol from PoW to PoS within the next three years. The nonprofit noted that the upgrade would limit the ZEC price’s downward pressures by removing miners that “immediately liquidate” the token for Bitcoin or fiat.
“This shift will also increase the utility for ZEC through capabilities that include yield generation through staking and a possible path to on-chain governance mechanisms for ZEC hodlers,” added Josh Swihart, the senior vice president of growth at ECC, adding:
“There are other benefits of moving to proof of stake which include the reduction of the ZEC energy footprint, providing a possible path to on-chain governance mechanisms, and support for interoperability by addressing problems with proof-of-work transaction finality, among other reasons.”
ZEC/USDT daily price chart. Source: TradingView
ZEC bulls cashing on the PoS FOMO
Unlike PoW, PoS mechanisms allow a person to mine or validate block transactions based on the number of underlying tokens they hold/stake. In return, the so-called “validator” receives rewards in the form of yields.
Ethereum, the leading smart contracts platform by market cap, also initiated its transition from PoW to PoS after introducing a dedicated smart contract. In response, users locked about 8.33 million Ether (ETH) tokens into the so-called Ethereum 2.0 address, effectively pushing them out of active supply.
ETH/USD weekly price chart. Source: TradingView
ECC’s announcement promised that users would be able to stake a portion of their ZEC holdings into a dedicated Zcash smart contract to become validators on its blockchain. Therefore, as a result, more ZEC may end up going out of active circulation due to lockup periods, against its Bitcoin-like fixed supply of 21 million tokens.
Barry Silbert, the founder, and CEO of Digital Currency Group — a venture capital firm tweeted Saturday that he would “buy more” Zcash tokens, citing their supply cap. His tweet coincided with a sudden ZEC price rise against the U.S. dollar and Bitcoin (BTC).
$BTC max supply: 21 million$ZEC max supply: 21 million$ZEN max supply: 21 million
— Barry Silbert (@BarrySilbert) November 20, 2021
Nonetheless, some analysts argued that Zcash would not have a supply cap after implementing PoS.
For instance, on-chain analyst Willy Woo noted in his response to Silbert’s tweet that if Zcash could “decide to extend the dev tax,” and “if it can switch to PoS and cut out the miners,” then he is confident that the cryptocurrency does not have a maximum supply.
“And,” Woo added, “that’s ignoring the inflation bug of 2018 and assuming we could in fact audit the supply,” referring to the Zcash’s infamous vulnerability that could have created infinite ZEC tokens.
Related: Zcash Vulnerability Permitting Infinite ZEC Counterfeiting Fixed and Disclosed
Minutes after Woo’s remarks on ZEC’s doubtful supply ca, Silbert tweeted:
Wow, you all hate $ZEC. I’m going to buy more
— Barry Silbert (@BarrySilbert) November 20, 2021
Inflection zone
ZEC’s latest push upside made it enter an inflection zone, prominent for its record of capping the cryptocurrency’s rallies.
Specifically, the trading range defined by $170-$205 (the reddened area in the chart below) has earlier provided selling opportunities for traders. Even recently, the ZEC price retreated lower after entering the said range while eyeing extended declines toward the purpled upward sloping trendline.
A clear breakout trend may appear after ZEC closes above the inflection zone, accompanied by rising trading volumes, thus targeting the Fibonacci retracement levels at $247 and $316. Conversely, a decisive close below $170 may risk sending ZEC toward $136.
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.
New York-based crypto-mining service provider Foundry USA takes the lead to become the world’s second-largest Bitcoin (BTC) mining pool after taking up a 15.42% share of the network.
Data from BTC.com shows that Digital Currency Group-owned Foundry USA stands behind the pool leader AntPool by a hash rate of just 4,000 PH/s, which contributed to a 17.76% network share at the time of writing.
The rise in the participation of American entities can be attributed to China’s recent blanket ban on crypto trading and mining activities. The ban forced a large-scale migration of local Bitcoin miners, who now reside in crypto-friendly jurisdictions including the United States, Russia, and Kazakhstan.
According to https://t.co/1YRYr4QCmY, DCG’s mining pool Foundry has become the second largest Bitcoin mining pool. China’s severe crackdown on Bitcoin mining and the transfer of mining industry to the United States are the core reasons. https://t.co/VjtWgD9Hsp pic.twitter.com/XK9Y19QDrg
— Wu Blockchain (@WuBlockchain) November 20, 2021
Out of the top five mining pools in terms of hash rate distribution, Foundry USA charges the highest average transaction fees of 0.09418116 BTC (nearly $5,500) per block. American businesses have also picked up China’s slack in terms of crypto ATM distribution.
Coin ATM Radar data shows that Georgia-based Bitcoin Depot has overtaken its Chinese counterparts to become the world’s biggest crypto ATM operator. Interestingly enough, a majority of the crypto ATM operators are run by American companies, a trend more prominent after China’s proactive ban on crypto activities.
Despite the clear intent to pursue an in-house central bank digital currency (CBDC), the Chinese Communist Party has also sought public opinion on the Bitcoin mining ban on Oct. 21, which has sparked conversations around the amendment of the government’s negative stance on Bitcoin and cryptocurrency mining activities.
However, Statista’s data confirms that China’s contribution to the Bitcoin mining hash rate has been on a steady decline since September 2019. Two decades ago, China represented over 75% of Bitcoin’s mining hash rate, which by April 2021 reduced to 46% prior to banning cryptocurrencies.
Related:US lawmakers introduce bill to ‘fix’ crypto reporting requirement from infrastructure law
As the United States inches towards Bitcoin’s mainstream adoption, the regulators seek clarity in relation to the new reporting requirements put forth by the Biden administration.
Members of the Republic and Democratic party have appealed, in different occasions, to amend the crypto tax reporting reforms along with a plea to redefine the word “broker” in crypto transactions.
Starting from 2024, the bipartisan infrastructure bill requires the general public to declare digital asset transactions worth more than $10,000 to the Internal Revenue Service. The bill currently considers miners and validators, hardware and software developers and protocol developers as brokers.
Welcome to the latest edition of Cointelegraph’s decentralized finance newsletter.
Read on to discover why almost half of the liquidity providers on Uniswap v3 are losing capital due to impermanent loss.
What you’re about to read is the smaller version of this newsletter. For the full breakdown of DeFi’s developments over the last week, subscribe below.
Acala wins Polkadot’s debut parachain auction
Decentralized finance protocol Acala was announced as the winning project in Polkadot’s inaugural parachain auction this week, beating fellow competitor Moonbeam to the finish line with a seismic total of 32.5 million DOT ($1.28 billion) raised from 24,934 contributors.
Acala is a multi-functional DeFi platform built on Polkadot that enables developers to build smart contracts applications with cross-chain capabilities, as well as being compatible with Ethereum. Its top investors include Digital Currency Group, Polychain Capital and Alameda Research, among others.
In the case of Acala, all of the proceeds from the crowdloan initial coin offering are classified as “crypto debt” and, therefore, must be paid back by the project following the conclusion of the rental agreement.
With over 32M DOT contributed by over 81,000 community members, Acala has won the first parachain auction on @Polkadot!
Thank you to everyone who took part in this historic event. (1/3) pic.twitter.com/CL2jCwA9Re
— Acala – DeFi Hub of Polkadot (@AcalaNetwork) November 18, 2021
Related:DFG piles $12.6M into Astar Network’s Polkadot parachain bid
Iota Foundation set to launch staging network and reward token
The Iota Foundation, an open-source, nonprofit entity endeavoring to support the Iota ecosystem, announced the upcoming launch of a staging network, Shimmer, this week alongside an accompanying token asset, SMR.
Shimmer is a layer-one sandbox platform that will enable builders and developers to test the efficiency and compatibility of their decentralized applications within the DeFi and NFT space, prior to deployment on the Iota mainnet.
Expected to launch in early-2022, the network will also facilitate community governance confirmations for Iota’s large-scale network upgrades, including the upcoming programmable multi-asset ledger, smart contracts, full decentralization and sharding.
Related:Iota launches beta smart contracts to foster interoperability
Almost 50% of Uniswap v3 liquidity providers are in the red
A research report published this week by Topaz Blue and the Bancor Protocol revealed that almost half, 49.5%, of liquidity providers on Uniswap v3 have experienced financial losses due to impermanent loss, a common occurrence on automated market makers when supplying two-sided, volatile liquidity pairs.
An instance of this would arise if, for example, a user has supplied equal values of Tether (USDT) and Ether (ETH) in United States dollars to a liquidity pool and the price of ETH goes up.
This would mean that arbitrageurs — investors who often work in accordance with financial institutions to benefit from price discrepancies in the market — will remove ETH from the pool to sell at a higher price. This leads to a decrease in the U.S.-dollar value of the user’s position and, consequently, an impermanent loss.
The report suggested that, based upon current statistics, it may well be more profitable to simply hodl the market, as opposed to actively participating in liquidity services, stating:
“The user who decides to not provide liquidity can expect to grow the value of their portfolio at a faster rate than one who is actively managing a liquidity position on Uniswap v3.”
Related:Bancor releases no-liquidation lending with Vortex as AMMs continue diversification
Token performances
Analytical data reveals that DeFi’s total value locked has decreased 7.89% across the week to a figure of $160.47 billion.
Data from Cointelegraph Markets Pro and TradingView reveals DeFi’s top 100 tokens by market capitalization performed indifferently across the last seven days.
Avalanche (AVAX) secured the podium’s top spot with 30.11%. Curve DAO Token (CRV) came in second with 0.67%, while Maker (MKR) came third with 0.34%.
Analysis and hot topics from the last week:
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.
