Paradigm Raises $850M Fund III

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Good Morning.

The market is down as it’s looking like there aren’t any significant catalysts other than the Ethereum ETF. Meanwhile, the holder profiles of Bitcoin ETF indicate that the large majority of inflows might be basis traders instead of actual retail inflows.

Grandma please buy my coins!

In Today's Email:

• What Matters: Egorov $100M+ CRV Liquidation 💸 

• Founders Highlight: Volgin of Pixelverse 👾

• Deal Flows: Paradigm’s $850M Fund 💰️ 

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TOGETHER WITH

Only a couple days left to invest in this smart home startup.

The ball-park isn’t the only place to look for home runs. Best Buy has a proven record of placing early bets on home-tech products that go on to dominate the market.

• Ring - acquired by Amazon for $1.2B

• Nest - acquired by Google for $3.2B

Early investors in these companies are sitting on some serious returns - but for the rest of us, there's still a chance to get in on the action with RYSE.

History tends to repeat itself, and RYSE's launch in +100 Best Buys points towards their company being the next home run.

Their Smart Shade tech is poised to dominate an industry growing at 50% annually, and there's still time to invest in their $1.50/share public offering.

The window to invest is closing - learn more here.

WHAT MATTERS

Curve Founder $100M+ Loan Liquidated

State of play: Michael Egorov, the founder of Curve, was liquidated for $140M in CRV of his on-chain loan positions as the price of Curve DAO (CRV) dropped about 39% to $0.22 yesterday.

• Egorov borrowed $95.7M in stablecoins, mainly crvUSD, against $141M in CRV from DeFi platforms Inverse, UwU Lend, Fraxlend, and Curve's LlamaLend.

• According to Arkham, Egorov has $50M in crvUSD borrows on Llamalend at ~120% APY.

• Egorov faced liquidations on Inverse but took action to mitigate risks, improving his health rate to 1.07—close to the liquidation threshold of 1.0.

• Egorov’s USDT and DAI loans on UwU Lend underwent further liquidations worth over $5M.

• Egorov has started repaying borrowed DOLA stablecoins, on-chain data indicates.

Egorov cleared over a million dollars of bad debt on Curve’s Llamalend across two accounts after receiving $6M USDT from Christian Seale of NextGen Venture Partners.

• Christian tweeted about purchasing 30M CRV tokens from Egorov.

• This means he bought the 30M CRV for $6M or $0.2 each, nearly 30% below the market price and 10% under Binance's lowest price.

• Currently, CRV is trading around $0.25-$0.3.

Why it Matters: Egorov has previously faced significant liquidation risks; last year, $60M in loans from Aave nearly resulted in bad debt for the protocol.

• In response to risk concerns, Gauntlet advised Aave to freeze its v2 CRV market in June, which was approved by August 2023.

• That month, Egorov sold 106M CRV for $46M to reduce his debts, clearing his Aave balance in September with an $11M USDT deposit.

For builders and investors: Understanding token flow is arguably the most important skills once you have a mature protocol with a lot of circulating supply. Don’t fall into the bullish unlock meme.

BUILDER-INVESTOR HIGHLIGHT

Kirill Volgin of Pixelverse

Intro: Kirill Volgin is the founder and CEO of Pixelverse, a Telegram-based crypto gaming ecosystem that just launched a "tap-to-earn" web3 game, PixelTap, that attracted over 15M users in less than a month.

Previous background: Before Pixelverse, Volgin was the founder and CEO of step.app, a move-to-earn app.

The big idea: Pixelverse aims to build the largest and most accessible 2D world using procedural generation technology and an EVM L1 blockchain for third parties to build mini-games to expand the universe.

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

Terraform Labs Plan to Dissolve

State of play: Chris Amani, CEO of Terraform Labs, has announced plans to dissolve the firm and has encouraged the community to take over leadership.

• The company will sell its projects within the Terra ecosystem, including Pulsar Finance, Station Wallet, and Enterprise DAO.

• This decision comes after Terraform settled with the US SEC for $4.47B over the collapse of its UST algorithmic stablecoin in 2022.

• Amani stated the firm plans for a community proposal that would lead to the burning of all unvested Luna.

• Amani suggests that Terra and Terra Classic blockchains could continue under the community’s control.

DEAL FLOWS

Paradigm’s $850M Third Fund

Deal flows slowed down a bit this week, we saw $900M+ in deals 💼 

Leading crypto VC firm Paradigm has secured $850M for its third fund.

• Recently, Paradigm led a $55M funding round for Succinct Labs and participated in an $18M Series A for Privy.

• Alongside this raise, Paradigm has also promoted its CTO, Georgios Konstantopoulos, to a General Partner.

• Paradigm previously raised $2.5B for its second fund in 2021.

Deal flows in the past week:

• Repo Swap, $500K Seed Round

• Codetta, $2.5M Seed Round

• Halo, $3M Seed Round

• Ink Finance, $5M Seed and Strategic Round

• Symbiotic, $5.8M Seed Round

• Ava Protocol, $10M Seed Round

• RepoSwap, Undisclosed $ Seed Round

• Squads, $10M Series A

• Layer3, $15M Series A

• Nexus Labs, $25M Series A

• Nuffle Labs, $13M Unknown Round

• Irys, $8.9M Strategic Round

• Zircuit, Undisclosed $ Strategic Round

• GenomesDAO, Undisclosed $ Private Round

QUICK BITES

• Paxot cuts 20% of staff.

• Biden proposes a 30% tax on BTC mining.

• UwU Lend drained for $3.7M in a second exploit.

• Curve Founder gets liquidated amid CRV price drop.

• Anchorage hires ex-Goldman Exec as a Board Member.

• Ripple argues for lower fines than SEC's proposed $2B.

• JPMorgan skeptical $12B YTD crypto inflows will continue.

• US Judge signs off on $4.5B Terraform-Do Kwon settlement.

• Paradigm makes Georgios Konstantopoulos a general partner.

• MicroStrategy proposes $500M convertible notes to buy BTC.

• The Graph removes training wheels, completing decentralization.

• Gensler says Ethereum ETF S-1 approvals are likely over the summer.

NOTEWORTHY READS

• Knower’s read on making sense of some niche modular infra.

• Jason Yanowitz’s read on the Coinbase State of Crypto summit.

• Paul Veradittakit’s read on crypto users being comparatively impatient.

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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.