Why Offshore USD Stablecoin Is Key

Tribe $100M Crypto Fund | David of JokeDAO

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Marco Manoppo & Karon Pangestu
June 02, 2023

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Good Morning,

The crypto markets are still flat. Perhaps Apple’s rumored VR headset will help rejuvenate the Metaverse tokens. One can only hope. In other news, the Ethereum community warns of the danger of Lido’s control over staked ETH.

Let’s dive in 🤿

In Today's Email:

  • What Matters: Offshore USD stablecoin 🏝️

  • Founders-Investors Highlight: David Phelps, Founder of Jokerace 🃏

  • Deal Flows: Tribe Capital $100M Crypto Fund II 🔥

Narratives: LSDfi continues to soar while DeFi TVL decreases. Focus on the intersection of LSDfi and Layer 2.

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WHAT MATTERS

Eurodollar Stablecoin Potential

State of play: First Digital, a Hong Kong-based qualified custodian and trust company, is launching a USD stablecoin that will be regulated in Asia.

At the same time, Tether, the world’s largest stablecoin, reached an all-time high market cap of $83.2B.

  • First Digital USD (FDUSD) is backed one-to-one by the US Dollar or asset of equivalent value — the reserves will be held at institutions in Asia.

  • Binance seems to be involved with FDUSD as it’s launched on BNB Smart Chain (other than on Ethereum).

  • Hong Kong regulators have stated that stablecoins aren’t allowed for public trading by retail investors in the country.

Why it matters: One thing is clear — the demand for Eurodollar (offshore) USD stablecoin continues to soar.

  • There’s an opportunity to become another dominant Eurodollar player other than Tether.

  • Eurodollar stablecoin will become increasingly important for the crypto and DeFi ecosystem as US regulators continue their crackdown.

Eurodollar definition:

The standard definition of a Eurodollar is any US Dollar that is on deposit in a bank outside of the United States (not just in Europe, that is simply the naming convention). Domestic US dollars in circulation can be measured in several different ways, but the broadest and most widely accepted is M2, which as of January of 2021 is ~$19 trillion. Eurodollars are, therefore, by the standard definition, all other US dollars in circulation not accounted for by M2.

Jeff broadens the definition, however, to include all dollars not under the watch of the domestic US monetary system (M2).

For builders and investors: Competition is always a good thing. USDC is under regulatory pressure in the US, whereas USDT is not known for its transparency.

  • For crypto to truly thrive globally, we need a strong Eurodollar stablecoin ecosystem.

BUILDER-INVESTOR HIGHLIGHT

David Phelps, Co-Founder of Jokerace

David Phelps is the Co-Founder of Jokerace, a governance tool for decentralized communities to submit entries and vote on favorites.

  • Simply put, if you want to make decisions on-chain, Jokerace is your tool — it can be used for hackathons, grants, bounties, and many more.

  • Jokerace supports 15 blockchains including Polygon, Optimism, Arbitrum, Fantom, Avalanche, and Gnosis.

  • No code is necessary. Jokerace can be deployed on any EVM-compatible chain.

Previous backgrounds: David attended Yale with a degree in Literature before working on numerous tutoring and college consulting jobs. He started his first company in 2014, before starting Jokerace in January 2022.

The big idea: Decentralized governance is hard. Better tools are needed and David is helping to build them.

Take a peek at our new referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

INSIGHTS

Uniswap Fee Switch: Again

Uniswap is voting to turn on the fee switch, again.

  • The proposal listed above was simply used to gather information via Snapshot.

  • Another formal proposal will be published for the temperature check voting.

  • Even though the proposal above failed (because of how the options were set up), it’s clear that 50%+ of voters want some sort of fee.

If Uniswap does implement a fee, it will be a new paradigm, marking one of the most important DeFi events in 2023.

DEAL FLOWS

Tribe Capital Targets $100M Crypto Fund

Deal flows remained steady this week 🏄 — we saw $230M+ in deals.

That’s not even counting Tribe Capital’s new fund. VC firm Tribe Capital, which had backed firms such as Kraken and Bitfinex, has introduced a new crypto fund with a $100M target raise.

  • The SF-based firm has over $1.6 billion in AUM.

  • The new crypto fund will make early-stage investments ranging from $500,000-$3M check sizes.

  • Tribe Capital had previously raised $75M for its first crypto fund in October 2021.

Deal flows in the past week:

QUICK BITES

  • Tether reaches an all-time high in market cap, above $83B.

  • TP ICAP announces crypto spot trading.

  • Cowen shuts down its crypto unit.

  • Binance discloses investigation by Canadian Securities Regulator.

  • First Digital introduces Hong Kong-based USD stablecoin.

  • Crypto firms bolstered lobbying efforts last year.

  • EU Parliament releases a study on crypto as securities.

  • Multichain's CEO reportedly went missing.

  • MakerDAO plans to purchase another $1.28B worth of US Treasury.

MEME & NOTEWORTHY READS

  • Paradigm’s read on intent-based architectures.

  • Arthur Hayes’ read on why the bull market is forming.

  • r/ethfinance read on the risk of Lido staking dominance.

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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.