Special KR1 guest post: Mona El Isa, Founder of the Melon Protocol exploring the emerging DeFi movement
Off-piste DeFi observations
DeFi has been gaining momentum and increasingly more people are watching the growth in the space as tracking tools like DeFi Pulse and DeFi Prime emerge to track the various metrics. The most talked about metric of performance at the moment is ‘locked ETH’, but no doubt others will emerge over time.
Maker remains the lending protocol of choice with just under half a billion dollars of assets locked in there but an interesting trend is emerging as more and more DeFi projects come to market. Maker dominance is diminishing as a percentage of overall marketshare. It’s still early days, but keep an eye on new DeFi protocols coming to main-net and take note how some of them start to aggregate the DeFi space with other parts of the value chain facilitating the user experience.
As an example I happen to be quite familiar with the Melon protocol, a protocol for ‘smart third party asset management’. Investment managers are enabled to set up an investment vehicle (eg. a Fund) which pre-defines all the rules of that fund in smart-contract code. For example; what the investible asset universe is, which DEX’s the manager is allowed to trade with, management and performance fees, risk management rules imposed on the managers in the form of pre-trade checks, how and when the NAV is calculated, who is allowed to invest in the fund and so on and so forth. Such protocols also enable full transparency to investors in those funds by enabling them to maintain self-custody of their portfolio investments at all times with the comfort of knowing that managers have to adhere to the transparent rule-sets enforced by code.
One doesn’t have to look too hard for an example of why this can be so important. The recent drama with renowned investor Neil Woodford in the UK at the moment is a good reminder of some of the challenges industry faces. It has been unravelled that the fund which promised daily liquidity to its investors was in fact invested too heavily in unlisted and illiquid investments. Recent bad performance has led to some big redemptions which caused Woodford to have to “block redemptions” indefinitely for all other parties still invested in his fund. Investors now have to pay the price (again) for lack of transparency, possible internal conflict of interest when it comes to oversight of the fund, lack of ability to enforce fund rules and failure to provide daily liquidity. In contract, DeFi protocols like Melon give investors full transparency, custody and enforce manager’s promises by code.
Melon has integrated several parts of the ecosystem including aggregating several DEX’s (Kyber Network, 0x, ERC Dex, Radar Relay and soon Ethfinex). It runs its governance system on Aragon and with a view to adding more types of assets (eg. Lending, interest-baring products, derivatives etc) into the protocol creating more of an ecosystem for DeFi than a feeling of fragmentation and disparity. Melon has so far seen 93 crypto test funds launched on the main-net since going live just over two months ago. Whilst the fund sizes are small and mostly set up in the spirit of early innovator and pilot testing capacity, trying these kinds of protocols out and using a bit of imagination enables users to see how DeFi can quickly emerge into a very efficient and powerful ecosystem encompassing almost all parts of the traditional financial and asset management on-chain.
- Mona El Isa, founder Melon Protocol
All Things KR1
Portfolio Update: Cosmos & Staking Yields
As included in last month’s blog already, we were pleased to announce our first profit taking of our Cosmos Network (ATOM) investment position to the market as well as continued selling the staking yields. We sold 70,079 ATOM from our investment position for an average price of $5.14 USD per token, realising $360,605 USD in proceeds. We acquired the tokens at a price of $0.10 USD per ATOM during the public Cosmos fundraiser in early 2017, see our announcement from back then here, a 51.4x for us. The multiples remind of the returns of Golem, OmiseGo, Qtum to name a few. In addition we continued to realise our staking income, this is part of of policy to selldown staked assets to USD to generate regular cash inflow for the company. We generated a further 7,008 ATOM from our staking activities on the Cosmos network up until the day of the announcement, which we realised at a price of $6.93 USD per ATOM, thus yielding us $48,578 USD. Link to some media coverage below:
Crypto firm KR1 cashes in USD $360K worth of Cosmos (ATOM) tokens
Crypto and blockchain asset investment firm, KR1, announced today an update on its portfolio holdings. The company…
We are excited to say Nexus Mutual is nearly live! The pool just a few ETH away from launching. With over 6,500 Ether collected in the pool it’s very close to going live with smart contract cover.
Nexus is nicely summed up by our friend Ric Burton below.
Nexus have had some great engagement with the community and the interest is mounting, social media being a great place to answer member questions, below one about the KYC and liability aspect.
Itamar gave a great demo at the CogX festival in London with a hacking bounty, detailing how Argent’s smart contract protect users from unintended behaviour, just like normal bank accounts sometimes do (whenever they’re not a pain to deal with).
It was great to see Nexus and Argent teaming up.
Colony, the future of work collaboration and incentivization launched its mainnet, no investment here from KR1’s side as of today but the team is very excited to see it launch.
We were out in Berlin for the first-ever Cosmos ecosystem get-together event and hackathon (lots of developers hacking away on some new projects over the weekend). It was an incredibly exciting event given the recent launch and was very helpful to see who is doing what in the ecosystem as well as what is being prioritized in terms of features for the network.
Watch the full recap video below with lots and lots of hackathon projects presenting, some very exciting ones are being build right now, certainly a focus of our attention for now.
The whole Tendermint and Interchain Foundation team was represented.
We were also glad to witness another Ethan rap performance :)
KR1 in the Press!
KR1 and the Facebook Libra story
The Facebook Libra story dominated June’s media and KR1 got extensive coverage in all media!
What is Libra? Facebook's new cryptocurrency, explained
After months of speculation, and years of rumours, Facebook has announced plans to launch its own cryptocurrency. Named…
Bitcoin smashes through $11,000 as Facebook's Libra fuels fresh interest in crypto-currency
Bitcoin has gone on a surge, with the crypto-currency powering past the $11,000 mark less than 24 hours after breaching…
Facebook Libra Interest Spikes, Pushing The Bitcoin Price On
Facebook, the social media giant that's found itself caught in a web of scandals over recent years, is gearing up to…
We also had extensive coverage on the recent Bitcoin volatility and price movements.
Bitcoin climbs above $11,000 as memories of popped bubble fade
Bitcoin traded above $11,000 for the first time in 15 months, recouping more than half of the parabolic increase that…
Crypto Compare Summit London
KR1 was at the CryptoCompare conference in London. Andreas Antonopoulos gave a great speech on the borderless, permissionless vision of Bitcoin — a banking system that is available to everyone in the world.
It was a timely speech in light of the Libra announcement!
George was on a panel on getting funded in the crypto space together with a few other VCs in London.
KR1 is Europe’s leading digital asset investment company supporting early-stage decentralised and open source blockchain projects. Founded in 2016, KR1 has been a notable first investor in many key projects that will power the decentralised assets, platforms and protocols that form the emerging Web3 infrastructure.