Bat Cave: 23.7.4 Last Week’s Financing Review

Starting around July last year, I used to update Twitter every week with financing news that I thought was worth paying attention to. At that time, I paid a little more attention to GameFi and NFT categories. I only persisted for more than three months or 100 days.

In fact, the crypto market has a strong regularity of four years because of the Bitcoin halving cycle, and now is also the time when the valuation of the best projects is the lowest. Now I try to start introducing some primary market projects every week again, hoping that the market can pay attention to those truly excellent startups and allow these best builders to survive the cold winter of the primary market.

Because this is a purely personal blog, it will be highly subjective, and it is just for the fun of others.

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1. Velo received USD 10 million in financing from DWF labs. Velo is an old project that issued a token as early as 2020. It has dropped from its historical high of USD 2.066 to the current USD 0.003, but still has a fully diluted market value of nearly 100 million and a circulating market value of more than 20 million. DWF may value Velo more because their token has been listed on exchanges with strong liquidity such as OKX for a long time. This company can be mentioned together with Conflux, the PR on the 28th, which raised USD 18 million.

Those who are familiar with it may know that the main profitable business of DWF labs has always been the market maker department. Unlike some market makers such as Jump that came out of Wall Street and inherited the habits of the traditional financial industry to a certain extent, DWF's gameplay is relatively rough. At the beginning of this year, it used the news of the Hong Kong government's new policy, the Hong Kong Conference, and cooperation with operators to stimulate the violent pull of CFX by 16 times. There is a vague shadow of Alameda Research under SBF. CFX currently has a circulating market value of about 600 million US dollars. DWF should have made a profit of more than 81 million in this battle. Now this round of 18 million investment may just be a return of favor.

Some of the market makers that I am really familiar with actually have their own first-level departments, providing small financial investments and various incubation services, but the most important thing is that they will sign the market-making rights of the project tokens at a very early stage of the project, and then suggest project improvements as much as possible in accordance with the exchange's listing requirements without affecting the project's own business as much as possible, and polish the community based on purchasing power.

When the market is slightly better, the expected gross profit of a project that can be listed on a second-tier exchange will not be less than 2 million US dollars. The quality of projects invested by market makers is not lower than the industry average, but projects that have been roughly manipulated will always overdraw some community vitality.

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2. Tegro raised money at a valuation of 100 million, but the amount of money raised was not disclosed. Their introduction is not very complete at present. The biggest highlight is that the founder is Siddharth Menon, the former co-founder of WazirX, and the direction of the NFT-20 Exchange trading market is not new or eye-catching. The most noteworthy thing is that this round was led by Polygon. This kind of investment with a valuation of 100 million should be more of a strategic cooperation than an expectation of financial returns, which may mainly benefit from Wazirx's leading position in the Indian exchange and Polygon's ecological layout in India.

If you check the Play Store download volume, it shows 500+. The UI of the web version is not that great, but there is hope for the future.

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3. Mythical games received a huge investment of 37 million led by Scytale Digital, and also brought in A16Z ARK Invest, Animoca Brands, and PROOF to form a superstar endorsement group. Their previous flagship game "NFL Rivals" media PR said that it had 1 million downloads, but given that SoftBank's Masayoshi Son was also deceived by fake data recently, there is no need to trust the due diligence capabilities of these superstar groups. Their CEO John Linden was previously in charge of Call of Duty and Baby Dragon series at Activision Blizzard.

I am not familiar with Scytale, the lead investor this time. I just remember that one of their more famous investments before was Sumi Network, which should also be in the Polkadot ecosystem. What is more bizarre about this round of financing is that a group of people from their team started a game distribution platform and raised 150 million yuan at the beginning of this year.

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4. Shutter Network raised 2.36M. We actually had a lot of communication with them when they raised the first round last year, but unfortunately it was delayed because of some other deals that needed to be followed up. It was a pity. At that time, AC capital's friends invested a little in the first round, and now OKX's friends also invested a little in the second round. I am still very optimistic about their team and the direction they have chosen.

They should be simply understood as an L2 Eden Network, using a series of methods such as packaged requests to prevent user transactions from being clamped by MEV robots. But at present, when Arb or Op, zk are still centralized sequencers, they seem to be slightly ahead of the underlying development. However, as L2 gradually becomes truly decentralized, based on the current TVL and number of active addresses, I personally am very optimistic about this infrastructure with strong value capture capabilities.

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5. One Trading raised 30 million euros from Peter Thiel's Valar Ventures. The exchange itself is not very attractive. It was spun off from the old European exchange giant bitpanda with a valuation of 4 billion. This kind of exchange, which was founded by Josh Barraclough, the former head of digital innovation at JP Morgan, does not need excellent products, good user experience, or any innovation. As long as some old money from Wall Street plays quantitative games on it, it will inevitably be a business with excellent cash flow. What is worth noting is that Thiel led the investment.

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6. Mind Network completed a $2.5 million financing round, led by Binance, with participation from 7x and Hashkey. Mind Network should have won the second prize in a hackathon organized by Mask in Q1. At that time, it also had some linkage with the AR ecosystem, so I noticed this project. Their official documents are very well written. In addition to the common project concept introduction and solution explanation, they also list four major use cases, of which dWeb and DeFi explain the project use cases very well:

dWeb Use Case: A Zero Trust Web

Use Case Description:

The traditional web is built on a web front-end and a back-end server structure. In Web3, web applications are expected to be fully decentralized. Decentralized storages are able to persist web front-end as static files, but the dynamic backend (normally databases) is not available. The current Web3 landscape lacks protection for dynamic & private data.

The How:

Mind Network serves as a data lake to host dynamic & private data for decentralized web applications

Web front-end could be persisted with decentralized storages/CDNs and connect Mind Network via Mind Query

Data are fully encrypted and only the web application owner could have access to the data

The What:This use case could be generalized to almost all types of dapps, from UGC platform, SocialFi, GameFi, DeFi, and even middleware protocols like Lens Protocol, etc. 

The most interesting thing about this project is that there is a quote from He Yi at the bottom of the official website: "I think you definitely deliver good public speech and you have a very good team, you have a very good tech."

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Looking at the seven financings we talked about, it is the two projects invested by Binance/OKX, with financing amounts of only 2.5m and 2.36m, that are building the crypto world, while the others are either relying on team endorsements or relationships or just foreplay, which is very boring. I also sincerely hope that the former can get more attention from VCs in the current bear market of the primary market.