HashKey Launches ETH L2 - HashKey Chain

Lens’s $31M Raise | Polygon $1B Bridge Drama

Marco Manoppo & Karon Pangestu
December 20, 2024

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Good Morning.

How’s your bag folks? A bit too soon? Ok… I’m sorry. Anyway, it’s time to touch some grass and refocus on your 2025 strategy if you’ve been severely impacted by the past 24H. Besides, it’s always a good idea to think that the money you see on the screen is fake — always discount it by 50%. Nothing is real until it touches your bank account.

In Today's Email:

What Matters: HashKey Launches L2 🇭🇰
Founders Highlight: Casey of Topology 👩
Deal Flow: Lens’s $31M Round 💰️

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WHAT MATTERS

HashKey Group Launches Ethereum L2

State of play: HashKey Group, a digital asset financial services provider based in Hong Kong, has launched its Ethereum L2 network, HashKey Chain, on the mainnet.

This development follows eight months after the initial announcement and leverages Optimism's OP Stack as part of the Ethereum Superchain ecosystem.
HashKey Chain generated significant activity during its testnet phase, recording 25M transactions, over 860,000 wallets, and achieving 400 tx per second.
Additionally, 50 projects were deployed, with participation from 300,000 community members.
The L2 network's native token, $HSK, is live on multiple exchanges and facilitates governance within the ecosystem.
To support developers, HashKey has launched a $50M grant program offering funding, technical support, and hackathon opportunities.

Why it Matters: HashKey Chain is backed by a regulated, institutional player, which bridges the gap between traditional finance and blockchain. This instills trust and attracts both institutional and retail participants.

What’s next: In the next phase of its development, scheduled for the first half of 2025, HashKey Chain will focus on expanding its ecosystem through cross-platform collaboration and community-driven initiatives

For builders and investors: The technology of creating a new chain is getting commoditized. The key remains on why should user trust your bridge and come to your ecosystem above all else.

BUILDER-INVESTOR HIGHLIGHT

Casey Caruso of Topology Ventures

Intro: Casey Caruso is the founder and managing partner of Topology Ventures, an early-stage venture firm dedicated to frontier technology.

Previous background: Casey began her career as a Research Engineer at Johns Hopkins APL under a DARPA grant, then spent over three years at Google, focusing on machine learning, UX, and cloud systems.

Transitioning to crypto, Casey served as an EIR & Crypto Specialist at Bessemer Venture Partners and later as an Investment Partner at Paradigm, gaining deep expertise in blockchain and digital assets.

The big idea: Through Topology, Casey partners with ambitious technologists to drive innovation at the intersection of technology and humanity, focusing on AI, decentralized systems, and neurotech.

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

Money View of the Polygon Bridge Drama

Source: Steakhouse Financial

Credits to Steakhouse Financial for the original article

State of play: The "Polygon Bridge Drama" centers on a proposal to allocate over $1B in bridge assets to Ethereum lending markets, aiming to generate returns that support the Polygon ecosystem.

This proposal has ignited debates over bridge design and risk, particularly the tradeoffs between full-reserve and fractional-reserve models.

The full-reserve model ensures 1:1 asset backing, providing high liquidity and safety for user redemptions.
However, it doesn’t address solvency risks, such as loss in value or compromise of underlying assets.
The fractional reserve model allocates reserves to yield-generating strategies like lending against high-quality collateral.

While this introduces risks of illiquidity and redemption delays during stress events, it can fund ecosystem incentives, reduce transaction fees, and build financial resilience through surplus buffers.

Critics argue fractionalization could harm user trust, as bridged tokens might lose fungibility with the original assets.

Proponents, however, emphasize the potential benefits of prudent risk management and transparency, transforming idle capital into a mechanism for ecosystem growth.
The debate highlights the broader implications of bridge design, requiring a balance between liquidity, solvency, and innovation.
Studying bridge balance sheets dispassionately can help the crypto community better navigate these tradeoffs and leverage blockchain systems' transparency for sustainable development.

DEAL FLOWS

Lens’s $31M Strategic Round

Deal flows remained steady this week - we saw $160M+ in deals 💼

Lens, an Ethereum L2 network focused on SocialFi, has closed a $31M strategic funding round led by Lightspeed Faction, with participation from Circle, Consensys, Wintermute, and angel investors like Rune Christensen and Aleksander Larsen.

The funds will enhance Lens Network's scaling infrastructure and support its mission to integrate social and financial features seamlessly in dApps.
The network will transition from an EVM-compatible Validium to a Volition architecture using zkSync's ZK Stack.
Lens V3 introduces customizable SocialFi features like Accounts, Feeds, and Groups, with mainnet launch planned for early 2025.

Deal flows in the past week:

BitDCA, $2M Pre-Seed Round
Juicyway, $3M Pre-Seed Round
Promeet, $3.1M Pre-Seed Round
Fraction AI, $6M Pre-Seed Round
Yei Finance, $2M Seed Round
Silencio, $2.5M Seed Round
BOXBOX, $2.5M Seed Round
fantasy.top, $4.25M Seed Round
BVNK, $50M Series B
Flock, $3M Strategic Round
Lens, $31M Strategic Round
XYRO, $1.4M Private Round
DAWN, $2.5M Strategic Round
MegaLabs, $10M Public Token Sale
Moonray Game, $1.75M Unknown Round
Kettle, $4M Unknown Round
Prometheum, $20M Unknown Round
Plume Network, $20M Unknown Round

QUICK BITES

Aptos Co-Founder Mo steps down as CEO.
Craig Wright sentenced to one year in prison.
Federal Judge says Coinbase can delist wBTC.
Usual Money uses M0 infrastructure to launch its token.
El Salvador to limit bitcoin activities for $1.4B deal with IMF.
The Open Platform launches TON Space self-custody wallet.
Ilya Lichtenstein said he worked alone on the 2016 Bitfinex hack.
HAWK memecoin team got sued for alleged securities law violations.
Sui Foundation names Christian Thompson as its new managing director.
Binance Australia derivatives faces legal action for misclassifying investors.

NOTEWORTHY READS

Mattis’ read on the war for mindshare.
0xmikko’s read on building a rollup-centric app.
Coinbase Institutional’s read on the 2025 crypto market outlook.

— Kits 🌸 (@0x_kitsune)
4:18 AM • Dec 20, 2024

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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.