TradFi Wants ETH Yield

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Good Morning,

Sequoia cuts down its crypto fund from $585M to $200M, a week after shedding down its crypto investors. Sequoia is not known for doing much activities on-chain — which actually signals that their downsizing is the right move.

Crypto requires investment firms to become a liquid-venture fund. You need to be doing market activities on-chain scale (or deploy) that much AUM. A pure venture model wouldn’t work.

Let’s dive in.

In Today's Email:

• What Matters: First ETH staking index 📈

• Founders-Investors Highlight: Mark Rydon of Aethir 👨‍💼

• Deal Flows: Flashbots unicorn valuation 🤖

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WHAT MATTERS

The First Ethereum Staking Rewards Indexes

State of play: MarketVector Indexes and Figment are teaming up to launch the industry's first Ethereum staking rewards indexes. The collaboration aims to introduce two products:

1. MarketVector Figment Ethereum Staking Reward Reference Rate.

2. The MarketVector Figment Ethereum Total Return Index.

Why it matters: Institutional adoption of ETH staking products is further sign of ETH staking growth and dominance.

• The number of ETH staked has increased from 18.7M to 24.8M.

• 20.87% of ETH total supply is staked.

• The number of ETH validators has increased from 585K to 776K.

For builders: We’ve seen alt L1 becoming ETH L2s, and projects moving to ETH L2s — Ethereum ecosystem liquidity flywheel is a big edge.

• Founders should think of a strategy to capitalize on this.

For investors: An increasing number of regulated crypto investment products -especially those that embrace yield and other crypto-native mechanisms- will eventually bring in new capital to the space.

BUILDER-INVESTOR HIGHLIGHT

Mark Rydon, Co-Founder and CEO of Aethir

Mark Rydon is the Co-founder and CEO of Aethir, a decentralized cloud network for gaming and AI.

• Aethir has successfully concluded a Pre-A funding round, raising a total of $9M and achieving a valuation of $150M to date.

• The investment will drive Aethir's expansion into SEA, Latin America, and North America, while also developing its decentralized cloud infrastructure for AI companies and gaming studios.

Previous backgrounds: Rydon studied Business and Geology at the University of Queensland.

• He worked on various construction projects from 2012-2017. He also founded various projects from medtech to rugby clubs in China before diving into the crypto space as VC and founder.

• Eventually, Mark becomes a Partner at Gaas Global LTD, a Singapore-based investment firm.

The big idea: Aethir aims to offer a Decentralized Physical Infrastructure Network (DePIN) service for enterprise-grade gaming and AI applications.

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INSIGHTS

Maker Considers 8% DAI Savings Rate

MakerDAO mulls a promotional campaign to increase demand for its decentralized stablecoin, DAI.

• 74% of voters voted yes to raising the DAI savings rate (DSR) to 8% and gradually reduce it until half of all DAI is staked to earn yield.

• $4.6B worth of DAI has been lent against assets valued at $8.6B, resulting in a collateralization ratio of 188%.

• Borrowers are charged interest rates ranging from 3-6%.

• Currently, only around 7% of the total dai is earning the DSR.

• In February 2022, the market had nearly $10B DAI, but the supply has been decreasing since the LUNA implosion.

DEAL FLOWS

Flashbots $60M Series B

Deal flows remains steady 📈 — we saw $150M+ in deals.

Ethereum infrastructure service Flashbots is officially a unicorn as it raised approximately $60M at a valuation of $1B in a Series B round led by Paradigm.

• The funding will support the ongoing development of SUAVE, Flashbots' maximum extractable value (MEV) network.

• SUAVE (Single Unifying Auction for Value Expression) is an autonomous network that functions as a mempool and a decentralized block builder.

• SUAVE allows developers to deploy intra-block applications, resulting in cost-effective and private transactions.

Deal flows in the past week:

• Side Protocol, $1.5M Pre-Seed Round

• Eyeball Games, $1.5M Pre-Seed Round

• dappOS, Undisclosed $ Seed Round

• Kandle, $1.7M Seed Round

• Releap Protocol, $2.1M Seed Round

• Delabs Games, $4.7M Seed Round

• Ethstorage, $7M Seed Round

• Dmail Network, Undisclosed $ Pre-Series A

• Aethir, $9M Pre-Series A Round

• Flashbots, $60M Series B

• Passage, $6M Private Round

• Over Protocol, $8M Private Round

• Cymbal, $18.5M Venture Round

• Hi, $30M Strategic Round

QUICK BITES

• Judge issues gag order on SBF.

• Sequoia cuts crypto fund size from $585M to $200M.

• FTX-Genesis reach agreement in bankruptcy dispute.

• SEC charges Quantstamp over $28M ICO.

• SEC warns accounting firms over legal liability for crypto audits.

• US Senate passes military bill with crypto AML provision included.

• US Crypto Bill endorsed by House Financial Services Committee.

• Singapore High Court declares crypto as property in a case.

• Gemini gamifies overseas derivatives trading platform.

• MarketVector-Figment-DAR introduces the first ETH staking rewards Index.

MEME & NOTEWORTHY READS

• Arthur Hayes’ read on macro markets, AI, and crypto trends.

• @barkteh.eth’s read on how Worldcoin does the ZK magic.

• DeFi Ignas’ read on the golden age of decentralized stablecoin.

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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.