Tether’s $90 Billion Reserves Confirmed… Right?

Pendle’s 24% ETH Yield | Cross-Chain USDC Transfer

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Marco Manoppo & Karon Pangestu
January 17, 2024

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Happy humpday 🐪,

Spot Bitcoin ETFs 3rd day volume top $1.8B, with Grayscale, Fidelity, and BlackRock dominating 90% of the trading activities.

Meanwhile, Coinbase and the SEC is set to face-off in the courtroom today - the outcome of this lawsuit will be another landmark event that will decide the future of crypto assets. Stay yuned.

In Today's Email:

  • What Matters: Cantor confirmed Tether's billions 🏦 

  • Case Study: 2024 tokenization outlook 👀

  • Governance & Features: Cross-chain USDC ⛓️

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Narratives: Give all of the LRT protocols a shot. You might be rewarded in the next few quarters.

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WHAT MATTERS

Cantor Fitzgerald’s CEO Confirms USDT’s Billions

State of play: Howard Lutnick, chairman and CEO of Cantor Fitzgerald, confirmed Tether's claimed reserve funds after reviewing parts of the stablecoin issuer's balance sheet as a custodian.

  • In its October attestation report, Tether reported about $86B in assets to support $83B of its USDT stablecoin as of September.

  • Cantor Fitzgerald has been a Tether custodian since late 2021, according to Paolo Ardoino.

  • A knowledgeable source claims that Cantor custodies "the vast vast majority" of Tether's reserves.

Meanwhile, a report by the UN stated that illegal online gambling platforms are used for crypto-based money laundering in East and Southeast Asia, particularly involving Tether or USDT on the TRON blockchain.

  • Tether urged collaborative dialogue with the UN, emphasizing its cooperation with global law enforcement agencies such as the DOJ, FBI, and USSS.

  • USSS recently onboarded the Tether platform. The firm also noted its proactive measures, including freezing over $300M recently.

  • The UN report recognized Tether's freezing of $225M in USDT tied to human trafficking in Southeast Asia while highlighting USDT's prevalence in regional organized crime.

Why it matters: There are many Tether’s truthers — aka people that have screaming that Tether is a scam. The reality is often in the middle and nuanced.

  • This confirmation from Howard is a step in the right direction, but many is still expecting a full audit.

  • However, some form of “privacy” is Tether’s edge because it deals primarily in the offshore dollar market.

For builders and investors: Stablecoin will continue to be the one superior crypto product that will still grow exponentially until it competes with most of the existing global transaction settlement layer (see: SWIFT).

  • The key is finding a specific type of stablecoin that targets a specific segment of the market to find PMF.

  • Margins will also compress as there’s no way incumbents can continuously maintain the revenue they generate from yield without giving some back to their customers.

CASE STUDY

The State of Asset Tokenization & 2024 Outlook

Credit to Tokenized Asset Coalition for the original report.

State of play: The Tokenized Asset Coalition released a report forecasting the state of asset tokenization in 2024.

Here are the key takeaways from the report:

  • The report emphasizes the emergence of tokenized investment risk curves and the growing interest in on-chain financial markets.

  • The report addresses the challenges and opportunities in bringing crypto to a wider audience and improving wallet user experience.

  • Despite a downturn in crypto and blockchain venture capital, there's notable interest in tokenized assets driven by US Treasury yields and the stability of tokenized Treasurys in DeFi.

  • The adoption of tokenized asset markets is expected to rise, with stablecoins diversifying, US Treasury products gaining more traction, and asset managers utilizing tokenized private credit for liquidity.

  • Digital bonds will increasingly be used by financial institutions and governments alike to explore new issuance mechanisms.

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

EtherFi’s eETH Yield Opportunity on Pendle

Pendle is entering the liquid restaking tokens (LRTs) ecosystem by partnering with EtherFi.

  • Users can earn up to 24.26% APY of fixed income yield by staking their ETH.

  • All this while simultaneously accumulating EigenLayer and EtherFi points for future airdrops.

  • This collaboration attracts $25M TVL in one day.

  • TGE by EtherFi is confirmed for April this year.

  • Pendle Points will "play a role in decentralized governance" and EigenLayer points are thought to be the same too.

Based on @PendleIntern’s “moonsheet”, a $200M-$300M FDV should give 21.75-82.56% returns.

FEATURES & GOVERNANCE UPDATE

Chainlink announced that its Cross-Chain Interoperability Protocol (CCIP) has integrated Circle's Cross-Chain Transfer Protocol (CCTP) to provide users with a secure and reliable way to transfer USDC across chains.

  • Developers can now start building secure cross-chain applications using CCIP and utilize USDC across the multi-chain ecosystem.

  • CCIP is a generalized cross-chain messaging framework that allows developers to transfer data and assets across chains.

  • CCTP is a standardized bridge protocol that lets users make native USDC transfers by burning and minting the stablecoin between supported chains.

Why it matters: This integration will further compound USDC’s dominance across multiple blockchains’ DeFi ecosystem.

Other notable feature updates:

QUICK BITES

  • Bungee exploited with $6M+ stolen.

  • Tether responds to UN USDT report.

  • Do Kwon’s trial pushed back to March.

  • SBF parents seek to dismiss FTX lawsuit.

  • Binance Thailand is now open for trading.

  • Jupiter plans to launch JUP token on January 31.

  • HashKey raises $100M and claims unicorn status.

  • Solana Mobile to sell the second crypto smartphone.

  • Spot Bitcoin ETF hit $1.8B of trading volume on day 3.

  • ProShares files for 5 leveraged and inverse Bitcoin ETFs.

  • Coinbase-SEC set to face-off in the courtroom tomorrow.

  • IRS says businesses don’t have to report certain crypto tx.

  • Ethereum Dencun goes live but fails to finalize on testnet.

  • Core Scientific to emerge from bankruptcy, relist shares this month.

  • Circle CEO sees a high likelihood of US stablecoin legislation in 2024.

NOTEWORTHY READS & MEME

  • Maven11’s read on 2024 crypto predictions.

  • Multicoin’s read on things the firm is excited about for 2024.

  • 4pillars’ read on 2024 Bitcoin outlook: ecosystem beyond ETFs.

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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.