Arbitrum's $1 Billion Airdrop (💙,🧡)

DeFiance's Arthur Cheong | NEW $100M Liquid Token Fund

March 17, 2023

GM folks 👋🏻 - Happy Friday.

Crypto markets are up. Many predict that the Fed will be forced to pivot sooner than later as months of QT got wiped out by the banking issues. Arbitrum is playing this well. They announced an airdrop as soon as the market starts to look somewhat good 👍

In Today's Email:

What Matters: Arbitrum announces airdrop, transitions to a DAO 🪂
Founders-Investors Highlight: Arthur Cheong, Founder of DeFiance 🐎
Deal Flows: DeFiance Capital $100M Liquid Token Fund 💧

Take a peek at our new referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

Narratives: Arbitrum ecosystem. Pay attention to DeFi dynamics on Arbitrum as the token release gets closer. What happens next is usually pool2 farming on steroids.

WHAT MATTERS

Arbitrum Announces Airdrop 🪂

Wen? Now. 🧑‍🚀💙🧡
— Arbitrum (💙,🧡) (@arbitrum)
1:01 PM • Mar 16, 2023

State of play: Leading L2 network Arbitrum has announced its upcoming ARB token airdrop on March 23. ARB will be a governance token. This will begin the transition process for Arbitrum to become a full-fledged DAO. You can check if you're eligible, here.

The initial supply cap of ARB tokens is 10 billion, with a maximum inflation of 2% per year.

Breakdown of the ARB token supply:

Arbitrum

The airdrop represents 12.75% of the token's total supply.
ARB token will control the governance of Arbitrum One and Nova networks.
The DAO will be self-executing. What this means is that governance members can pass protocol upgrades which will be automatically applied on-chain, if there are enough votes, without relying on the goodwill of the team behind Arbitrum.

The key takeaway: Use crypto protocols. A proper system for you to keep track of existing protocols without tokens can be extremely useful in assessing and experiencing the technology firsthand as investors, and occasionally you might get a nice payout 🤓

At Optimism's FDV, Arbitrum's strongest competitor, the ARB tokens will be worth ~$1.

Why it matters: Ethereum and EVM-compatible chains still command the majority of liquidity and TVL across the broader crypto ecosystems. Arbitrum's airdrop will rejuvenate the DeFi markets alongside what seems to be a better macro backdrop for risk assets.

For builders: Arbitrum does the right thing by timing its airdrop announcement alongside market conditions, and ensuring that the requirements to receive the airdrops are fairly achievable for the majority of users, not falling prey to Sybil attacks 🎯

For investors: Arbitrum seems poised to draw developers and generate exciting consumer dApps. It's already the largest L2 chain by TVL, and many profitable protocols such as GMX are building on Arbitrum because of its ties with Ethereum reliability and EVM liquidity.

BUILDER-INVESTOR HIGHLIGHT

Arthur Cheong, Founder of DeFiance Capital

Arthur Cheong is the Founder & CEO of DeFiance Capital. Previously, he was the VP of Growth and Strategy at Zilliqa, a layer 1 blockchain network. Prior to that, he was a cryptoasset trading strategist at JST Capital.

DeFiance rose to fame during the DeFi summer of 2020 as they were one of the first funds to focus on the sector.
Arthur is now back. Not that he ever left in the first place. However, his firm DeFiance was impacted by the downfall of 3 Arrows Capital, having once described itself as a "sub-fund and share class of 3 Arrows Capital".

Previous backgrounds:

Arthur started his career at Cargill doing metals market risk.
Arthur then moved to BP and join the Trader Development Program, eventually focusing on the oil markets.

The big idea: DeFiance Capital's new liquid token funds will be focusing on investing crypto assets on the open markets whose prices have fallen below their fundraising rounds.

The notion that primary market VC investment in crypto is less risky and have lower volatility than investing in liquid crypto directly is perhaps one of the dumbest concept to ever infect the mind of crypto investors.
Market will learn this the hard way.
— Arthur (@Arthur_0x)
7:51 AM • Nov 13, 2022

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DEAL FLOWS

DeFiance Capital $100M Liquid Token Fund

DeFiance Capital

🤝 Deal flows slowed down significantly this week. This week we saw $74M+ in deals, excluding DeFiance Capital's latest $100M liquid token funds.

Seems like no one wants to do press releases during the same week as all the ongoing SVB news.

DeFiance Capital $100M Liquid Token Fund: Led by Arthur Cheong, The Singapore-based investment firm has completed its first close of a new $100M liquid token fund, raising eight figures in the process.

"While that could mean anything between $10 million and $99 million, the initial raise came in under $50 million, said one of the sources." — The Block

DeFiance was hit by the bankruptcy of 3 Arrows Capital, having been seeded by 3AC when it first started in 2020.
LPs in the fund include DeFiance's existing investors, crypto funds of funds, and family offices.
The goal of the liquid token fund is to invest in venture-backed projects with tokens that proceeded to slump below their previous fundraising valuations.

Deal flows in the past week:

Metacade, $10M Presale Round
Smooth, $2M Seed Round
Soul Wallet, $3M Seed Round
Jungle, $6M Seed Round
DressX, $15M Series A
CNHC, $10M Series A+
Orbs, $10M Token Round
Ark Invest, $16.3M Crypto Funds
Alex, $2.5M Strategic Round
Capsule, Undisclosed $ Round by a16z

QUICK BITES

Arbitrum announces new token airdrop, transitioning to a DAO.
Fidelity Crypto goes live.
SEC Gensler suggests Proof-of-Stake tokens are securities.
Blockchain Association seeks documents on crypto de-banking from FDIC.
Coinbase integrates Standard Chartered for Singapore FIAT on-off ramp.
Brian Brooks comments on crypto banking issues.
BlackRock comments on tokenization of asset classes.
Worldcoin ramps up iris-scanning orbs production.
Signature SVB Buyers won't need to divest crypto business.

MEME & NOTEWORTHY READS

Arthur Hayes' article on bank term funding program.
Luca Prosperi's article on how banking is broken.
Joel John's article on making Bitcoin fun again.

— Hsaka (@HsakaTrades)
1:52 PM • Oct 1, 2022

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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.