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• What raising venture capital is like in a frothy venture environment
• Goldbard’s game-plan to recruit top engineers
• Why Signal decided to partner with MobileCoin
• How Goldbard poached Cash App’s founding CTO Bob Lee

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto infrastructure developer Qredo has secured an $80 million Series A investment that values it at $460 million.

The round consists of $60 million in primary capital and $20 million from secondary investors, according to an announcement. The money will be used to fuel growth through acquisitions, product development and geographic expansion. 

Hedge fund veteran Dan Tapiero’s 10T Holdings led the raise, alongside strategic investors Coinbase Ventures, Avalanche and Terra. Kingsway Capital, HOF Capital, Raptor Group and GoldenTree Asset Management also participated. 

Qredo builds decentralized tools that help DeFi operators move assets between blockchains, as well as with settlement and custody.

The company’s COO, Josh Goodbody, said there is currently “huge appetite” among venture capital investors for crypto infrastructure firms. Tapiero, founder and CEO of 10T Holdings, said in a statement that “infrastructure is a key battleground for scaling crypto adoption.”

Earlier this week, crypto data startup Dune Analytics confirmed that it had raised $69 million at a $1 billion valuation. Custody specialist Fireblocks has just closed a $550 million raise at a valuation of $8 billion, while Ethereum software developer ConsenSys is set to close a deal that will more than double its price tag to $7 billion.

“Infrastructure is extremely hot right now,” continued Goodbody. “What you have also seen in the background is really a race for multi-party computation (MPC) technology.”

The network is the vault

Qredo’s core premise is that it offers “decentralized custody for decentralized assets,” according to its website. 

The company uses MPC to split and scatter customers’ private keys but claims to take the concept further than the first wave of crypto security firms — like Fireblocks and Copper — by distributing these fragments across watertight data centers, with control in the hands of the Qredochain, the firm’s Layer 2 network.

The key difference, according to Goodbody, is that Qredo itself doesn’t hold those fragments.

“Each custodial operation — each transaction, each signature, and each change to wallet custodial policies — is mined into the blockchain,” states Qredo on its website. “In this way, the network becomes the vault.”

The firm’s infrastructure also supports instant cross-chain swaps and settlement on supported blockchains. 

Growth mode

Qredo’s customers include major crypto platforms and trading firms such as Coinbase, Celsius, Deribit and GSR. As of December last year, the firm boasted more than $6 billion in assets on the network, according to Goodbody.

The startup raised $11 million in seed funding in early 2021, before staging a $35 million token sale in July. Goodbody, who previously led Binance’s operations in Europe and joined Qredo in June 2021, said the firm has grown significantly since the token sale.

“We’re now 100 people globally. We’ve embraced this remote-first workforce,” he added.

Qredo’s client roster has also been growing. In October last year, the firm partnered with Ethereum wallet firm MetaMask Institutional to help institutions access DeFi ecosystems.

“We now have over 100 of what we call institutional clients. Of those, half the clients are interested in DeFi,” said Goodbody.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto asset management firm Arca has closed a $50 million fund dedicated to investing in individual NFTs. 

The firm said in a press release on Thursday that it would focus on individual NFTs because many items have immediate cash flows and yields, and unique properties that accrue directly to the token holder.

The fund was capped at $50 million and was oversubscribed. 

Existing investments include Alethea, CXIP, Portals, Raremint and Recur. 

Future acquisitions will include digital property, in-game assets, passive income generators, art and collectibles, DeFi integrated NFTs, utility and reward based NFTs, AI NFTs, identity tokens and royalty streams.

The fund will also focus on investing in the tokens underpinning the ecosystem, such as gaming assets, infrastructure, metaverse related tokens and utility tokens that shape the fabric of the burgeoning NFT economy.

Sasha Fleyshman will serve as Portfolio Manager with oversight from CIO Jeff Dorman. 

It follows the October debut of Arca’s Endeavor Fund, an early-stage, closed-end venture fund focused on investing in innovative founders across various segments of the digital asset ecosystem.  

Interest in the NFT market has soared in recent months, with Google search volumes hitting all time highs at the end of last year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Venture capital firm, Fundamental Labs launched its Fundamental Labs Fund V – the fifth in its  series of funds that kicked off in 2016. It was constituted within one month with a medium size of  $50M. Fundamental Labs’ investment philosophy is anchored around being a long-term, strategic,  value investor. Short-term speculation is not its approach so remains phase agnostic.  

Looking ahead into 2022, it plans to launch another new fund with a decent sized $200M AUM to  encompass more of the exciting Web3.0 application and infrastructure project it sees as prime  investable sectors. 

With 2021 being a landmark year for the global digital asset market and Web 3.0 ecosystem, the  Fundamental Labs team has seen an incredible combination of talent and capital flow into this  space. While all-time highs (ATHs) were printed across crypto markets there were several trends  that commanded even more attention. 

Digital assets emerged as one of the hottest alternative investments in recent times. Coinbase,  the largest US cryptocurrency exchange and one of Fundamental Labs’ portfolio companies, made its public market debut on the Nasdaq in April. It was a breakthrough moment for digital  assets investors, adding to a sense that the asset class has become “mainstream”. 

The emergence of NFTs, the Metaverse, and GameFi set off a massive wave of innovation (and  investment) in the underlying decentralized technology stack and “Web 3.0” rose from being an  ambiguous buzz word to become an inevitable trend that promises to substantially change to our  work and daily lives.  

With more investment comes more innovation, and with more innovation the entire ecosystem  will only grow, exponentially, as we move headlong into the future. This change is exciting and  rich with opportunities, and Fundamental Labs will be continuing its mission to help  entrepreneurs accelerate their fundamental innovation and mass adoption and will be riding  some key themes in 2022: 

1. Web3.0 and Crypto 

Web 3.0 is the next phase of the evolution of the internet. It aims to be a decentralized version of  the virtual world, where users can interact and collaborate intelligently without worrying about  the central Web 2.0 servers. To make the web evolution more inclusive and less biased,  blockchain technology will be a foundational resource to focus on.  

2. NFT Mania

“NFT” was ranked as the top trending Google search in 2021. NFTs, or Non-Fungible Tokens, took  the world by storm in 2021. The trading volume of non-fungible tokens (NFTs) surpassed $13  billion, according to The Block Research. That figure is a massive 42,988% increase compared to  2020 NFT trading volumes. 

NFTs are not limited to showing ownership of a unique PFP, or digitization and tokenization of  artworks like Beeble’s “Everydays: The First 5,000 Days.”, the scope of NFTs has expanded to  include music, games, sports and any digital or real-world asset — that can be tokenized while  still holding their value and providing unique ownership into the metaverse.  

The rise of metaverses has kept NFTs firmly in the spotlight having spawned a new breed of real  estate investors looking to grab a piece of digital land through non-fungible tokens. One NFT  blue chip is Decentraland ($MANA), an investment made by Fundamental Labs in 2017, which  continues to hold its first-mover advantage from NFT to thriving metaverse. To kick off 2022,  electronics giant Samsung opened 837X, a virtual replica of its flagship 837 store, in the heart of  Decentraland. 

The demand for NFTs insatiable and offering creatives and rights holders new avenues to protect  their intellectual property and create value. Initially the NFT space has been the domain  dominated by Ethereum, powering much of the development. However, as NFTs prosper, they are no longer limited to the Ethereum chain for success, as we have witnessed a number of our  portfolio companies with diversified protocols built on other Layer1 chains thriving: 

• RMRK.app,  
• Metaplex 
• Mintbase 

The prime watershed moment for NFTs that followed the metaverse narrative is through GameFi  protocols. 

3. GameFi:Play-to-Earn 

GameFi is the intersection of DeFi and Play-to-Earn (P2E) blockchain gaming inside the Metaverse.  GameFi encompasses the economies that become possible by passing ownership of assets to  players and incentivizing greater loyalty, engagement, and positive stewardship of these gaming  communities – thus changing the types and rules of games. 

Axie Infinity’s Play-to-Earn (P2E) model — coupled with Guilds’ is the real game changer. 

The traditional games market in 2021 generated total revenues of $180.3 billion, so even 10% of  the traditional “pay-to-play” or “play-to-win” model shifting to “play-to-earn” will bring  handsome profits to Web 3.0 users. We are super bullish to see traditional gaming players joining  the GameFi craze. Below are a few recent investments supported by Fundamental Labs that we  see following this trend:

• Genopets 
• StarSharks 
• Solchicks 
• NASH Metaverse 
• Ajuna Network 
• Tristan 
• Bullieverse 

The advent of GameFi has led to the Metaverse taking off in 2021, which is a great credit of  Web3.0 infrastructure readiness. If we compare the state we are in with Web 3.0 with the days of  DApps (circa 2018) – most of the DApps failed. With the benefit of hindsight, this failure was a  result of the difficulties to build something of value when the ideas were so far ahead of the  supporting infrastructure. But it’s the natural course. 

4. Infrastructure Stack 

The “multi-chain” narrative was strong in 2021 and could extend to the whole year of 2022, as  various Layer 1 blockchains and Layer 2 scaling solutions emerged to address the scalability  problems that have historically plagued Ethereum. 

Fundamental Labs is an advocate for multi-chain to increase the blockchain scalability as a whole,  the portfolio of Layer 1 is comprehensive, including NEAR, Avalanche, Polkadot, Kusama, Stacks,  Nervos, Conflux, PlatON,Binance Coin, etc. 

Decentralized storage is a niche Web3.0 infra at the intersection of Metaverse and Web 3.0. The  current main decentralized storage solutions are the IPFS/Filecoin and Arweave. 

Looking beyond 2022 

Despite the turbulent markets to start 2022 and the prospects that the Fed will remove stimulus,  Fundamental Labs maintains an active and positive outlook on the market and continued growth  across the above trends. There is no perfect time, and as such Fundamental Labs is quick to make  

investments when opportunities arise. Within the first week of the New Year, it has already  closed a few new deals. Some additional that the partners are watching most closely for further  investment in the near future, include: 

Web Social recent investments in RSS3 and SOCOL have great synergy with its existing Web 3.0 portfolio ecosystem: Steem, Theta, Brave(BAT), Dora Factory(DORA), Status (SNT), as well as Mask Network(MASK).

DeFi  

2021 boasted a few interesting DeFi2.0 projects like Abracadabra, Convex, Olympus, and Tokemak.  Compared with DeFi 1.0, the total value locked in DeFi 2.0 is still small but with better funding  models linked t protocol goals (Protocol Control Value) this dynamic should change.  Fundamental Labs started 2022 with investments in Treehouse, Neptune Mutual, and Zecrey  

DAO 

Over the course of 2021 we saw DAOs become more mature and mainstream. DAOs are a new  coordination layer which will eventually replace the traditional model. A DAO is an  internet-native organization with core functions that are automated by smart contracts, and with  people who do the things that automation cannot (e.g., marketing, software development). 

The Future of Work is Not Corporate — It’s DAOs and Web3.0 Networks 

One of Fundmental Labs’ portfolio companies, SuperDAO, is an operating system for DAOs.  SuperDao OS maintains the real-time status of DAO ownership, including tokens, NFTs, promises  of future equity, allocation plan, governance structure, and custom roles. 

Wrap-up 

“The future is already here, it just isn’t evenly distributed” .  

The promise of Web 3.0 is an infinite game. New technology such as crypto assets, Web Social,  DeFi, NFTs, Metaverse and the DAOs support the free flow of users, identity, data, and value which is facilitating collaboration and constituting an open digital economy – and ultimately a  fairer, more stable and sustainable society.  

Fundamental Labs remains an active and willing partner to back the boldest entrepreneurs. You  can read more about its outlook and portfolio companies in the full note here.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A newly formed decentralized autonomous organization (DAO) called AssangeDAO, formed by “a collective of cypherpunks,” is raising funds to be used to fight for the freedom of WikiLeaks founder Julian Assange.

The DAO is currently raising funds to bid on an NFT by digital artist Pak that was created in collaboration with Assange himself. Similar to ConstitutionDAO, anyone can donate to the pot of funds and donors receive a proportionate amount of its governance token in response. And it’s certainly catching hold; so far the DAO has raised 1,441 ether (worth $4 million)

“This is a powerful movement showing we can organize in the cloud and make a difference on land,” said one of the people behind the DAO who goes by Crypto McKenna on Twitter. McKenna is a smart contract developer and a DeFi advisor, they added.

“We are showing the power of leveraging permissionless, censorship-resistant digital currencies and zero-knowledge proof cryptography for retaining anonymity. We are working hard to ensure the DAO fulfills its mission,” they said.

AssangeDAO was formed on Thursday by McKenna and nine other core contributors, said McKenna. The other contributors include Assange’s brother Gabriel Shipton, his fiance Stella Morris, and core Bitcoin developer Amir Taaki.

“AssangeDAO is a line in the sand where DeFi takes a strategic step towards post-corporate democratic wealth,” Taaki told The Block. Cypherpunks around the world have heard Assange’s call, and have rallied to stand in defense of the original cypherpunk.”

Assange and Pak’s collaboration

Assange’s NFT, created by Pak, is going on auction on February 7. The NFT project is dubbed Censored and it will consist of two parts: a dynamic 1/1 and a dynamic open edition. 

McKenna said the NFT will be auctioned on a custom platform that Pak and Shipton have arranged. “It has forked the contracts of Manifold,” they said, adding that more details about the auction will be announced via Pak’s official Twitter account. 

If AssangeDAO wins the bid for the NFT, the NFT will be held by the DAO, and its contributors will be given the DAO’s governance token, JUSTICE, in proportion to their ETH contributions. Contributors will then decide via governance voting what to do with the NFT and the future roadmap of the DAO. McKenna said there was no initial target for the raise.

If the DAO loses the bid, the ETH contributed by people will then be redeemable via a multi-sig wallet. Taaki is on the multi-sig, said McKenna.

DAOs are catching on

AssangeDAO follows in the footsteps of ConstitutionDAO, a movement that almost managed to secure an early rare copy of the US Constitution. It was bested in the auction by Citadel CEO Kenneth Griffin. After the failed auction, owners of its governance token were able to redeem their tokens for the original amount of ETH paid — but the token ended up trading at much higher value on secondary markets. 

Another DAO looking to achieve a similar goal is the Free Ross DAO, which raised funds in an attempt to free Ross Ulbricht, the founder of the Silk Road online marketplace. It raised 1553 ether ($4.4 million at current prices) to bid on a collection of Ulbricht’s artwork as a single NFT. The DAO won the auction and bought the NFT for 1446 ether ($4 million). Other bidders included ​​the person who owns CryptoPunk 6529 (who operates pseudonymously under the Punk’s identity) and Kraken CEO Jesse Powell.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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MicroStrategy CEO Michael Saylor touted the firm’s stock, MSTR, as a better alternative to other exchange-traded vehicles with exposure to bitcoin — and he’s considering alternative methods to increase the amount of bitcoin on the balance sheet.

In an interview with Bloomberg, Saylor argued that unlike bitcoin futures exchange-traded funds on the market or bitcoin funds like Grayscale, investing in MicroStrategy doesn’t come with fees. With considerable sums of bitcoin on the balance sheet — now nearly 125,000 BTC — the firm presents considerable exposure to the cryptocurrency. 

According to Saylor, even a spot ETF, which the Securities and Exchange Commission has yet to approve, might be less attractive than a MicroStrategy investment since as an operating company, it does not charge fees. Furthermore, MicroStrategy can generate additional yield from its holdings.

“If you’re looking for a leveraged bitcoin play with spot exposure that’s got positive yield, then MicroStrategy is the only game in town,” said Saylor.

The firm will continue to buy bitcoin as part of its strategy, according to Saylor. It executed its most recent purchase using free cash flow, rather than issuing debt or equity as it has in the past. The firm generated $90 million in cash flow this year, which Saylor said will also be used to pay the debt service. The remainder, he said, will go into bitcoin.

But the firm is also considering alternative methods to make future big bitcoin purchases.

“Probably the most compelling and interesting ones are to generate yield off the 110,000 bitcoin that are currently unpledged, or to borrow against that 110,000 bitcoin and then reinvest that in more bitcoin,” he said.

Still, Saylor said the firm hasn’t made any decisions yet and any plans will be tested against its risk parameters. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

On February 3, leading cryptocurrency forensics firm Chainalysis announced that it has acquired Abaxx, a government consultancy firm.

Based in Great Falls, Virginia, Abaxx touts its management consulting as well as data analytics and financial intelligence services. Chainalysis is, meanwhile, the leading firm in blockchain analytics for financial investigations and a major contractor for the US government. 

In a statement to The Block, Eric Scofield, CEO of Abaxx wrote: “The Abaxx team is thrilled to join forces with Chainalysis and combine our industry and domain expertise with the world-class data and technology that Chainalysis is pioneering. Chainalysis is positively changing the landscape for financial crime fighters everywhere.”

Scofield founded Abaxx after leaving the US Treasury’s analysis and intelligence office in 2015. Chainalysis declined to share the dollar amount of the acquisition. 

Flush with cash from fundraises earlier in 2021, Chainalysis has been acquiring other firms and new employees at speed. In October, the firm announced the acquisition of Excygent

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Cameo, the platform through which celebrities sell personalized videos for a fee, has launched a pre-mint for a non-fungible token (NFT) collection called Cameo Pass on Thursday.

The NFTs in the Cameo Pass drop are not from celebrities but rather the artists Burnt Toast of Doodles fame, Vinnie Hager behind the Letters NFT collection and cartoonist Luke McGarry.

Each Pass NFT costs 0.2 ETH to mint (about $520), and users can only mint up to six NFTs in the pre-sale. Cameo has partnered with OpenSea, the world’s largest NFT marketplace, to facilitate the mint pre-sale and secondary sales.

“Cameo’s mission is to create the most personalized and authentic fan experiences on earth. With Web3 rising as one of the most significant and promising trends in celebrity, athlete and creator interactions and monetization, Cameo is exploring how it can be used to further our mission for fans and talent,” a Cameo representative told The Block.

Owning a Cameo Pass NFT allows users to attend exclusive celebrity events such as Q&As, meet-and-greets and in-person parties. — — especially as more celebrities buy and show off their NFTs.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Open-source software developed in a collaborative research project between the Federal Reserve of Boston and the Massachusetts Institute of Technology’s Digital Currency Initiative was released Thursday.

The two sides announced their collaboration last August, forming a key component of a broader investigation of central bank digital currencies (CBDC) by Federal Reserve officials. While no decision has been made on whether the Fed will go live with a digital dollar in the near future, the Fed has been busy, recently releasing a report on the benefits and risks of a US-centric digital currency.

Thursday’s release was comprised of “a theoretical high-performance and resilient transaction processor for a CBDC by developing open-source research software, OpenCBDC.” The phase-one publication included code on GitHub as well as a white paper. 

“It is critical to understand how emerging technologies could support a CBDC and what challenges remain,” Jim Cunha, executive vice president at the Boston Fed, said in a statement. “This collaboration between MIT and our technologists has created a scalable CBDC research model that allows us to learn more about these technologies and the choices that should be considered when designing a CBDC.”

Notably, the white paper stressed that “[d]espite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals.”

The paper’s executive goes on to state:

“Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton’s approach, which assumes that the platform would be administered by a central actor. We found that even when run under the control of a single actor, a distributed ledger architecture has downsides. For example, it creates performance bottlenecks, and requires the central transaction processor to maintain transaction history, which one of our designs does not, resulting in significantly improved transaction throughput scalability properties.”

Looking ahead, the work sets the stage for an additional phase of research, which the paper fleshed out in terms of areas of priority.

“In Phase 2 of Project Hamilton, the Boston Fed and MIT DCI will explore new functionality and alternative technical designs,” the authors wrote. “Research topics may include cryptographic designs for privacy and auditability, programmability and smart contracts, offline payments, secure issuance and redemption, new use cases and access models, techniques for maintaining open access while protecting against denial of service attacks, and new tools for enacting policy. In addition, we hope to collaborate and explore these challenges with other technical contributors from a variety of backgrounds in the open source repository.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.