Ethereum's $6 Trillion, SocGen/Maker, US Banks and Weekly News!

We start this week with settlement value on Ethereum. 

At the end of Q3, Ethereum settled US$6.2 trillion in transactions over the prior 12 months.😮

That’s a jump of more than 350% year-over-year and more than 20x the value of what was settled in 2019:

Readers of this newsletter know that we are fond of referring to Ethereum as a global settlement layer for any digital asset. This data, again, puts that thesis firmly into context.

And speaking of assets on Ethereum…

Société Générale, the French multinational bank with $1.8 trillion in assets, had some big news this week: it is tokenizing loans on Ethereum and using them as collateral in decentralized finance - a giant step forward towards institutional adoption of DeFi.

But that’s not all.

SocGen plans to take the tokenized loans and deposit them into the Maker smart contract on Ethereum so they can serve as collateral for US dollar borrowing on Ethereum.

Say what?🤔 

Simply put, SocGen is using an Ethereum smart contract as a bank.

Assets go in (in this case, AAA-rated loans backed by real estate) and US dollars come out.

The difference is that Maker is a decentralized smart contract, not an actual bank. And SocGen isn’t getting actual US dollars - it’s getting DAI stablecoins, which are tokens on Ethereum that are pegged to the US dollar.

Are you still with us?🤓

The transaction and structure itself is quite complex, but let’s not get caught in the weeds… the key takeaway in our view is that we’re witnessing two major trends that will reshape finance:

SocGen and Maker tick both boxes. It’s just another reason we are excited to be investors in Maker (see here for our MKR thesis).

Two headlines this week show burgeoning interest from US financial institutions in digital assets.

First, Bank of America launched research coverage of the space, citing “growing institutional interest” and a “massive appetite among retail clients.”

Second, US Bank announced the launch of a cryptocurrency custody service to fund managers saying that it’s “getting very serious about the potential of cryptocurrency as a diversified asset class.”

The trend continues!

We were quoted in the following articles this week:

Check them out and let us know if you have any questions or comments!

 NFT sales continue to be robust, recently hitting new highs of US$10 billion in Q3. This is more than 8x the sales volumes in Q2.

Soros Fund Management, the family office established by billionaire George Soros, owns some crypto and is interested by use cases like DeFi.

Crypto fundings in Q3 were US$8 billion, up 22% from Q2. So far this year, funding of US$17 billion is more than the prior six years combined.

One of the five Commissioners of the SEC says lack of clarity for the crypto industry has hindered development around innovation and safety.

As always, feel free to contact us at info@ethcap.co with any comments or questions or just to say hello.

Thanks for reading - until next week!

Ether Capital (NEO:ETHC) is an Ethereum ecosystem investor based in Toronto, Canada. Ether Capital selectively invests in projects, protocols and businesses that leverage the Ethereum ecosystem and Web 3 technologies. For more information, visit www.ethcap.co.