Ten31 Timestamp 786,283
The bitcoin ecosystem saw a variety of exciting updates this week. On the business front, Unchained announced a $60 million Series B fundraising round, a brief roadmap for what’s next, and a new look for the brand. On the software side, developers proposed multiple noteworthy new projects, including a way to efficiently and cheaply resize lightning network channels and a protocol for P2P bitcoin trading built on top of Nostr. Market participants in traditional asset classes showed continuing signs of concern, as credit default swap spreads on US Treasuries reached levels not seen in over 10 years, at least partially due to light tax receipts that could lead to the US reaching its (mostly imaginary) debt ceiling earlier than expected. Use of emergency lending facilities for banks also ticked up, reversing several weeks of declines.
Portfolio Company Spotlight
Mempool.space is the leading explorer and analytics platform for the bitcoin ecosystem. The platform provides extensive data and tools for real-time analysis of the multi-layer bitcoin network, including granular information on the bitcoin blockchain, the lightning network, and a mining dashboard, all presented in an intuitive and sleek UI. The platform’s suite of tools allow users to easily estimate forecasted transaction fees, drill into in-depth data on both historical and forecasted blocks, explore the liquidity and connectivity of nodes across the lightning network, and much more. Users can either query data directly through the mempool.space site or choose to self-host an instance of the platform on their own hardware to eliminate third-party dependencies. Mempool.space co-founders Wiz and Simon Lindh will co-host a full-day summit at Bitcoin Park in Nashville on May 10th to delve into bitcoin mempools, the importance of open source software, and new features coming to mempool.space.
Selected Portfolio News
Unchained announced a $60 million Series B fundraising round, as well as a set of upcoming product offerings and rebranding:
Mutiny Wallet launched MutinyNet, a custom signet for testing new features:
Media
Strike’s Send Globally remittance service was featured in a write-up on Coindesk.
Fedimint creator / Fedi co-founder Eric Sirion and Matt Odell appeared on the Bitcoin Review podcast to discuss the latest advances in Fedimint and e-cash implementations on top of bitcoin.
Matt also published a piece highlighting the importance of privacy in preserving wealth and freedom.
Tom Honzik at Unchained published a deep dive into bitcoin UTXO “signing mass,” the latest piece from Unchained’s highly informative blog series on bitcoin transactions.
Market Updates
Growing concern about the latest round of US debt ceiling brinkmanship spooked markets this week, spiking US credit default swaps to their highest levels since 2011 and the 3 month Treasury yield to a 20+ year high.
A weak showing from this year’s tax season so far added to jitters, as month-to-date receipts are down 39% Y/Y, potentially threatening to pull forward a debt ceiling standoff several months earlier than expected.
In the banking sector, emergency lending volumes reversed their recent trend and increased slightly W/W for the first time in several weeks.
Elsewhere in the US macro picture, the number of Americans filing jobless claims increased more than expected to a 17 month high, and major pension fund Calstrs pointed to expectations for significant write-downs in its commercial real estate portfolio and across the CRE sector more broadly.
With that backdrop, UBS suggested the Fed might begin to point to a higher long-term inflation target soon.
Overseas, UK inflation declined to 10.1% but still came in higher than expected, with food inflation near 50 year highs.
Meanwhile, Bank of England officials said they were weighing updates to the country’s deposit guarantee program, including increased coverage for businesses.
Intel announced it would discontinue production of its bitcoin mining chips.
Regulatory Update
The SEC filed a lawsuit against crypto exchange Bittrex, alleging the company illegally operated as an exchange and broker. The suit comes a few weeks after Bittrex announced it would be ceasing operations in the US.
The EU approved new KYC / AML rules for institutions and custodians interacting with cryptocurrencies; the rules do not apply to non-custodial wallets and P2P interactions.
Noteworthy
A proposal was released for hierarchical lightning channels, which could allow for dynamic, off-chain resizing of channels to significantly improve lightning scalability without any need for a change to the bitcoin protocol.
Another proposal from this week introduced n3xB, a Nostr layer 2 protocol to facilitate decentralized, censorship-resistant bitcoin/fiat trades.
Former Dallas Fed President Robert Kaplan told a group of institutional investors that the US banking crisis is only in its “second or third inning.”
The erosion of the USD’s dominance of reserve currency balances accelerated notably last year, per one report.
The Russian central bank announced it is in the process of introducing an “experimental legal regime” for using cryptocurrencies in cross-border payments, as well as special organizations devoted to mining.
ECB President Christine Lagarde gave a wide-ranging speech that included references to the potential decline of the reserve currency status of the dollar and euro, as well as the need for greater coordination among global central banks.
In the latest illustration of the vulnerabilities resulting from financial data collection, a CPFB staffer reportedly sent personal records of over 250,000 people to a personal email address.
Travel
Nashville BitDevs, Mempool Summit, and Meetup, May 9-10
Ten31 / Unchained Institutional Investor Event @ Bitcoin 2023, May 17
This afternoon event in South Beach will feature panels and networking with founders and operators from many Ten31 portfolio companies. Please reach out if you would like to attend.
Bitcoin 2023, May 18-20
Nashville Ten31 Tribe event, June 14
Nashville Lightning Summit, July 13-14