Three Pinoy Unicorn Crypto Startups
With a current price of ~$2.15 per $YGG token, Filipino-led Yield Guild Games joins the unicorn club of startups, i.e., companies with a fully diluted valuation (FDV) of $1B or greater. Now, most old-school crypto people are more used to using market-cap as a way to measure the size of a given token, so allow me a quick digression on this! Using FDV as a metric is different from market cap in one critical way: market cap refers to the circulating supply of tokens, while FDV refers to the maximum amount of tokens issuable. We compute both of them using the current price, so for example, today $BTC’s market cap is $750B, but its FDV (assuming that all satoshis have been mined) is $840B. Although market cap is the crypto world’s accepted way of ranking coins, FDV is well-accepted in the traditional business world. Startup founders often only sell a small portion of their company’s shares to the general public, so if they sell 10% of their company for $1M, the FDV is $10M. In the case of $YGG, a little under 9% of their tokens have thus far been issued.
$YGG is the third Filipino-led crypto project to cross this mark, with both $SXP and $XVS hitting their strides earlier this year. If you’ve never heard of any of these tokens, let me give you the Cryptoday tour! $SXP is the token of Swipe, a crypto debit card infrastructure provider that launched in 2019. They were quietly acquired by Binance in 2020 and their $SXP token quickly found its way into the unicorn club shortly thereafter. (You can read more about Swipe here.) They’ve since dropped out of the unicorn club because their CEO Joselito Lizarondo opted to burn $200M worth of his founder shares in late April of this year, as part of their roadmap to eventually whittle down their circulating supply to 100M tokens. It was a fascinating move that didn’t get enough local media coverage, and probably deserves more discussion than just this one writeup in my newsletter.
The team at Swipe also produced Venus.io, a decentralized lending protocol built with Binance Smart Chain, which positions itself as “the MakerDAO for BSC.” If you’re not sure what that means: MakerDAO was at the forefront of the whole decentralized finance craze of 2019-2020, and their $DAI stablecoin and $MKR governance token were two of the core assets of the entire movement. As BSC is a competing blockchain ecosystem, they would need a similar organization to propel their version of DeFi. Venus’ $XVS token became the second Filipino crypto unicorn in late January 2021 and currently sits at a $3B FDV.
What does Binance look like without its beloved CEO and Founder Changpeng Zhou? I’ve been thinking about this one for the last few days after reading about his intention to replace himself as CEO. It’s not abnormal to see a CEO serve his company for 5-6 years before stepping down, but two consequences immediately spring to mind with CZ’s departure. The first is that no matter who the new CEO is, they will not be as accepted by the community as CZ was. It’s not just a matter of having big shoes to fill either, you’re talking about a singular personality in the crypto universe. This community has a way of mythologizing its biggest heroes, and it doesn’t help that part of Binance’s criteria for their CZ replacement is a leader with a strong regulatory background. I don’t think the world needs another Coinbase, because I don’t think the world needs more banks masquerading as crypto companies. The best-case scenario for Binance, given this new focus, is that the replacement will be perceived as a “divisive” choice.
So I think the second consequence would be that Binance is going to start to resemble all other regulated exchanges, even though they don’t offer fiat-based trading. As of this Wednesday, they’ve reduced withdrawals for customers with basic accounts to $2000. I’ll be watching closely to see if they start to implement tighter rules across their entire family of products also. It’s fortunate that Binance Smart Chain is already fully operational, so even if Binance starts to voluntarily restrict all of its centralized operations, the decentralized side of their ecosystem can (hopefully) continue to exist with or without their direct support. I’m most worried about Binance’s P2P marketplace, which is a massive part of its ecosystem in the developing world.
I find this all quite troubling because it feels like the governments and the gatekeepers are winning. No matter how big your crypto company becomes, you’ll eventually capitulate to the old world and its TradFi rules, and we’ll all end up back where we started. We need to find another way, cryptofam.
See you all on Monday! And if you’d like to hang out tonight, I’m doing a livestream at 9pm with Museigen Academy to talk about trading on BloomX!
Quick clarification on (4) -- there are NO IMMEDIATE PLANS for CZ to step down as CEO of Binance. This section was more of a thought experiment in what that kind of departure would look like.
I hope Satoshi envisioned or saw this never-ending contentious relationship between Tradfi and crypto. Like art, haute couture keeps evolving to keep pop/mass art as far away from it as possible. The former avoids the latter like the plague. “There must be a better way!”