Crypto Funding Hits New Lows
StarkWare Token Unlock | VC Funding Environment
Marco Manoppo & Karon Pangestu
October 04, 2023
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Good Morning,
The market remains flat while SBF trial begins. So far, nothing exciting in particular other than a few *checks notes* memos about SBF and Caroline relationship. I need to touch some grass after reading that.
One thing has been confirmed though. The US government never offered any plea deals to SBF. At least we have that going on.
In Today's Email:
What Matters: StarkWare delays token unlock 🔐
Case Study: Crypto funding environment 💰
Governance & Features: Espresso testnet ☕
Narratives: ETH ETFs trading volume is meh. As a result, the market has given back its small rally. Pay attention and wait.
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WHAT MATTERS
StarkWare Postpones Token Unlocks
State of play: StarkWare has postponed its first token unlock by over five months to April 15, 2024.
StarkWare spokesperson stated that they are focusing on building the technology and extending the lockup period is needed.
The first unlock of tokens is designated for StarkWare's core contributors, early supporters, and employees.
STRK launched on Ethereum in November 2022 with a four-year lock for shareholders, employees, and developers, initially set to start releasing in November 2023.
STRK will be used for paying transaction fees, governance, and staking on the StarkNet network.
After securing $100M in Series D funding co-led by Greenoaks Capital and Coatue in May 2022, StarkWare achieved an $8B valuation.
On the other side, @CryptoRank_io reported that there are 7 tokens with the largest unlock amount that will be unlocked next week:
$SUI ($32.7M)
$IMX ($23.9M)
$ENS ($11.2M)
$NEAR ($10.8M)
$ORBR ($10.3M)
$KAP ($5.09M)
$MC ($2.66M)
Why it matters: The crypto markets is already battered. Further token unlock only means that there will be more selling pressure as founders take some chips off the table and VC fulfill their fiduciary duties by taking profits.
For builders and investors: Understand that token flows still triumph everything in the crypto markets.
Fundamentals might win in the long-term, but if your livelihood is tied to your token prices, make sure you get the flow game.
CASE STUDY
Are VCs Running Away From Crypto?
Credit to @joel_john95 for the original tweet.
State of play: VCs may seem to be withdrawing from crypto, but a detailed analysis reveals a different picture. Data from 25,000 funding events across various sectors, including fintech and SaaS, show similar investment patterns.
SaaS investments rose in January 2021 due to pandemic-induced remote work, with crypto fundraising seeing a similar uptick later.
Increased venture capital in various sectors, high consumer interest, and liquidity in crypto assets boosted investment appetite for crypto.
Despite seeming like a decline, the frequency of early-stage crypto fundraising is actually higher compared to 2021.
Venture investments in crypto persist, albeit in fewer rounds with larger sizes.
In summary, the current investment climate is tough for all sectors, not exclusively a crypto phenomenon.
What’s next: It’s a game of survival now, there is money out there but not “easy money" and builders have to show their worth for that money.
Our take: The situation is tightly tied to the current macroeconomic situation (higher interest rates) and not sectoral problems.
Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇
INSIGHTS
September VC Report: Funding Hits New Lows
Credits to WuBlockchain for the original piece.
In September, 77 cryptocurrency VC investment projects were publicly announced, marking a 3% increase from August 2023 but a 44% decrease from September 2022.
According to RootData, the total funding for September was $510M, a 24% decline from August 2023 and a 72% drop from September 2022.
Investments were distributed across various crypto sectors: 30% infrastructure, 22% DeFi, 4% CeFi, and 10% NFT and GameFi projects.
Notable investment rounds included:
Bitmain's deal with Core Scientific for $231M cash and $539M in stock.
Proof of Play raising $33M.
Bastion completing a $25M seed round.
Story Protocol securing $25M.
Supra obtaining $24M.
Mesh raising $22M.
Animoca Brands receiving $20M for its Mocaverse series.
IYK raising $16.8M.
Brine Finance raising $16.5M.
Why it matters: The data shows that infrastructure projects remain as VC’s favourites. But it is important to note that the current investment climate is tough for all sectors, not exclusively a crypto phenomenon.
FEATURES & GOVERNANCE UPDATE
Espresso Systems Launches Cortado
Espresso Systems launches a public testnet for Espresso Sequencer Testnet 3: Cortado, the third Espresso Sequencer Testnet, integrating OP Stack and Polygon zkEVM rollups for decentralized sequencing.
Espresso Systems and Caldera launch Vienna, an OP Stack rollup with Espresso Sequencer's third testnet integration.
Caldera's infrastructure features a core rollup node, bridge UI, testnet faucet, and block explorer.
Cortado now supports a catchup mechanism, allowing nodes to rejoin after being offline for any number of views.
Why it matters: The release enhances the Espresso Sequencer protocol, with each testnet release further bolstering the reliability of its consensus protocol, HotShot.
Other notable feature updates:
Deopx launches public testing for CLAMM.
Angle launches stEUR.
Chaos Labs launches GMX V2 Risk.
Arbitrum relaunches Odyssey.
Holesky Testnet goes live.
Aori Order Beta goes live.
Notional V3 Beta goes live on Arbitrum.
LlamaFolio goes live.
Dopex sunsetting V1.
QUICK BITES
Ether Futures ETFs go live.
SBF’s quiet first day in court.
Ex-Celsius CEO trial set for September 2024.
SEC denied motion to appeal loss in Ripple case.
Deus X Capital launches with $1B in assets.
CFTC Chair Behnam turns his focus to DeFi.
Ripple obtains Singapore payment license.
UBS taps Ethereum to pilot tokenized money market fund.
Central Bank Group unveils crypto transfer mapping data project.
StarkWare delays first token unlocks to April 2024.
Crypto-friendly Congressman McHenry takes over House (temporarily).
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