Weekly Newsletter, 14 February 2025

The world will be one big liquidity pool

The world will be one big liquidity pool.

This week there was yet another crypto friendly nomination in the US. This time of Brian Quintenz for chairman of the CFTC. Brian is Global Head of Policy at a16z Crypto, one of the managers we work with. It is yet another data point to show that things really are changing in the US and blockchain technology is being embraced as one of the most important technologies after years of regulatory resistance.

One strong view we hold around the impact of blockchain technology is that it will turn the world into one big liquidity pool. Today, asset markets are fragmented, slow, and full of intermediaries. But over time, as everything moves on-chain, we will transition from this patchwork of isolated pools into one giant, hyper-liquid marketplace where everything is on-chain and tradable. A crazy prospect? Maybe. But when even BlackRock—after all the world's largest asset manager—pounds the table on tokenization at every opportunity, it's less of a question of 'if' but more 'when.

A significant step in that direction was this week’s launch of Unichain, a layer2 appchain built on Ethereum by Uniswap Labs, the company behind Uniswap, today’s largest decentralized exchange. On Unichain, transactions are much faster and cost around 95% less than execution on Ethereum directly. Exchange volume in the first days since the launch came to an impressive $150mln. You can compare Uniswap to Coinbase, except for the thousands of employees working at Coinbase. Uniswap is all code. Since its initial launch in June 2018, Uniswap has processed a stunning $2.7trn in volume, with zero failure. These days, its volumes often surpass those of Coinbase.

Until recently, the assets traded on-chain were predominantly crypto assets, but this has changed with the introduction of stablecoins which now already make up c80% of volume. Imagine what happens when more and more 'real world assets' (RWAs) such as treasuries and stocks start moving on-chain. The result will be that every asset will become exchangeable on the spot with minimal friction. It's no longer difficult to imagine paying for your weekly shop using your Apple stock, your airline loyalty points, or even your gaming assets.

In related news, Ondo Finance also launched a new chain specifically aimed at facilitating financial institutions looking to transact on-chain. Ondo, which like Uniswap Labs is an underlying portfolio company of ours, has been at the forefront of tokenizing treasuries and works with institutional partners such as Franklin Templeton, Blackrock, Morgan Stanley and PayPal. Their roadmap is to expand from Treasuries to other asset classes, with stocks high on the agenda.

With the change of direction in the US, nicely illustrated by the nomination mentioned at the start, there is suddenly a much clearer path forward for moving all these assets on-chain.

This is bringing the likelihood of a global liquidity pool much closer.

Also this week

Relevant financial updates

Plasma*, a a payment network enabling zero-fee USDT transactions on the Bitcoin blockchain recently raised a $24mln Series A co-led by Framework and Bitfinex with the participation of Karatage, 6MV, Flow Traders and Mirana Ventures
CoalaPay*, a decentralized payment platform using blockchain technology for secure, low-cost global transactions raised $3.5mln led by Castle Island with the participation of Lattice and Factor Capital
GamerBoom, a Web3-enabled social gaming platform that offers an “intent-centric” experience raised a $9mln in Series A with the participation of Solana Ventures, Bing Ventures, NVIDIA, Sky Ventures amongst others
Fragmetric*, a liquid restaking protocol on Solana focusing on network security and economic stability raised $7mln in Seed funding on February 7th, 2025, led by HASHED, Hypersphere Ventures, Bitscale Capital, Presto Labs, Finality Capital Partners, and three other investors
Sardine, a company that provides a platform to combine risk management, compliance, and payment protection services raised a $70mln Series B led by Activant Capital with the participation of Andreeseen Horowitz, Google Ventures and Nyca Partners
Legend*, a platform providing embedded smart wallets with native support for various protocols and EVM-compatible blockchains, raised $15mln in a seed round on February 11th, 2025, with investments from Coinbase Ventures and Andreessen Horowitz
Whetstone Research, a protocol development company focused on on-chain markets raised a Pre-Seed led by Variant with the participation of Nascent, Credibly Neutral and Figment Capital
Solayer*, an infrastructure provider and rising liquid staking platform in Solana launched a token network and currently trades at $794mln FDV
Story Protocol*, a company working in bringing intellectual property (IP) on-chain launched a token network and currently trades at $1.8bln FDV
B3* (or NPC Labs), a company working on a horizontally-scaled gaming ecosystem built on Base launched a token network and currently trades at $1bln FDV
MyShell* a company building an AI consumer layer launched a token network and currently trades at $417mln FDV
Li.Fi*, a project working in the cross-chain liquidity space recently acquired Catalyst

*Underlying TBV portfolio position | Prices as per 14/02

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