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GRAYSCALE VICTORY As recently discussed, we’ve been awaiting either short-term relief in liquidity conditions—indicated by falling interest rates, a declining DXY, and increasing central bank liquidity—or the realization of crypto-specific catalysts for better price action. This week, we received encouraging news on both fronts. The courts have ruled that the SEC acted in an arbitrary and capricious manner when denying the spot Bitcoin ETF. _Source: Court Decision in Grayscale v...

INTRODUCTION The top 50 most valuable protocols all have circulating market caps of at least one billion. Why do these tokens, many of which have unproven business models, trade at such high valuations? One of the core assumptions behind these valuations is that the protocol will someday mature to have product-market fit, justifying its current market value. For protocols that operate decentralized applications (dApps), assessing profitability is one of the...

WHAT IS [CRYPTO] GOVERNANCE? Strong governance models have been catalysts for the golden ages of progress, while poor governance models have propelled humanity into the dark ages of regression. Governance models establish formal procedures for conducting the policy, actions, and affairs of a state, organization, or people. They enable systematic decision-making to move groups with shared interests forward. Governance and power are closely related. The decision-making implications given to those...

Funding was the highest it’s been in months, shooting up from $160M last week to $659M this week. Not surprisingly, the bulk of this funding ($416M) came from infrastructure, which has been the strongest segment for most of 2022. Nine of this week’s 24 deals were infrastructure, the two standouts being Homa and Copper Technologies, which raised $100M and $196M, respectively. Interestingly, DeFi accounted for $216M of funding this week,...

RISK ASSETS RETREAT (FOR NOW) After several consecutive weeks of bullish price action across risk assets, we have seen markets pull back on both technical exhaustion and underwhelming global economic data. As we write this note, the global crypto markets have retraced 7.0% over the preceding 24 hours, with the most substantial drawdown occurring in the overnight hours upon the opening of equity markets in Europe. Ongoing concerns over the...

VENTURE CAPITAL DEALS Swoops is an NFT-based fantasy basketball game where each basketball player is minted as an NFT that can be purchased, traded, staked, etc. The startup raised $3.5 million in a Series A led by Courtside Ventures and Alpaca VC. Other participants in the round included Slow Ventures, Red Beard Ventures, and a few individual investors like Jason Robins, the CEO of DraftKings. An important note, this game...