GM. This is the Milk Road, the crypto newsletter that has so much sauce you’ll be wondering where the spaghetti is.
It’s Friday, so lets boogie:
- Meet "Bitcoin Patient Zero"
- Uniswap makin’ big moves
- Funding Friday
- Meme of the day
MEET "BITCOIN PATIENT ZERO": WENCES CASARES
We got in touch with one of the most interesting guys in the world. No, it’s not the Dos Equis guy.
His name is Wences Casares. He’s…
- “Bitcoin Patient Zero” - convinced heavy hitters in Silicon Valley (eg. Reid Hoffman) to look at Bitcoin way back in 2011-2012
- CEO of Xapo - a bitcoin wallet company that helps wealthy people & big institutions buy and store crypto. **They apparently hold ~$10B worth of crypto in underground vaults across multiple continents
- Sold his last company (Pentagon) for $750M
And he’s super lowkey. But we asked him for an interview…and we simply don’t miss.
In fact, he sent us a 15-page doc with all his thoughts on Blockchains and Bitcoin.
You know the rules: Never let a fellow hodlr spend more than 2 minutes reading something.
Here are the top 5 takeaways:
1/ Why Bitcoin?
Wences is a fan of Bitcoin. But he isn’t all “Hoorah! BTC is here to fix all our problems”. In fact, he thinks it can be slow and cumbersome at times.
But there are the 3 things that make it special:
- Open - Anyone can use it. There are no borders and it doesn’t discriminate
- Uncensorable - No one has the power to restrict or change your transactions
- Undilutable - There will only ever be 21m Bitcoin. No one can change that
Wences makes the point that Bitcoin is an open protocol, not a company.
Companies change (Myspace -> FB, eBay -> Amazon), but protocols don't (we still use the same email protocol).
“Bitcoin could do for money what the Internet did for information.”
2/ Best use cases
First, here’s where he says blockchains are NOT useful:
- With systems that have any info that will need to be changed. Things like court docs, supply chain management, property titles, etc just don’t make sense to him
- In most cases it’s actually easier & cheaper to run open protocols & standards than putting everything on a blockchain where it can be expensive and difficult
Where it IS useful:
- With systems that have info that won’t need to be changed. Things like your social security, date of birth, etc
- As a global non-political standard of value & settlement. Similar to how meters and kilos are standards for length and weight - neither change due to political factors
Everything will one day be quoted in Bitcoin or “satoshis”.
USD? 107 satoshis
Barrel of oil? 50 satoshis
Global GDP? 97,365,765 satoshis
The Milk Road? Still free
Wences thinks our grandchildren will call us weird when we tell them we used USD (government money) to price a lot of things in the world.
3/ Price Prediction for Bitcoin
If Bitcoin becomes the world standard of value and settlement its market cap will be:
- worth more than gold ($12T market cap)
- worth less than the world’s narrow supply of money ($40T market cap)
If this happens, 1 Bitcoin will be worth between ~$500k and ~$1m
4/ How much to invest in Bitcoin
Only up to 5% of your net worth. Wences doesn’t believe in DCA, he thinks you should just buy it all at once and forget about it for 5-7 years.
But of course, Bitcoin is still an experiment. So only invest what you can afford to lose.
5/ How Bitcoin can fail
- Price panic. If we all decide at the same time that bitcoin is worthless, that it will be worthless. It’s a self-fulfilling prophecy
- Bitcoin doesn’t become mainstream. And it’s only used by believers and fanatics. This could happen due to the government and institutions keeping it separate from the financial world
Wences thinks there's only a 10% chance that Bitcoin fails at this point.
Wanna read the whole 15-page doc? Reply below with "Cookies please" and we'll send it your way!
UNISWAP IS MAKING MOVES
Uniswap is a place where you can swap any crypto coin for another. It has:
- 70% market share for DEXs on Ethereum
- $1T+ in cumulative volume
- $1b+ in fees generated for LPs over the last year (sometimes even generates more daily fee revenue than Ethereum)
And there are 2 big moves being made:
1/ Creation of a Uniswap Foundation
- Earlier this week, a proposal was passed to create the foundation to fund open-source development & support community governance.
- It has a $74m budget. Most of it will go to the Grants Program to fund R&D and more projects that want to help grow Uniswap.
2/ Voting to turn the “Fee Switch” on
Uniswap has been a money-making machine for liquidity providers. But what if I told you Uniswap, itself, doesn't make any money from those fees?
Well, it’s true. And it’s all because the Uniswap fee switch hasn’t been turned on.
Sidebar: I love saying I haven’t flipped the switch yet.
Uniswap not making money? Haven’t flipped the switch yet
I’m hungry? Hey ma’ flip the switch on that meatloaf!
I’m single & lonely? Just need to flip that relationship switch
Anyways - the Uniswap DAO members are voting on a proposal to flip the switch.
- It would give them a 10% cut of LP fees for 3 pools (ETH-DAI, ETH-USDT, and ETH-USDC)
- The fee switch would only be activated for 120 days. After that, there’s another vote on whether to turn it off or keep it on
- For reference - Uniswap would’ve made ~$5m in protocol earnings over the last 120 days if the fees were turned on
There’s one final vote left to pass the proposal. If it passes, the Uniswap fee switch will be flipped on for the first time ever. **Queue Drake**
TODAY'S EDITION IS BROUGHT TO YOU BY THIRDWEB
Web3 is in its early days. We’re in the 'beer-drinking iPhone app' stage.
The main problem is it’s difficult for devs to build in web3 - workflow is fragmented, complex, and slow. We need products to make it easier.
Stripe made it easy to add payments to your app.
AWS made it easy to add storage & compute for your app.
Now it’s thirdweb's turn - thirdweb makes it easy to add web3 tools like tokens and NFTs to your app.
Some of the world's biggest brands (Afterpay, Coinbase, etc) are using it to launch and power their apps.
Since launching:
- 55,000+ developers have joined
- 200,000+ smart contracts deployed
- just raised a $24m Series A from Haun Ventures, Coinbase Ventures, and more. The Milk Road boys even got in on the fun.
Companies like thirdweb are crucial to the growth of web3, as developer tools help builders create real-world applications of the technology.
Interested in learning more? Check it out here!
FUNDING FRIDAY
Each Friday, we give you a rundown of Web3 companies that got funded.
This week we saw ~$275M get invested into crypto companies. Here’s who got the money:
ReadyPlayerMe got $56M to develop a cross-game avatar platform for metaverses. One avatar, multiple worlds.
thirdweb got $24M to make it easy to build web3 apps. Your boys at the Milk Road invested. Because we’re smart. And handsome.
Comm got $5M to build the Discord of Web3. Holdup, isn’t Discord the Discord for web3?
Spectral Finance got $23M to create an on-chain credit score.
If you wanna check out the full database of companies that have raised money in 2022, we got 'em for you right here.
MEME OF THE DAY
That's a wrap for this week. Stay thirsty and see ya on Monday!
If you want more, be sure to follow our Twitter (@MilkRoadDaily)
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A ROADERS REVIEW
VITALIK PIC OF THE DAY
19. DAYS. LEFT. UNTIL. THE. MERGE
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
