Posted In:

Ethereum, DeFi

Burn Baby Burn


Aug 07, 2021


Posted In:

Ethereum, DeFi


Aug 07, 2021



This week Ethereum underwent its next round of updates since launching just over 6 years ago.

Implemented via the ‘London’ hard fork — a backward-incompatible upgrade which forces miners to run new software — the update housed the next series of Ethereum Improvement Proposals (EIPs) which aim to improve Ethereum.

EIP-1559, one of five EIPs implemented via London, has become one of the most widely anticipated updates to Ethereum to date. The proposal changes how users will pay to use the network and introduces a ‘token burn model’ where a large portion of transaction fees going forward (which are paid in the native token ETH) will be permanently removed from the total supply of Ether (somewhat akin to a stock buyback).

While EIP-1559 won't necessarily make Ethereum cheaper to use, it should make the costs to transact on the network more predictable and streamlined. That’s because the update overhauls what was known as a ‘first-price auction’ to pay transaction fees — where users set bids for transactions to be included in a block, with the highest bids included until the block is filled — to a ‘base fee’ model that is priced deterministically based on network utilization. Notably, all base fees now paid will be the fees that are burned and removed from circulation. While still early, over 4,000 ETH was burned in the first 30 hours of implementation — worth more than $10 million dollars worth of ETH as of Friday’s prices. For context, a little over 13,000 ETH are created and rewarded to miners each day.

Beyond the clubby confines of the crypto community, the EIP-1559 proposal illustrates to a wider audience how digital currencies can improve and upgrade over time despite their decentralized nature. As ETH 2.0 struts out on the scene, we hear a familiar tune in the air: Burn Baby Burn.

Portfolio News

Reserve Trust raises $30.5m to become the ‘Stripe for B2B payments’ - Congratulations to new FTC portfolio company Reserve Trust, the Denver based financial services provider, which has raised $30.5m in Series A funding led by QED Investors. FinTech Collective, Ardent Venture Partners, Flywire CEO Mike Massaro and Quovo founder and CEO Lowell Putnam also participated in the financing, which included $17.9m in secondary shares. Read more

Inside MoneyLion's quest to become a financial 'super app' - It's a strategy that resembles competing propositions from other fintech companies, but founder and CEO Dee Choubey said what sets MoneyLion apart is its approach to serve customers across the financial needs spectrum, from times of "excess" — through banking, cash management and e-commerce features — to times of need, with offerings such as its Instacash cash advance product, as well as personal and credit-builder loans. Read more

Octane raises $52m at a $900m+ valuation to help people finance large recreational purchases - Congratulations to portfolio company Octane on their $52m Series D round, led by Progressive Investment Company and with participation from existing backers Valar Ventures, Upper90, Contour Venture Partners, Citi Ventures, Third Prime and Parkwood, as well as new investors Gaingels and ALIVE. Looking ahead, Octane plans to use its new capital to expand to adjacent “other passion purchase” markets and continue to launch customer engagement tools as well as buying solutions for consumers shopping for powersports vehicles online. Read more

JPMorgan launches in-house bitcoin fund for wealthy clients - JPMorgan began pitching its Private Bank clients on an in-house bitcoin fund, offered in partnership with bitcoin powerhouse NYDIG, for the first time this week, completing its transformation from the never-bitcoin mega-bank to a genuine player in the digital assets space. Read more

Fintech is booming, despite a weak economy. Can that last? - The buzz about fintech in Lagos, the commercial capital of Nigeria, is so loud that even those without access to the internet cannot miss it. Flashing billboards advertising Kuda, a digital bank, loom over traffic jams, and signs for Paga, a mobile-payments company, adorn thousands of corner shops. Investment has been flowing in, too. In March Flutterwave, a digital-payments firm, raised $170m, making it Africa’s latest unicorn. Read more

Burn Baby Burn

Ethereum just activated a major change called the ‘London hard fork’ — here’s why it’s a big deal - The changes to the code are designed to fix many of the most prevalent issues by destroying or “burning” ether coins and changing the way transaction fees work so that they are more predictable. If you think of ethereum like a highway, London is adding a few lanes to tamp down traffic and is standardizing toll prices. Read more

Ethereum hard fork sends price jumping as fees start to burn - Crypto traders had been hotly anticipating the upgrade while monitoring the deployment for signs of how the changes might affect the pace of new issuance of ether by the blockchain – a key factor in determining the balance between supply and demand. Analysts had also noted the risk that something might go amiss as the new technology is implemented. Read more

Industry News

Square leads $29b buyout of lending pioneer Afterpay - The takeover underscores the popularity of a business model that has upended consumer credit by charging merchants a fee to offer small point-of-sale loans which their shoppers repay in interest-free installments, bypassing credit checks. Read more

FCA probes UK bank Monzo over potential money laundering breaches - Monzo revealed the investigation in its latest annual report, which also showed the six-year-old bank kept losses stable in its last financial year despite taking a heavy hit at the start of the pandemic. Read more

Moody's to acquire RMS, leader in climate & natural disaster risk - Moody's Corporation and RMS announced today that they have entered into a definitive agreement for Moody’s to acquire RMS for approximately $2.0b from Daily Mail and General Trust. The acquisition will immediately increase Moody’s insurance data and analytics business to nearly $500m in revenue and will accelerate the development of the Company’s global integrated risk capabilities to address the next generation of risk assessment. Read more

Senators file crypto broker amendment to infrastructure bill after industry backlash - If included in the final bill, the amendment would be a win for the crypto industry, whose advocates have said was at risk of losing innovators and investors interested in doing crypto business in the U.S. The original language could also force some companies to shut down if they can’t comply or move offshore, these advocates said. Read more

Figure to merge with mortgage lender Homebridge - The blockchain revolution may soon be coming to mortgage lending. And it could take the form of a very old-school lender – Homebridge Financial Services. The Mike Cagney-led fintech lender Figure Technologies, most recently valued at $3.2b, announced that it intends to merge with Homebridge. Read more

Starling Bank leads in latest account switching service statement - UK based neobank Starling net gained 17,769 accounts via the national account switching service in the period April and June 2021. In contrast, Santander net lost 10,965 accounts. Of note, some of the leading winners offered strong incentives during the period, and these deals can change over time. Read more. 

Crypto ‘wild west’ needs stronger investor protection, SEC chief says - U.S. financial regulators have struggled to get their arms around the fast-growing world of cryptocurrency and related financial technologies. Unlike in the securities and derivatives markets, no single regulator oversees crypto exchanges or brokers. Read more

Robinhood shares slide 28% after big investors file to unload stakes - The volatility has come as many on Wall Street and Main Street still look to make sense of what some are calling the latest meme stock. Retail investors have recently gobbled up shares, while the likes of Cathie Wood, Ark Invest's prominent CEO, are helping buoy the stock among institutional investors. Read more

Next up on Synapse’s fintech services platform: white-labeled credit products - When Sankaet Pathak co-founded Synapse in 2014, he had a vision of doing more than just building a platform that enables banks and fintech companies to easily develop financial services. Read more

Africa’s appetite for digital currencies is growing - Private cryptocurrency providers are also increasing on the continent and even central banks are making sure they aren't left behind, by exploring better ways to create and own virtual money, inside secure ecosystems. Read more

The Mexico-based fintech that decided to buy a bank - Credijusto’s co-founders wanted to avoid building a lender from scratch — their investors thought they were ‘mad’. Read more

Select Financings

BharatPE - India based payments company raised $370m in Series E funding led by Tiger Global. Read more

Human Interest - San Francisco based SMB 401(k) provider raised $200m in Series D funding led by The Rise Fund. Read more

Jupiter - India based neobank raised $45m in Series B funding led by Nubank, Global Founders Capital, Sequoia Capital and Matrix Partners India. Read more

Kuda - UK and Nigeria based digital bank raised $55m in Series B funding led by Valar Ventures and Target Global. Read more

MakersPlace - San Francisco based NFT marketplace raised $30m in Series A funding led by Bessemer Venture Partners and Pantera Capital. Read more

Matrixport - Singapore based digital assets financial services platform raised $100m in Series C funding led by DST Global, C Ventures, and K3 Ventures. Read more

Mesari - New York based cryptocurrency analytics firm raised $21m in Series A funding led by Point72 Ventures. Read more

Naked - South Africa based insurance technology provider raised $11m in Series A funding led by Naspers. Read more

OfBusiness - India based B2B commerce and financing startup raised $160m in Series E funding led by SoftBank Vision Fund 2. Read more

Prime Trust - San Francisco based maker of fintech infrastructure raised $64m in Series A funding led by Mercato Partners. Read more

Rapyd - London based “fintech-as-a-service” platform provider raised $300m in Series E funding led by Target Global. Read more

SentiLink - San Francisco based identity verification technology startup for financial institutions raised $70m in Series B funding led by Craft Ventures. Read more

Tabby - UAE based “buy now, pay later” company raised $50m in Series B funding led by Global Founders Capital and STV. Read more

TrustToken - San Francisco based operator of decentralized finance lending protocol TrueFi and stablecoin TUSD raised $12.5m in new funding led by BlockTower Capital, a16z and Alameda Research. Read more

VNLife - Vietnam based payments provider raised $250m in Series B funding led by General Atlantic and Dragoneer. Read more

Wildfire Systems - California based financial tech platform that powers reward and loyalty programs raised $15m in Series A funding led by TTV Capital and QED Investors. Read more

Xepelin - Chile based creator of a financial services platform for SMEs in Latin America raised $30m in new funding led by Kaszek Ventures. Read more

Yaydoo - Mexico City based B2B software and payments company raised $20m in Series A funding led by Base10 Partners and monashees. Read more

Zeni - Palo Alto based provider of real-time financial services data to venture-backed startups raised $34m in Series B funding led by Elevation Capital. Read more

ZenLedger - Seattle based cryptocurrency tax software and blockchain analytics startup raised $6m in Series A funding led by Bloccelerate VC. Read more


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