Welcome to zero knowledge. A weekly newsletter breaking down where the top VCs are investing in web3/crypto.
Expect portfolio breakdowns (like this) every week and other crypto topics, insights, and updates everywhere in between.
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Three Arrows is a hedge fund established in 2012 and focused on providing superior risk-adjusted returns. It was founded by ex-high school classmates and is among the world’s largest crypto holders.
It's estimated that their blockchain holdings alone are worth $10 billion+. Combine this with investments in top funds like Multicoin and select investments in top performers like Starkware, Fireblocks, and AAVE, and the result is one of the highest performing hedge funds by epic proportions 📈.
Here's what to expect below 👇
- Recent funding news from Three Arrows.
- Three Arrow's portfolio broken down by layer, blockchain, company type, and category.
- 🕵️♂️ The most interesting company in their portfolio.
- 💼 Entire Three Arrows portfolio (in an Airtable sheet).
- 💰 Tokens available from Three Arrows portfolio companies.
Recent funding news from Three Arrows
1. Three Arrows to move Headquarters to Dubai, raise first-ever external capital
- Three Arrows Capital is joining the likes of Binance and others who have sought out the Middle East as the regulatory climate in Singapore appears to have soured.
2. Bastion raises $9 million series A as it has become the biggest DeFi protocol on Aurora (Tokens 💰 + equity 💵)
- The protocol offers a lending and stableswap platform on Aurora — an Ethereum-compatible scaling network created by the team at the NEAR protocol. It's TVL stands at over $600 million.
- Why Bastion chose to build in the NEAR ecosystem? According to them, it has the highest growth potential of any L1. As the fastest sharded Layer-1 blockchain with super infrastructure and a seamless developer experience, NEAR has all the tools to become the next DeFi powerhouse.
Below is a thematic view of Three Arrow's investments by:
- Category (ex: infrastructure vs. finance companies)
- Company type (ex: payments vs. NFTs and digital ownership companies)
- Layer (ex: L1 vs. L2)
- Blockchain (ex: Eth vs. Solana)
#1 Investments by category
#2 Investments by company type
#3 Investments by layer
#4 Investments by blockchain
Most interesting portfolio company 📈
- Elevator ⚡️: Lido is a liquid staking solution for Ethereum. Lido lets users stake their ETH while receiving derivative tokens to participate in other on-chain activities, e.g. lending, to compound returns.
- Lido is 👑: About a week ago, Lido surpassed all other DeFi protocols in TLV (Total-value-locked) to become #1 and hit an all-time high of $20 billion+ in the process. It has since pulled back and dropped to #2 behind Curve, another DeFi lending protocol that started in Jan 2020, about a year before Lido.
- What is TLV (total-value-locked) 💲? A metric that tracks the number of assets deposited in various DeFi projects.
- How does it work: When staking with Lido, users receive stETH tokens on a 1:1 basis representing their staked ETH. stETH balances can be used like regular ETH to earn yields and lending rewards, and are updated on a daily basis to reflect your ETH staking rewards, minus any penalties. Note that there are no lock-ups or minimum deposits when staking with Lido.
- What problem is Lido solving 🙏: Lido attempts to solve the problems associated with initial ETH 2.0 staking - illiquidity, immovability, and accessibility - making staked ETH liquid and allowing for participation with any amount of ETH to improve the security of the Ethereum network.
- Key insight 🕵️♂️: As a user, you can earn a yield on your ETH and on your stETH. stETH has become very popular as collateral and for yield farming strategies, according to Andrew Thurman, content lead at blockchain analytics platform Nansen.
"Investors are flocking to staked ether and its derivatives for its income potential and its composability.”
Individual portfolio company data
Tokens available from Three Arrow backed companies
Let us know what you think here!