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A
November 2019
The Block Genesis consists of the most in depth timely and impactful articles giving
you an informational edge over the entire financial and technology industry The
Block Genesis is the first and last word in the world of digital assets
cryptocurrencies and blockchain
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Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
2
Contents
Contents 2
Meet the Research Team 3
MACRO 1
A look at CFTC regulated, and self reported bitcoin derivative data: 18
hedge funds at an all time high in CFTC net short position this month
Evaluating exchanges based on the liquidity of its Bitcoin pairs 28
Analysis of volume per website visit indicates larger traders are re entering the game 31
Bank runs 2.0: Exploring the relationship between on chain lending and staking 37
Examining the value settled on Bitcoin 44
Projects 2
MakerDAO: Multi Collateral Dai 53
Maker MKR Price to Burn Analysis: Still "relatively expensive" to peer group 67
as investors continue to pay a massive premium for a credit facility
An analysis of Zcash's private transactions 78
CEO of DigixGlobal considers full liquidation of DigixDAO's 54M treasury holdings 84
Stellar lumens token burn displaying market price inefficiencies 87
Company 0
Crypto finally gets its U.S. IPO, and the Cliff of Valinor 91
Overstock 3Q19 Review: Weak earnings and SEC subpoena sends shares tumbling 17 98
Org Chart: Kraken 101
A look at Binance US' growth and volume after its first month in business 109
Trends 113
2019 funding trends within blockchain and crypto sub verticals 114
Crypto exchanges are experiencing a 37 traffic drop since June 120
Transaction fees are less than 3 of the total revenue in the bitcoin mining industry 124
Exchange volumes suggest decreased interest from Asian investors 129
Spot Market Trends: Binance s dominance on the rise while Bitfinex 133
continues to underperform
Money 2.0 Stuff: Making money making money 140
Ecosystem Maps 14
Mapping out Binance Labs' Portfolio 146
Mapping out the 10 most active crypto funds' 2019 investments 154
Mapping out Crypto Custody 173
Org Chart: Huobi Group 179
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Meet the Research Team
Larry Cermak Ma eo Leibowit Ryan Todd
DIRECTOR OF RESEARCH RESEARCH ANALYST RESEARCH ANALYST
Steven Zheng Ma hew Yamamoto John Dantoni
RESEARCH ANALYST RESEARCH ANALYST RESEARCH INTERN
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Ma e O I g
No ember
P ce
No ember as no a good mon h for cr p oc rrenc in es ors Bi coin s BTC price
fell b more han erasing ro ghl billion of marke capi ali a ion Similarl
E her s ETH price dropped b abo S ellar XLM had he s ronges
performance among he op cr p oc rrencies likel beca se i s go erning
fo nda ion has des ro ed o er half of he s ppl b he price is s ill do n in
No ember XRP had he ors performance do n nearl
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CoinGecko The Block
Volatilit
Bitcoin s and Ether s volatility has declined in November After ETH started the year
as signi cantly more volatile than BTC annualized volatility is now nearly
identical about for both BTC and ETH
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source The Block
S e change
Cryptocurrency traded volumes in November continued declining and hit an
eight month low The average daily trading volume on legitimate exchanges was
about 1 billion in November 12 lower than 1 2 billion in October and 1
lower than billion in June
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CryptoCompare CoinGecko The Block
The most active trading day was Nov 22 when volume reached 3 23 billion There
were two other days when volume surpassed 2 billion Nov 25 2 6 billion and
Nov 2 2 33 billion
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
As for market share Binance continues to dominate In No ember Binance captured
of the legitimate traded olume its highest market share since March Coinbase
captured about of the olume follo ed b Kraken Bit ne Bitstamp
and bitFl er The remaining e changes all captured less than of the
total olume
I i i al dema d
Gra scale Bitcoin Trust GBTC a closed end fund that in ests e clusi el in bitcoin
ser es as perhaps the best indicator of institutional in estment in BTC because it
gi es in estors an opportunit to get e posure through a traditional in estment
ehicle ith shares titled in the in estor s name
GBTC s assets under management AUM in this case the alue of all the bitcoins
held in the fund currentl sits at around billion B the end of No ember
Gra scale held bitcoins or about of the total circulating suppl Nearl
bitcoins ere added to the fund in
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source YCharts The Block
GBTC s share price trades higher than the net asset value meaning that investors pa
a premium over just bu ing bitcoin directl This is because the price of GBTC is
determined b suppl and demand and the majorit of investors prefer o ning a
securit as opposed to ph sical bitcoin
An increase in the GBTC premium signals more demand for GBTC and therefore also
a gro ing institutional interest The premium has surpassed in t o
months Ma and August It s currentl about much lo er than the
local high of in Jul hich signals that the demand is declining
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source The Block
A similar trend can be observed b looking at the monthl traded volume of GBTC
The traded volume in Jul reached nearl billion but has since continued to fall
each month The volume in November was less than a quarter of that about
million
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Futures
Following its underwhelming start in late September Bakkt recently witnessed a
signi cant and sustained increase in the trading volume of its physically settled
bitcoin futures hitting around million on Nov Bakkt s open interest reached
an all time high of million on Nov which indicates that new money is owing
into the market
CME continues to dominate Bakkt in terms of futures trading volume but the lead
has been decreasing In early November Bakkt s volume was less than of CME s
but towards the end of the month it was reaching as much as Similarly to Bakkt
CME registered higher volume towards the end of the month reaching as much as
million on Nov
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
CME s open interest has declined in No ember albeit not drasticall hich co ld
f rther indicate that some traders are s itching to Bakkt The open interest
decreased from million to less than million b the end of the month
E cha ge ke
The total market cap of e change tokens declined from billion in October to
billion in No ember Binance s BNB remains the largest e change token b far
ith a market cap of billion It is more than three times larger than the trailing
e change tokens b Bit ne OKE and H obi BNB is c rrentl of the total
e change token market cap trailed b Bit ne OKE H obi
K Coin and FTX
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CoinGecko The Block
The only exchange token that had a positive return in November is FTX s FTT Smaller
cap exchange tokens performed signi cantly worse than large caps
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
O e Fi a ce
The ecen mon h in O en Finance ha e la gel been de ned b he ma a ion and
inc ea ing o hi ica ion of ma ke c e A he end of No embe he e ee
million ETH million locked in O en Finance nea l inc ea e f om
Oc obe Thi mean ha abo of E he e m ci c la ing l i no locked
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So ce DeFi P l e The Block
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
po en iall hrea ening near medi m erm f re lending liq idi gro h and
adop ion of hese neo sa ings acco n al erna i es
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
MAC
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A look a CFTC reg la ed and
self repor ed bi coin deri a i e
da a hedge f nds a an all
ime high in CFTC ne shor
posi ion his mon h
No ember
Q ick Take
● A look a bi coin deri a i e da a incl ding CFTC reg la ed bi coin f re
CME Bakk bi coin op ion Deribi and elf repor ed cr p o e change
perpe al ap and f re da a
● Looking a reg la ed CFTC f re bi coin da a hedge f nd are a all ime
high in he o al al e of ne hor po i ion in he la o eek
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Traders of Financial Futures report in Comparable products ith the same
number of traders this ear includes the CME S iss Franc at CME Cash Settled
Butter at and month SOFR at
Weekl CFTC COT reports published Frida and using Tuesda s closing data for that
eek sho that the estimated notional alue of open interest on CME cash settled
bitcoin futures has also declined signi cantl since the highs of Jul do n almost
since then and no at similar le els from Ma at million Currentl
recentl launched ph sicall deli ered bitcoin futures from Bakkt makes up less than
of CME Group Bitcoin Futures open interest
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
As open interest has continued to come down over the last three months there
also has been a notable uptick in short concentration among the largest traders and
speci call coming from those that are classi ed as hedge funds This past week
more than of the outstanding short interest came from the top largest traders
Likewise the concentration of net longs among the top traders within CME bitcoin
futures is at an all time low suggesting the largest funds that trade the product are
crowding into a short trade
Interestingl the net short positioning Short OI Long OI among hedge funds that
trade the CME bitcoin product is at an all time high over the last two weeks of COT
report prints This is notable as throughout Q hedge funds have been relativel
net neutral while asset managers and non reportable traders skew heavil long
while Other traders have been net short most likel operating in a
dealer sell side capacit in making markets
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Standardizing the size of open positions across trading groups by the percentage of
total open interest helps highlight which trading groups make up the bulk of open
interest on either the long short or spreading side On the long side hedge funds
have made up as much as 5 of total open interest January 201 however they ve
now ceded a bulk of that of that dominance to non reporting traders the small
accounts which now make up 40 of total long open interest On the short side
hedge funds make up more than of the total short interest which is also close
to all time highs
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Granted reg lated CFTC f t res and to e en non material e tent for Bakkt make p
a relati el small portion of total ol mes and open interest compared to the largest
bitcoin e changes that self report bitcoin f t res data and are nreg lated In terms
of total trading ol me this past month CME has made p an here from
of the total reported BTC f t res ol me among other e changes bit er BitMEX
Coin e Binance H obi and as m ch as of the total open interest on those
e changes last eek CME at m s self reported bitcoin e change f t res
ol mes of B esterda r according to data from Ske Ho e er hile
CME data is relati el tin to self reported e changes e ha e the bene t of ha ing
greater con iction that the n mbers are indeed more acc rate
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Abo he CFTC COT Re o
The Commi men of T ade Re o i a de ailed blic e o ha o ide a
b eakdo n of each T e da o en in e e on f e ma ke ha ha e o mo e
ade ha hold o i ion a o abo e e o ing le el The e o i bli hed b he
CFTC e e F ida and bmi he nal n mbe f om he io T e da ading
clo e
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Spreading the number of future positions that are equally held both net and long by
the same trader Can be used for calendar spreads that match different maturates
Example A trader in bitcoin futures holds 2 000 long contracts and 1 500 short
contracts 500 contracts will appear in the Long category and 1 500 contracts will
appear in the Spreading category
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
E aluating e changes based on
the liquidit of its Bitcoin pairs
No embe
Quick Take
● E al a ing e change b o de book dep h i fa pe io o looking a he
ading ol me
● A dep h Binance ha he mo liq id BTC pai i h combined o de
follo ed b Coinba e Bi ne K aken and Bi amp
● A dep h Bi ne ha b fa he mo liq id pai follo ed b Bi amp
Coinba e and K aken
● Af e e al a ing la ge e change i clea ha Bi ne Coinba e K aken
Bi amp and Binance ha e he mo liq id BTC pai
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
In order to get an understanding of which exchanges have the deepest liquidity, The
Block has analyzed the order book depth of Bitcoin trading pairs on 15 exchanges
(Binance, Coinbase, Bitfinex, Kraken, Bitstamp, Liquid, Gemini, OKEx, CEX.IO, Huobi,
itBit, Bittrex, Poloniex, KuCoin and bitFlyer).
If we consider 1 depth, Binance has the most liquid pair with combined orders of
$6.54 million; followed by Coinbase ($5.81M), Bitfinex ($5.47M), Kraken ($4.99M) and
Bitstamp ($4.39M). The most liquid pair is BTC/USDT but the four trailing pairs are all
BTC/USD.
Source: Coinpaprika, The Block
When looking at 10 depth, Bitfinex has, by far, the most liquid pair with combined
orders of $47.5 million; followed by Bitstamp ($30.8M), Coinbase ($28.5M) and Kraken
($24.3M). The disparity between the results of 1 vs. 10 depth analysis could be
caused by different market making programs as well as traders that have orders of
1 to take advantage of liquidations.
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source Coinpaprika The Block
Even though the values above are just measured at a single point in time on Nov
the appear to be consistent with historical order book depth anal sis In
short Bit ne Coinbase Kraken Bitstamp and Binance have b far the deepest
liquidit of Bitcoin trading pairs None of the other retail facing e changes come
close
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Anal sis of volume per ebsite
visit indicates larger traders
are re entering the game
No ember
Quick Take
● O t of e changes that ere e al ated onl e changes o tside of
Bit ise appear to ha e traf c that ro ghl corresponds to the trading
ol me
● Bit ne and Bitstamp ha e the largest traders hile Polonie Bittre and
Coinbase ha e mostl retail clients
● Vol me per isit increased signi cantl from September to October hich
likel means that larger position traders are entering the game again
According to The Block s ndings at least other albeit lesser kno n e changes
also appear to ha e legitimate traded ol me
The Block has anal ed the ratio of the estimated eb traf c and self reported
traded ol me o er a period of months in order to determine hich e changes
appear to ha e legitimate trading ol me
Before getting into the res lts it s important to ca eat three things
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
● Web af c c d he e ca be a a ed a ch a eb
fa ha d d a a a ge ca e a d ac c g a e
● I b e ha he eb af c c gf Ch a c d be de a ed
beca e f he e a a d VPN
O f e cha ge ha e e e a a ed e cha ge de f B e
a ea ha e af c ha gh c e d he ad g e I d da
I d e a L Af ca CEX IO U K Za f Ja a Y B GOPAX S h K ea
EXMO R a K b S h K ea C e S h K ea B a ce US USA a d
B ba Ja a
S ce S a eb C Gec C C ae
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Bi ne and Bi amp ha e he highe raded ol me per i i hich indica e
larger clien rade on heir pla form or ha a lo of he rader rade hro gh API
hich logicall doe n regi er a a i i h re l ing in lo er eb raf c Polonie
Bi re and Coinba e ha e he lo e ol me per i i o of Bi i e hich
indica e ha he a rac he highe n mber of re ail clien
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source: Similarweb
A similar trend can be observed when looking at legitimate trading volume, which is
now down about 54% since June.
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Another interesting metric to look at is the weighted average of volume per visit each
month This metric gives us an indication of the involvement of larger traders Volume
per visit increased significantly from September to October, which likely means that
larger position traders are entering the game again
The full table of exchanges that appear to have real volume can be seen below:
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce Similar eb CoinGecko Cr p oCompare
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Bank r ns E ploring he
rela ionship be een on chain
lending and s aking
No ember
Q ick Take
● In his latest paper Ga ntlet Net ork s Tar n Chitra s ggests that the rise of
on chain lending protocols ma lead to bank r n t pe phenomena in Proof of
Stake net orks
● Chitra s sim lations sho that the e tent of this threat largel depends on the
protocol s monetar polic
S mmar
Cr ptoc rrenc anal sts and researchers often characteri e the rapid emergence of
blockchain based Open Finance protocols as a positi e de elopment a potential
catal st for e er co eted mainstream adoption
While the rate of traction has been impressi e it remains to be seen hether these
prod cts can coe ist ith base la er net orks in a s mbiotic fashion a recentl
p blished research paper b Ga ntlet Net ork s Tar n Chitra b ilds on pre io s ork
from Cornell s Phil Daian pro iding formal proofs indicating that nder certain
monetar policies Proof of Stake based blockchains ma be s sceptible to
debilitating stake based bank r ns
The Proof of Work S bil resistance mechanism pop lari ed b Bitcoin req ires
miners to pro abl spend capital on energ in ret rn for a reg larl iss ed block
re ard While largel effecti e to date Proof of Work often recei es criticism for both
its e cessi e energ sage and s sceptibilit to economies of scale hich res lts in
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
he concen a ion of mining po e ind e pe e ima e ha o e of
Bi coin ha hpo e e ide in he Chine e ci of Chengd
O e F a ce a a h e
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A ne e f bank n
If implemen ed p ope l Open Banking ma help bol e compe i ion and inno a ion
in he nancial ec o o he be e men of con me and he econom mo e
gene all Ho e e hi ma come a he co of le able depo i aking
in i ion hi d pa ie ma be highl mo i a ed o mo e mone a a o
enco age hei depo i clien o do o f om a po en iall o bled in i ion a he
hin of an p oblem I o ld no be p i ed if malle in i ion nd hei
depo i ba e become le ick o e ime and mo e likel o na he hin of
o ble
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
enables the seamless mo ement of assets across contracts thro gh the se of
atomic transactions making them partic larl s sceptible to stake instabilit
Where historic bank r ns and stake r ns di erge is the possible remedies The
introd ction of Federal Deposit Ins rance Corporation in the Sec rities Act
alle iated concerns aro nd f t re bank r ns ith the Federal go ernment promising
to nder rite deposits p to Other potential sol tions proposed b
Ninimaki incl de modi cations of the Diamond D b ig model here banks f nd
their illiq id assets b iss ing a combination of demand and time deposits the
former eq i alent to a sa ings acco nt the latter a Certi cate of Deposit B catering
to both risk a erse and risk seeking clients banks can replicate a erage asset
liq idit thro gh deposit liq idit These same remedies cannot be ported o er to the
orld of blockchains as decentrali ed s stems there is no single Federal
go ernment eq i alent that can pro ide FDIC eq i alent ins rance and most sers
req ire their stake to be at least semi liq id at all times
Chitra s research le erages agent based models a s bset of sim lation techniq es
here each net ork participant is represented as an indi id al agent ith a req isite
tilit f nction Agents are ass med to ha e different risk preferences and each
agent optimi es their token portfolios based on obser ed ret rns and risk
preferences
The ine tricabl comple m lti ariate nat re of permissionless s stems means that
researchers m st make some simpli ed ass mptions as to the en ironments the are
sim lating Chitra s models ork nder the ass mption that the sampling process in
Proof of Stake is tr l random so that alidators cannot anticipate the timeframe on
hich the ill recei e a re ard the n mber of participants is ed Algorand and
A alanche s formal proofs of Proof of Stake make similar ass mptions lending
acti it onl takes place on chain the block re ard and mone s ppl are
deterministic and kno n to all participants at an gi en time alidator re en e is
onl deri ed from block re ards rather than a combination of iss ance and
transaction fees block re ards are not immediatel rein ested and there is a
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
1
Chitra s simulations take inspiration from Marko it s Modern Portfolio Theor hich
pro ides a frame ork for portfolio construction such that the e pected return is
ma imi ed for a gi en le el of risk preference Where Chitra s model de iates is that
each agent in the simulation is designated a particular risk preference hich is
subject to change on a per block basis methodolog that is directl comparable to
that of multi strateg backtesting in quantitati e trading B contrast Marko it s
models sol ed for optimal risk adjusted portfolio allocation o er static time periods
assuming constant returns of underl ing assets
Results
The models described abo e produce four distinct claims regarding the implications
of on chain lending for Proof of Stake based protocols
First the ma imum turno er in each agent s portfolio is bounded b the staking
olatilit di ided b the mone suppl plus the lending olatilit If the mone suppl
goes to in nit i e in ationar then the rst component staking olatilit
o er mone suppl goes to ero and thus turno er is solel a function of lending
olatilit The implication here is that earl in a net ork s life c cle the olatilit in
the amount staked should be lo to a oid rebalancing once a net ork has gro n
this olatilit matters much less
Second if there is minimal ariance in the lending rate either due to rate cur e
parameteri ation or lo borro demand e should not e pect portfolios to
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
rebalance regularly and rational stakers will tend to keep their tokens locked in a
staking contract
Third as long as we have in ation and the borrowing demand is not too high we can
be sure that the worst case rebalancing is bounded by the variance of lending
volatility Conversely this implies that if borrow demand is too strong we cannot
bound the change in expected returns for validators and lenders
Finally Chitra claims that the alpha excess returns over a benchmark index that
a rational agent generates is usually small but is maximized at a point dependent on
the rate of money supply growth the time over which capital has to be locked in
order to participate in staking and the average time to be matched as a lender
These claims have important implications for monetary policies set by protocols
Given that monetary policies are generally considered to play an outsized role in
protocol social contracts and thus unlikely to be modi ed at later points it is
important that protocol designers heed the following
For a de ationary monetary policy if there are fewer coins left to be issued than
market participants we should expect large rebalances for each staker no matter
their risk preference when borrow demand is high Totally de ationary currencies are
inherently vulnerable to large rebalances that depend strongly on the number of
coins in the system This conclusion is fairly intuitive if issuance falls to zero then
any lending yield above zero will be preferable
For protocols with polynomial in ation i e issuance increases over time but does
not scale proportionally with money supply individual validators will almost never
rebalance their token portfolio provided that the system has a large number of
validators In particular if there aren t many whales then individual rational validators
enjoy a level of stability in their token portfolios that is better than a fully
de ationary model and systems with faster in ation Moreover the simplest form of
polynomial in ation linear in ation e g adding h coins to the system at block height
h provides a simple way for protocol designers to adjust the sensitivity of the
protocol to whales
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
For protocols with e ponential in ation i e issuance as a percentage increases
over time the worst case rebalancing is bounded b the initial token distribution
as opposed to the nal token distribution because there is diminishing pro t to
rebalancing as the number of participants grows Comparativel in the de ationar
case there is increasing marginal pro t from rebalance regardless of the number of
participants as the protocol emitted block returns deca to ero whereas lending
ields still are a constant multiple of the outstanding suppl As most networks
assume that there will be more users than those participating in initial token
distribution events this implies that large rebalancing events should become rarer
once the network achieves an scale greater than the si e of the initial distribution
set
C cl i f e k
Additionall Chitra s paper shows that the turnover in staked quantit is sensitive to
the precise nature of monetar polic de ationar policies cannot support on chain
lending whereas protocols emplo ing e ponential in ation are largel protected
Future work on this subject should aim to rela some of Chitra s assumptions
Namel how do the results change if we work under the assumption of variable
transaction fees a multitude of lending protocols with var ing lending curves
d namic stake withdrawal dela s and non constant borrow demand Further
researchers should consider the t pe of relationship that e ists between lending
protocol risk premiums and stake suppl and the viabilit of pegging validator
rewards to on chain lending ields
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
44
Quick Take
● Over the past four quarters the Bitcoin network has settled over billion
a little more than billion per day on average
● Bitcoin has experienced two consecutive quarters of increases in value sent
over it
● Bitcoin is the leader in value being sent over its network averaging a
market share out of the top five cryptocurrencies by market cap
Bitcoin the peer to peer currency has given individuals and businesses the ability to
conduct transactions in an alternate fashion without an intermediary Due to Bitcoin s
highly volatile nature its price is typically the central focus for speculators and the
press
What is often lost in the news is whether Bitcoin is actually providing any utility and
what sort of economic activity is taking place on the protocol We will explore the
Bitcoin blockchain and look at the value taking place across its transactions over the
past four quarters This will give us a better idea if Bitcoin is more of a toy for
geeks and enthusiasts to send money to one another or if it has evolved into
something much larger to where serious economic activity is taking place
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Va e Se ed B c
Over the past four quarters the average total value settled on Bitcoin has been a
little more than 1 billion per day on average with a median value of approximately
1 5 billion per day
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Va e Se ed b Q a e
In total over the past ear a little more than billion has been settled over the
peer to peer network
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce The Block Coinme rics
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A e age Med a T a ac S e
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
the weight of the economic activity in value is being recorded by the high value
transactions taking place This can be a result of individuals with large holdings
moving funds or exchanges with large holdings moving funds to serve its customers
C a i g he Va e
To get a better picture of the value being settled on Bitcoin we will examine the value
transferred relative to other networks in the ecosystem that rank top five by market
cap Bitcoin remains the leader in value transferred where it has averaged over
the past four quarters Ethereum has been the clear runner up in economic activity
averaging of the market share Over the past quarter we have seen a slight
increase for Bitcoin to about and a decrease for Ethereum to
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Dail Fee
Over the past four quarters Bitcoin has averaged in dail fees for miners
while the median has been appro imatel From Q to Q dail
fees collected b miners increased b appro imatel b The dramatic increase
was short lived and dropped b about returning closer to its average for dail
fees Despite the decrease Q still returned more revenue than Q
and about more than Q
C cl i
The Bitcoin network ma still be in its infanc however it is providing utilit to users
with over billion settled For an internet currenc started b an anon mous
creator and sent to a mailing list to a few individuals this should be largel
considered a success With high average transaction si es being much larger
than the median transaction si e this suggests much of this economic activit
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
i being o ed b ading and coming f om e change mo ing la ge m of
mone Wi h con ec i e a e of inc ea ed al e being en o e i ne o k and
an inc ea e in ela i e ma ke ha e e cen o e he a a e i ill be
in e e ing o ee if hi end follo and if he in e ne c enc can edge clo e o
e ling illion o e he co e of a ea
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Projec
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Ma e DAO M C a e a Da
No ember
Q c Ta e
● On Monda No ember MakerDAO ill of ciall begin he ran i ion o i
M l i Colla eral Dai em
● M l i Colla eral Dai open p ppor for addi ional colla eral pe a ell a
in rod cing e eral impor an em mechani m de ign change
Ma e DAO
MakerDAO i a credi facili and n he ic i ance pla form er ing a he de fac o
cen ral bank for he E here m ba ed Open Finance eco em A he hear of
MakerDAO i he Dai oken a n he ic a e i h a of peg o he US dollar
affording ri k a er e agen all he ad an age of cr p oc rrencie cen or hip
re i ance permi ionle acce cro border al e ran fer e c i ho he
ola ili
Con idering MakerDAO cope of ambi ion Dai ha een enormo cce o da e
Since la nching in December o er m Dai ha been origina ed hro gh he
MakerDAO em here i c rren l mo anding Ro ghl CDP ha e
been opened acco n c rren l hold Dai and ro ghl m of Dai i
ran ferred on a dail ba i Mean hile de pi e an dra do n in E her Dai ha
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
for the most part, successfully maintained its soft peg, with the average daily
deviation from $1 over 2019 (as of 10/28/19) coming to just 1.24%.
While Ether has so far served as a useful primary source of collateral, there are
benefits to collateral portfolio diversification. The introduction of alternative,
uncorrelated collateral types lowers risk within the system. In the event that
collateral type A sees a period of volatility and, as a result, mass liquidations,
collateral type B will ideally remain stable, saving the system from a state of mass
undercollateralization. Additional collateral types also facilitate the scalability of Dai
supply: because all Dai must be backed by a minimum of $1.50 worth of collateral,
the Dai supply is ultimately constrained by the value of the underlying collateral.
Relying upon a single collateral type limits the extent to which Dai can grow and
serve as a fundamental primitive for a parallel global financial system.
To this end, on Monday, November 18th, the MakerDAO protocol will migrate to the
long-awaited Multi Collateral Dai (MCD) state. The MCD upgrade also contains a
number of significant mechanism upgrades alongside the support of alternative
collateral types. For the remainder of this report, the existing system will be referred
to as Single Collateral Dai (SCD) and its token as ‘Sai.’ CDPs will be referred to as
‘vaults,’ and the MCD token will be referred to as ‘Dai.’
The G ea M g a
The migration process between the SCD and MCD systems is complicated by the fact
that SCD continues to be used and various vault holders still have outstanding debt.
MakerDAO stakeholders cannot unilaterally shut down the SCD system — instead,
they must manage both economies simultaneously while encouraging SCD users to
switch over to the MCD platform. This is somewhat analogous to the Ethereum 1.0 to
Ethereum 2.0 transition, where Ether holders will be required to migrate their
holdings over from the legacy chain to the upgraded sharded network.
There are three sets of immediate, mutually inclusive stakeholders in the MakerDAO
system: Dai holders, MKR holders, and vault holders. Each stakeholder has a tailored
migration process, defined as follows:
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
K
AI
Sai holder can migra e o he MCD em b depo i ing heir oken in o a con rac
on ei her he migra e makerdao com or oa i app in erface Thi con rac i i elf
r c red a a a l for each Sai depo i ed a er can i hdra Dai The
colla erali a ion ra io i e a and he abili fee a Oa i al o pro ide a
epara e con rac for con er ing Dai back o Sai
DI CLAI E
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source dai in de com
Of the three dYdX is currentl the onl project that will handle the migration process
on behalf of its users according to an announcement post weeks after MCD
launches an remaining balances in Sai will be converted automaticall to Dai During
this period both Sai and Dai markets will be paused until the conversion is
completed the team expects this process to take somewhere on the order of
hours Meanwhile Compound and Uniswap expect their user bases to migrate
manuall
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
5
The upgrade schedules for other MakerDAO ecos stem partners can be found below
Vault
In order to re nance to MCD SCD vault holders must rst repa their outstanding
debt This process entails sourcing Sai Sai can be withdrawn from the MCD Sai vault
this Sai is then used to pa back SCD vault debt while an outstanding interest fees
are paid in MKR SCD vault collateral is then unlocked and dul deposited into a MCD
vault This multi step process is concealed b a one click contract offered on the
oasis app website
This vault migration process is contingent on there being suf cient Sai sitting in the
MCD Sai vault SCD vaults cannot be migrated over in tranches so users with large
volumes of outstanding debt ma be forced to wait for the Sai contract to ll up
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
before por ing o er Al erna i el SCD a l holders can so rce Sai from secondar
marke s or OTC desks
Challenge
A migra ion of his magni de does no come i ho challenges
The rs challenge is ens ring ha he migra ion akes place o er a reasonabl shor
period of ime As men ioned he abili for SCD a l holders o re nance o MCD is
largel con ingen pon e is ing Sai holders redeeming heir okens for Dai The
Maker Fo nda ion has no ed ha se eral ecos s em par ners i h s bs an ial
holdings ha e commi ed o migra ing i hin a ma er of da s ens ring ha here
ill be a a minim m a base la er of liq idi in he Sai a l con rac Ho e er if
Sai holders hold o on he migra ion process SCD a l holders ma be forced o
acq ire Sai on secondar marke s Depending on a ailable liq idi his co ld lead o
des abili a ion and de ia ion a a from he sof peg as a l holders marke b Sai
a a premi m
The second rela ed challenge is go ernance rela ed Req iring MKR holders o
manage o dis inc s s ems sim l aneo sl ma lead o e cessi e cogni i e
o erload perhaps o he de rimen of risk managemen To his end MKR holders ill
likel se a disco n on he MCD s abili fee in order o incen i i e borro ers in
he SCD s s em o migra e o er Ho e er his co ld po en iall crea e per erse
second order effec s depending on Dai marke ac i i i h he spread l ima el
des abili ing he Dai peg If his is he case MKR holders ma be req ired o lif he
MCD s abili fee abo e he SCD s abili fee hich o ld onl f r her incen i i e
SCD a l holders o remain in he e is ing s s em
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
MCD c lla e al a a e e
While the Multi Collateral Dai system is capable of supporting any number of
collateral types, at launch, the system will be solely reliant on Ether and Basic
Attention Token (BAT). Like the SCD system, Ether-based vaults will be required to
maintain 150 collateralization ratios and a liquidation penalty of 13 will be levied
on those that fall below this threshold. The stability fee for Ether-vaults will initially
be set at 4 or a 1 discount from the existing SCD stability fee. BAT-based vaults
will start with the same risk parameters. However, the amount of Dai available to be
minted from these collateral types at any given time — known as the ‘debt ceiling —
will diverge: Ether will start with a 50m Dai debt ceiling, while BAT, an asset with a
significantly lower market capitalization and liquidity, will be limited to just 3m Dai.
For context, the debt ceiling for Sai was recently raised to 120m, so we can expect
the Ether-based Dai debt ceiling to be lifted beyond 50m after a relatively short
period of time.
While BAT and Ether currently share the same risk parameters and stability fees, this
will likely change as more collateral types are onboarded. MKR holders will be
required to vote on collateral specific ‘risk premium rates, which are combined with
the system-wide ‘base rate. As an example, imagine that the system-wide ‘base rate
stability fee is 5 . Collateral type XYZ is then onboarded but considered to be riskier
than Ether, which has a risk premium rate of 0 . MKR holders decide that
prospective XYZ-vault holders should pay a 3 APR premium over Ether-vault
holders. XYZ-based vault borrowers will be required to pay 8 APR, assuming the
base rate remains constant over the proceeding year.
Dai Sa i g Ra e
An equally important element of the MCD transition includes the introduction of the
Dai Savings Rate. To date, MKR holders have had just one monetary policy lever — the
Stability Fee — to pull in order to incentivize market participants to honour the USD
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
peg The S abili Fee is le ied on all a l holders as a cos of borro ing In he
e en ha Sai drif s belo i s peg he S abili Fee can be ele a ed incen i i ing
prospec i e borro ers o so rce heir f nding else here and e is ing borro ers o
close o heir deb Like ise if Sai drif s abo e i s peg he S abili Fee can be
decreased in order o incen i i e he genera ion of more Sai
Limi ing mone ar polic o he borro side has been s bop imal in ha i onl
applies o one side of he Dai ecos s em marke As a res l e ha e seen he
S abili Fee lif ed o as high as APR in order o comba Sai in a ion This is
considered remarkabl high for colla erali ed lending par ic larl in a global
en ironmen of near ero if no nega i e ra es
The DSR addresses his b direc ing some por ion of a l holder in eres o Dai
holders Considered he Open Finance eq i alen of he risk free ra e he DSR
crea es organic demand o hold Dai as a non ola ile sa ings acco n The emergence
of organic demand means ha he S abili Fee paid b borro ers can also be
lo ered as he beha io r of bo h sides of he marke b ers and sellers can be
adj s ed
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
le e age and li idi DSR ill nece a il e ea he lo e bo nd fo a ing
a e ac o Open Finance lending pla fo m no a ional ac o o ld be illing o
lend on ano he pla fo m hich come i h addi ional c edi i k a a lo e ae
o e a ing h o gh he DSR con ac We can h e pec econda lending a e o
mo e in ep i h he DSR hif ing p a he DSR i lif ed and coming back do n a
he DSR i d opped The effec i ene of he DSR i dependen on he a mp ion
ha ma ke pa icipan a e conce ned i h i k adj ed e n e ab ol e
e n If e con in e o eek he highe ma ke ae hen he S abili Fee ill
emain he p ima mechani m fo incen i i ing ma ke beha io
K
While he mig a ion p oce fo MKR holde i a he eamle akeholde m
no e he change in oken mechanic nde he MCD em
DI CLAI E
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce The Block
In MCD MKR holders become he primar bene ciaries bene ing dispropor iona el
from liq ida ions hro gh a ne rs price a c ion s r c re he S rpl s A c ion
Moreo er in MCD a l holder in eres pa men s accr e con in o sl hile in SCD
in eres is onl paid a he e en of principal pa men This ens res ha a l holders
pa in eres e en in he e en of liq ida ion
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A c i n
MCD in od ce h ee a c ion pe o he Make DAO em Colla e al A c ion
Deb A c ion and S pl A c ion Each of he e a c ion ake an Engli h A c ion
c e o he i e kno n a a p ice a c ion he e pa icipan bid p blicl
he highe bid in and he highe bid i paid Whe he he e a c ion can be n
in a a ha i e i an o coll ion emain o be een
C lla e al A c i n
The colla e al a c ion eplace he e i ing SCD li ida ion p oce Unde SCD
colla e al locked in a a l i li ida ed in he e en ha he a io be een colla e al
al e and o anding deb fall belo Keepe ep in b ning he al e of
deb in Sai fo a ed di co n on he colla e al An pl colla e al i b n
in a ing he PETH ETH a io in fa o of a l holde
Unde MCD he li ida ion p oce f nc ion a follo A oon a a keepe igge
li ida ion a p ice a c ion commence Le imagine ha he a l o ne ed
E he a colla e al E he i ading a he e a E he depo i ed a colla e al
and o anding deb p incipal pl in e e a Dai Wi h he addi ional
li ida ion penal he Make DAO em need o ai e Dai in o de o co e
he ho fall
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A i h an a c ion p e e pa ame e m be e Fo colla e al a c ion he
minim m lo i e ha been ini iall e a ETH and BAT o ghl e i alen
o The ea oning behind hi lo i ei o nd a ade off be een
enco aging ide pa icipa ion and con e en l compe i i e bid and if
a c ion e ol ion A c ion pa icipan m bid fo he en i e lo i e
S pl A c ion
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
disco n on he MKR DAI rade as MKR holders sho ld na rall be incen i i ed o
par icipa e in order o reali e di idends
Deb A c
The nal a c ion model is he Deb A c ion here MKR is sold in order o co er
s s em ndercolla erali a ion In heor if he s s em is correc l managed b MKR
holders hese Deb A c ions sho ld ne er occ r The lo si e is Dai bid
d ra ion is min es ma im m a c ion d ra ion is da s and he minim m bid
incremen is
The deb a c ion f nc ions similarl o he second phase of he colla eral a c ion
he s s em no es ha i needs Dai and keepers s bmi he amo n of MKR
he o ld like o recei e in re rn Deb a c ions ha e one addi ional parame er
he ma im m amo n of MKR ha can be req es ed in order o pre en keepers
from bidding for dispropor iona el high amo n s of MKR This ma im m amo n is
o ed on con in o sl b MKR holders ra her han se a oma icall based on an
oracle price of MKR D e o he minim m lo si e of DAI if he s s em does
en er in o a period of ndercolla erali a ion i ill no be co ered n il here is a
leas Dai or h of bad deb
T e a ead
Monda s MCD con rac deplo men is b he s ar of a m l i mon h migra ion
process Whe her he ransi ion can ake place in a coordina ed s able manner
remains o be seen al ho gh he Maker Fo nda ion s pl s emplo ees are
cer ainl prepared for he challenges ahead and capable of addressing hem as he
come If s ccessf l he MCD migra ion hich offers a more rob s and scalable
s n he ic asse iss ance pla form bodes ell for broader Open Finance momen m
in addi ion o E here m s imminen Sereni pgrade
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Maker MKR Price to Burn
Anal sis Still relati el
e pensi e to peer group as
in estors continue to pa a
massi e premium for a credit
facilit
November 5, 2019
Quick Take
● Maker (MKR) trailing 12 month Price to Burn multiple has rationalized from
2000x in early 2019; but is still at 200x
● This compares to Binance s trailing 12 mo Price-to-Burn of 35x, and an
estimated trailing 12 mo Price to Earnings (PE) of 6x; which isn t exposed to
nearly as much credit risk
● Binance estimated trailing 12 month Price-to-Earnigns (P/E) puts it well
underneath the 15x P/E traditional brokers (ICE, Schwab, Nasdaq, E*Trade,
etc.) currently trade at
With the help of explicit "earnings" data within the Maker system — visible via smart
contracts on the Ethereum blockchain and courtesy of data from Marc-André Dumas
— we re-calculated relative valuation metrics for Maker such as Price to Burn
(Interest Earnings) and Earnings Yield (Burn Yield) through the third quarter of 2019.
Our findings show that although Maker has achieved a fairly stable peg with its
stablecoin DAI (daily price standard deviation of .015 since Jan 2018), the system
hasn't been able to capture and distribute interest payments (revenue) to its MKR
stakeholders adequate to its current total market value, relative to a peer group (i.e.
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
investors are paying a massive premium in terms of price to burn, and for a credit
facility exposed to credit risks no less!).
*This post is for informational purposes only; none of this information should be
used as a basis for investment.
MKR Token Holders have taken the back seat to PETH holders
Using Stability Fees, or the interest rate paid upon closing a CDP, we can calculate
the total amount of interest paid by CDP holders to date. Considering the current
single collateral DAI system, the only revenue that currently gets distributed to MKR
token holders is via the closure of a CDP, which translates to a realized payment of
interest on the respective outstanding balance at the variable rate set by MKR token
holders (currently ~5.50% and has been as high as ~21% in 3Q19). Interest payments
can be paid in DAI or MKR, both of which will lead to a subsequent burn (removal) of
the dollar value of MKR from the total outstanding supply.
In 3Q19, the equivalent of ~$1.3 million worth of DAI was paid in interest to the
system, and "earned" by MKR holders (seeing how Maker has no operating expenses,
we assume all interest received, and subsequently burned, is equivalent to
"earnings").
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce Marc André D ma The Block Coin Me ric E her can
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So ce Ma c And é D ma The Block Coin Me ic E he can
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So ce Ma c And é D ma The Block Coin Me ic E he can
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So ce Ma c And é D ma The Block Me a i Lending Cl b LC Regional Managemen RM Ele a e C edi ELVT
Binance E he can
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Binance ake c en o al al e of BNB pa q a e USD al e of BNB b n
So ce Make b n com
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
S ce The Bl ck Fac Se
S ce Ma le Leaf Ca i al
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
TLDR: Investors are still paying significantly more for a credit facility with credit risk
than exchanges that have demonstrated significant operating leverage and earnings
and subsequent burn power
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
78
Quick Take
● U age of f ll hielded an ac ion ha e lo l been g o ing i h i
con ec i e mon h of a lea f ll hielded an ac ion
● Since he Sa ling g ade Zca h ha a e aged o an ac ion e
mon h an inc ea e b a o ima el com a ed o io ea
● De i e ome inc ea e in he age of f ll hielded an ac ion he ha e
onl e e en ed of he an ac ion made on Zca h o e he a ea
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
F S d dTa ac b M
Represented in the data abo e are three t pes of f ll shielded transactions that
ha e been possible Spro t addresses are the original shielded addresses Sapling
as the pgrade to shielded addresses that acti ated on Oct and
Migrations are the transactions of sers migrating from a Spro t address to a Sapling
address
The se of f ll shielded transactions has slo l been gro ing ith si consec ti e
months of at least f ll shielded transactions Prior to this there had onl been
three other times this threshold as reached From September to October this ear
e sa a b mp in sage ith transactions increasing b appro imatel
What has likel contrib ted to to sage is the Sapling pgrade Sapling made it
possible for shielded transactions to be performed m ch faster and req iring
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
less RAM This has made it easier for third part allet pro iders to add s pport
hich e ha e seen ith G arda Wallet Zepio Wallet and Zec allet
Ob e i g he A i Se
The Zcash anon mit set gro s as more transactions happen in the pool O er time it
becomes more ef cient as opposed to other pri ac methods s ch as mi ing Th s
e ill e amine the c m lati e total of transactions in the shielded pools o er time
In total there ha e been f ll shielded transactions since the net ork came
into e istence While Sapling transactions ha e onl been possible for appro imatel
a ear the no acco nt for of all to transactions e er cond cted
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
P c Ta ac F S d d
Through Zcash s histor up until October this ear full shielded transactions have
onl represented approximatel of transactions on the network However since
the Sapling upgrade that number has increased to about This October also
experienced its highest monthl percentage total representing While
transactions overall have been declining essentiall since June full shielded
transactions have sta ed stead and have slowl increased
The ear prior to the Sapling upgrade the network averaged to transactions
per month Since the upgrade Zcash has averaged to transactions per
month an increase of approximatel
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
82
To get a better pict re of pri ate transactions on Zcash e ill e amine to sage
relati e to Monero another pop lar pri ac foc sed cr ptoc rrenc Since Zcash
la nched the net orks ha e had almost an identical n mber of transactions
to a difference of onl abo t The main difference has
been XMR transactions offers its pri ac feat res b design hereas ith ZEC it
req ires o to opt in This has res lted in Monero ha ing more pri ate
transactions
Conclusion
O er the months since the Sapling pgrade la nched for Zcash e ha e seen an
increase in f ll shielded transactions ith more third part allet pro iders offering
s pport Despite this these transactions onl represent appro imatel
altho gh this n mber has been gro ing With a high n mber of pri ate transactions
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
cond c ed on Monero here ma be room o gro for o sage as cond c ing
s ch ransac ions becomes easier
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
CEO of Digi Global considers
full liquidation of Digi DAO s
M treasur holdings
No ember
Quick Take
● Digi Global he compan behind Digi DAO DGD i con idering a f ll
liq ida ion of Digi DAO rea r balance of ETH and re rning i o
DGD oken holder
● Beca e DGD marke cap c rren l rade a a di co n o he al e of
ETH in i rea r a f ll liq ida ion co ld lead o a po en ial re rn for
DGD oken holder a ming all price held con an
Digi Global he compan behind one of E here m earlie ICO Digi DAO DGD i
con idering a f ll liq ida ion of i rea r and re rning he remaining f nd back
o DGD oken holder
● DGX a oken ppo edl backed b ph ical gold ored in The Safe Ho e in
Singapore
● DGD a go ernance oken for Digi DAO he DAO re pon ible for managing he
ICO f nd o f r her he projec de elopmen
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
ea balance If Digi DAO e e o liq ida e i en i e ea and e ni o
DGD oken holde hi o ld ield a e na c en ma ke ae
Ho o ld f ll di ol ion ge pa ed
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
H i hi a f he e
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Stellar lumens token burn
displaying market price
inefficiencies
No ember
Quick Take
● After obser ing diminishing res lts from its token gi ea a s the Stellar
De elopment Fo ndation chose to b rn billion of the e isting billion
l mens XLM rather than mostl distrib te it ia airdrops and partnership
programs
● Altho gh the token s ppl had been effecti el red ced b appro imatel
the price of XLM onl ent p after the anno ncement
● This co ld possibl be a signal that XLM as o erpriced to begin ith
● Gi en the lack of token speci c catal sts and high correlations to Bitcoin
prices perhaps the potential re ard is not orth the risk for short sellers
leading to inef cient market prices
Last eek the Stellar De elopment Fo ndation SDF anno nced that it had b rned
billion l mens XLM or of the e isting s ppl orth abo t billion at the
time of the b rn After reali ing the diminishing effects of its token gi ea a s the
fo ndation made a complete and chose to red ce the token s ppl rather than
tr to force adoption thro gh dil ti e airdrops
Prior to the e ent the fo ndation had controlled billion of the billion e isting
l mens After the b rn SDF no controls billion o t of the e isting billion
Altho gh none of the billion l mens b rned ere part of the c rrent circ lating
s ppl the ast majorit of these tokens had pre io sl been set to be added to the
circ lating s ppl ia airdrops and partnership programs
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce The Stellar De elopment Fo ndation
Gi en the h ge discrepanc perhaps one co ld come to the concl sion that l mens
ere o er al ed to begin ith This o ld feed into man skeptics beliefs that the
ast majorit of cr ptoc rrencies are o erpriced Ho e er if this ere the case h
o ldn t hedge f nds make a fort ne b shorting these tokens
Considering the lack of token speci c catal sts and high correlation to Bitcoin prices
it s likel that the risk re ard is j st not there
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
nega i e headline from a his leblo er or go ernmen en i aking enforcemen
ac ion b hose are fe and far be een
Addi ionall cr p oc rrenc prices s ill re ain high correla ions o one ano her Good
l ck shor ing a par ic lar oken o onl ge blo n o of he a er af er a s dden
j mp in Bi coin prices According o ske man of he op cr p oc rrenc prices
ha e an correla ion o one ano her Al ho gh XLM s price correla ion o Bi coin
as onl in comparison i s correla ion as s ill s bs an ial
So rce ske
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Company
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Cr pto nall gets its U S IPO
and the Cliff of Valinor
No embe
Q ick Take
● Sil e ga e IPO P and Take f om he c o bank
● E o ean bank Cliff of Dea h No i e
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Whe he i S a e JPM gan Faceb k Mic f ICE Fideli he e ha been a
f ann ncemen ff a in c and bl ckchain b la gel c e ed U S
blicl aded c m anie hi ea and e he li ing f Sil e ga e and c ming
c mine Canaan C ea i e IPO gge ha m e e la c c m anie
a e indeed c ming he blic U S ma ke I an e ci ing de el men a ch
in
Back Sil e ga e The Bl ck Ma Yamam e an da ed Q Sil e ga e S
anal i ahead f he IPO ha I ec mmend gi ing a ead if e in e e ed in
lea ning m e ab he c m an a eg and g h ec In h he
c c mm ni bank ha een an im e i eg h in c me
YTD acc n ha an ac c e change C inba e Gemini Bi am Pa
Ci cle in i i nal in e Bl ck e P l chain Ca i al and e en he
c me ch a S Fi Mike Cagne Fig e and Ki a
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Sil e ga e digi al a e e icing a ed a a g o p ha foc ed on he depo i and
ca h managemen need of he e c ome i hin c p o and g e f om he e
p ima il b o d of mo h and clien efe al In h ee ea ime he compan
ipled depo i all ca h depo i he compan doe n c od c p o e f om
million o billion The bank eal ime ca h pa men ne o k he
Sil e ga e E change Ne o k SEN al o con in e o ee imp e i ego h SEN
p o ide acce o nea l in an aneo USD an fe among he bank
g o ing digi al c enc ela ed clien ba e and no ee mo e han billion in
q a e l ol me p YY
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Speaking of bank do o emembe he De che Bank banke bi coin bag aga
Ha d o belie e i a onl fo mon h ago I kno Wha I emembe abo ha
eek a ho he banke bi coin bag image a emblema ic of he b oade conce n
of a o al collap e of he EU banking ec o led b De che I al o emembe call
fo E opean bank o b eak pa he Cliff of Dea h b Global Mac o p ndi and
Co Fo nde and CEO of DoomRealVi ion Rao l Pal
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Us all I d sa these proclamations in good faith are largel innocent People are
entitled to their o n opinions These are markets after all B t hen some directl
pro t from the fear of total nancial collapse promotional one time sale offers
s rro nding recession programming at Real Vision kicked into high gear directl after
the call and ha e as m ch reach and impact as Rao l I don t think it s o t of line to
q estion some of the intentions
For s in cr pto land it also led man ithin bitcoin circles to b into the fear hook
line and sinker Granted Bitcoiners ha e a er odd penchant for cheering for macro
meltdo ns b t still it s hard to effecti el DYOR Do Yo r O n Research hen
charlatans roam the lands nabated
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Back in Jul I wrote in this column that people were blowing the DB and European
bank narrative out of proportion warning not to fall for the Pomplovian response
and to ignore the meme
The fact of the matter is DB is a SS of a bank and it has been for over a decade Yet
latching onto the recenc bias of the last decade s nancial crisis mixed with DB
headlines and bitcoin bag photos as a sign of European banks crossing cliffs of
death is a false positive
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Look I ge i he Pomplo ian e pon e can be i e i ible a ime Who doe n ha e
bank B De che i n Lehman a he a of no i hi e c ing he
a of he m ol enc n ind
So ce Fac Se
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
O erstock Q Re ie Weak
earnings and SEC subpoena
sends shares tumbling
No ember
Quick Take
● Despi e lo ering g idance in Sep ember O ers ock s Q res l s came in less
han e pec ed as sales fell ear o er ear
● ZERO con in es o disappoin as rade ol mes remain lo and miles ones
ge dragged o
● Q ar erl lings re eal ha he compan recei ed a s bpoena from he SEC in
regards o he compan s digi al di idend
● The compan also q ie l anno nces i s plans for an ATM offering for p o
million or h of common s ock
Follo ing he idel p blici ed depar re of i s CEO and CFO O ers ock pos ed
disappoin ing Q res l s on all fron s The compan missed he S ree es ima es on
bo h he op and bo om line as re ail sales and progress on ZERO s sec ri oken
b ildo ere less han e pec ed The re eal of an ATM offering and a s bpoena from
he SEC added o shareholder fr s ra ion leading o a p llback in he s ock
T esda
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
99
Although the company cited a negative impact from “increased tariffs on goods
manufactured in China (similar to that of its main competitor Wayfair in its 3Q19
earnings call), sales was likely further adversely affected by the company s pullback
in marketing spend (a strategy that Overstock had implemented in April 2018 to
reduce operating losses).
As a result of the weak top-line performance, Overstock s net loss of 30.9 million
( 0.89 a share) came in much higher than the Street estimate of 22 million ( 0.62 a
share).
Since the launch of tZERO s security token platform in January, progress has come
much slower than originally anticipated. The only tokens that trade on its ATS include
its own two tokens TZROP and OSTKO, and trading volume is nearly non-existent
(TZROP averaging less than 7,000 of volume a day for the past month).
tZERO CEO, Saum Noursalehi, previously estimated that there would be five to 10
tokens available for trading by the end of the year. However, he has now dialed down
expectations to adding only three to five tokens to the platform either in 4Q19 or
1Q20.
The anticipated launch date for tZERO s national security token exchange, BSTX, was
also extended from 4Q19/1Q20 to now 1Q20/2Q20.
Hidden in a separate 8-K filing released this morning, Overstock quietly announced
its plans to sell up to 150 million in new shares via an ATM offering.
Given repeated sizable losses from both the retail business and the blockchain
business, cash has been a reoccurring issue for Overstock. The company just
completed a separate 150 million ATM offering, but a year-to-date net loss of 105
million has chewed through most of the proceeds.
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So ce O e ock
S b e af m he SEC
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
O C a K a
N embe
Q c Ta
● K aken i ne f he lde c c enc e change c f nded b Je e
P ell in
● The e change i he i h la ge em l e in he bl ckchain ind i h
a ima el em l ee K aken al ank a a f e change in i
de b k de h he li idi i ide and al aded l me
● The Bl ck ha ma ed ke membe f he K aken eam and hei
hi ical le a a m leading hei c en i i n
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
The Block has mapped o t ke members of the Kraken team and their historical
roles at past rms leading p to their c rrent position This is part of an ongoing
series e ploring and mapping o t the organi ations in the cr pto ind str
Jesse Po ell
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Da d R e
Da id Ri le i Chief O e a i g Of ce a K ake He j i ed he m i Oc be
P i j i i g K ake Ri le c f ded Glide a a bl ckchai c m a ha a
la e ac i ed b K ake Ri le a al P i ci al a The B C li gG
he e he ad i ed F e e ec i e a daP d c Ma age a S cl
Ka e Ng
Ma Ma
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
104
Nicholas Percoco
Steven C.
S e e C G ba Head f C a ce a K a e P gKa e A g
S e e ed a FIU Ma age a OFX S e e a he d e ec e e a he
c c e c c d de Xa a Ch ef C a ce Of ce a d he Ba f
he We a a V P BSA AML I e ga Ma age
Robert Zago a
R be Zag a Ch ef C e c a Of ce a K a e He ed K a e J e
Zag a ha he d e ec e e a CME G a d Ga aghe He a c f ded
a d e ed a Ch ef E ec e Of ce a F hF C g a ae he d
a age e c g
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
R Wa a abe
Ne M e
S e eH
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Ma B B c a a
R dH
B a d Ga
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
107
Shimon Lazarov
Kevin Beardsley
Maximilian Marenbach
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Dan Held
Dan Held is the Director of B siness De elopment at Kraken Held joined Kraken in
J l Prior to joining the compan Held orked as the Director of B siness
De elopment for Interchange Held has also had roles at Uber as Head of ASO and at
other blockchain rms hich incl de Changetip and Blockchain
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A look at Binance US gro th
and volume a er its rst
month in business
No embe
Quick Take
● Binance US ecen l comple ed i f ll mon h of ope a ion
● The Block anal e he e change ading ol me and g o h
● We fo nd ha e en a e make p o e of he e change ol me
● T ading ol me ha al o ecen l lo ed do n ince he end of he e change
e o fee ading campaign
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
The chart below shows Binance US volume since Oct
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CryptoCompare The Block
When looking at the historical trading volume distribution on Binance US we see that
bitcoin maintains a large share of trade interest on the exchange Since the beginning
of October bitcoin averages around of total trading volume on Binance US as we
see below
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CryptoCompare The Block
Of the three base pairs that Binance US supports USD is the most popular with a
55 share of total trading volume since Oct 1
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Trends
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
funding trends within
blockchain and cr pto
sub verticals
No ember
Quick Take
● Refre hed f nding rend ia da a from Pi chbook
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
YTD in 2019, the total USD value of venture investment (excluding deals 1.0 million,
Seed and All Series) into the sector has come in at 1.5 billion in 2019 (total number
of deals at 269), down 40 Y/Y (vs total number of deals down 60 ). These
numbers exclude Mike Cagney's, Figure, which raised 1 billion in debt financing early
in 2019 to fund blockchain-based HELOC loans. While the average deal size came in
at 26.2 million in 2018 vs. 11.1 million in 2019, the median for the two values is
significantly smaller (big-ticket deals skewing the average to the upside) at 10
million vs. 5.5 million, respectively; suggesting 2018 saw a larger concentration of
higher value "outlier" deals compared to this year.
Within Seed funding, the average size of the deal has actually slightly increased in
2019, from 2.3 million in 2018 to 2.5 million in 2019, due largely in part to a 60
reduction in deal count year-over-year.
Finally, M A has seen almost a 60 reduction in total value of deals in 2019, due to
muted M A in the year (Kraken Futues and Xapo leading the way at a combined 155
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
million worth of investment) as well as a pair of $400 million deals for exchanges
(Poloneix and Bitstamp) in 2018.
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce Pi chbook The Block
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
We ve listed the top 10 largest deals for both Seed rounds and All Series investments
below:
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Finally DCG continues to outpace total investments in the space in both 2019 and
2018 across both Seed and All Series investments Galaxy has made most non seed
investments this year at seven to DCG s four
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Crypto exchanges are
experiencing a traffic drop
since June
No embe
Quick Take
● The Block anal ed e change and hei mon hl af c in he la mon h
● Coinba e Binance Bi MEX and Bi h mb combined d e mo e han of he
o al n mbe of i i
● In Sep embe c p oc enc e change eco ded a o al of million
i i hich i le han in J ne
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
All the other e changes had less than million visitors Coinbase Binance BitMEX
and Bithumb combined dre more than of the total number of visits
What s far more interesting though is to look at the total eb traf c trend In
September hich is the latest month ith available data cr ptocurrenc e changes
recorded a total of million visits hich is less than in June
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source: SimilarWeb, The Block
This trend indicates that retail interest in cryptocurrencies is down on a global scale
after growing until June Perhaps not surprisingly, the traded volume on
cryptocurrency exchanges manifests a very similar trend
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So ce CoinGecko C oCom a e The Block
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Transaction fees are less than
of the total revenue in the
bitcoin mining industry
November 0
Quick Take
● In 0 miners have so far generated 0 billion billion from subsidy
and million from fees
● Gold production appears to be at least a 0 times larger than the Bitcoin
mining industry
● Despite reaching more than in December 0 the transaction fees were
on average only about of the total revenue in the last months
To put things in perspective Barrick Gold the largest gold mining company in the
world produced tonnes of gold in 0 and generated revenue of billion
The global gold mine production was reportedly tonnes in 0 meaning that
the total revenue generated from mining gold was likely upwards of 0 billion in
0 That would make gold production at least a 0 times larger industry than
Bitcoin mining
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CoinMarketCap Coin Metrics The Block
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CoinMarketCap Coin Metrics The Block
It s hard to project hat that ill mean in terms of USD since no one kno s the price
of BTC in the future If BTC prices ere to decrease or sta constant it can be
e pected that some less ef cient miners ould be pushed out of the industr and
the hash rate ould likel decrease The more ef cient miners ould all survive but
their pro t margins ould certainl be compressed Hut Mining announced last
eek that despite the BTC price dropping b and the net ork dif cult rate
increasing b the compan reported a pro t margin of
If prices ere to increase the hash rate could either sta at similar levels or increase
depending on multiple different factors
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source New Money Review The Block
In the long run though as subsidy continues halving every four years the revenue
from transaction fees will eventually have to replace the subsidy Sometimes in 0
more than of the total BTC supply will be in circulation and the block subsidy
will drop to 0 BTC
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source CoinMarketCap Coin Metrics The Block
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
1
Quick Take
● Among the e changes etted b Bit ise trade olumes are do n
considerabl since June
● As trade acti it has been trended lo er o er the past fe months olumes
ha e been notabl eaker bet een a m and a m UTC a m to p m in
China
● More Asia focused e changes as ell as Bitme ha e e perienced similar
declines during those hours
E change trade olumes remain suppressed from this ear s highs in June and b
looking at the hourl trade olumes the data ould suggest a fall off in interest from
Asian in estors O er the past fe months there has been a notable pull back in
acti it during the orking hours in Asia a m and a m UTC
We took the aggregate monthl trade olume of the etted e changes b Bit ise
and categori ed it b the time of da As sho n belo the most acti e trading hours
ha e generall been bet een p m to p m UTC coinciding ith the orking hours
for those in Europe and U S East
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
So rce Cr p oCompare Paradigm API The Block
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
A a f c ed e c a ge
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
potential e planation could be that Asian investors are getting their cr ptocurrenc
e posure through other methods besides spot e changes derivatives OTC etc
Bitmex
Self reported trade volumes on Bitme as sho n belo also sho a similar pattern
Activit is most notable during the orking hours for those in Europe and U S East
When comparing volume relative to the most active part of the da the data sho s
that relative performance falls off more signi cantl during the orking hours in Asia
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Spot Market Trends Binance s
dominance on the rise while
Bit nex continues to
underperform
No ember
Quick Take
● Among the Bit ise Real e changes Binance s market share has increased
from in J l to this month likel ca sed b increased traf c from its
ne prod ct la nches margin trading f t res lending Y an to cr pto OTC
trading etc
● Altho gh Bit ne has sho n short b rsts of o tperformance d ring periods of
large BTC price s ings its market share has declined from at the start of
the ear to mid single digits
● Polonie e perienced a b mp in market share in No ember thanks to spot
trading fees a promotion that ill last till the end of the ear
While e change trading ol mes contin e to disappoint relati e to the ele ated le els
e e perienced in J ne the market share amongst the e changes is constantl
shifting Within the past fe months reported ol mes sho that the ind str is
becoming less fragmented as Binance s dominance becomes more pre alent
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source: CryptoCompare, The Block
By plotting out Binance s daily market share , we can see its allocation increase
since July with its market share 15 day moving average approaching 70
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source Cr ptoCompare Paradigm API The Block
In the chart below we have taken the aggregate trading volume of the Bitwise
e changes and categori ed them b the time of da
Each e change s market share uctuates throughout the da based on its user base s
active time one Relative to other parts of the da Binance has t picall been most
dominant during Asia s active time one a m to a m UTC
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Despite Binance blocking U S c stomers from trading in September Binance has
appeared to ha e increased its market share across all time ones hen compared to
J l s aggregate trading ol mes as sho n belo
The timing of Binance s impro ed market share coincides ith the e change s
e panded prod ct offerings s ch as the la nch of its margin trading la nched J l
lending A g st f t res September and Y an to cr pto OTC trading
platforms September
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source Multicoin Capital
Although many of these products don t impact Binance s spot trading volumes
directly the culmination of these products onto one location has likely strengthened
the exchange s network effects
Bi e i i c i e de e i a e
After starting the year with around 18 market share Bitfinex has since seen its
position quickly dissipate to mid single digits
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Source Cr ptoCompare Paradigm API The Block
While its market share held relativel stead between Ma and August Bit ne has
e perienced a notable drop off within the past few months
In conversations with The Block Paolo Ardoino CTO of Bit ne suggested that
Bit ne tended to underperform relative to its peers during periods of low activit
When the market is slow we do reall low volumes But as soon as there is a price
spike our volume is higher than almost an e change said Ardoino
As shown from the scatter plot above Bit ne has had small bursts of
outperformance when there has been a large shift in Bitcoin prices
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
● On October Bitcoin s price jumped Bit ne obtained market share
that da Bit ne s elevated trading volume persisted the ne t da before
falling back down to around
Polonie has hovered around market share for most of the ear Since its
announced spin out from Circle last month Polonie has temporaril reduced its
spot trading fees to as part of a promotion to increase traf c As a result
Polonie has had its market share increase to nearl although it s uncertain how
sustainable this will be once the promotion ends on December
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
1 0
Quick Take
● C m nd la e al a i n ld be ab d if he did n ha e a iable a h
m ne i a i n
● The PLA ie MMORPG
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Compound, the decentralized finance (DeFi) lending protocol, just raised a staggering
25 million Series A led by Andreessen Horowitz, with participation from Bain Capital
Ventures, Polychain Capital, Paradigm, and others.
Leshner said Compound has yet to figure out a viable business model. However, the
handsome Series A funding will sustain the company before it achieves significant
market share.
"In some ways, I think of us similar to Google, which is nobody asks Google what its
business model is because it developed [the business model] after it achieved
significant market share," said Leshner.
Stepping back for a second: take a company like WeWork. WeWork feels like a
disaster but could, in theory, become profitable if it manages to charge more for
desk rentals than it spends on long-term lease payments. Take a company like Tesla,
which feels like a passion project that got slightly out of hand but, in some
multiverse, can produce enough cars to sell for enough cash to cover the
flamethrower R D budget. But then we have Compound, which just raised 25m at a
rumoured 90m valuation. Not only has Compound not generated any revenue, they
don t even have a business model. Some analysts have pronounced the valuation as
‘absurd and, on first look, it feels like they might be onto something?
Open Finance projects, of which Compound is one, have two fundamental, orthogonal
obstacles to overcome before constructing a path to monetization. The first is
defensibility. As open-source systems, Open Finance protocols are exposed to
‘forking risk : the introduction of explicit user fees may perhaps be perceived as
‘rent-seeking , frustrating those initially attracted to this parallel financial system due
to its emphasis on disintermediation. Forking is not exactly free — repos must be
maintained and liquidity itself cannot be duplicated via GitHub — but it is not outside
of the realm of possibility. Given enough goodwill and technical merit, a forked
protocol can feasibly usurp the master platform: although not by definition a fork,
Uniswap has certainly succeeded in bypassing Bancor as the go-to Automated Market
Maker exchange. The reality is that justifying value capture becomes increasingly
difficult as you collapse mediated marketplaces into peer-to-peer networks.
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
The econd mo e h ea ening ob acle i eg la o i k The e al e o o i ion
of O en Finance lie in eg la o a bi age a o e I ha e e io l de c ibed
a e mi ionle o i migh eem i e ob io ha he e eg la o ha a e
being a bi aged ill no ake a ic la l kindl o he mone i a ion of ch e ice
Mo e eci call one migh a g e ha b no manda ing ha e a h o gh
Kno Yo C ome KYC oced e O en Finance la fo m a e iola ing bo h he
Banking Sec ec Ac and he Pa io Ac The e la fo m migh be able o a oid
com liance nde he g i e of innocen l o iding o en o ce ool b hi line of
a g men become inc ea ingl im once he a di ec ing mone i ing
e don mo nancial ac i i
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
upgrade po ers and centrali ed control o er the s stem s oracle one could
con incingl argue that this third part no longer e ists
The approach itself is certainl important I ha e pre iousl ritten that distribution
strategies can make or break a protocol at the outset but is also just an
implementation detail The focus more broadl should be on making this path to
moneti ation more publicl ob ious and encouraging prospecti e entrepreneurs to
embrace e plicit fees the industr cannot gro in a sustainable fashion ithout
them
Mili a game
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
The Chinese militar sho ld se blockchain technolog to impro e operations and
re ard soldiers in tokens according to the co ntr s of cial arm ne spaper PLA
Dail
In an op ed p blished last eek PLA People s Liberation Arm Dail said that
blockchain co ld be sed to store militar personnel data s ch as basic information
career path and missions ndertaken Some of this data can then be sed to re ard
soldiers for performance assessments according to the ne spaper
I ll be candid for a second real orld XP on the blockchain for the Chinese militar
as not in m list of predictions for B t as a pre io sl a id ideo game pla er
I do no ha e an imp lsi e rge to enroll in the PLA so I g ess ell pla ed Xi
Jinping
PLA Dail also s ggested e ploring other se cases of blockchain in the militar
incl ding storing militar secrets
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Eco em Map
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
14
Quick Take
● Binance Labs is the venture arm of cryptocurrency exchange Binance
● The rm has made investments in over cryptocurrency and blockchain
startups
In mid Binance announced the launch of Binance Labs a venture arm aimed at
incubating and investing in various blockchain and cryptocurrency projects
Binance Labs has a two fold strategy making direct investments in working projects
and incubating early stage startups through a week on site program
For its incubator program Binance Labs team of investor provide its startups with
seed investments mentorships with experienced entrepreneurs in the space and
connections with its network of industry leaders
As Binance Labs enters the third season of its incubation program The Block has
mapped out the rm s portfolio of startups
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Bac Of ce
Dec e i a c c e c acc i g i
Pa h i a c c e c f i acke a d a i
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Content
Pi i ac c e c e a di f ma i ide
C e i ac e ec em e a di g c e c ea a dc me
C stod
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he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
1
Data
Akio Labs provides a platform to collect and anal ing blockchain data
Dune Anal tics is an anal tics platform for quer ing and visuali ing data from the
Etheruem blockchain
DeFi
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he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
F a c a Se ce
Ga g
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
I f a c e
O he
The NFT Compan enables users to create recei e and send non fungible tokens
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he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Raise is a platform for issuing and managing security tokens
Pri ac
Sec ri
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T ading
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Mapping out the most active
crypto funds investments
November
Quick Take
● Mapping out investments made in across the most active investors in
cr pto and blockchain according to Pitchbook
Using Pitchbook e mapped out the investments made b the most active funds in
Seed Earl Stage Late to see if there is a speci c sector funds are allocating
more into than others The top active funds and their investments in are
depicted belo
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
B ea d b ec
Interestingl ever fund outside of Galax Digital invested in either regional
exchanges South America Europe Middle East or trading services which made up
the largest mix at a majorit of the most active investors in Outside of trading
services exchanges investments into wallets and open nance on ramps and game
studios leveraging blockchain were the next most popular categories in across
the most active funds
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
NGC Ven re
NGC Ventures is a VC focused on investing in blockchain industr and is based in
Singapore
CoinFLEX is cr pto e change that also has ph sicall delivered cr pto futures
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Cere Ne ork is a blockchain based CRM ecos s em
Marlin Pro ocol is an in eroperabili sol ion be een chains ha aims o increase
cross chain hro ghp impro emen s
DI CLAIME
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
C inba e Ven e
Coinbase Ven res is an in es men arm of Coinbase ha in es s in earl s age
cr p oc rrenc and blockchain s ar ps i h a il o ards open nance sol ions
and is based in San Francisco
Linen App is an on ramp in o cr p o lending ser ices and has plans o offer o her
n ech prod c s
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
BlockFi offers cr pto backed loans and cr pto wealth management solutions
Bitski is a digital wallet software solutions that plugs into other apps
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Digi a C e c G
Digital Currenc Group is an investment rm focused on the cr pto and blockchain
industr and is the most proli c investor in the space with a portfolio of
companies
Digital Assets Data offers a platform that enables enterprise grade cr pto anal tics
and data feeds
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Qoha h offer en erpri e grade da a ec ri ol ion
Merkle Science pro ide a ri k moni oring ol ion o help blockchain companie and
la enforcemen de ec and pre en illegal e of cr p oc rrenc
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Fe b hi Ca i a
Fenb shi Capital is the rst and most acti e blockchain foc sed ent re capital rm
in Asia Fo nded in Shanghai in the f nd has made o er in estments to date
Verad is a cr pto acco nting ta and a dit ser ice pro ider
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
BlockApps is an enterprise grade blockchain as a service provider
The Block is a research and media compan speciali ing on cr pto and blockchain
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Ga a Digi a Ve e
Gala Digital manages a di erse portfolio of earl stage in estments primaril
centered aro nd blockchain infrastr ct re c stod e changes ecos stems and
b siness to b siness B B soft are sol tions In addition to f nding in estments
thro gh its Principal In estments team it also manages a million ent re f nd
that seeks to directl in est in emerging projects and opport nities s pported b the
EOS blockchain
BlockFi offers cr pto backed loans and cr pto ealth management sol tions
Spring Labs is de eloping sol tions that ses an attestation based approach
red cing the risk and se erit of data breaches for nancial instit tions and
cons mers
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Imm able is a blockchain based game de eloper crea ors of Gods Unchained
Digi al Asse s Da a offers a pla form ha enables en erprise grade cr p o anal ics
and da a feeds
Ripple is a ech compan ha de elops a pa men pro ocol ili ing XRP
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
P l chai Ca i al
Pol chain Capital is a hedge f nd based in the San Fransisco Ba Area foc sed on
blockchain assets
Linen App is an on ramp into cr pto lending ser ices and has plans to offer other
ntech prod cts
CoinFLEX is a cr pto e change that also has ph sicall deli ered cr pto f t res
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Fold is a bitcoin rewards e commerce app
CMT Digital
CMT Digital a division of the CMT Group is focused on crypto asset trading
blockchain technology investments and legal policy engagement in the crypto asset
blockchain technology industry To date CMT Digital s investments have largely
focused on infrastructure
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Seed CX i an in i ional pla form for rading digi al a e
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Robo Ven re
Robot Ventures is a pre seed investor in ntech cr pto companies led b Robert
Leshner at Compound Finance
Bitski is a digital allet soft are solutions that plugs into other apps
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Compo nd is an open so rce protocol b ilt for de elopers Interest and borro ing
for the open nance ecos stem
M ltis is cr pto allet for open nance lending and ielding ser ices
D ag Ca i al Pa e
Dragon Capital Partners is a cr ptoasset ent re f nd based in San Francisco and
Beijing
CoinFLEX is cr pto e change that also has ph sicall deli ered cr pto f t res
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Anchorage offers cr pto custod solutions
The follo ing funding and M A data into Blockchain Cr ptocurrenc industr
verticals comes from Pitchbook
Note Pitchbook includes man broader companies ith non core business lines or
strategies that involve blockchain or cr pto businesses ithin its peer group some
of hich include traditional soft are IT services and c ber securit companies The
data as cleaned and improperl classi ed companies dollar transactions ere
removed ithin the top ro s sorted b capital raised It s important to note
there ma still be some inconsistencies be ond these values e report
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Ma C C d
No ember
Q c Ta e
● This is ersion o of The Block s cr p oc rrenc c s od map
● The Block has mapped o c s od ser ice pro iders spli be een
ins i ions and cons mers
● Of he ins i ional onl c s od pro iders e iden i ed ere fo nded
be een and
Cr p oc rrencies are essen iall digi al bearer bonds O nership of hese asse s
herefore are in rinsicall linked o he possession of i s pri a e ke s D e o his
niq e s r c re being able o properl safeg ard a cr p oc rrenc s pri a e ke s is
especiall cri ical o he s ccess of a cr p o c s odian
Coinbase anno nced i s c s od ser ice in and has since gro n o manage o er
billion in asse s hanks o i s acq isi ion of Xapo s ins i ional b siness
Gemini also la nched i s c s od ser ice in mid Along i h hese s ar ps e
also sa legac rms like Fideli and he In erna ional Con inen al E change
la nching cr p o c s od effor s in prepara ion for a po en ial f re in o of
ins i ional mone
In addi ion o hese ne l la nched ins i ional foc sed ser ices e also sa ne
ser ices for he a erage cons mer S ar ps like Casa and Argen began o offer
c s odial ser ices i h a foc s on ser friendliness
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
In this updated piece, we will map out the current state of crypto custody solutions.
Institutions
Aegis Custody founded 2018 is a San Francisco firm offering cryptocurrency custody
solutions with a focus on self custody.
DISCLAIMER
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ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Anch age f nded i a San F anci c a e cha e ed c m an ffe ing
ali ed c d l i n
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Fi eBlock fo nded i a Ne Yo k m p o iding c p oc enc c od
e ice in addi ion o offe ing hi e labeled c od echnolog ol ion
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
S iss Cr pto Va lt fo nded is a s bsidiar of Bitcoin S isse a cr ptoc rrenc
ser ices pro ider that offers ser ices incl ding trading lending and c stod
Cons mers
Armor fo nded is a ser ice for sers to create their o n cold storage allet
for bitcoin
Blockchain fo nded is a London cr ptoc rrenc ser ices pro ider that offers a
s ite of sol tions incl ding c stod The rm offers a mobile cr ptoc rrenc allet
for cons mers
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Ca a fo nded i a Ne Yo k Bi coin e ice o ide The m offe f ll node
ha d a e de ice in addi ion o c od e ice
DI CLAIME
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
179
Quick Take
● H obi Global the Singapore based cr ptoc rrenc e change as fo nded in
b Leon Li
● Across all of H obi s b siness lines the compan c rrentl emplo s the
second most indi id als in the entire blockchain ind str at appro imatel
people b o r estimates
● The Block has mapped o t the ke members of H obi Global s team across
man of their different b siness lines and their historical roles at past rms
leading p to their c rrent position
Some of these b siness lines incl de H obi Global the compan s spot trading
platform H obi Research a research arm that is committed to ad ancing the
ecos stem thro gh research and de elopment H obi DM a deri ati es trading
platform for cr pto assets To e en H obi Capital an in estment arm that has
in ested in o er different blockchain projects across se en co ntries
The Block has mapped o t the ke members of H obi Global s team across man of
their different b siness lines and their historical roles at past rms leading p to
their c rrent position This o er ie is part of an ongoing series e ploring and
mapping o t the organi ations in the cr pto ind str
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
H b G Se Ma a e e
Le L
Leon Li is the founder and Chief Executive Officer at Huobi Group Before founding
Huobi Group in 01 Li was a computer engineer at Oracle
R b Z
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
R bi Zh i Chief O e a i g Of ce a H bi G Bef e j i i g H bi G ba i
Se e be Zh ked f O ac e a d Ca ge i i C i g
Ma Che g
Ch i Lee
Si W
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
Cia a S
Li i g F
Elai e S
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en
H b G ba Se Ma a e e
L We
Li i We g i Chief E ec i e Of ce a H bi G ba P i i i gH bi i A g
We g he d a Se i Ma age e i i i h he a cia e di g af
Jiedaiba We g a a a P d c Di ec a S h I ca df ded he c a
SXBBM a cia e i ga f c ege de
M Da a
DISCLAIMER
Thi e ha been e a ed lel f inf ma i e e and h ld n be he ba i f making in e men deci i n be c n ed a a
ec mmenda i n engage in in e men an ac i n be aken gge an in e men a eg in e ec f an nancial in men he i e
he e f The Bl ck ill n be liable ha e e f an di ec c n e en ial l a i ing f m he e f hi blica i n c mm nica i n i c n en