FTX Lists of Political Donations 📄

How Much $ Does Lido Finance Make? | Web3 SDK for Games

February 06, 2023

GM, folks 👋🏻 - Happy Monday.

We started releasing this newsletter publicly in late January 2023. Thus far, we've acquired 1,000 subscribers! 🍾 (technically it's 992 but let me live!).

We might sound like a broken record 🤖, but we want to thank all of you, early readers. We strive to create the best platforms to elevate web3 founders' and investors' work. Stay tuned to our upcoming products!

Anyway, let's get into today's issue 👇

Crypto stagnated over the weekend 📈📉. All the craziness seems to be around crypto, FTX debtors want their money back from politicians, and a16z unsurprisingly voted against deploying Uniswap on the BNB chain.

In Today's Email:

What Matters: FTX wants back political donations money 💼
Products: Metafi, crypto SDK for web2 games 🎮
Charts: Uniswap volume dominance, Lido Finance revenue 📈

WHAT MATTERS

FTX Political Donations Revealed

@unusual_whales

State of play: FTX has been sending letters to political entities that previously received donations from the firm. The new management demands that these funds are returned. The list of entities receiving these funds is finally made public.

FTX Debtors are reviewing $93M in political donations.
The Democratic National Committee stated that it would set aside more than $1M in cash linked to FTX.
Donating the money isn't an option. FTX stated: “Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX contributor does not prevent the FTX debtors from seeking recovery from the recipient or any subsequent transferee,”

What’s next: The important takeaway here isn't the number. $93M, that's a chunk of change compared to how much was lost. However, this marks the level of seriousness about clawbacks. Until now, we don't have any clarity as to what extent the FTX Debtors and current management will go through in order to receive their money back, nor do we know how much power they have over other jurisdictions. What's interesting is when they'll begin clawing back investments in crypto funds and projects ⚖️

Our take: FTX's ability to claw back its money will also set a precedent in how other bankruptcy cases will be played out. They're doing the right thing by starting the process in the US, in the political donations realm, as the legality is much more clear. Once they try to go after entities outside of the US, especially if those entities aren't fully centralized, then things will get interesting.

For builders: Make sure the funds that you've raised aren't tainted by FTX money. If they are, and if the amount is substantial, you want to start thinking of a way to divest those investments. Below, I shared an article as to how LayerZero did this. Ask your investors for help, and next time; make sure that you also do your diligence on your investors. Its a two way street ✍🏻

For investors: Clawbacks. If you're backing a portfolio company that received funds from FTX or its affiliated entities, you want to start thinking about how you can help them navigate potential clawback, especially if the funds received were substantial. There's a great example of how to handle this. LayerZero labs bought back its stake from FTX-Alameda. Ideally, investors in the cap table should work together to construct such solutions 🤝

PRODUCTS OF THE WEEK

Metafi Wallet Unity SDK

What is Metafi Unity SDK: Metafi is a crypto wallet infrastructure tool optimized for web3 games. Simply put, it wants to simplify the process of bringing crypto into your game. It's backed by Y Combinator 🎮

Metafi SDK allows developers to embed a web3 wallet in their games with 5 lines of code. This way, gamers won't even know that they're using crypto, enabling developers to focus on gameplay and other aspects of the products while tapping into the benefits of web3 🖥️
Metafi features include the creation of wallets from emails, ERC-20 token transactions, staking mechanisms, on-chain leaderboards, and so on. All this while ensuring that gas costs are kept to a minimum.

Other cool products:

RealNifty, a curated NFT marketplace focusing on artists.
Certhis, a web3 portal for launching NFT collections.
Z3US, a community centered browser wallet for Radix DLT.
Inevitable, a blockchain and web3 education platforms for companies.
Apelytics, a DEXs analytics tool.
Underdog Protocol, an on-chain reputation protocol.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

CHARTS OF THE WEEK

Uniswap Remains King

Kaiko

There are 50+ DEXs across the EVM ecosystem, but Uniswap remains King 👑. The chart above shows that SushiSwap had a decent market share prior to the launch of Uniswap V3. Since then, no DEXs have managed to acquire substantial market share away from Uniswap. All this while Uniswap stopped its liquidity incentive programs, and neglected to innovate on its tokenomics design 🛑

Our take: Uniswap's moat is its brand equity and the belief that a Silicon Valley-backed, predominantly US entity would do much more to manage risks because of strong regulations. Although this means that Uniswap is relatively limited in what it can do with the UNI token, the trust seems to be doing well

To watch: Politics, governance, and fee switch. Just a few days back, a16z voted against deploying Uniswap on BNB Chain. This is despite the community being in favor of the move. a16z backed LayerZero, a competitor to Wormhole, the bridging infrastructure that will be utilized if this deployment gets passed. In the future, we will be seeing more political battles between firms with opposing commercial interests affecting the largest DEX in crypto ⚔️

Lido Finance Revenue

Our Network

There are hundreds of crypto decentralized applications, especially on Ethereum, but only a few make actual revenues. Other than GMX, Lido is the only app in the top 7 names that generated positive revenues in the past week, month, quarter, and half a year.

State of Play: Lido was the first liquid staking protocol on Ethereum that took off as users want to tap into liquidity while also receiving Ethereum staking yield. Competitors have since emerged and taken market share away. Its recent growth, however, can be attributed to Layer 2 networks, specifically Optimism and Arbitrum 📈

Our take: As Ethereum staking withdrawals got enabled, there will be less reason to hold stETH, requiring Lido to differentiate itself via other strategies. It can enter the staking infrastructure game, providing unique combined services with its liquid staking product, while maintaining its liquidity dominance across DeFi ecosystems. For a derivative product such as stETH, liquidity is key 🔑. God hope we've learned that from 3AC.

QUICK BITES

Pantera loses Co-Cio Joey Krug.
FTX Debtors want political donation returned.
Ray Dalio thoughts on inflation-beating coin.
a16z votes against deploying Uniswap on BNB Chain.
South Korea broadens rules on tokens as securities
Lightning Network hits ATH capacity.
StarkWare plans to open-source prover technology for ETH L2 network.
Protocol Labs (Filecoin) cuts 21% of staff.
Genesis 7-member committee formed in its bankruptcy case.

MEME & NOTEWORTHY READS

Mika Honkasalo's article on decentralized casino thesis.
@abdullahbumar's thread on Uniswap governance politics.
Adam Cochran's thread on gambling as an incentive model in DeFi.

Pay to suspend another Twitter user
— gaut (@0xgaut)
3:41 PM • Feb 4, 2023

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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.