Paradigm's new $2.5bil fund, Spectral raises $6.75m - The Daily Gwei Refuel #253 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of the delight refuel where i cap the latest news in the ethereum ecosystem i'm your host anthony sosano and today the 16th of november 2021 right everyone let's get into it so a massive new uh fundraise here from paradigm which is a fund uh they have a new 2.5 billion dollar fund now for those of you who don't know what who paradigm is they're a very popular investment kind of vc firm within the crypto space they've invested in a ton of the top projects you can see here projects like argent coinbase compound i mean you can scroll through the list dydx uh flashbots ftx the list goes on right they have unisop of course they're one of their most famous investments they have been very active in the crypto

space for quite a while uh one of their co-founders was also the co-founder of coinbase fred ursam yeah and i'm pretty sure matt uh matt worked at uh coinbase as well uh or maybe he worked at another firm no no he was a partner at sequoia capital there so yeah a lot of experience here and their team is just stacked i mean if you look at the team in terms of like who they have on as partners and researchers and all this sort of stuff i mean for me paradigm has been always been kind of like less less of a vc kind of investment firm and more of like a hotbed for for for bleeding edge research and development and really helping their portfolio companies go to the next level and that's been very evident with unisop like with v3 which was done by dan roberson played a big part there

he's been with paradigm for quite a while now and they also have samsung who a lot of you will know as a security researcher and i mean you can go down the list and kind of and kind of go to this page and see all their team members as well but anyway enough gushing over paradigm i do want to talk about this new fund the 2.5 billion fund i think this is uh bigger than at 16 z's i think a 16 days was 2 billion or maybe it was 2.5 it's at least equal to what they kind of announced a few months ago and this i mean obviously this is absolutely massive this money is going to be going towards earlier stage projects of course like seed in series a stage i guess maybe even series b paradigm has done a bunch of investments there um they're going to be investing

all across crypto it seems not just ethereum even though they've been very ethereum heavy up until now i'm sure they're going to start branching out into other areas but when they do their investments it seems like they invest in things that they believe are going to be like the category winners so for example they invested only in uni swap and as far as i know they haven't invested in any other amms because they believe that unisop would be the category winner of an of the amms of of amms in general um they've invested in optimism and uh i think they've invested in another uh kind of like layer two uh stockwear as well um but generally they don't kind of like do a spray and pray approach they're very targeted with their investments so i'm really looking forward to seeing how they deploy these 2.5 billion dollars

because when you think about it this is a i mean obviously it's a lot of money but it's a lot of money and to deploy this into into kind of like fundraisers i mean you've seen what happened with a16z they've been um deploying it like crazy into all sorts of projects not just targeted bets but like basically across the whole spectrum and now paradigm is going to have to do the same so i'm very curious to see how they actually kind of like distribute this money which teams they actually invest in are they going to be um you know just as targeted as they've been in the past or they're going to broaden their horizons here i think just by virtue of how much money they raise they're probably going to have to broaden their horizons a bit i'm going to be i'm going to be curious to see if they start

investing in any other of the ecosystems because um the only ecosystems that they seem to have invested in so far has been ethereum and uh and cosmos but i'm sure with this amount of money they might they're probably going to branch out into other ecosystems as well i'm going to be curious to see what that looks like but i also hope to see them investing in kind of like the layer two space because i think that they're perfectly positioned to invest in kind of like things building in the layer two space uh more than uh more so than other kind of like vcs and funds because they have such great researchers there that are working on the bleeding edge sort of stuff i mean i went through the team before but georgios here uh georgios constantinopoulos he has been very very involved with kind of like the layer 2

area for a very long time now actually like since i mean i've known about him since 2017 but even before that uh he may have been involved uh then as well um but essentially you know we thought we and not just him as a few other people on the team as well but with that kind of brain power you definitely want to be putting it towards kind of like uh the right things and i think the lay two space on ethereum right now is one of the most interesting areas to be so so yeah massive fund here that was raised 2.5 billion dollars but you know it's funny because like the market's kind of selling off today right it's a bit of a it's a bit of a kind of like dump i don't have the chart in front of me actually i do not just not on screen

um we went down to like 4 100 on each and now it's back to like almost 4 300 um and it's the biggest dip we've had since since september so obviously there's a bit you know a bit of panic out there um a lot of crypto twitter is just posting right now like a lot of the bear tweets you'll see are just like pure posts like everything that i post about kind of like bear markets or bearish posts literatures me memeing guys like i'm not i don't think we're going to a bear market or anything like that you guys know me by now um but you know it also speaks to the fact that so this 2.5 billion dollar fund speaks to the fact that the appetite for investing in crypto is is higher than it's ever been by orders of magnitude there i mean and as i've said before

like paradigm and a16z i mean they're not the only funds doing this there's so many funds out there more and more funds are raising uh kind of like more money to to deploy and this money has to be deployed as i've explained before because they've got lp's limited partners and investors who want to see a return on on their investment they're not just putting money in here for it to sit in a bank account so it actually has to be deployed um so from that point of view the i mean this this ecosystem has never seen so much attention in terms of capital attention but also social attention and just because we've had like a little bit of a dip doesn't really mean anything to me at least uh and you know the long-term stuff is obviously still intact there's so much adoption going on you know it's

funny because like last month and a month before i guess like september october we had a lot of the nft stuff happening a lot of nft adoption happening across the board but this month that's slowed down considerably but i've actually been noticing that we have a bit of a defy resurgence going on not just with the quote-unquote d5 2.0 projects but just more generally there's a lot of innovative stuff coming out that seems to be taking d5 to the next step and not just with the new protocols but also the older protocols as well we have the layer 2 rollout happening still i mean honestly i i just i can't see any prolonged bearish period in the market unless we we went crazy like unless eth went to like 20k by like q1 next year and then we had and then you know we came down really fast and it wrecked a

lot of people and and we go into a longer term kind of like bear period i just don't see it happening there's just too much happening in this ecosystem this market cycle has already been very different to all the previous ones and i think that reflects the fact that the uh there's so much happening within the ecosystem and there's so much fundamental value being created it's not just pure speculation anymore yes a lot of the crypto ecosystem is pure speculation but i'm talking more about kind of like eth right and ethereum and the ethereum ecosystem more generally there's real products that people use every single day they get real value out of we're scaling the ecosystem now eth has the best tokenomics out of any asset in crypto like and i i truly mean that out of any asset and look i talked about this yesterday

on the refuel you can go watch the first 10 minutes of that to get my lowdown on that um but you know taking all that in and taking that perspective uh kind of like leads me to believe that these dips are just like nothing like really i mean i bought more if today as i do every day but i bought even more today on this dip because i'm like i just see this and i'm like i just don't see anything any kind of like thing happening here we don't even i mean we went to all-time high and then we came down again and we're just kind of like i guess going sideways around it these aren't the times when you're going to have like a massive drop and going into a bear market or anything like that we already kind of like did that in may

and then rejected that and went back up so i think the appetite is there the market is still very very hot and i'm super excited to see um where kind of like these funds get deployed from paradigm and from the other funds as well i want to see i want to see what gets funded i want to see what these vc's are betting on i know a lot of vcs copper a lot of flat because of their spray and pray approach but paradigm is one uh firm and there are others but paradigm is definitely one firm that takes a more targeted approach so whatever they invest in i definitely pay attention to so so yeah congrats to them on this fund excited to see where they go from here so tim biker shared a little picture of his private notes today where he basically where basically says 2022

goals ship the merge the merge most important by 10 to 100 x so the merge is obviously the most important thing on the ethereum roadmap uh you know by a long shot there is nothing that even comes close to in as in importance because without the merge we can't have sharding guys like it's not going to happen because sharing only works under the proof of stake architecture that ethereum is being built with um you know using the beacon chain so uh and we obviously need to get off proof of work for a number of other reasons as well but uh i mean yeah it's just like it's super super important obviously and he also kind of like has other notes here where he just kind of like had a um a picture where he basically teases the rest of the the things in his private notes i don't know exactly what

these are all referring to but pretty cool to see to see that i mean i always get super excited about ethereum kind of layer one core protocol roadmap items especially when it comes to things like the merge and sharding and statelessness which of course i mean the merge i haven't spoken about for a couple of weeks here but there is stuff happening obviously i i gave you guys the update that the kinsugi kind of like effort was going on from the different eth2 teams where they were going to try and spin up a long lived uh sorry a long uh kind of like standing devnet or test net uh by the end of this month so that it could last at the holiday so that you know december early january period and go from there now you can see here eighth dreamer from sigma prime

basically put out a screenshot saying that uh lighthouse which is the client that sigma prime builds and geth is passing the m3 milestone for the consortium spec so i think there are six milestones on that spec i've showed it before to you guys uh so it seems progress is going pretty well from what i can see from this screenshot uh but as i've said plenty of times in the past the merge is the most important thing everyone's kind of focusing on this right now we're going to get there it's just going to take a little bit longer i still i as and as i said before i still think q2 launch window is is a go for now i will update you guys if i change my opinion on that but i definitely think that q2 is is definitely a go right now but could change in in the

future for sure uh and speaking of ethereum core development as well there's an interesting video uh uh going live um well actually it's already gone live yes sorry this is from november 10th i thought this was recent i must have missed this on the other day but essentially this is a video of a technical deep dive from piper miriam on the portal network which basically is an effort to get reliable lightweight decentralized access to ethereum aka light clients and this is very very important as part of the ethereum long-term roadmap so i'm pretty sure this video is now available yep you can kind of go to this link here it will link to the usual description to kind of cover that um and pipe has been with you know building on ethereum for a very long time is one of the giga brains with ethereum core development um and you

know the key highlights of the talk as puja puts here uh going over what is the portal network what makes ethereum clients heavy today explaining the transaction network and transaction pool design expanding a global archive node a practical example you know sending a transaction with the portal network and the future of it as well and there's a specular you can check out too so if you want to learn more about ethereum core development kind of like major roadmap items this is definitely one of them so definitely go check out this video so i spoke to yesterday about uni swaps and used 0.01 percent fee tier and how i said that it would be perfect for stable coin swaps well you know this is i'm pretty sure this has only been live for like 24 to 48 hours and this pool the usdc usdt pool with 0.01 fee revenue is currently doing

a hundred million dollars of volume on just 15 million dollars of tbl that's really crazy um you know this just shows the efficiency of unisop v3 as well this tablecloth pool isn't the only one that shows this efficiency there's a bunch of others out there but this is awesome like seriously uh i don't know how much volume curve is doing right now i think it might be like a hundred sorry a billion dollars a day or something like that on stable coin swaps actually i'm gonna bring it up here while i'll just get up on a different screen here and then uh it's just loading just so i can get the exact number yeah so curve over the last 24 hours actually okay i was quoting seven day volume over the last 24 hours curve did 153 million dollars of stable coin uh swap volume

so uniswap is already doing i mean i don't know you know this is obviously the first day so things can change here but unisop is already doing almost as much as curve on just like the first couple of days of these new 0.01 feet here and as i said yesterday it makes sense because you know if you can get like especially for for larger swaps if you can get a much cheaper uh kind of like a fee than you can anywhere else on your stablecoin swap then you're going to use it and a lot of these swaps are used for arbitrage transactions and stuff like that so and for whales to do this too so they're definitely going to want lowest fees possible as not to eat into their profits so i'm going to keep an eye on this and see how it goes i mean if they

can maintain this 24 hour volume and basically have it as you know as steady and keeps and keep growing that's absolutely massive uh and you know you can see here that state layer actually i said that at the moment that's 26 apr apr annualized so if you put put your kind of like money into this pool right now with this amount of tvl whether that be usdc or usdt you get 26 annualized yields on your stable coins and there's no in permanent loss because it's a stable coin pool unless one of these stable coins was to uh depeg severely of course but you know in the in the normal sense it is not a risk there um but yeah i'm going to keep an eye on this you know i i don't believe in things being you know a killer of one thing or a killer of another thing um i

always kind of like cringe whenever someone says you know this is going to kill that or this is going to kill that i mean people were saying sushi swap was going to kill unison for a very long time and that didn't go anywhere and i would actually say in unisop's case their brand and their network effect is insane like it really is like unisop is the most well-known ethereum app i would say um and their network effect in terms of integrations who they're plugged into trust um all that sort of stuff like the amount of kind of innovation they're doing it's kind of like second to none they are so far ahead of everyone uh it's actually incredible so yeah i mean i'm i'm gonna say that this kind of volume is probably gonna be consistent and growing on stable coin swaps especially because the fee is so cheap

and on top of that um i i'm gonna be curious to see if curve actually readjusts their fees to to basically this level or to lower than this to compete with uni swap because as i said i don't believe in things being killers of other things but over the longer periods of time market share can definitely be stolen from you know certain kind of apps from other apps so i'm going to be interesting to see that's for sure so zk sync announced another fiat on and off ramp to their layer 2 network which isn't live yet by the way like their zk evm or zk roll up that's going live i think early next year but they're already getting all these integrations happening so this one is hobby ventures or hobby the exchange so hobby ventures are invested in zk sync in their latest round and now hobby the centralized

exchange is going to be offering on and off ramps to zk sync which is as i said you know plenty of times is the kind of like holy grail for these layer twos they need this uh they need kind of like centralized exchange on and off ramps that's critical to them critical to their kind of like not just survival but thrive as well like for them to thrive they need this sort of stuff so awesome to see that and again this is the power of getting these kind of like uh strategic partners on board during an investment round because you know actually i'm going to talk a little bit about this because this is an interesting topic there's a lot of people who say you know they they say things like well it's unfair that uh uh people get access to these kind of like uh uh funding

rounds and and they don't for example right like you have to be an accredited investor you have to be well known you have to you know kind of like be invited to be part of the round blah blah all that sort of stuff and i mean i get the argument for sure and as someone who participates in these rounds i know i'm a bit biased here by talking about this but what i do want to point out is that the you know the everyday person who is just like uh you know in crypto they're kind of like you know even if you're like really into crypto but you're just like an everyday person you don't have like a massive network you don't have a massive following you don't have you know you're not like a a strategic partner the value that you're going to bring to the project

versus the value that someone like quality brings is vastly different this is exactly why projects want to raise from these strategic partners because hobby is giving zk sync an on and off ramp right um like if if if they just let anyone into kind of like uh their kind of um a fundraise like they want to get something out of it at the end of the day it's more than just the money uh the money as i've said before the money is like it can come from anywhere uh there's so much money sloshing around right now that it's really not just not about the money anymore and that's why they don't really raise also because of the legal implications but they don't really raise from the public because they you know they can get the money from from elsewhere and they can distribute the tokens to the public in a

different way i mean zk sync's been very very open about doing a community-based token distribution when it goes live um but i guess like there's that angle to it and there's just like the really strong angle of getting these strategic partners on board which just helps the project in general right it helps everyone um kind of like get used out of the projects helps them scale helps them actually onboard people on onto it so that's why this happens and though though again there are a lot of kind of like uh investors out there are vcs or funds that are kind of like useless and don't do much and i i hope that you know i hope that as going forward projects can kind of like weed more of these out and invite more of the kind of like long-term oriented people on board and get tokens

into people's hands as well uh but yeah just a little bit of a kind of like note on that because i think that if you're not part of this world if you're not actually part of the early stage investment world you don't you don't kind of like see behind the curtains and you don't see what goes on you probably lack that context and you know i'm always happy to provide that context always happen to talk about it i mean i've answered this on the ama a few times before on a few of the amas um but basically yeah i mean don't kind of like feel like you know it's all an insider's game i mean some of i mean to be fair though unfortunately a lot of it is uh but like when done right and getting the right strategic partners on board it can

lead to very very magical things and as i was saying about paradigm before they were the first investor into uni swap in early 2019 when no one else wanted to invest in uni swap they put a million dollars in um to uni swap then and they help unisop get to where they are today they were an absolutely massive value add for them and they've been a massive value ad for all of their projects from what i've heard so i mean they're not the only one there's a few out there but uh you know that's the value that i guess like um you know just every day kind of like normal retail investors most of them can't add that value so most of the and also most of them actually bring kind of like a risk in that if you you know if you do like a sale to these people you risk um

you know facing uh the the heat of regulators whereas you could do an air drop and i know uh uh the air drops are kind of like becoming a legal kind of minefield now as well which is really shitty but there's like a delicate balance there too so so yeah just a little bit of a note on that but cool to see another centralized exchange supporting zk sync here speaking of zk evm roll ups and things like that uh and zk efforts polygon has put out an announcement of an announcement so i think this is going to happen today it may happen by the time you've already watched the refuel but basically they have exciting news coming out now uh you can see here that they giving a quick reminder about their zk efforts so the acquisition of of polygon hermes of

course and also working with ey on polygon nightfall so i'm gonna assume uh that's uh i mean they've mentioned zka a few times here i'm assuming this announcement's about something got to do with zk stuff i don't actually know i mean i'm an advisor to polygon but i don't get this information before anyone else does which i actually really like about polygon um and kind of like working with them but essentially i mean i just kind of like deduced from this i was like okay well it must be something zk related because they've mentioned zk in both of these tweets and they've also kind of given a reminder about their zk effort so very much looking forward to seeing what this is uh you know i'm actually i'm thinking about doing a bit more education around polygon just as a separate thing because too many people still think that polygon

is just the pos chain but they have such a an awesome world of solutions coming um scaling solutions coming in that are already here and they're already being worked on actively that i want more people to know about it so so yeah definitely looking forward to this announcement maybe by the time you've watched this it's already happened though so if you have well i guess like i i was i i i i'd like to know if i was right or not about the ck stuff all right so a spectral uh i a uh not finance just spectral spectral uh announced a six point seven five million dollar funding round today led by poli chain capital with participation from a bunch of other investors such as galaxy digital parify capital edge and node and more now disclaimer here i participated in this round as a small annual investor

alongside a bunch of other people which you can see in the list here now you're wondering what's spectral well they build themselves as a protocol for programmable credit worthiness which in plain english is basically a way to do on-chain credit scores essentially right but in a radically different way to credit scores that we're all used to in the real world which are completely broken i mean i i i i don't know how it is in like uh the us um but in australia i mean in australia it's okay but i've heard that like in the us it gets really bad with credit score it's just like a really broken system it's super centralized of course um it doesn't really make sense it's opaque no one knows how their credit score actually comes to be so um spectral is trying to kind of like

tackle this and bring on chain credit uh credit scoring to d5 and also on the other side of it as well is that if you have a way to assign a credit score to an address on ethereum you can offer under collateralized loans which is what we don't have right now you always have to over collateralize on pretty much everything which leads to worse capital efficiency and it's actually the number one thing i hate about d5 is the fact that i have like all my eighth right and i want all the e that's not in staking i i want to be able to leverage that eath and borrow against it for certain reasons i do borrow against it but the capital efficiency is absolutely insane because i have to make sure that my liquidation price is very low um because obviously crypto can move very quickly

and because of that i can only borrow a certain amount so i'd like to be able to borrow more but by doing so i raise my liquidation price and makes it more risky whereas with potentially with an on-chain kind of like credit score and credit worthiness i could essentially do an under-claralized loan or do way less than you know it does maybe i don't have to do 150 percent collateral over collateralization maybe i can do like 50 and then get much more kind of like efficiency out of my my collateral so that's why i like back this team and i'm very much looking forward to seeing what they build out here and kind of like get to mainnet with it um but yeah if you want to learn more about them you can and then they're also encouraging people to join their discord channel too so

definitely do that if that's a project that you're interested in keeping up with all right so um i think the final thing here and this is actually going to branch off into another topic uh related to this but danny ryan put out a tweet today that he says the ethereum foundation is hiring a research engineer so if you love building network tools reading the latest a post on each research prototyping cutting edge ideas and more well then you can join the ethereum foundation as a research engineer engineer so the link is here to the job description and to apply uh definitely check this out uh if you have the you know requisite skills uh uh here to do this or if you're interested in it obviously it's full time it's fully remote as well which is really cool and

you'll be working with you know the smartest people in the ethereum ecosystem i couldn't think of a better kind of job here if you have the skills to do this of course um and if you are interested in this as well uh don't just kind of like apply for this job you can also dm me i have a direct line to danny ryan he actually asked me to um to reach out to my network and see who was available for this so if this is a um a role that you're interested in and you do have the requisite skills do reach out to me dm me on uh hear me on discord or ping me on discord because my twitter dms are a mess right now and i'll be more likely to get back to you there and i can kind of like pass on your

information to danny as well so rather than going through uh the kind of like normal applying for this job kind of button here so so yeah but anyway on this topic of kind of like jobs and careers and crypto i wanted to branch off a little bit because i get a lot of questions all the time from people like pretty much every day about like you know they're coming from such and such industry and they're wondering how they can actually break into crypto now i'm not going to give you like the blow by blow all the step by step right now i don't have enough time to go through it all but from the highest level i do wanted to give some just kind of like some some advice here the way to break into kind of like the crypto ecosystem um is to basically just uh

just kind of like find what you're interested in doing and then do it right even do it for free or even do it like on as a side job or even get involved in kind of like different communities as a side thing to your normal full-time job because you know the the thing about crypto is that it's all community-based it's all community-oriented there's a lot of kind of like networking that needs to happen um you know the more work that you do the more body of work you build up the kind of like more opportunity you'll have and also like as i said plenty of times before everyone is hiring for roles in crypto for whatever role that you want to fill so don't feel intimidated by by the fact that you know you may not have worked in crypto before you work a job outside of it there's so

much noise in this industry don't be intimidated intimidated by that just start just get started get involved with things you know i i there are people that i know that basically got their start just like writing newsletters i mean i got my start writing a weekly newsletter um now i didn't you know i the the thing is i think a lot of people seem to assume about um you know myself and other people in the ecosystem is that we kind of like always started from from 100 whereas we started from zero and we kind of like built ourselves up uh in the same way that i'm encouraging you guys to build yourselves up because no one starts from from 100 unless they know someone in the industry already and there's some kind of nepotism going on but actually in crypto there's not there's not that much uh of that going

on from what i've seen uh it really is very merit-based which is which is awesome of course but essentially at the highest level the things you can do is simply just like get involved with any community that you like with anything that you like to do even if you're doing stuff that you don't even want to do full-time but you know you're happy doing part-time on a casual basis still do that build up your kind of like reputation within the community build up uh a network um and then you know you can go to cryptocurrency jobs the cryptocurrency jobs website to look at open roles apply to things obviously it's like any other job where you apply to things and then i'll go through go through the normal process and hopefully get a job but if you want to increase your chances and stand out above everyone else join the

projects discord channel be active in there help them with things uh you know without like prompting for kind of like compensation whatever just do it um you know get to know the community talk to them kind of put forward ideas do all these sorts of stuff i mean really the the world is your oyster you can actually do this anonymously if you want as well you don't have to put out your real name and then if you do um end up breaking into that project and becoming a core community member then you can maybe like approach the team and be like hey like i'd love to do what i've been doing full-time um you know is there any kind of like spots for me and then you can maybe reveal yourself and whatever if you want to but there are teams that hire anonymous people as well so

yeah just a little bit of high level advice there um i'm always as i said like as i've said before sorry i'm always happy to chat to people and give a little bit more advice it may take me a little while to get back to you depending on where you dm me because my dms as i said are flooded um but uh there are so many resources as well i mean as i said the cryptocurrency jobs website is a fantastic resource for finding all different kinds of roles you can talk to people in the daily grade discord channel about it they're i mean their channel is so active now i can't even keep up with it anymore um and they'll kind of give you advice on things and they'll help you with things and trying to get you on the right track just i guess like getting involved is is

is the way to go don't just like sit on the sidelines and wait for something to come to you you need to go to it because uh you know that's that's kind of like the way to make your mark in this industry and really any industry but i think within crypto it counts uh for a lot more because crypto is so kind of like community based and so kind of interconnected that you can really quickly make your mark just from uh getting involved in a you know even if it's a later stage project just by getting involved in a discord channel if people know you and they see you and you build like a network effect for yourself it can be very very very beneficial to you as time goes on so yeah hopefully that helps with you know you're thinking about it um but yeah feel free to reach

out to me or ping people in the discord channel and we'll be able to help you there as well but on that note i'm going to end it there for today so thank you everyone for listening and watching be sure to subscribe to the channel if you haven't yet give the video a thumbs up subscribe to the newsletter join the discord channel and i'll catch you all tomorrow thanks everyone