Traders Bullish on ETH 💰 + Former Fed Economist Goes DeFi 🚀

Hype is building around the upcoming Merge and we couldn’t be more excited for Ethereum’s full transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). 🥳

We became the first public company in the world 🌎 to stake a significant portion of our portfolio (20,603 ETH) and generate an attractive yield 💰 of ~5%. You can check out our 2021 annual results that we released on Thursday for a full financial breakdown.

But staking rewards aren’t the only thing that has captured our attention 👀 Ethereum developers 🧱 successfully tested the upcoming merge that we’re told is months 🗓️ away. Some are even speculating it will take place in June. 😮

This will be a turning point for the entire industry. As a result of the Merge, mining ⛏️ 🔋 on Ethereum will become obsolete and network activity will be verified by those who stake their assets — a 99% more energy-efficient 🌎 form of validation. ✅

There’s roughly 10 million ETH currently deposited into the PoS contract, which represents approx. 8.3% of ETH in circulation. The amount staked has grown by 20% in the last 90 days and 10% in the past 30 days alone, according to blockchain analytics firm IntoTheBlock. 📈

Traders taking note 📝

Some traders and analysts are betting big on ether post-merge and estimate the yield generated from staking could be in the 10-15% range 🔮. It could also pave the way for more institutional adoption 🏛️ as it no longer poses a threat to company ESG mandates.

Another important factor: ETH issuance is expected to drop significantly (~90%) post-merge. Some say this will lead to ether becoming a deflationary asset and store of value, similar to bitcoin.

Our take 💡

Staking has been a fundamental part of our roadmap since inception, so it’s exciting to see the Merge is just around the corner. Ethereum is the leading smart contract platform 🏆 and activity will only continue to ramp up when it fully transitions to PoS. 💪

Investors are starting to ask questions about what yield generation will look like post-merge. Stay tuned because we’ll have more to say on that subject in an upcoming newsletter! 💡

OK, the cat’s out of the bag. 😼 The grass is greener on the crypto side. 🐇 🕳️

By now, I’m sure you’ve seen the parade of developers, business executives and various other professionals jump ship from traditional finance and Big Tech for opportunities in Web3. 🚀

This is why we’re so excited to tee up our discussion with Gordon Liao, Head of Research at Uniswap — a leading DeFi crypto trading protocol.

Prior to joining the world of DeFi, Gordon was a senior economist for the United States Federal Reserve 🏛️ where he co-authored the report on stablecoins that was released earlier this year.

Gordon says during his time at the 🇺🇸 U.S. central bank, he was amazed to learn how much of the world economy relies on so few intermediaries. There are currently 24 primary dealers that handle all U.S. Treasury auctions, eight American global systemically important banks (G-SIBs) that provide most of the dollar-based liquidity to the 🌎 world, and only one bank (BNY) that settles all tri-party repos. 🏦

Risk associated with the concentration of power is too high where there are single points of failure that could have a detrimental impact on the world economy. His argument — that we fully agree with BTW — is that DeFi is transparent and anyone can audit 👨‍💻 not just smart contract code, but the entire history of transactions. This level of transparency fosters innovation and reduces risks in the long run. 💡

Next week, we’ll share our conversation with Gordon about his career 180 and what it will take for traditional finance to embrace open-source blockchains. Be sure to keep an eye out for it! 📺

Every great story revolves around a strong character, someone readers can identify with. We were recently quoted in a CNBC article about a 20-year-old Ukrainian refugee who fled to 🇵🇱 Poland with only US$2,000 worth of bitcoin. This is a real-world example of how commercial banking systems 🏦 can be very inefficient during times of crisis. ⏳

As Brian Mosoff, CEO of Ether Capital, explains: “That’s a very powerful thing for a group of people who don’t have financial stability, or political stability right now. To be able to hold their net worth in some type of asset or product that essentially can be stored in a password.”

TIME Tell-All 🎤

Vitalik Buterin, co-founder of Ethereum, shares his hopes and fears about the world he created in an 80-minute sit down interview with TIME magazine. The feature touches on the falling out with other Ethereum co-founders and Vitalik’s goal to be “more risk-taking and less neutral” when it comes to social and political issues.

Milestone OTC Trade 🏦

Goldman Sachs made history earlier this week as the first major U.S. bank to conduct an OTC (over-the-counter) crypto transaction in the form of a bitcoin non-deliverable option (NDO). This move is seen as a notable step in the development of crypto markets for institutional investors.

Haun Ventures 💰

Crypto investor Katie Haun raised US$1.5 billion for her new firm, Haun Ventures, following her departure from Andreessen Horowitz (a16z) last year. Her new firm will be divided up into two segments: US$500 million for early-stage companies and protocols, and US$1 billion for “acceleration,” or later-stage projects.

Going Ape 🐒

To say deals happen fast in the crypto industry would be an understatement. Yuga Labs, the creator behind Bored Ape Yacht Club, introduce the “ApeCoin” last week that already secured US$450 million in a funding round led by a16z.

The industry is quickly evolving and there’s a lot of information to keep up with. That’s why we want to help! 🦸

Email us your questions and we’ll respond to as many as we can. While we can’t provide investment advice, we do want to steer you in the right direction so you can be informed.

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