In this week’s edition of The Context, Circle circles the globe and layer 2 gets bigger. Here are the top stories and how they were covered, along with YAP Global’s take:
[Circle Grabs Another Partner ⭕🚕]
Circle CEO Jeremy Allaire laid out his plans for expansion at the Token2049 conference in Singapore. The crypto payments firm is partnering with Southeast Asian web2 superapp Grab to enable USDC transactions for Singaporeans using Grab’s forthcoming web3 wallet.
What Journalists Said 🧑💻:
There’s a lot riding on this Singapore pilot for Circle. 🇸🇬 Westerners may not be familiar with it, but Grab has 187 million users in 330 Southeast Asian cities, noted Helen Partz (Cointelegraph). And it’s used for everything from ride-hailing and food delivery to digital payments.
Circle is charging hard into Asia, wrote Callan Quinn (DLNews). “Singapore and Hong Kong have especially gained attention for their crypto-friendly regulatory frameworks, standing in stark contrast to more opaque jurisdictions, including the US.”
Circle seems to be charging into everywhere. This week, it deployed USDC onto Polkadot and, wrote Vishal Chawla (The Block), “all interconnected parachains in the Polkadot ecosystem and their users will have access to the stablecoin.”
Why It Matters ⁉️:
Though its USDC stablecoin remains #2 in market cap, Circle is putting pressure on Tether by doing three things at once: 1) Strategically expanding into Asia; 2) mainstreaming stablecoin adoption via collaborations with web2 players such as Grab; and 3) expanding to major chains such as Polkadot and layer 2s like Optimism and Base.
[Base Beats Optimism and Arbitrum 🥊]
Base is indeed a good place to be, and not just for USDC. Coinbase’s Ethereum layer 2 set a new high for daily use on September 14. 📈 Its 1.88 million transactions beat the combined activity for Optimism and Arbitrum that day. It also bested Ethereum. Meanwhile, the Canto blockchain announced it will move from Cosmos to become an Ethereum layer-2 via Polygon’s zk bridge. 🌉
What Journalists Said 🧑💻:
Base’s numbers have been boosted by Friend.tech’s “renewed growth,” said Diego Almada Lopez (Crypto Briefing). The social network, which is built on Base, also saw record transactions last week.
Yes, but Base still lags behind Polygon, wrote Hope C (CoinMarketCap). And that chain is attracting a lot of development, including Canto and Astar, a Polkadot chain. 🥰 By using Polygon, “they will be able to harness the security and scalability of the Ethereum network while retaining their own unique features and functions.”
“Ethereum is eating all the blockchains,” predicted Paul Brody (CoinDesk). 🍽️ The recent decision by Celo (a YAP client) to go from standalone blockchain to Ethereum layer 2 was “just the beginning” of a consolidation that will look similar to the standardization of the Internet Protocol itself.
Why It Matters ⁉️:
Ethereum by itself is slow and expensive. The various layer-2 blockchains built atop Ethereum all work to scale the latter to something that can handle loads of transactions all at once. And the likes of Polygon and Base are jockeying for devs to build apps on their chains, which could drive revenue back to them.
[Blockchain Capital Raises $580M 🤑]
Crypto venture capital firm Blockchain Capital announced a $580 million raise to invest in early-stage companies and other projects, including tokens.
What Journalists Said🧑💻:
“The crypto bear market may be ongoing, but Blockchain Capital is still going big,” wrote Jacquelyn Melinek (TechCrunch). The half a billion for its sixth early-stage fund 6️⃣ and first opportunity fund will let it invest in “decentralized finance, centralized finance, centralized infrastructure, decentralized infrastructure, gaming and consumer/social.”
Blockchain Capital sees opportunities “despite the steep downturn in NFT sales and prices,” said Hannah Miller (Bloomberg). 📉 And big-name limited partners are betting on them to succeed, including the Teacher Retirement System of Texas.
There are deals to be had, hinted Ben Strack (Blockworks), who interviewed founder Bart Stephens. “Stephens told Blockworks that with the inflow of capital at the seed and pre-seed stage during the bull market in 2020 and 2021, 🌱 valuations became distorted at the later stages.” 🐂 In Stephens’ view, “generalists and newcomers misjudged the opportunity-set.”
Why It Matters ⁉️:
Blockchain Capital's recent closure of two new funds totaling $580 million exemplifies a multi-faceted strategic approach that signals robust investor confidence in the blockchain and crypto sectors, despite market uncertainties. This nearly doubled investment from their previous $300 million fund underscores the firm's growth ambitions. Further bolstering this impact is the firm's strategic partnerships with players like Visa and PayPal, indicating a growing alignment between traditional financial institutions and blockchain ventures.
[Tweet of the week]
Credit: @Suveranitet
[TradFi Translations]
A segment exploring one particular aspect of DeFi.
This week: “Securities” by Alice Li.
Securities are tradable financial instruments with monetary value. Companies issue securities to raise capital.
Securities, which are traded in financial markets such as stock exchanges, help investors diversify portfolios, manage risk, and invest across sectors. They are subject to various regulations and laws to protect investors and maintain the integrity of financial markets.
Securities can represent ownership, debt, or the right to buy/sell financial assets. Examples include stocks (which represent ownership), bonds (which act like loans), and derivatives (whose value depends on assets).
Stocks (Equity Securities): These show ownership in a company. Investors who own stocks have a share in company assets and earnings. They often get voting rights and can receive dividends, making stocks relatively more valuable than other assets.
Bonds (Debt Securities): Governments, municipalities, or corporations issue bonds to raise capital with lower risk. Buying a bond means lending money to the issuer in exchange for periodic interest payments and getting the bond's face value at maturity.
Derivatives: These are financial contracts tied to underlying assets such as commodities or currencies. Common derivatives include options, futures, and forward contracts.
The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
The team: Founder Samantha Yap and consulting editor Jeff Benson, Sam O'Donohoe, Ewan Brewster, Damian Alvarez, Andrew Wickerson, Tiffany Mac Sherry, Becky Corbel and Delon Chan. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and Web3 brands through impactful storytelling. Find out more about us here.