Tether Lends Stablecoins Again

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Good Morning,

I love competition in crypto. A month after Friend Tech’s success, a competitor emerges. Post Tech mimicks Friend Tech’s concept but copied Twitter’s UI and start with a web-app to further target crypto native users. The results?

It worked. Post Tech traded ~$2M in the past 24h. Coincidentally, the boom of Post Tech (which is built on Arbitrum) coincided with Arbitrum’s effort to take back (or maintain) its L2 lead against Base.

Ah, the beauty of open source — everything gets copied and eventually execution matters. Have a great weekend.

In Today's Email:

• What Matters: Tether lends again 🌱

• Founders Highlight: Jess from Seed Club 🌱

• Deal Flows: Oak Grove $60M Fund 💰

NOTEWORTHY READS

• Multicoin Capital’s read on exploring the design space of DePIN.

• Paradigm’s read on the casino on mars.

• Ivangbi’s read on why there are so many infrastructure projects.

BROUGHT TO YOU BY

NEAR Horizon

WHAT MATTERS

Tether Resumed Lending Stablecoins

State of play: According to WSJ, Tether has reinstated the practice of lending its own stablecoins to customers, less than a year after announcing its intention to wind down this operation.

• In its latest quarterly financial update, Tether reported $5.5B in loans as of June 30, up from $5.3B the previous quarter.

• A company spokeswoman confirmed new loans were issued.

• Tether offers secured loans with limited borrower and collateral disclosure, all in the form of tether tokens.

In Q2 2023, Tether received several short-term loan requests from long-standing clients. As a result, the decision was made to accommodate these requests.

• Tether spokesperson Alex Welch announced that loans are slated for elimination by 2024.

• She emphasized the company's aim to protect customers' liquidity and prevent them from selling collateral at unfavourable prices.

• Over the past year, Tether Holdings has grown its capital cushion to $3.3B, or 3.8% of total assets.

• Tether maintains that its secured loans are supported by 'over-collateralized liquid assets,' but refuses to disclose the specifics, such as whether cryptocurrencies are included

Why it matters: We’re not Tether truthers, but one thing remains imperative.

• If you’re a centralized crypto companies that handles customers’ assets, you deserve to be scrutinized for a lack of transparency and audit.

•  If you’re building a DeFi product, transparency exists on itself thanks to the blockchain.

For builders and investors: New generation decentralized stablecoin projects like Ethena is exciting as there’s a proven business model, an obvious need, a margin to be taken (passing treasury yield).

• “Your margin is my opportunity” — Jeff Bezos

BUILDER-INVESTOR HIGHLIGHT

Jess Sloss, Founder of Seed Club

Jess Sloss is the Founder of Seed Club, a DAO for builders at the intersection of builders and culture with three areas: an accelerator, a community of members and now the venture arm.

Previous backgrounds: Jess Sloss earned a BBA from Capilano University in 2008. He started his career in entertainment and marketing agencies.

• Prior to crypto, he held positions in both a software development company and a financial services firm.

• In 2017, he jumped into the crypto space full-time and joined Protos Cryptocurrency Asset Management as a Community Manager and Orbit as a Product Strategist.

• In 2020, he founded Seed Club.

The big idea: Crypto is suffering from a lack of actual consumer applications. Consumer apps are underfunded. Jess’ Seed Club focuses on helping consumer crypto products get to the next level.

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

Curve Exploit Post Mortem

On July 30, Curve alerted the Alchemix team on a vulnerability in multiple pools, including the alETH — ETH pool.

• The Alchemix Multisig team promptly initiated the process to withdraw AMO-owned liquidity from the affected pool, successfully recovering 8,027 alETH. 

• The exploiter drained the remaining portion of the pool, which consisted of 4,821 alETH and 7,258 ETH.

• The exploit resulted from an underlying vulnerability in the Vyper compiler used to create the affected Curve pools.

• Moving forward, all upcoming alAsset pools deployed by Curve will exclusively use Vyper version 0.3.1 or higher, eliminating this vulnerability.

• Alchemix is now asking Coinbase to return some funds related to the exploit because the exchange ran the validator that processed the transaction during the exploit.

The full post mortem is available here.

DEAL FLOWS

Oak Grove $60M Web3-AI Fund

Deal flows soared this week 📈 — we saw $750M+ in deals.

Alumni from notable crypto firms launched a $60M fund called Oak Grove Ventures that focuses on Web3, AI, and Biotech.

The fund boasts notable team members such as:

• Sally Wang, formerly of Sino Global Capital (now Ryze Labs)

• Ethan Wang, former tech lead at Libra

• Shawn Shi, co-founder of Alchemy Pay

• Michael Li, a former VP at Coinbase

Formerly a family office, Oak Grove Ventures has backed more than 30 projects. Its disclosed investment portfolio comprises eight funds and 14 high-quality projects, including SpaceX and Neuralink.

Another notable deal: Blockchain Capital raised $580M for two new crypto-focused funds.

• 1/3 of the $580M will be allocated for its opportunity fund.

• 2/3 of the $580M will be allocated for its early-stage fund.

Deal flows in the past week:

• BeWater, $1M Angel Round

• GRVT, $2.1M Pre-Seed Round

• Fuze Finance, $14M Seed Round

• Bastion, $25M Seed Round

• Proof of Play, $33M Seed Round

• Orb, $2.3M Seed Round

• Only Dust, $3M Seed Round

• Bubblemaps, $3.2M Seed Round

• Freatic, $3.6M Seed Round

• Essential, $5.15M Seed Round

• CoinScan, $6.3M Seed Round

• Jiritsu, $10.2M Seed Round

• Topic.Market, $2M Strategic Round

• ProsperEx, Undisclosed $ Strategic Round

• Oak Grove Ventures, $60M Web3 Fund

• Blockchain Capital, $580M Two New Funds

QUICK BITES & MEME

• Tether lends stablecoins again.

• Binance participates in MiCA EU regulation discussion.

• Binance & CZ ask court to dismiss SEC suit.

• Tim Draper launches crypto accelerator.

• JPM says ETH Shanghai upgrade failed to boost network activity.

• Optimism Foundation sells $157M OP tokens.

• House Committee advances anti-CBDC bill.

• Grayscale files for new Ether Futures ETF.

• South Koreans hold $99B of digital assets overseas.

• Venmo to offer PayPal USD stablecoin.

• US Court rejects SBF’s efforts for pre-trial release.

• UK regulator warns crypto firms over 'lack of engagement'.

• Post.Tech activity picks up with $1.8M in daily volume.

• Mt. Gox pushes back the deadline to 2024.

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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.