May 23, 2020
The Week In Crypto In Five Graphs 5/23/20
There’s something happening here, what it is …
The march to mainstream adoption of crypto is accelerating across the world. Below are five of the highlights from last week:
1. The Flippenning — Tether Passes Ripple In Market Cap As Stablecoins Continue To Kill It
Tether’s market cap has increased 114%, year-to-date, surpassing Ripple’s market cap last week. Ripple’s market cap is up only 5% this year. We expect Tether to continue to grow its market cap as stablecoins increasingly benefit from the flight to dollars and other benefits uniquely to stablecoins.
The stablecoin ecosystem’s other major event last week was the release of the Rai whitepaper
The paper introduces a framework for “reflex bonds”, a new asset type who’s purpose is to dampen the volatility of its collateral (e.g. Eth). The paper was co-authored by Stefan Ionescu and Ameen Solemani.
IMHO, Ameen is the most under-appreciated person in crypto. Ameen learned to code so he could build Spankchain and provide financial sovereignty for people in the porn industry who struggle to get access to traditional banking services. Ameen than started MolochDAO, a minimum viable DAO that introduced “rage quitting” to the world of Ethereum grants. Vitalik, Joe Lubin, and others, appreciated the innovation and helped MolochDAO become the most well capitalized DAO. MetaCartel was started by Ameen and Peter Pan to engage a broader community than Moloch with it’s 100 Eth minimum.
Ameen’s latest, and most ambitious project to date, is Rai, which took the Multi-Collateral DAI protocol, and made “…only the simplest changes to the original MCD codebase in order to achieve our implementation”. We’re excited to have Rai’s Stefan Ionescu as a featured speaker on “Stablecoins Are Killing It” Episode #4, Thursday, May 28th, from pm-2pm. You can register for the Zoom show here.
2. Bitcoin’s Third Halving: A Thesis for Institutional Investment
Messari, Jack Purdy & Ryan Watkins, May 2020
This terrific 26 page report makes a compelling case for Bitcoin across multiple vectors, highlighting the asymmetric opportunity (63.5X upside) if Bitcoin can attain the same market cap ($10.8 billion) as gold has today.
The report acknowledges that other inflation hedge assets like gold and silver have thousands of year track records successfully maintaining purchasing power. But the report makes the case that Bitcoin’s sovereignty, its secular tailwinds, and its upside, differentiate it from other politically neutral, scarce monetary stores of value.
3. Andressen Horowitz — The Crypto Price-Innovation Cycle
In a recent blog post following the announcement of their second ($515 million) crypto fund, A16Z partner Chris Dixon wrote that “A key feature of crypto cycles is that each one plants seeds which later grow and drive the next cycle… Ethereum was created in the 2013 cycle, for example, and that became the foundation for the ICOs that drove the next cycle in 2017….The 2017 cycle spawned dozens of exciting projects in a wide range of areas including payments, finance, games, infrastructure, and web apps. Many of these projects are launching in the near future, possibly driving a fourth crypto cycle.”
4. CoinMarketCap Dominates Web Traffic Of Retail Data Providers
The Block, The State of the Digital Asset Data and Infrastructure Landscape,
CoinMarketCap saw 207.2 million visits from October 2019 to March 2020, nearly three times more than the next six competitors combined.
Binance’s recent acquisition of CoinMarketCap for $400 million was the first major acquisition of a digital asset data provider, and in-line with the price of the two other largest deals in the history of crypto, Poloniex ($400 million paid by Circle in 2018) and Bitstamp (estimated at $400 million for 80% paid by a Belgian private equity firm in a deal reached in December, 2017).
5. DAO: A Decentralized Governance Layer For The Internet Of Value
George Samman & David Freuden, May 2020
This report is an awesome 49 page deep dive in to the DAO ecosystem. It provides an overview of the major current projects, while addressing the many misconceptions around what DAOs are and their purpose. It’s the bible for the DAO ecosystem today.
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