DeFi Endgame: SEC vs Uniswap

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Good Morning.

The SEC finally decided to move forward after investigating Uniswap Labs for three years. It’s important to get clarity around what tokens are, but we all know that the SEC doesn’t have the best interest in creating a regulatory environment that can support this new asset class. It’s not just securities.

In Today's Email:

• What Matters: SEC vs Uniswap 👨🏻‍⚖️

• Founders Highlight: Hart of Across 👨‍💻

• Deal Flows: Monad $225M raise 💰️ 

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WHAT MATTERS

Uniswap vs SEC

State of play: Uniswap Labs was served with a Wells Notice from the SEC, indicating that the agency would likely be suing the entity behind the largest DEX.

• The SEC was reportedly investigating Uniswap Labs in 2021.

• Uniswap recently hit $2 trillion in trading volume. It’s one of the building blocks that power the DeFi economy.

• Uniswap plans to fight the lawsuit, according to its statement.

Why it Matters: This will be the highest-profile DeFi case that will have some effect on the status of a token as an asset class. Looks like the fee switch ain’t happening anytime soon…

For builders and investors: The outcome of this case will determine the future of DeFi protocols in the US, and perhaps also the global landscape.

BUILDER-INVESTOR HIGHLIGHT

Hart Lambur of Across Protocol

Intro: Hart Lambur is the co-founder of Across Protocol and UMA, a decentralized cross-chain bridge and a decentralized optimistic oracle for web3.

Previous background: Before Across, Hart was a serial founder at multiple companies including Openfolio and UMA.

• Hart is now a Director at Risk Labs Foundation and a Venture Partner at Robot Ventures.

• He was also a research assistant at Columbia and was an interest rate trader at GS before becoming an entrepreneur.

The big idea: Across just introduced DeFi’s first standard for cross-chain intents.

• “With the standard for cross-chain intents, users on Across, UniswapX, or other intents-based systems can sign a cross-chain order that follows one standard. This creates new possibilities for cross-chain applications as they can share filler sets through a universal network.”

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INSIGHTS

The Token Is the Product

Crypto projects are built by attracting attention and capital to a token and then converting that attention into valuable products for users. Tokens are a powerful coordination tool that can help companies in commodified markets maintain their competitive edge.

• Crypto projects that don't launch a token will eventually have their margins competed away or be beaten by competitors who do launch a token.

• Tokens create self-reinforcing positive feedback loops by consistently delivering on promises to the community and driving continued innovation.

• Tokens will enable an explosion of tokenized networks that will challenge existing powerful institutions in the next decade.

In essence, tokens are an essential component for building successful and sustainable crypto projects in the long run

DEAL FLOWS

Monad $225M Funding Round

Deal flows soared this week, we saw $370M+ in deals 💼 

Fortune reported that Monad Labs has closed a $225M funding round led by Paradigm. The new L1 aims to enable high throughput (claiming 10,000 TPS) while sustaining EVM compatibility.

• This is the largest crypto fundraising round in 2024 thus far.

• The capital will be used for talent expansion and for bringing the test version of its blockchain into production.

• Electric Capital, Castle Island Ventures, Animoca Ventures, Coinbase Ventures, and CoinFund also participated in the round.

Deal flows in the past week:

• QuantAMM, $1.85M Pre-Seed Round

• MadFi, $1M Seed Round

• RootData, $1.25M Seed Round

• Stream Trading, $1.5M Seed round

• Zoth, $2.5M Seed Round

• OpenTrade, $3.2M Seed Round

• Tomo, $3.5M Seed Round

• Sapien, $5M Seed Round

• Today, $5M Seed Round

• Alpen Labs, $10.6M Seed Round

• Lumoz, $6M Pre-Series A

• Auradine, $80M Series B

• Uplink, $10M Unknown Round

• Mezo, $21M Unknown Round

• Monad, $225M Unknown Round

• Ritual, Undisclosed $ Strategic Round

• AgentFi, Undisclosed $ Unknown Round

QUICK BITES

• SEC moves to sue Uniswap.

• Ryan Salame’s sentencing is set for May 28.

• GBTC sees record lower daily outflow of $18M.

• CF Benchmarks launches BTC volatility index.

• Brevan Howard Digital rises 34.5% to $1.7B in Q1.

• Sushi DAO proposal passes vote amidst controversy.

• NEAR plans to hire AI engineers as part of its AI roadmap.

• Dubai regulator wants to lower the cost of crypto compliance.

• MarginFi Leader resigns on a fiery day for major Solana lender.

• Bitfinex Securities introduces El Salvador’s first tokenized debt.

• Bitcoin mining difficulty hits fresh ATH in the final pre-halving adjustment.

NOTEWORTHY READS

• Arthur Hayes’ read on heatwave.

• 1kx’s read on Safe: unlocking the era of programmable ownership.

• Alexander Osipovichs’ read on what we learned about Jump in the Terraform Labs trial.

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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.