Velvet.Capital blog

Weekly DeFi & Crypto Alpha

Greetings Velvet Fam. 

Three weeks into January and 2023 is off to a bang.  Crypto assets are seeing a boost in the new year as various factors converge to create a more optimistic outlook for risk assets. Not to mention, the uncertainty caused by the implosion of FTX has decreased as the dust continues to settle, lowering the overall FUD for the crypto sector. Broader economic headwinds such as inflation and the efforts to curb it are potentially shifting. There are indications that inflation in the US has peaked and is decreasing and that interest rates may soon stop rising, with even the possibility of cuts by the end of the year - as the economy stares down the barrel of a possible (Federal Reserve-induced) recession.

2023 will undoubtedly be a wild ride! At Velvet.Capital, we understand the fast-paced nature of the crypto markets. Our goal is to provide our frens with valuable insights and the top news from the crypto-sphere. Don't forget to take a look at what the future of DeFi has to offer: Velvet.Capital

Now let's jump into some news!

Quick Hitters

·      Binance announces plans to increase staffing by 15-30%.
·      FTX already recovers over $5B in customer assets.
·      House Republicans are forming a congressional group specifically focused on digital assets.
·      Solana rose 58% this week to $23.70, its highest price point since its recent tailspin.
·      Russia and Iran are exploring gold-backed stablecoins. The Central Bank of Iran considers a relevant partnership with the Russian Federation to facilitate international trade.
·      Polygon is set to hard fork on January 17th.
·      Ethereum (ETH) hit 500,000 validators ahead of the "Shanghai upgrade," securing its proof-of-stake migration.
·      Amazon's cloud computing partners with Avalanche.
·      Binance will allow institutional investors to collateralize via Binance Custody.
·      Ondo announces plan to tokenize US Treasury Bonds.

In The News

DeFi + TradFi: The Beginning of a Beautiful Friendship
This interesting op-ed elaborates on the convergence of TradFi and DeFi. Despite the dogma around decentralization and it’s position on institutional money, ultimately institutions can financially support and benefit from DeFi innovations. Lots of major players, from regulators, DeFi protocols, institutional investors, and large banks recognize that blockchain technology has a major role in the future of finance. The fallout from FTX highlighted skepticism around CeFi across the board. Leave centralization to TradFi, and decentralization to DeFi. 

DeFi, DAOs and NFTs: Crypto is redefining how charities raise funds
A new challenger emerges! Plenty is made of blockchain applications to finance, as crypto seems to be its strongest application. However, not enough is made of its potential contributions to charities and non-profit organizations. One of the most encouraging developments is ReFi (regenerative finance), the idea that DeFi can have a role in solving systemic problems that TradFi has historically overlooked. The Crypto world has a social cause bend to it, and the ability to cultivate communities and crowdfund on web3 supersedes it web2 counterparts. 

Cross-Chain Messaging Can Blow Open Interoperability
Interoperability is one of the core utilities of DeFi (see yours truly). One of the features we are very interested is in cross-chain messaging, which is arguably underserved and underdeveloped in web3. For web3 to take over, there needs to be more network effect. Instead of “one protocol to rule them all,” the ecosystem is more likely to be a multitude of specialized protocols, which will need better communication systems. This paves the way for smart contract enabled messenger dapps, without any need for intermediaries. The thinking now is that this feature will become important for the survival of smaller and less established protocols to carve out a niche in the ecosystem. 

Hashkey Capital raises $500M to support Web3 ecosystem
Hashkey Capital, a major player in funding blockchain projects, raises $500M to support web3 initiatives. This “Fintech Investment Fund III (Fund III)” focuses on development of infrastructure and mass adoption, especially in emerging markets. Emerging markets tend to be the hub of most web3 use cases, and VCs are taking notice. 

Metahood Raises $3M to Build the Zillow of the Metaverse
Metaverse startup Metahood just raised $3M to built a platform for the buying and selling of real estate in the metaverse. Metahood seeks to add value to its users by consolidating digital property data into a map-based interface. The utility and use cases within the metaverse are still speculative, but the thinking is that enough interest is there for a project to aggregate all this information into a more intuitive and consolidated way. 

Don't Miss out on Future Gains

Here is an example of one of the portfolios available on Velvet.Capital — our Blue Chip portfolio that is made up of the top 5 cryptocurrencies by total market capitalization excluding stablecoins, weighted by market cap, and rebalanced every 2 weeks. This portfolio has a 37% gain in one month.

You can get exposure to all the best projects in just a few clicks. Not bad right? Position yourself to take advantage of the next bull run market today!

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