Apollo’s Moonshots: A new Crypto Age is dawning. Also, Strips Finance launch
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Australia’s leading cryptocurrency investment firm, Apollo Capital, shares the fund’s weekly take on what’s happening in the fast-changing and volatile cryptocurrency space.
It’s the dawn of a new Crypto Age, where large parts of our daily lives will become increasingly tokenised to be stored and exchanged on a blockchain, predicts Apollo Capital investment partner Marc Woodward.
The American-born Sydneysider and longtime venture capitalist has penned an ultra-bullish essay for Apollo Capital, writing that “the crypto-powered future is already here.”
Woodward compared the emergence of crypto to the emergence of the big tech companies 10 years ago.
“The eventual ubiquity and inevitably of software and the web looks blindingly obvious with the benefit of hindsight, but it was not well understood nor distributed at the time,” he wrote.
Crypto combines the disruptive forces of software with the velocity of capital “to create a powerful, global, and permissionless 24/7 digital free market whose goal is adoption, efficiency, and exchange,” Woodward says.
Money is becoming programmable, and the definition and types of money is evolving, Woodward says.
“Fast forward 10 years from now, crypto’s rise will look obvious and inevitable… just as the dominance of software and the web do today,” he writes.
This isn’t the focal point of his essay, which is well-worth reading in its entirety, but pricewise Woodward says it’s not hard imaging crypto’s total market cap increasing 3x to 10x over the next decade.
Meanwhile, decentralised finance projects are getting more and more sophisticated.
Apollo Capital has received an allocation in Strips Finance, as part of the platform for interest rates swaps’ $8.5 million capital raising. Multicoin Capital, Sequoia Capital India, Fabric Ventures and Morningstar Capital also took part.
0/ We recently led a round in @StripsFinance
Been thinking a lot about the evolution of DeFi derivatives markets, and we think the time is now for interest rates (IR) derivatives
Specifically: perpetual contracts!https://t.co/nqOP8CzsJa
— ksam.sol (@KyleSamani) October 6, 2021
“So basically, in DeFi right now, the market’s really mature in interest rates,” says Apollo analyst David Angliss.
“Interest rate products everywhere now – Aave, Compound, Maker … that makes up about US$19 billion in outstanding loans.”
But unlike in traditional finance, almost all of these crypto lending products have variable rates, one reason that big institutional players like banks aren’t dipping their toes into DeFi.
“There’s a lot of different events that can cause variable rates to increase or decrease, like a big liquidity provider pulling out liquidity,” Angliss says.
“So that’s a caused a bit of hurdle to get in, with that risk.”
Strips will let users speculate and hedge on interest rates, locking in a lending or borrowing APY through an interest rate derivatives exchange.
It’ll also let DeFi users “supercharge” yield farm returns with 10x leverage.
The project plans to launch on Ethereum scaling solution Arbitrum next month and has a token sale this week on Polkastaker, which Angliss calls the best platform for coin offerings.
Its name is taken from the acronym STRIPS, Separate Trading of Registered Interest and Principal of Securities. A stripped bond is a bond that has had its principal and coupon payments “stripped” into two separate components.
“The the point we want to hammer home is that there’s a large market for fixed interest rates, seeing there’s currently $19 billion in outstanding loans on the three biggest money markets in DeFi … and they’re all variable interest rates.”
The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.
Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
This article has been corrected to reflect that Aave, Compound, Maker have a total of US$19 billion in loans outstanding, not $90 billion.