Today, enjoy the Empire newsletter on Blockworks.co. Tomorrow, get the news delivered directly to your inbox. Subscribe to the Empire newsletter.
Is there an app for that?
One thing we’ve talked about a lot here is that some in the venture capital space are now looking past the infrastructure raises.
PitchBook’s Robert Le told me just last week that there are “too many L1s,” for example.
Though he noted that, throughout last quarter and earlier this year, “blockchain infrastructure such as layer-1s, scaling solutions and staking/restaking remained areas with strong investor interest in Q2” in his second quarter report earlier this month.
There are, as always, some exceptions. Both Berachain and Monad raised a significant amount of capitalearlier this year. ICYMI: Berachain raised $100 million in a Series B, while Monad raised $225 million.
Those two rounds are well within the top 5 megaraises this year, alongside Farcaster’s $150 million round and Zentry’s $140 million round. To fill out that group, Babylon raised $70 million in an early-stage round.
Last month, I spoke to Michael Anderson of Framework Ventures, and he told me that this cycle, he’s watching and “spending a lot of time on” Monad and Berachain. Framework, to be fair, is an investor in Berachain.
Specifically with Berachain, Anderson said that the team is showing off its ability to innovate. Something that our team at Blockworks Research also noted in a research report last week.
“They have some crazy concepts that they are building on that are just so crazy they just might work,” Anderson said. He specifically cited Puffpaw which is a vape-to-earn DePIN app building on Berachain that aims to reward folks for quitting vaping.
This type of building actually supports what Le is looking for. In his second quarter report, he wrote that he’ll be looking for projects that are building for non-crypto-native users to receive attention and investments.
Berachain’s Smokey, on the Empire podcast, said, “I think you do need stuff that lay people can use and people actually care about if they have a couple hundred dollars or a thousand dollars in their bank account.”
Smokey stated that the “chain should not be the main character,” because “at the end of the day, the apps are what matter. Part of Berachain’s push will be to highlight that and try to give the apps, like the vape-to-earn one, a chance at success.
For Monad’s Keone Hon, an app should offer “inherent value to the end user so that they keep coming back rather than being purely motivated by some sort of temporary incentive or temporary condition that maybe logic would dictate is not going to last.”
Last week, we talked about how venture capital funding might not bounce back to 2022 levels any time soon, but perhaps that’s not a bad thing.
At least the projects that have caught the attention of VCs seem focused on delivering results that could improve the ecosystem. And they’re keen to offer potential ways to bring back the non-crypto native crowd.
— Katherine Ross
Data Center
- Crypto is awash with green today, BTC and ETH are up 4% and 2.7% apiece over the day. (BTC: $60,700; ETH: $2,650.)
- Memecoins are rallying the hardest: BRETT, WIF, FLOKI and PEPE have all gained between 24% and 10%. AAVE is in between with 16%.
- CEX liquidations are calm, with only $85.9 million wiped in the past 24 hours. Almost 75% of it came from shorts.
- $200 million has flowed out of Ethereum bridges in the last week, per DeFiLlama with Polygon and Arbitrum seeing the most inflows: $31.5 million and $27.8 million.
- Global stablecoin supplies are still climbing, now at $168.3 billion — up $4 billion in the past month.
Crypto academia
Crypto is anti-credentialist. A cypherpunk sandbox for coding anything and everything, backed by an open-source ethos that encourages forking and other forms of entrepreneurial riffing.
But there’s also a massive cohort of cryptocurrencies and blockchains being built by teams led or advised by professors, either former or current.
Some of the biggest projects in the space are powered by professors. Hedera, Bittensor, Stellar, Arbitrum, Algorand, Chainlink and Avalanche all have either been founded by, or employed professors among their senior leadership.
Other projects have enlisted professors as advisers, including Aptos, Filecoin, Ondo and Theta Network and even MakerDAO for a time a few years back.
For the sake of neatness, we can probably label projects with professors in advisory roles “honorary” professor coins, while the fully-fledged moniker can be reserved for coins with professors in decision-making roles.
Out of the top 150 or so cryptocurrencies by market cap, there are 20 professor coins and another 10 honorary coins.
It’s easy to see why academics might be drawn to crypto. Blockchain has been filled with white space — the odds of creating novel utility with crypto has been incredibly high for over a decade.
There’s also a certain old-world credibility that comes with having professors either on staff or steering the ship.
Crypto is, however, clearly a middle finger to the establishment, despite recent moves to meld it with traditional finance and even two-party politics. Professor coins then make for an awkward fit at times.
Cardano, for instance, has for the longest time been positioned as the peer-reviewed blockchain created in consultation with esteemed academics. Newcomers may find that messaging enticing, but crypto natives would probably find it embarrassing.
And this translates to some mediocre returns for professor coins.
Over the past five years, only eight professor coins have beaten bitcoin: FTM, THETA, QNT, ADA, KAS, and the three AI-related tokens that just merged into one, FET, OCEAN and AGIX.
Not to mention two-fifths of the analyzed professor coins are in the red over the same period, with ICP, FIL, MINA, ALGO, STRK losing more than 80% of their value.
Does this mean professor coins are doomed? Probably not. This analysis was purely surface level and any connection between the performance of professor coins is almost certainly correlation without the causation.
But they do make for an easy target when there’s blood in the streets. Thankfully, we’re not there yet — outside of the coins on the chart above, that is.
— David Canellis
The Works
- State Street is branching into tokenization and crypto custody with the help of Taurus, CoinDesk reported.
- Mango DAO, which governs Mango Markets, voted to settle with the SEC.
- Nigeria’s SEC plans to issue the first virtual-asset licenses later this month.
- The SEC voiced concerns about Solana as a potential security before Cboe removed 19b-4 filings, The Block reported.
- The chair of the Democratic National Committee met with executives from bitcoin miner Marathon Digital earlier this month.
The Riff
Q: Is X the new LinkedIn of crypto?
Two years ago, I would have immediately said yes.
That was the height of the “intern” meta. Crypto projects, alongside Web2 and TradFi brands, all fronted their Twitter accounts with a phony intern — more than likely a marketing executive — that would communicate with other users on their level. Degen-to-degen.
Shitposting was, all of a sudden, an audition to work your dream job. This trend seems well past its peak, and a lot of the fun on X has faded along with it.
That said, people do still get hired based on the content they produce on X.
It’s the accounts posting deep-dives to under 300 followers for a few likes and a retweet that now present some of the most value. Hire them, not the shitposters.
— David Canellis
Let’s face it: LinkedIn’s for boomers. It’s boring (don’t hate me, chronically online LinkedIn-ers) and I find it hard to interact with anyone on there. I use it mostly as an ever-evolving resume so that people can see that I’m not just full of crap.
X (RIP Twitter) is a better way to gauge someone’s personality and their strengths. It’s also far easier to interact with other users than LinkedIn.
For crypto specifically, it helps to understand a person and their potential strengths before just cold-DMing them. Or perhaps that’s just the journalist in me talking.
Anyway, CT gives folks a better look into what’s being built or what, say, devs are working on than a LinkedIn post. I guess you can fight me on that.
— Katherine Ross
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.
The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.
- Empire Newsletter
- Funding
- Layer-1
- social media