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RelayNode NYC #15 - August 19

David Gogel

Welcome to RelayNode NYC Area edition! The NYC blockchain ecosystem is growing rapidly. Our goal is to harness its energy and innovation for the benefit of New Yorkers and provide a weekly curated list of interesting content, upcoming events, and local jobs.

Some personal thoughts from this week…

I got decentralized finance on my mind. I continue to be amazed by the growth, speed, and breadth of innovation in DeFi. MakerDAO is starting to see some competition in the lending space, principally from Compound, which recently passed the $100M total value locked mark, increasing 3x from $25M locked in June. Ken Deeter, Engineer at Electric Capital, has a great post on evolving market dynamics. With $17T (yes trillion) of negative-yielding debt, double digit interest rates loans across multiple products (YAY to the democratization of creation of new financial products) are appealing. I’m starting to see Ben Thompson’s aggregation theory play out. While DeFi lego blocks are composable, search, discovery, and administration are still huge pain points. Users reap value through discovery and curation, which is why aggregators like InstaDApp and MetaMoneyMarket are growing by delivering superior discovery of rates. Whoever owns the user relationship is likely to win big.

Other reflection from this week is that when most people talk DeFi they think of MakerDAO and Compound, among a few others. The narrative seems to be focused around B2C and retail investors. One area where I think there is a lot of opportunity is DeFi for B2B and institutions. More research to come.

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RelayNode NYC is curated by:

David Gogel

Advisor @ Paperchain fmr Associate @ Techstars' Blockchain Accelerator, Co-president @ Wharton FinTech

Hsin-Ju Chuang

Director of Community & Growth @TQ Tezos, ex-Head of Growth @Stellar/Lightyear, Side Hustle @Dystopia Labs

Things to read

Funding & Exits

  • Coinmine, a consumer-focused crypto mining hardware & software startup, announced a $2.5M seed round, led by M13, with participation from Gumi Crypto, Republic Labs, Canaan Labs, and Shervin Pisheva.

  • Blade, a SF-based cryptocurrency derivatives exchange, announced a $4.3M seed round, with participation from Coinbase, SV Angel, A.Capital, Slow Ventures, Justin Kan and Adam D’Angelo. The cryptocurrency derivatives exchange market is heating up (I covered FTX’s fundraise last week) but who can compete with Blade’s 150x leverage? Unfortunately, Blade is not currently available for US residents.

  • Coil, a startup focused on micropayments for online content creators via the Interledger Protocol, announced a $4M seed round, with participation from Xpring, Ripple’s investment subsidiary. Xpring also granted 1 billion XRP (~$260M) to Coil to increase the utilization of XRP.

  • Coinbase announced that its subsidiary Coinbase Custody has acquired Xapo’s institutional custody business for $55M. Coinbase Custody has grown to $7B+ in Assets Under Custody stored on behalf of 120+ clients in 14 countries. This announcement comes on the heels of Grayscale’s decision to move $2.7B worth of crypto from Xapo’s wallet. With Coinbase now storing ~5% of all Bitcoins in circulation, will institutions rebalance their assets towards others players like BitGo, Bakkt, and Fidelity?

Macro

  • Stock market volatility, tariff delays, inverted yield curve, occupy Hong Kong airport, political upset in Argentina sending the S&P Merval Index plunging 48%, what a week for macro risk. Yet, Frank Chaparro, Director of News at The Block, explains why investors are not fleeing to Bitcoin just yet.

Trading

  • Kelly Loeffler, CEO of Bakkt, announced the crypto futures exchanges has been approved by regulators to launch bitcoin futures and warehouse in September. Bakkt offers a way for large, risk-averse institutions to buy and custody bitcoin through an end-to-end regulated system backed by ICE and approved by the CFTC and NYDFS. The institutional era of crypto has arrived.

Open Finance / DeFi

  • Graychain released an excellent report on the collateralized crypto lending landscape, estimating that crypto lenders have only earned ~2% on $4.7B in loans. Is the low margin a product or a feature of decentralization and disintermediation? High yields won't last forever.

  • While lenders’ margins remain thin and competition in DeFi heats up with projects trying to steal market share from each other, new initiatives are expanding the pie outside of existing crypto users. Tinlake announced a partnership with the Maker Foundation facilitating 182,000 Dai in pilot loans to bring real-word assets, starting with mortgages, on chain.

  • DeFi composability in action (thanks Jordan Lyall, product lead from ConsenSys): USD → ETH → WETH → PETH → Dai → cDai → rDai. rDAI builds upon Compound protocol's cDAI, which allows users to earn interest by lending their DAI. rDAI allows this interest to go to a different address than the one lending the DAI. Possible use cases include charity or donations for dapp development.

  • Oracles, which bring off-chain data to the blockchain, are a key piece of infrastructure for DeFi. Trustworthy oracles are one of the biggest bottlenecks for bringing real-world assets on the blockchain and more experimentation / research is needed. Yin Yin Wu, founder of DIRT Protocol, released an open-source protocol for pricefeed oracles.

ICOs / STOs

  • Republic launched the first Security Airdrop with Althea Mesh, a system that enables people to build their own internet service providers. The tool allows issuers to distribute securities, tokens, or equity to everyday people for completing a whole range of actions. Early stage crypto companies or late stage companies like Uber and AirBnB will be able to give equity or SAFEs to drivers, hosts, and fans alike.

Regulatory

  • The SEC requested an emergency freezing of $8M in assets from Veritaseum, which raised $15M in an initial coin offering. The day after being informed of an impending enforcement action, the Brooklyn-based founder siphoned $2M from the allegedly fraudulent unregistered security offering to his own accounts. I don’t think the funds will be enough to cover his future legal costs.

Layer 1

  • Blockchain projects are competing in a war for developer talent. Maria Shen, Analyst at Electric Capital, released her H1 2019 Developer report. Despite market downturns in 2018, Full Time developers increased 13% YoY and are consolidating around high network value projects. Ethereum ecosystem has ~4x the developers of the next biggest ecosystem. Meanwhile, BlockStack announced a partnership with Lambda School to feature educational material and active learning sessions for students, which will prepare them to build apps using Blockstack’s open source developer tools and network.

  • The blockchain industry has never been a stranger to malicious attacks. This week, Litecoin users on Binance fell victim to a large scale dust attack, which is a relatively new kind of malicious activity that aims to deanonymize the privacy of cryptocurrency users. Ilir Gashi, a community manager at the Litecoin Foundation, suggests using a few privacy-enhancing techniques to protect yourself.

Things to listen to:

  • VENTURE UNPLUGGED: new podcast series launched by host Mayra Ceja who interviews leading founders and investors to uncover the challenges faced by budding entrepreneurs. Bitcoin Billionaire Tim Draper joins Mayra to discuss Bitcoin, blockchain use cases, regulation, space travel, Elizabeth Holmes, and spirituality. Spotify link here.

Highlighted Industry Jobs (non-exhaustive list for NYC / remote):

If you would like to highlight jobs or internships in future editions, please email links here.

Events this week:

Lighter week in NYC with many flying to Berlin Blockchain Week. Das blockchain!

Presentation: Clarity, Blockstack's language for predictable smart contract (Free)

When: Monday, August 19, 2019, 6:30 PM to 9:00 PM

Where: WeWork Dumbo Heights, 81 Prospect St · Brooklyn

In this session, Ludo is Engineering Partner at Blockstack will do a deep dive into the design of Blockstack’s language, Clarity. Clarity is a decidable language. A programming language is decidable if you can know, with certainty, from the code itself what the program will do. Clarity is intentionally Turing incomplete as it avoids “Turing complexity.” This allows for complete static analysis of the entire call graph of a given smart contract.

BitDevs: Summer Series: The Mempool; Lightning Network Topology; Wallet Descriptors

When: Wednesday, August 21, 2019, 6:30 PM to 8:30 PM

Where: Chaincode Labs, 450 Lexington Ave 38th Floor · New York, ny

Our Summer Series concludes with three excellent talks by the Chaincode Residents. Amiti will present on How the Mempool Actually Works, Carla will speak about Lightning Network Topology Creation & Maintenance, and Hugo will introduce Wallet Descriptors in Bitcoin Core. Expect these talks to be deeply technical in nature.

Upcoming events

Hyperledger Fabric for the Enterprise - Privacy and Security Strategies (Free)

When: Monday, August 26, 2019, 6:30 PM to 9:00 PM

Where: WeWork Dumbo Heights, 81 Prospect St · Brooklyn

Hyperledger Fabric (HLF) blockchain’s architecture was designed from the ground up to be highly extensible with plug and play modules in order to meet most business cases. In this session, we will address the challenges of privacy and security by presenting the best patterns and methodologies, of how to implement enterprise grade HLF blockchain implementations. We will cite real world examples – illustrated with diagrams, code-patterns and in some cases short demos or video segments.

⚡UMA: Intro to Decentralized Finance & Financial Derivatives on the Blockchain⚡(Free)

When: Monday, September 16, 2019, 6:30 PM to 9:00 PM

Where: WeWork Dumbo Heights, 81 Prospect St · Brooklyn

The Flatiron School // Access Labs are proud to support the Ethereum Blockchain Devs Study Group. This is a regular gathering for Blockchain Devs of all levels to learn, present, work on in collaboration with one another or on solo projects in this fast-growing field. Our community is a welcoming space where any Ethereum and de-centralized ledger related question is fair game, be it beginner, intermediate, or advanced.

6:30pm -7:00pm Intro to #DeFi, or Decentralized Finance

7:00 - 7:30pm: Intro to financial derivatives on the blockchain and demo of UMA’s infrastructure

7:30pm -8:15pm: Workshop to create synthetic assets on testnet

‍ 8:15pm - 8:30pm: Workshop to create synthetic assets on testnet

8:30pm - 9:00pm: Q&A

Introduction to Decentralized Exchanges (Free)

When: Wednesday, September 18, 2019, 7:00 -- 9:00 PM

Where: 142 W. 57th Street, New York, NY

During this meetup we'll talk about Ethereum, smart contracts and how they are used to build decentralized exchanges. We'll learn about what decentralized exchanges are and how they have the potential to revolutionize how securities are traded. Then we'll take a look at Metro, a project that I have been working on during nights and weekends that attempts to provide a central location to validate and settle trades on the Ethereum network using these three protocols allowing the trading of tokens, debt instruments and options on the blockchain. During this talk we will cover the following technologies: Ethereum, 0x, dYdX, and Dharma.

Mondo.NYC music festival & global music / tech business conference ($99 - $598)

When: Tue, Oct 15, 2019, 4:00 PM – Fri, Oct 18, 2019, 5:00 PM

Where: Williamsburg Hotel, Brooklyn, 96 Wythe Ave., Brooklyn, NY

Mondo.NYC is the first music festival and global business conference focusing on the intersection of emerging music discovery, blockchain and other frontier technologies, and how these new applications and economies will significantly impact both music and tech industries. Emerging artists, innovators and industry insiders will connect and collaborate with fans in a mission to advance human creativity in an ever-changing world.

Notable Conferences