Kraken Introduces "Ink" Layer 2

📢 Sponsor | 💡 Telegram | 📰 Past Editions

Good Morning.

Just a friendly reminder that for the next few weeks, it’s much more critical to pay attention to how the macro markets react (T-Bill rate, US election, China, etc.) instead of the micro-dynamics of the crypto markets. Total2 and Total3 (crypto market cap excluding BTC and ETH), is still nowhere near the growth period we saw in Q4 of 2023, even if some memes like GOAT are soaring.

The new pod episode is up!

In Today's Email:

• What Matters: Kraken Launches an L2 🔏 

• Founders Highlight: Dennis of Midas 🖐️ 

• Deal Flow: TeraWulf Seeks $350M 💰️ 

You read and share. We listen and improve. Send us feedback at [email protected].

BROUGHT TO YOU BY

Ourselves! - If you’ve been enjoying our podcast episodes and want to support us, kindly reach out below for more details.

WHAT MATTERS

Kraken Introduces ‘Ink’ Layer 2

State of play: Kraken, the world's 6th-largest crypto exchange, is launching its own Ethereum-based L2 network called "Ink" using Optimism’s OP Stack technology.

• This move came nearly a year after Kraken considered its own network following the success of Coinbase's Base.

• Ink will join a growing ecosystem of Optimism Superchain networks, including Base, Uniswap, and Sony, contributing to the collective "Superchain" that uses Optimism’s technology.

• Set to launch in early 2025, Ink aims to foster an interoperable ecosystem for DeFi applications and protocols.

Why it Matters: While Arbitrum leads in L2 competition with $13.6B in TVL, Optimism’s "Superchain" has 43 rollups and a combined $18.1B in TVL. Arbitrum-based projects total $14B across 29 networks.

What’s next: As more firms adopt Optimism’s technology, the "Superchain" could see further expansion, solidifying its position as a leader in the L2 market.

For builders and investors: There’s a unique dynamic that deserves its own essay. As it becomes easier to move capital between chains and launch your own chain, more entities will do this — some argue this will hurt ETH as an asset itself in the long run.

• Meanwhile, others have said that SOL is learning from this mistake and won’t let the same type of liquidity and attention fragmentation happens with its own L2.

BUILDER-INVESTOR HIGHLIGHT

Dennis Dinkelmeyer of Midas

Intro: Dennis Dinkelmeyer is the Founder and CEO of Midas, an asset tokenization protocol bringing regulatory-compliant exposure to institutional-grade assets onchain, unlocking DeFi composability for RWAs.

Previous background: Prior to Midas, Dennis had extensive investment experience with roles at Greentrail Capital, Capital Group, and Goldman Sachs.

• At Greentrail (2021-2022), he co-sponsored a $200 million IPO for GTAC I.

• At Capital Group (2019-2021), he is focusing on international software and European small/mid-cap companies and led alternative data research.

• At Goldman Sachs (2015-2019) in London, Dennis led cable industry research and developed a vessel tracker to forecast offshore cable earnings.

The big idea: Dennis through Midas aims to be an RWA issuer with a regulatory-compliant offering with no minimum thresholds, an investor accreditation process, and full DeFi composability of a permissionless token.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

The Journey of ZachXBT: From Victim to Vigilante

Credits to Wired for the original article

State of play: ZachXBT's crypto journey began in the late 2010s, when he invested thousands but fell victim to scams like "rug pulls." After losing $15,000 in a hack on his Electrum wallet in 2018, he recognized the risks and changed his strategy.

• Instead of retreating, ZachXBT immersed himself in blockchain technology, analyzing transactions to understand how seasoned investors navigated the market.

• This dedication honed his ability to detect suspicious activities, transforming him into a crypto investigator.

• In 2021, ZachXBT started sharing his findings on social media, exposing scams and tracing stolen funds.

• Acting as a whistleblower, he targeted high-profile influencers involved in pump-and-dump schemes.

• As his online presence and expertise grew, he tackled more complex cases, including major thefts and hacks.

The Big Break & Becoming a Recognized Figure

• ZachXBT’s big break came in August 2023 when he uncovered a staggering $243M theft from a single victim.

• ZachXBT’s truth-seeking abilities attracted law enforcement attention, leading him to collaborate with authorities in recovering millions in stolen assets.

• Despite his growing reputation, he maintains anonymity for safety while working diligently to protect the crypto community from fraud.

DEAL FLOWS

TeraWulf Seeks $350M for Share Buyback

Deal flows soared this week, we saw $1.1B+ in deals 💼 

TeraWulf, a bitcoin mining firm, plans to raise $350M through convertible senior notes to fund a $200M share repurchase program. The notes, maturing on February 1, 2030, will allow for an additional $75M in purchases within 13 days of issuance.

• TeraWulf's board approved the buyback through December 31, 2025, reflecting confidence in its financial health.

• This move follows the recent sale of its 25% stake in the Nautilus facility for approximately $92M.

• Despite a decline in Bitcoin mining in September, TeraWulf's stock has seen a significant year-to-date increase.

Deal flows in the past week:

• Borderless, $3M Pre-Seed Round

• Echo Protocol, Undisclosed $ Pre-Seed

• BulbaSwap, $1.3M Seed Round

• Craftt, $2M Seed Round

• Ordzaar, $2M Seed Round

• Moonwalk, $3.4M Seed Round

• Fluid Protocol, $3.9M Seed Round

• Hata, $4.2M Seed Round

• Genius, $6M Seed Round

• Azura, $6.9M Seed Round

• Party Icons, $9M Seed Round

• Bluesky, $15M Series A

• Skyfire, $1M Strategic Round

• Sparkball, $2M Unknwon Round

• Hana, $4M Unknown Round

• ZEROBASE, $5M Unknown Round

• Karpatkey, $7M Unknown Round

• STOKR, $7.98M Unknown Round

• Validation Cloud, $10M Unknown Round

• Bridge, $1.1B M&A

Secondary Market and M&A Deals (Powered by Acquire.Fi)

• BounceBit (Sell), SAFT, Min Size - $500,000, Valuation: Open

• ZkSync (Sell), SAFT, Min Size - $500,000, Valuation: Open

• Movement Labs (Sell), SAFT, Min Size - $1,000,000, Valuation: 650mln

• SUI (Buy), Tokens, Min Size - $1,000,000, Valuation: Discount from spot

• Babylon (Sell), SAFT, Min Size - $1,000,000, Valuation: Open

• Web3 Marketing Agency + Syndicate, TTM Revenue: $7M, TTM Profit: $3.5M Asking Price: $10M

• Australian Crypto Exchange, Daily Trade Vol: $400M, AUSTRAC DCE License, Asking Price: $1.5M

QUICK BITES

• Denmark plans to propose taxing unrealized crypto gains.

• Grails plans to bridge liquidity between Cardano and BTC.

• GSR co-CEO and CTO leave the crypto market-making firm.

• Ripple contests prior ruling’s Howey test application on XRP.

• Bitcoin options traders position for price gains post-US election.

• Microsoft places 'assessment in investing in BTC' as a voting item.

• EURC supply hits all-time high as market cap approaches $100M.

• GnosisDAO is launching a new $40M venture fund targeting RWAs.

• South Korea plans a reporting mandate for 'cross-border' crypto tx.

• Arkham and ZachXBT say ~$20M in crypto was likely stolen from the US government.

NOTEWORTHY READS

• Eli Nuss’ read on the state of crypto venture Q3 2024.

• DWF Ventures’ read on AI agents and projects worth looking at.

• Scooter’s read on how to spot rug pull and tricks used by grifters.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

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.