The rise of Cake DeFi

In Token Issue this week, we analyze a Singaporean crypto firm's healthy financial performance despite the negative sentiment around digital assets. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Deepti Sri Crypto journalist Hi {NAME} When Saudi Arabia defeated Argentina 2-1 on Tuesday, sports analysts dissected every aspect of what has become the most dramatic loss in FIFA history. Oh, and ARG, the Argentine Football Association Fan Token, shed one-third of its value just two hours after the country lost. Welcome to soccer in the cryptoverse, another occasion for the crypto folks to invest in a short-term narrative. A month-long event like the World Cup, coupled with the love this industry has for meme tokens, has pushed the launch of themed tokens like [World Cup Inu]( and [World Cup Willie](. Speculators can make bets on their favorite teams thanks to these tokens, which are not licensed or even affiliated with any World Cup participant. Meanwhile, several projects like [Ultimate Champions]( a play-to-earn game built on Polygon, are capitalizing on the World Cup’s betting boom. FIFA has also teamed up with companies like Upland, [Matchday]( Phygtl, and Altered State Machine to develop football-themed Web3 games. After an overwhelmingly bad month for crypto, the World Cup may mark a new beginning for the sector. On the other hand, the lack of regulations and the normalization of gambling will probably set the industry up for an own goal. Our big story for the week talks about a dark horse: a relatively low-key crypto investment platform (which is also part of the crypto betting field) that has hit US$631 million in revenue on only US$16.6 million in operating costs in 2021. So far, the company has also weathered the crypto storm that has sunk many other ships. Read on to figure out how! -– Deepti  ---------------------------------------------------------------  THE BIG STORY [Cake DeFi’s revenue hits $631m in 2021, but income to reduce in 2022, CEO says]( Cake DeFi is among the companies that have bucked the negative sentiment following the collapse of crypto exchange FTX. With transparency as its core tenet, the company has seen record inflows over the past week due to the ongoing concerns over centralized exchanges. However, it does not expect to see growth like it did in 2021.  --------------------------------------------------------------- ⭐TO THE STARS A look at what’s pushing Web3 forward Curve drops stablecoin white paper Curve, the second-largest decentralized exchange on Ethereum, has published its long-awaited crvUSD stablecoin [white paper](. Its CRV governance token, which gives holders a cut of protocol revenue, climbed 15% after the white paper was released. Curve’s stablecoin will be backed by collateral that’s governed by an LLAMMA - in other words a lending-liquidating automated market maker algorithm. It aims to better safeguard borrowers whose collateral falls below the liquidation price. The algorithm will convert the collateral's value to US dollars as it approaches its liquidation price. It will then convert the collateral's value back to ETH as the value of ETH increases. The dollar-pegged crvUSD will resemble MakerDAO’s stablecoin, DAI, which is overcollateralized with crypto assets. The launch of crvUSD comes amid a surge in interest for stablecoins as investors look to cement their positions in a rocky crypto market. However, the overall stablecoin market value slid this year, with Tether down over 20% since its high in May. Binance also recently delisted rival stablecoins, and then converted user balances in those digital currencies to its own BUSD stablecoin. Meanwhile, lending protocol Aave has its own dollar-pegged stablecoin, GHO, in the works.  --------------------------------------------------------------- 🌙TO THE MOON Promising crypto projects we’re noticing. [IMPT]( IMPT is a cryptocurrency that has raised nearly US$13 million to develop the carbon credits market using blockchain technology. It engages retail brands that allocate a specific percentage of their sales margins to buy carbon credits from environmental projects. When a consumer makes a purchase from one of the retail brands via IMPT’s shopping widget, they are credited with IMPT tokens. These can be exchanged for NFTs that represent carbon credits. It is currently in the second phase of its presale, with the token being priced at US$0.023. [Dash 2 Trade]( Dash 2 Trade is a crypto trading platform built on the Ethereum blockchain. Holders can use its native token, D2T, to access tools including technical charting, social sentiment analysis, on-chain analytics, and strategy backtesting. The platform is still under development and is set to launch in the first quarter of 2023. Currently, the D2T token is available through its presale. --------------------------------------------------------------- 🌏BACK TO EARTH The week’s biggest roadblocks [The Genesis meltdown]( At the end of Q3 2022, crypto lender Genesis had US$2.8 billion in active loans. Digital Currency Group (DCG), which owns the firm, is also the owner of some of the world’s largest cryptocurrency businesses (Grayscale and CoinDesk). Genesis announced last Wednesday that it was halting loan originations and consumer withdrawals in the wake of the FTX fiasco. The company has been trying to raise at least US$1 billion from investors and has warned that if those efforts are unsuccessful, it may be necessary for the firm to file for bankruptcy. This is what happens when you loan a bankrupt hedge fund (3AC) billions of dollars, exchange US$1 billion in bitcoin for a stablecoin on a failing blockchain (UST), and take magical money on the internet (FTT) as security. However, a Genesis spokesperson said that the company has no plans to file for bankruptcy imminently. “We’ve begun discussions with potential investors and our largest creditors and borrowers, including Gemini and DCG, to agree on a solution that shores up our lending business’ overall liquidity and addresses clients’ needs,” Derar Islim, interim chief executive at Genesis, wrote to clients last Wednesday. While these statements appeared to have calmed the markets a little, Genesis remains at risk. If it fails to raise funds, we may have to brace for the domino effect.  --------------------------------------------------------------- STILL A PONZI SCHEME Sounds like a bunch of bollocks. It’s a public address, not your private keys. Obviously there is something you are hiding which is unfortunate given the events transpired from the past week. If I was an investor in [$GBTC]( I would be legitimately concerned. — Curb◎ (@CryptoCurb) [November 18, 2022]( This angry tweet was triggered by crypto fund Grayscale Bitcoin Trust’s (GBTC) inability to secure investor confidence in the wake of a crash in its prices after the FTX collapse. GBTC has been trading at a 50% discount on the underlying Bitcoin asset after the crash. This led to an immediate rush from investors to liquidate their GBTC holdings. While the crypto fund could have published its proof-of-reserves to reassure investors, it didn’t do so, citing “security concerns” - and no other details - as the reason. GBTC did put out a statement from Coinbase, which promises the safekeeping of assets. But of course, this “sounds like a bunch of bollocks” after the collapse at FTX, which in retrospect had all the stamps of approval. --------------------------------------------------------------- MORE TO CHEW ON 1️⃣ [DBS’ new trade experiment]( JPMorgan's blockchain-based fixed income trading network Onyx, which uses tokens for short-term trading in fixed income markets, has teamed up with DBS, the first Asian bank to use the platform. Onyx helps investors lend assets for a short span of time without removing these from their balance sheets. 2️⃣ [Raids at Hodlnaut]( The Singapore Commercial Affairs Department, the police force’s white-collar crime division, said it has launched an investigation into embattled crypto firm Hodlnaut over claims of cheating and fraud. Hodlnaut and its directors allegedly falsified information on the extent to which the firm was exposed to a digital token – presumably UST. 3️⃣ [An apology from Sequoia]( In a conference call with its investors, Sequoia Capital partners apologized for their decision to invest in FTX.com and FTX US. The VC firm has reportedly funneled US$214 million into the two projects across two funds and clarified that it had reviewed FTX’s unaudited statements before investing. That’s all for this issue - we hope you liked it. Do also check out previous editions of the newsletter [here](. WAGMI.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? 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