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Signal 2021 07 13 012302
Signal 2021 07 13 012302
Revenue Producing
Digital Assets Soar
Written by Jeff Dorman, CFA
Jul 12, 2021
market
Of all of the egregious fees that the banking industry extracts from customers,
overdraft fees may be the most absurd. Banks can borrow for basically free, and
all transactions are just electronic records which means there is no actual cost
incurred if a balance briefly dips below $0. But given the profitability of this
business line, there is very little being done to protect consumers from incurring
But banks don’t receive any revenue from digital assets. In fact, if digital assets
ultimately succeed, the ability to combine your investment vehicles and your
payment vehicles into one freely sendable asset will ultimately compete with
many revenue lines of banks and brokerages. So naturally, the banks are now
stepping up their efforts to “protect consumers from digital assets”. Last week
Binance, for their protection. Needless to say, those customers that were
Barclays has had 40 violations since 2000, accruing fines totaling almost $6
billion. Barclays has also been accused multiple times of abetting money
laundering. Their stock is -87% since 2007. Meanwhile, the digital assets
industry passed major stress tests in March 2020 and again in May 2021, without
efforts to thwart its success. Many of the exchanges, including Binance, have
Source: TradingView
The banks are simply focused in the wrong place. Current Binance US CEO and
former Comptroller of the United States, Brian Brooks, may have summarized it
best on his way out of Washington. We now have a solution to putting power
back in the hands of the people, instead of governments and banks trying to
Infinity (AXS), a gaming token which was first listed by Binance in November
2020. The AXS token rose +123% last week, and has gained over 14,000% since it
owned equity, a real business model, and rapidly growing revenues, all of which
existed prior to Axie issuing its AXS token. The token was issued to help
bootstrap the growth of the company, and almost every customer and fan of the
game had a chance to buy this token in the early days of its growth. Axie also
popularized the newfound “play-to-earn” gaming model, and it has been a wild
success. Arca portfolio manager and NFT expert, Sasha Fleyshman, pointed out,
“play-to-earn turns sweat equity into actual equity. It aligns players with games
As we discussed last week, Bitcoin is one of the worst performing digital assets
YTD. What we didn’t mention was that some of the best performing digital
assets YTD are all similar to Axie Infinity - real companies, with real cash flows, a
token that accrues economic value, and a way to measure its success. These
companies also align their customers, employees and other stakeholders with
their success.
Top dapps and blockchains based on cumulative protocol revenue in the past
180 days
Source: TokenTerminal
These off-the-run small caps may not be as exciting for the media to talk about,
and certainly aren’t profitable enough for the largest asset managers, OTC
shops and exchanges to focus on, but they are doing exactly what we expect
digital assets to do --- turning customers into equity owners. In a world where
employee and customer alignment has never been further away from company
profits, it’s refreshing to see digital assets figure out the model for success.
Source: Twitter
By all accounts, the revenue and volume growth indicates that Axie is seeing
the last week. Aave Pro for institutional investors will be released this month,
week with Synthetix gaining market share after another strong week of
trading. Synthetix staking also nearly doubled as people rushed to claim the
four airdrops that reportedly will go to Synthetix stakers: Lyra, Thales, Kwenta
and Aedlin.
! Sushiswap (SUSHI) rose +11% after releasing their Q2 review which included
the Q3 roadmap. The main product update is the V3 version releasing on July
20. They also announced their ongoing fundraise which will be approved via a
governance vote. They are looking to raise $60m out of the treasury which
transactions and with Harmony, another L1 where they will be launching all
Ex-NYSE President Tom Farley’s SPAC to Merge with Bullish to Bring Planned
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Disclaimer: This commentary is provided as general information only and is in no way intended as investment
advice, investment research, a research report or a recommendation. Any decision to invest or take any other
action with respect to the securities discussed in this commentary may involve risks not discussed herein and
such decisions should not be based solely on the information contained in this document.
Statements in this communication may include forward-looking information and/or may be based on various
assumptions. The forward-looking statements and other views or opinions expressed herein are made as of the
date of this publication. Actual future results or occurrences may differ significantly from those anticipated and
there is no guarantee that any particular outcome will come to pass. The statements made herein are subject to
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In considering any performance information included in this commentary, it should be noted that past
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Some or all of the information provided herein may be or be based on statements of opinion. In addition, certain
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circumstances and objectives.
P R E V I O U S S T O R Y
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Jul 6, 2021 | 6 min read
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©2020 by Arca Funds Past performance is not indicative of future results. Past performance is not
indicative of future results. Investors should carefully consider the investment objectives, risks,
charges and expenses of funds sponsored by Arca Funds (the "Funds"). Other important information
about the Funds are in each respective Fund's offering documents. A Fund's offering documents
should be read carefully before investing. Disclaimer: This commentary is provided as general
information only and is in no way intended as investment advice, investment research, a research
report or a recommendation. Any decision to invest or take any other action with respect to the
securities discussed in this commentary may involve risks not discussed herein and such decisions
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should not be based solely on the information contained in this document.