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What does the father of smart contracts think of Genesis and DCG's liquidity problems?

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Nic Carter, founding partner of Castle Island Ventures, talks about framing institutional adoption, Bitcoin's long-term prospects, and proof of reserve

Original title: How Has Crypto Adoption Been Affected?

Original article by Revelo Intel

原文编译：深潮 TechFlow

In this edition of Empire Weekly Roundup, Nic Carter (Founding partner, Castle Island Ventures) joins hosts Jason and Santi to discuss whether Genesis and DCG can solve their liquidity problems and avoid bankruptcy, and what to expect next. Nic then walked us through his thinking on frameworks for institutional adoption, Bitcoin's long-term prospects, and proof of reserve.

Here are the notes from this podcast.

Genesis and DCG

, It's a scandal that Digital Currency Group (the parent company of Genesis) owes Genesis Trading's cryptocurrency lending arm $575 million.

, Genesis has certainly taken some hits since UST.

, It comes down to whether Barry has enough money to keep the empire afloat, or whether they will have to sell the Grayscale franchise to another asset manager.

, Genesis had short-term debt, but it appears that their working capital was redeployed into non-liquid long-term assets and was trying to raise funds from a variety of sources.

, One way to address the GBTC discount would be to commit to winding up the trust within a year or two.

, Barry is one of the best entrepreneurs in the space and has a reputation for raising money.

, Grayscale kept their BTC through Coinbase, which refused to certify it because it revealed too much privacy. Coinbase won't have all the BTCS in a cold wallet, and it will be much more complicated.

, Coinbase is an audited public company, as good as a certificate of reserves.

The bloodbayings of bitcoin miners and BTC's outlook

, One of the toughest neglected crypto areas will be bitcoin mining.

, Bitcoin mining has been unprofitable for the past few months due to rising interest rates, rising electricity prices, and a sharp rise in the hash rate, and is operating only to pay interest.

, Small finance companies have begun to collect on ASics (application-specific integrated circuits used to mine BTC) that have been borrowed.

, The hash rate (the computing power in the Bitcoin network) is arbitrary. Don't assume there is a linear relationship between the hash rate and the security of bitcoin.

, Bitcoin fees are at their lowest level in a decade, the trend is not good, and without utilization, there are not enough ways to support security.

, As many people become more aware of the fiat issue, it will be easier to galvanize political support for the BTC.

, The current priorities are:

1) Reform the trading platform because there are problems with reserves;

2) Find a way to make $BTC a mortgage asset that can be used elsewhere, because we have seen some sort of wrapping BTC failure with the FTX issue.

PoS

, Concerns are needed regarding the impact of MEV (maximum extractable value) on the review of OFAC (Foreign Assets Control Office) filtered transactions and the possibility of excessive compliance.

, The main problem with PoS is that a lot of the power is in the hands of trading platforms/custodians and larger institutions that end up being intermediaries in the system.

What's worth watching now?

, Nic's companies gradually invest in start-ups with good valuations.

, Very concerned about DeFi as it is currently in trouble and likes the new breed of lending projects that are trying to rebuild cryptocurrency credit from the ground up in a more credible and responsible way.

, A managed solution that provides a Web2-like authentication solution is important.

, This year has been generally positive on the institutional front, with Fidelity launching their retail cryptocurrency product and Blackrock already investing in the space.

How is institutional adoption affected?

, Institutions prefer physical exposure to Ethereum over bitcoin.

, Based on the performance of Terra and Solana, it is doubtful that the agency will have confidence in L1.

, There will be a greater focus on safety, liquidity and durability.

The future of Solana

, Due to the enthusiasm for the Solana Developer ecosystem and applications, a position has been assigned to the Solana ecosystem and plans to remain with Solana.

, As an investor, if we see something the market doesn't value, we're happy.

, It will be a challenge for the Solana ecosystem to take the impact and momentum it has and turn it into value.

About offshore trading platforms

I believe that offshore trading platforms will be more important than onshore trading platforms, but after the FTX failure, there will be a meaningful difference between offshore and onshore trading platforms.