Arbitrum Votes on $215M Gaming Fund

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Good Morning.

It’s the start of a new week and supposedly we should be hearing more details about the upcoming L0 and Berachain token launch sometime this week. Perhaps, that can help the market break from the sideways lul.

In Today's Email:

• What Matters: Arbitrum’s $215M gaming fund 🎮️ 

• Product: Friendchain ⛓️ 

• Charts: IBIT’s 300K BTC, DePINs $10M+ revenue 📈 

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WHAT MATTERS

Arbitrum’s $215M Gaming Ecosystem Fund

State of play: The Arbitrum Foundation will distribute 225M ARB tokens (~$215M) over three years to support gaming projects through its Gaming Catalyst Program (GCP) following the approval of the proposal last Friday.

• GCP is designed to “immediately expand awareness and adoption of Arbitrum/Orbit/Stylus by builders and players in the Gaming community.”

• The proposal passed with over 75% of votes in support.

• L2Beat, Wintermute, and Treasure DAO supported the proposal, while Blockworks Research and Camelot DAO voted against it.

• Treasure DAO stated that “Arbitrum is the home of gaming.”

• Much of the fund is earmarked for publishers, with new and early-stage developers eligible for grants up to 500,000 ARB (~$483,000).

• Established developers must seek investments with a value share component through tokens, equity, or similar means.

• The remaining funds will go to infrastructure-related bounties and operational expenses.

What’s next: Day-to-day operations will be managed by a dedicated GCP team, overseen by a council of five individuals with gaming, venture, analytics, or DAO governance expertise.

• The GCP team's budget cap is $25M, with any excess requiring DAO approval.

Our take: Criticisms have emerged because of the way the funds will be distributed. We’ve seen mismanagement of funds in other ecosystem funds before whereby accountability system was not established properly.

For builders and investors: Remember to capitalize on the incentive programs that chains and foundations implement because if you don’t your competitors will.

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PRODUCT OF THE WEEK

FriendTech’s New Blockchain: Friendchain

Web3 social network FriendTech plans to end its partnership with Coinbase's L2 network, Base, and migrate to a new blockchain called Friendchain, developed with Conduit.

• The network will use FriendTech's native token as a "fully transferable gas token."

• No specific timeline for the migration was given, but updates will be provided "over the coming months" as development progresses.

• The move isn't a surprise given FriendTech co-founder Racer's recent hints about wanting to leave Base.

Other cool products:

• Tori, a simple self-custodial crypto wallet.

• arkreen, a Net zero DeEnergy data network.

• Deswap, a functional NFT-creating platform.

• GemSniper, an autopilot crypto research tool.

• bagel agents, an AI agents team for crypto marketing.

CHARTS OF THE WEEK

BlackRock's IBIT Exceeds 300,000 BTC in AUM

State of play: BlackRock's IBIT spot Bitcoin ETF surpassed 300,000 BTC in assets under management, reaching 302,534 BTC (~$21B) just five months after trading started on January 11.

• According to Coinglass, IBIT gained about 7,300 BTC in net inflows on Thursday and Friday last week.

• Last week, IBIT surpassed Grayscale’s GBTC in AUM.

• Currently, GBTC holds 285,105 BTC.

• US spot Bitcoin ETFs hit a record 18-day net inflow streak, adding $217.7M on Thursday and nearly $1.7B over the week.

• US spot bitcoin ETFs now hold nearly 883,000 BTC ($63B), representing 4.2% of Bitcoin’s total 21M supply.

Our take: In the first 6 months BTC ETFs see $14B+ in inflows, which took gold more than 10 years to achieve. The flows will continue.

Top Six DePINs Surpass $10M Revenue

State of play: The top six DePINs—Flux, Braintrust, Helium, Glow, Render, and Storj—are generating over $10M in combined annualized on-chain revenues, with a median market cap multiple of about 100x.

• Generally, DePINs trade at market caps ranging from 100-250x their annualized on-chain revenues, with standout networks like Arweave, Pokt, and Livepeer exceeding 1000x.

• The coverage ratio, which measures on-chain revenues against new token issuance, is typically under 1%.

• These networks are supported by 1M+ active reward-earning nodes, using both dedicated hardware and smartphones for mining.

Our take: DePIN projects solve a cold start network problem but needs to solve the demand side problems; we’ll see newer project learning from the OGs like Helium and come up with new mechanisms.

QUICK BITES

• Loopring suffers $5M hack.

• South Korea to treat certain NFTs as regular crypto.

• IOnet CEO steps down from role before token launch.

• Orbit Chain exploiter moves $48M through Tornado Cash.

• HSBC China rolls out e-CNY services for corporate clients.

• COPA seeks payment of 85% of costs in Craig Wright's case.

• Base TVL surges to $8B just days after overtaking OP Mainnet.

• Arbitrum DAO votes to approve $215M gaming ecosystem fund.

• Binance reaches 200M users with $100B in assets under custody.

• NYAG pushes back against DCG & Silbert’s motion to dismiss case.

• Iggy Azalea says MOTHER tokens can soon be used to buy phones.

NOTEWORTHY READS & MEME

• Viktor’s read on ALT/BTC underperformance.

• Zee Prime Capital’s read on abstractions in crypto.

• Eugene Ng’s read on the summary of this cycle so far.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.