Institutional Ethereum

VeradiVerdict - Issue #130

Ethereum is currently the leading protocol in enabling smart contract applications. It is the silver to Bitcoin’s digital gold, utility vs store of value. While both Bitcoin and Ethereum have been utilizing proof-of-work, using machines and excessive electricity to secure their networks, Ethereum is in transition to a proof-of-stake mechanism for security. Through providing security to these networks, contributors earn rewards. Staking has been explained in the past in this article.

Pantera launched the first institutional Bitcoin Fund to provide a familiar structure, credibility, and convenience to investing into Bitcoin for high net-worth individuals and institutions. In a similar fashion, recently our portfolio company, Staked, has launched their ETH Trust, a familiar structure for investors to get exposure to the underlying ETH balance while also getting exposure to ETH 2.0 (proof-of-stake) staking rewards. Currently ETH 2.0 staking rewards produce higher yields (approx 7.5% annually) than just lending out your ETH. Staked uses leading providers for staking, custody, fund administration, accounting, and transfer agent services. In addition, shares of the Staked ETH Trust are eligible to be held in certain IRA, 401k, and other investment accounts.

I believe that this is a huge step for institutional investors to get the full exposure to the ETH asset. Staked has been already been providing staking services to the top crypto funds and infrastructure providers in the space, see below:

The company does this without needing their clients to give them custody of assets, being sort of a Stripe for staking/yield. You can imagine future institutional investment products that are powered by the Staked infrastructure, providing access to the decentralized finance and yield, which has pretty much evaporated from traditional banks during this pandemic.

- Paul V

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DIGESTS

Product Spotlight and Roadmap

Following on from the great momentum of our IDO, we’re excited to introduce Convergence Finance from a product perspective with the community alongside our roadmap. 

BitClout’s Insiders-Only Pre-Launch Overshadows Social Media Revamp

BitClout, a blockchain-based social networking platform branding itself on the ability to speculate on celebrities’ social media presence with real money, officially launches today. 


NEWS

Visa Will Start Settling Transactions With Crypto Partners In USDC On Ethereum

Visa is piloting transaction settlement in stablecoins on the Ethereum blockchain. 

Grammy Award-Winning Multi-Platinum Musician Lupe Fiasco to Launch NFT Collection on Origin

We are thrilled to announce the launch of Lupe Fiasco’s first-ever NFT drop on Origin’s industry-leading NFT Launchpad. 

PayPal Pushes Crypto Further Mainstream With Planned Checkout Service for 29M Merchants

PayPal’s Checkout will allow bitcoin (BTC), ether(ETH), bitcoin cash (BCH) and litecoin (LTC) to be seamlessly converted into U.S. dollars or other fiat currencies when making purchases, the same as credit card or a debit card would work inside a PayPal wallet, said PayPal – meaning merchants will not actually be the recipients of cryptocurrencies.


REGULATIONS

Civil Liberties Group Calls FinCEN Crypto Wallet Rule ‘Unconstitutional’

The nonprofit said FinCEN's proposed rule "represents a radical extension of ... financial surveillance of innocent Americans."

Coinbase Snags Former SEC Director Brett Redfearn Ahead of Public Listing

Redfearn, who previously ran the SEC’s Division of Trading and Markets and left public service late last year, will oversee exchange operations, brokerage and custody services at Coinbase


IN THE TWEETS


NEW PRODUCTS AND HOT DEALS

NAOS Finance Raises Seed Funding Round with $250 Million in Assets Originated

NAOS Finance, a technology company that has originated more than $250 million in crypto assets backed by real-world debt, announced today that it has raised a seed funding round to accelerate its efforts to bridge the worlds of traditional finance and crypto.

Element Finance DeFi Raises $4.4 Million for Fixed Rate Liquidity

The protocol aims to bring high fixed-rate yields to DeFi and maximize capital efficiency. Users will be able to purchase discounted BTC, ETH, and USDC without being locked into a fixed term.


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ABOUT ME

Hi, I’m Paul Veradittakit, a Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.