🧅 Layer by layer

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Is it really Monday if there isn’t a Strategy buy announcement? 

Putting aside the debates we could have about what these buys mean for bitcoin and, perhaps more specifically, Michael Saylor’s company, the firm spent $550 million last week on 6,556 more bitcoin for its sizable stash. 

I suppose one could argue that Strategy is looking to buy the dip because its average price per bitcoin is just under $85,000. Though, admittedly, I struggle to wrap my head around the fact that the company owns more than 538,000 bitcoin.

Anyway:

• Bitcoin’s up to $87k, a 3.5% increase over the past day. ETH’s up to $1,600, also up 3.5%. 

• LayerZero’s ZRO is up 4.6% in the same timespan to $2.50. 

• DEX volume’s up 6.6% in the past 24 hours to $5.2B, per Blockworks Research.

🔨 Just keep building

“I think the industry a year ago was messy, was very competitive,” LayerZero CEO Bryan Pellegrino told me. But it’s been “cleared up” thanks to the friendlier environment and overall adoption.

Last month, the company saw $6 billion in transfers, he added, and $100 billion worth of assets were built on LayerZero.

Admittedly, Pellegrino added, he still thinks of crypto as an underdog industry, one that’s fairly small. But now that he’s regularly meeting with the BlackRocks and PayPals of the world, it might be time for a mindset shift. 

LayerZero dominates with a whopping 75% market share, introducing a new set of challenges for Pellegrino and his team.

“It's easy when you're fighting for market share, because it's very clear what you need to do. But then you get to 75% market share. And … the last 25% doesn't seem as incrementally important,” he explained.

“How do we go from $6 billion a month to $100 billion a month? How do I make it so that every exchange that runs entire teams of people in the back end to deal with inventory management … you're basically custodying these things and interacting, and how can I make it so they don't ever need to think about that again?”

As LayerZero grows, Pellegrino noted, it’s become not just about the technology, and part of the challenge now is to make sure it’s used. 

At the end of last week, a16z announced that it bought $55 million worth of ZRO. The VC firm has previously invested in LayerZero. 

But what struck me about the announcement was the term length being included in the announcement. a16z Crypto partner Ali Yahya disclosed that the token purchase had a three-year lockup.

Pellegrino told me the disclosure was part of an effort to be as transparent as possible. But it also helps to show the “extreme conviction” on a16z’s part. 

“It's not something that they're thinking about in the near term. It's something they're thinking about for the very long term. That's how we think about the world, and that's how we want people to think about it. We care about what we're building,” he added.

I asked Pellegrino what the firm planned to do with the money, and he told me it’s all about “alignment.” The firm has a 10-year runway, which showcases how Pellegrino thinks about the industry. 

While there’s not necessarily a concern about funding in crypto, the money goes quickly for a lot of startups, and he’s worked to ensure that’s not a problem his company faces. 

LayerZero last raised in April 2023, accumulating $120 million in a Series B round. He told me that the round was less about the money, but more about getting the right folks involved to evolve the project into a “world-class company,” which is something Pellegrino didn’t have experience with.

He joked that the $55M check coming LayerZero’s way won’t turn into any fancy parties, and told me that while 2021 was an “interesting” time, he’s not going to be the one to revive those days.

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Arkham is a crypto exchange and a blockchain analytics platform that lets you look inside the wallets of the best crypto traders — and then act on that information.

Arkham’s Intel Platform has a suite of features including real-time alerts, customizable dashboards, a transaction visualization tool, and advanced transaction filtering — all of which is accessible on all major blockchain networks, and completely free.

Arkham’s main product is the exchange, where users can express their trade ideas against the market.

• $380 million of crypto, or roughly 27% of the funds stolen from the ByBit hack, is now untraceable, according to CEO Ben Zhou.

• ICYMI: DeFi Education Fund sent a letter to the SEC on Friday about establishing a ‘safe harbor’ for token issuers.

• Charles Schwab aims to launch spot crypto trading in the next 12 months, its CEO said on an earnings call.

🤝 M&A Monday

M&A szn is still going strong. 

Kado Software, the Web3 payments infrastructure company, was acquired by Swapped.com. 

The team declined to disclose the terms of the deal, but it plans to grow the US operations for Swapped.com, which is a Denmark-based firm. 

Emery Andrew, Kado’s founder, told me that the team’s been weighing its options for a while — from debating a fundraise to looking for the right fit to acquire it. 

It was an obvious choice, he added. Especially because Andrew will stay on to help helm the US operations and product expansion. He teased that they already have some products in the works, but they’re not yet ready to disclose them.

“By merging our expertise and vision, we can accelerate the creation of best-in-class Web3 products and UX, achieving more than either team could on its own. In addition, the US market expertise is something of great value to us,” Swapped.com CEO Thomas Franklin said in a statement. 

The company — which, transparently, was not one I was very familiar with before chatting with Andrew — is fairly new, only about three years old. Its focus is on expanding Web3 payments, which is what drew it to Kado. 

For Andrew, it’s about building the “next generation of crypto-native payments products.”

“It’s a natural progression that payments is a race to zero in terms of fees, as more players enter the market, it’s natural that there’s more competition,” he told me. Right now, it’s still quite expensive, but Andrew’s hoping to take a page out of the stablecoin book when looking at how Kado — and Swapped.com — can lower fees for users.  

And now we wait to see what products these two have up their sleeves. 

Note: Blockworks cofounder Jason Yanowitz is an investor in Kado.

It’s a builders market. It will always be a builders market. 

36 hours of pure output. The Permissionless Hackathon, powered by Cracked Labs, is where devs go heads down to ship.

Deployments. Not ideas — code in prod.

💻$100K+ in bounties

June 22–23 | Brooklyn

On our minds: Base

The Drop’s Kate Irwin:

Jesse Pollack, Coinbase’s head of Base and Coinbase Wallet, has been on a posting spree since Base launched some “content coins.”

One Pollack post with a GIF full of different phrases declared that “Base is for pimping” while another made the rather NSFW claim that “Base is for squirting.”

In response to one post about the latter statement, Pollack said we should respect “provocative artists.” In another, he said he would love it if someone launched a “better OnlyFans on Base.”

But as some have pointed out, Pollack’s wishes for a Base-based OnlyFans are ironic considering Coinbase’s current terms block anyone who has business around “any sexually-related services such as prostitution, escorts, pay-per view, [or] adult live chat features.” Because of that, it includes a ban on OnlyFans and creators making similar content independently or on other platforms.

When I posted about this, a number of reply guys didn’t deny that Coinbase is doing this. But they tried the good ol’ “it’s a blockchain” argument, meaning they expect sex workers to find ways to use Base while avoiding Coinbase.

If the head of Base, who works at Coinbase on Base, is saying sex workers should come to Base while ignoring Coinbase’s blatant restrictions, what kind of doublespeak is that? 

Time to change the rules — or at least admit that this is incredibly ironic. 

Crypto had been touted as one of the few promised payment methods besides cash that sex workers could actually use. But it has failed to live up to that promise.

Put your crypto where your mouth is, Coinbase — and let this industry truly be for everyone.