Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Anyone spending time on Crypto Twitter recently has been sure to run into users trying to farm positioning on some kind of mindshare leaderboard.



These leaderboards — the most popular of which <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">live on Kaito</a> — use algorithms to rank users’ X engagement. Some crypto ecosystems looking for better engagement will offer financial incentives to users who earn engagement points.



The first leaderboard to specifically measure Solana mindshare will be released Monday by Wallchain, the team exclusively told Lightspeed. Influential Solana CT users will receive quacks, Wallchain’s offchain points currency. In many cases, including Kaito’s, points are used to determine allocation in a future token. Wallchain co-founder Yuri Yatsenko declined to confirm whether a token is in the works.



Wallchain’s algorithm is built to disincentivize spam engagement by applying “exponential decay” in quack earnings to users who are repeatedly flagged for spam, Yatsenko <a href="https://x.com/kyparus/status/1906087494686248971">said</a>.&nbsp;



Based on a pre-launch version of Wallchain’s leaderboard, the highest-mindshare Solana posters over the past 30 days were Solana co-founder Anatoly Yakovenko, Helius co-founder (and Lightspeed podcast co-host) Mert Mumtaz, and trading influencer Ansem.&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXccuNkmFMrpM74J5Eddr9biZmKnaaINguckmMXbmCHMR3UmK7-CbWddOfa8RKr9ngTrhcdievj_pm7vUV9IY6I99d3yzqqzeSjhYGDJwHCohA2WxzNuRZ6IIV5sNCITikf2cg13?key=5iBagISS1-jYVxcE9zLuZQ" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://app.wallchain.xyz/app/profile">Wallchain</a></figcaption></figure>



But while the top of the leaderboard checks out at first glance, many in crypto still complain that tying token incentives to X posts makes CT lower-signal and higher-noise.&nbsp;



“[Y]eah I absolutely hate it lol,” Blockworks Research analyst Boccaccio said when I asked if he had thoughts on the mindshare leaderboard trend. He added that such leaderboard programs are “bad for [the] marketing side because [they are] clearly being gamed and not useful anymore” and have “ruined CT’s noise/value ratio.”



Yatsenko agreed that “toxic incentives” and “short-term alignment” have turned many existing mindshare leaderboards into “spam-to-earn” programs. He added that this can be solved by algorithms prioritizing users showing “authentic, sustained engagement” around a small number of projects.



While the market may be reaching a saturation point for CT mindshare leaderboards, my view is that there’s a real business model here. Until now, crypto ecosystem builders looking to pay influencers sometimes had to go through middlemen and opaque value propositions. Sometimes influencers are allocated tokens for their services, which can be worth a lot of money.



In a perfect world, mindshare algorithms make ROI on influencer spending more measurable.



Interestingly, Yatsenko and his co-founder Max Bevza initially built MEV rebate software. But after going through Alliance DAO’s incubator, the duo decided to pivot to so-called AttentionFi — which can be loosely defined as apps monetizing crypto social media activity. Yatsenko said the seemingly unrelated sectors are “conceptually related.”



“MEV focuses on value gaps in transactions — AttentionFi focuses on value gaps in attention flows,” Yatsenko wrote. “Until now, we couldn’t measure attention value at scale. But with the latest advances in LLMs, we can finally understand and evaluate content quality, relevance and impact — automatically.”



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data analytics

Solana to get first Kaito-like mindshare leaderboard

Donovan Choy

This is a segment from the 0xResearch newsletter. To read full editions, <a href="https://blockworks.co/newsletter/0xresearch" target="_blank" rel="noreferrer noopener">subscribe</a>.



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One of the longstanding complaints against Big Tech is that they “exploit” user data for their own profit.



In some sense, I guess that’s true. I’ve used Twitter for years, and was never paid a cent for giving up any information about my demographics and interests.&nbsp;



But is that “exploitation?”



Sure, my data is valuable in hindsight. But billions of dollars in cloud infrastructure and data analytics had to be invested to turn it into something economically valuable that marketers want to buy.



InfoFi, short for “Information Finance,” is a niche sector in crypto looking to do something similar.



Is InfoFi an investable category? Consider Kaito, the leader in this space.



Kaito has two main products. Both of these products generate a substantial $33 million in annualized revenue, based on <a href="https://dune.com/kaitoai/kaito">Dune</a>.



The first is its data analytics platform, offering structured, sentiment analysis of public information. This is packaged as a monthly $833 subscription service that is sold to traders, AI agent companies and funds whose businesses depend on accurate sentiment tracking.



The second is a B2B service for crypto companies doing marketing. Dozens of <a href="https://yaps.kaito.ai/yapper-leaderboards">prominent projects</a> use Kaito for this purpose today.



The rough idea is this: Companies want to do marketing. Rather than the traditional top-down way of sponsoring events, media or paid influencers, Kaito offers an alternative way to incentivize bottom-up and organic content marketing.



Anyone can register on Kaito, start tweeting about a listed project on Twitter, and earn a share of these rewards. dYdX, for instance, is <a href="https://www.dydx.xyz/blog/dydx-yapper-leaderboard?utm_source=dYdXTwitter&amp;utm_medium=GlobalSocial&amp;utm_campaign=GlobalSocial">committing</a> $50k a month in tokens for such a campaign with Kaito.&nbsp;



The problem, of course, is that this opens the door to all manner of trolls and low-quality content.



That’s where Kaito’s proprietary AI tech comes in. It’s supposedly filtering out slop from genuinely thoughtful content. So if you’re just posting “gmdYdX” or “bullish dYdX,” you’ll likely qualify for almost no rewards.



In sum, what Kaito’s really doing is using the blockchain to place a market value on attention, clout, social capital, or whatever you want to call it. Hence, “InfoFi.”



Based on partnerships with companies like Story, EigenLayer, Berachain and more, Kaito has helped distribute <a href="https://dune.com/kaitoai/kaito">$72.3 million</a> to <a href="https://blockworks.co/news/kaito-yap-to-earn-takeover">yappers</a> (this excludes KAITO’s own airdrop).



The KAITO token isn’t simply a governance token, either. The token can be <a href="https://yaps.kaito.ai/stake">staked</a> for an 11% APY, and the team has committed to buybacks — about $3.9 million cumulatively so far.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcPaXtlPzsvj00qTP-PQLu4zUzhfIkhsUAHmNBZL_YOuJFJgHX69u-HULZpQifw9AL_KkqeyL-5rDpA50zFVVJXaVzx0YJ373QdsXXA7Z2dtmHQEkRGzH5pW6bAVqFr-aKSt8VzAg?key=heH_Hib5eGQdBysOkiQnOg" alt=""/></figure>



At a circulating market cap of $502 million today, KAITO is trading at a ~15.8 P/S ratio. If you’re willing to comps KAITO to traditional SaaS companies (~20x), then it suggests KAITO is undervalued.



The tricky thing, of course, is that no one really knows what the “right” multiples are for a crypto company, let alone one in a niche subsector.&nbsp;



I think Kaito is leveraging token incentives to do something genuinely innovative. It’s struck up partnerships with major crypto teams like <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a>, Berachain and more.



Its success has attracted a few emerging competitors. One of them is Cookie DAO, a data analytics platform that rose to prominence during the <a href="https://blockworks.co/news/crypto-welcomes-ai-overlords">AI token craze</a> earlier this year. As far as I can tell, Cookies DAO is doing something almost identical. Instead of yaps, you have <a href="https://x.com/cookiedotfun/status/1924939636004237549">snaps</a>. Instead of yappers, they’re called snappers. You get the idea.



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXe63byUPx84imoj3sODspXIesul01KxypbmthYLyMGTWX1mTQ7Xsp7_TcqAurKG4rbTWO1aQOaxWfQGiDdb8gVwRN1h4XvZP8gfp0hmSwvVbGVMM4mjY3fC4qbrVPo14eJuZofBOA?key=heH_Hib5eGQdBysOkiQnOg" alt="" style="width:684px;height:auto"/><figcaption class="wp-element-caption">Source: @ahboyash on <a href="https://x.com/ahboyash/status/1925540901772026191">X</a></figcaption></figure>



This brings into question how strong Kaito’s moat is.&nbsp;



Anyone can scrape public social media data. Switching costs are also fairly low. In theory, it’d be easy for Kaito’s clients to switch to another sentiment analysis platform.



Where its edge lies, I think, are in its AI tools, and how well it scores user-generated content and filters for high-quality content. That’s crucial because it determines what kind of marketing is rewarded, which in turn determines continued usage.&nbsp;



The devil’s in the details.



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0xResearch Newsletter

Is InfoFi an investable sector? Crypto’s attempt to tokenize attention

Macauley Peterson

The Ethereum blockchain explorer Etherscan has rolled out a new advanced filtering feature that expands the tool kit available for reading on-chain data.



The new feature, in beta, makes it easier to search for specific information directly on the <a href="https://blockworks.co/tag/data-analytics" target="_blank" rel="noreferrer noopener">data analytics</a> platform, without needing to run specialized queries in analytics dashboards such as <a href="https://blockworks.co/tag/dune-analytics" target="_blank" rel="noreferrer noopener">Dune Analytics</a>, which require knowledge of SQL.



Etherscan serves as a powerful microscope for the blockchain that empowers researchers to uncover valuable insights into transaction histories.



It has been operating since 2015 as a free and open-source project “with the mission of providing equitable access to blockchain data,” according to its <a href="https://etherscan.io/aboutus" target="_blank" rel="noreferrer noopener">About Us</a> page.



The Advanced Filter beta currently supports filtering by various criteria, including transaction type, method, from or to addresses, types and amounts of assets.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Advanced Filter enables you to analyse a variety of transactions within a single view Filter by transaction type, function name, duration, amounts, assets and from &amp; to addresses <a href="https://t.co/6GYbWIxG7q">pic.twitter.com/6GYbWIxG7q</a>&mdash; Etherscan (@etherscan) <a href="https://twitter.com/etherscan/status/1664589461060227072?ref_src=twsrc%5Etfw">June 2, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



With an Etherscan login, you can save filtered queries for later use.



For instance, you might want to see withdrawals larger than $1 million in USDC from Binance <a href="https://etherscan.io/advanced-filtered?txntype=2&amp;fadd=0x28c6c06298d514db089934071355e5743bf21d60&amp;tadd=&amp;tkn=0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48&amp;amt=1M%7eMAX&amp;age=24H" target="_blank" rel="noreferrer noopener">over the past 24 hours</a>, to gauge customer reaction to <a href="https://blockworks.co/news/binance-execs-unlicensed-securities-exchange">Monday’s SEC lawsuit</a>.



The tool will be a boon for on-chain sleuths like ZachXBT and MyCrypto founder Taylor Monahan in efforts to track down scammers and thieves and their victims more efficiently.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">yeah sex is great an all but have you ever been tracing funds at 4am and suddenly been granted the magical ability to filter up and down a fat list of txns and hop from victim to thief instantly and share a link to it instead of taking yet another unsearchable screenshot 🤤🤤&mdash; Tay 💖 (@tayvano_) <a href="https://twitter.com/tayvano_/status/1664591535374204928?ref_src=twsrc%5Etfw">June 2, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Among many use-cases, it should come in handy for tasks like piecing together data for tax filing purposes or more fanciful endeavors like checking the latest <a href="https://etherscan.io/advanced-filtered?fadd=0x47a37ea6b691eb76aaf771d5bdbba2ca68add173&amp;tadd=0x47a37ea6b691eb76aaf771d5bdbba2ca68add173&amp;txntype=0&amp;mtd=0x11dabc93%7eCreate_bid&amp;amt=1-10" target="_blank" rel="noreferrer noopener">auction bids</a> for <a href="https://www.thellamas.io/" target="_blank" rel="noreferrer noopener">The Llamas</a> NFT collection.



The feature is still somewhat limited — you can’t dial in specific amount ranges, or sort and export results, for instance —&nbsp;but the Etherscan team expects to update it with improvements based on user feedback.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This is a Beta release, some limitations include: &#8211; Poor reputation tokens, ignore list tokens, and failed transactions displayed with no option to hide them &#8211; From and To addresses are only joined by OR operator Let us know what you&#39;d like us to add or improve! 🙏&mdash; Etherscan (@etherscan) <a href="https://twitter.com/etherscan/status/1664589479917813761?ref_src=twsrc%5Etfw">June 2, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



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Etherscan Advanced Filter Feature Helps On-chain Sleuths

Shalini Nagarajan

<div id="highlights-block_6332c5ec82bae" class="highlights">
 <ul>
 <li>An external hacker wouldn’t have the knowledge required for contract execution, Edwards alleged</li>
 <li>Wintermute must clarify how the attacker had the necessary signature required, he said</li>
 </ul>
 
</div>



The $160 million hack of market maker Wintermute might have been an inside job, according to one blockchain analyst.



The liquidity provider, among the largest dedicated to crypto market making, was allegedly hacked due to a recently discovered “<a href="https://cms.blockworks.co/wintermute-whacked-by-160m-hack-exploiting-known-vulnerability/" target="_blank" rel="noreferrer noopener">vanity address” vulnerability</a> in its DeFi (decentralized finance) operations. CEO Evgeny Gaevoy, who said the firm remained solvent, asked the hacker to get in touch and offered a 10% bounty if the funds were returned.



But a new theory by James Edwards, who goes by the name Librehash on Medium, claims the hack could be pinned down to Wintermute’s own team.



In a <a href="https://medium.com/@librehash_13479/analysis-of-the-wintermute-hack-an-inside-job-736422c08ef1" target="_blank" rel="noreferrer noopener">blog</a> posted on Monday, Edwards said the prevailing theory maintains that an externally owned address (EOA) behind the “compromised” Wintermute wallet was itself compromised because of a vulnerability in a vanity address generator tool. 



But he disputed that theory after analyzing the smart contract and its interactions, concluding that the knowledge required to go through with the hack rules out the possibility that the hacker was random or external.&nbsp;



Edwards noted that the smart contract at issue has “no uploaded, verified code,” which makes it difficult for external parties to confirm the external hacker theory and raises the issue of transparency.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The relevant transactions initiated by the EOA make it clear that the hacker was likely an internal member of the Wintermute team,” he wrote.</blockquote>



Further, on conducting an Etherscan analysis, he said the compromised smart contract received two deposits from Kraken and Binance’s hot wallets. “It&#8217;s safe to assume that such a transfer must have been initiated from team-controlled exchange accounts,” he said.



Less than a minute after the compromised Wintermute smart contract received over 13 million in Tether (the total amount of that token), the funds were sent from the wallet manually to a contract supposedly controlled by the hacker.



“We know the team was aware the smart contract had been compromised at this point. So why initiate these two withdrawals directly to the compromised smart contract smack in the middle of the hack?” he said on <a href="https://twitter.com/librehash/status/1574496083614613513" target="_blank" rel="noreferrer noopener">Twitter</a>.



Edwards believes the Wintermute team should provide an explanation of how the attacker would have the necessary signature for contract execution and know which functions to call, since there&#8217;s no contract source code published. He suggested only someone with intimate knowledge would have the capacity to do so.&nbsp;



Edwards is not a professional cybersecurity analyst and his blog on the Wintermute hack appears to be his debut Medium post. But he’s previously put out Twitter threads analyzing possible money laundering on various crypto projects.&nbsp;&nbsp;



The large scale theft was another blemish on the record of the industry as it would hurt the confidence of TradFi (traditional finance) institutions looking to enter the space, according to Marcus Sotiriou, analyst at GlobalBlock. “As Wintermute was one of the biggest liquidity providers in the industry, they may be forced to remove liquidity in order to mitigate further risk from their loss,” he said.



Wintermute didn’t return Blockworks’ request for comment by press time.



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Was the $160M Wintermute Hack an Inside Job?

Jacquelyn Melinek

<div id="highlights-block_61f9a7df672bd" class="highlights">
 <ul>
 <li>To date, over 10,000 analysts have created about 100,000 queries on Dune’s platform consisting of metrics on OpenSea NFTs to customized balance sheets for DAOs</li>
 <li>“It’s a clear validation of how big this opportunity is and the $1 billion displays how much the sentiment around the whole space has changed,” co-founder Fredrik Haga said</li>
 </ul>
 
</div>



About two years ago, Dune Analytics co-founders Fredrik Haga and Mats Olsen took a trip to San Francisco to gather investors to close a $1 million seed round.



At the time, no one wanted to participate, Haga told Blockworks.&nbsp;



Fast forward to today, the Oslo, Norway-based company just closed its $69,420,000 Series B round, which raised its valuation to $1 billion. 



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“It’s a clear validation of how big this opportunity is, and the $1 billion displays how much the sentiment around the whole space has changed,” Haga said. </blockquote>



Similar to <a href="https://cms.blockworks.co/sam-bankman-frieds-ftx-raises-precisely-420-69m/" target="_blank" rel="noreferrer noopener">FTX&#8217;s $420.69 million raise</a> in October, Dune&#8217;s funding round was totaled at those exact numbers for a playful effect, Haga said, giving homage to 420, which references the date April 20th — a holiday celebrating marijuana — and 69, which symbolizes something else you can Google.



The capital raise was led by Coatue with participation from existing investors like <a href="https://cms.blockworks.co/?s=multicoin#:~:text=Multicoin%20and%20Kraken%20Invest%20Millions%20in%20Crypto%20Startups" target="_blank" rel="noreferrer noopener">Multicoin Capital</a> and Dragonfly Capital. In total, Dune has raised almost $80 million, Haga said.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="683" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg" alt="" class="wp-image-16607" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=385 385w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=391 391w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=328 328w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/20210812_Dune_18-1-1024x683.jpg?w=50 50w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption>Mats Olsen, Dune co-founder and CTO (left) and Fredrik Haga, Dune co-founder and CEO; Source: Dune Analytics</figcaption></figure>



Dune provides on-chain crypto data tools that allow users on its community-driven platform to extract and query data to create real-time dashboards on five blockchains: <a href="https://cms.blockworks.co/?s=ethereum#:~:text=ConsenSys%20Acquires%20Open%20Source%20Ethereum%20Wallet%20to%20Expand%20MetaMask" target="_blank" rel="noreferrer noopener">Ethereum</a>, Polygon, Optimism, Binance Smart Chain and Gnosis Chain (formerly xDAI).&nbsp;



With the new capital, Dune will create an infrastructure that distributes financial rewards to content creators on the platform and attract up to 1 million additional Web3 analysts into its community.



“It’s hugely important to have the right tooling and also educate, reward and empower,” Haga said. “There are several individuals and companies building a business on top of Dune already. We want to further enable this and build the pipeline and more infrastructure.”&nbsp;



To date, over 10,000 analysts have created about 100,000 queries on Dune’s platform, ranging from metrics on <a href="https://dune.xyz/rchen8/opensea" target="_blank" rel="noreferrer noopener">OpenSea NFTs</a> to customized balance sheets for DAOs.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“This is an open opportunity,” Haga said. “Before this, data was used inside product teams or a set of analysts or banks had closed access to data. Now it’s open by default and has a public backend that people can create on.”&nbsp;</blockquote>



In the future, the platform also plans to add “all major blockchains” and incorporate layer-1 and layer-2 smart contract platforms as well, Haga said.&nbsp;



“As the space evolves, all these elements become more tangible,” he said. “So much has changed in the past year and with all the activity going on in Web3, it’s a tremendous opportunity.”



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Coatue

Web3 Data Firm Dune Analytics Hits Unicorn Status

<div id="highlights-block_61e15aaa41ab2" class="highlights">
 <ul>
 <li>Lukka provides services to both traditional financial firms and cryptocurrency companies including Arca, Circle, CPA.com, eToro, IHS Markit, S&amp;P Dow Jones Indices and State Street</li>
 <li>The investment comes nine months after its last funding round of $53 million</li>
 </ul>
 
</div>



Crypto asset software and data provider Lukka closed its $110 million Series E, valuing it at over $1.3 billion, the company’s CEO Robert Materazzi exclusively told Blockworks on Friday.&nbsp;



“There’s a ton of momentum in the crypto industry as a whole, and Lukka’s at the center of that,” he said. “We’re expanding globally very quickly here,” he added.&nbsp;



The funding will be used to accelerate Lukka’s growth and expansion strategy through creating new offices internationally. At the end of 2021, it opened up offices in Switzerland and <a href="https://cms.blockworks.co/?s=singapore#:~:text=Singapore%20Seeks%20to%20%E2%80%98Balance%E2%80%99%20Economic%20Innovation%20While%20Shielding%20Public%20From%20the%20Metaverse" target="_blank" rel="noreferrer noopener">Singapore</a>, Materazzi noted.&nbsp;



<div class="wp-block-image"><figure class="alignright size-medium"><img loading="lazy" decoding="async" width="300" height="275" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg" alt="" class="wp-image-15370" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=281 281w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=285 285w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=239 239w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/2022-01-14-Robert-Materazzi-300x275-1.jpg?w=1180 1180w" sizes="auto, (max-width: 300px) 100vw, 300px" /><figcaption>Lukka <meta charset="utf-8">CEO Robert Materazzi</figcaption></figure></div>



“Our team almost tripled its headcount in the last year, but we’re not done,” he said. “We will have a lot of further headcount growth in global locations and will continue to build out,” he added.



The capital raise was led by London-based hedge fund <a href="https://cms.blockworks.co/london-based-hedge-fund-firm-marshall-wace-moves-toward-crypto/" target="_blank" rel="noreferrer noopener">Marshall Wace</a>, which specializes in alternative investment strategies. Additional investors include Miami International Holdings, Summer Capital, SiriusPoint Ltd., as well as participation from its previous Series D investors Soros Fund Management, Liberty City Ventures, S&amp;P Global and CPA.com.&nbsp;



The investment comes nine months after its last funding round of <a href="https://cms.blockworks.co/soros-fund-backs-lukkas-53-million-series-d-funding-round/" target="_blank" rel="noreferrer noopener">$53 million</a>. In total, the company has raised about $210 million, Materazzi said.&nbsp;



Lukka’s software compiles data of over 16,000 crypto spot assets, 70,000 crypto derivatives, 300 exchanges and about 30 decentralized exchanges. It provides services to both traditional financial firms and cryptocurrency companies including Arca, Circle, CPA.com, eToro, IHS Markit, <a href="https://cms.blockworks.co/sp-dow-jones-brings-crypto-to-wall-street/" target="_blank" rel="noreferrer noopener">S&amp;P Dow Jones Indices</a> and <a href="https://cms.blockworks.co/state-street-teams-with-lukka-to-expand-crypto-services/" target="_blank" rel="noreferrer noopener">State Street</a>.&nbsp;



“We help them solve the most complex data challenges in the world and those challenges are more and more present with all the innovation going on in crypto,” Materazzi said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“It’s really challenging to keep up with innovation but that’s our goal and make sure we can simplify all those other data processes that results from all the innovation that’s constant,” he added.&nbsp;</blockquote>



Last year, a lot of organizations, from businesses like <a href="https://cms.blockworks.co/nike-files-to-trademark-virtual-goods-hiring-metaverse-designers/" target="_blank" rel="noreferrer noopener">Nike</a> to traditional financial institutions like <a href="https://cms.blockworks.co/how-megabanks-goldman-sachs-morgan-stanley-are-talking-about-the-metaverse/" target="_blank" rel="noreferrer noopener">Goldman Sachs</a>, began to immerse themselves into crypto as it gained mainstream attention. But, Materazzi suspects that the companies that were quiet last year, were probably busy working on private plans they’ll share this year. “We’re going to see industry by industry adopt crypto in different ways,” he said.



Going forward, Lukka will release more “thoughtful institutional data products, in addition to ones launched last year,” to grow upon its existing data services, Materazzi shared. “At the end of the day, software is about managing data thoughtfully,” he commented.&nbsp;



“Data is powering the world — and everything we’re doing here is driven by data,” Materazzi said.



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Crypto Asset Software Firm Lukka Hits Unicorn Status After $110M Series E

Sam Reynolds

<div id="highlights-block_61c32fef5e313" class="highlights">
 <ul>
 <li>The unspent miner supply of crypto is closing in at all-time highs, which suggests that miners are holding on to their bitcoin in anticipation of an upcoming bull market</li>
 <li>Singapore-based QCP capital wrote in a recent note that it expects a squeeze to take place over the holidays and into 2022 as liquidity thins out</li>
 </ul>
 
</div>



Bitcoin has been range bound for most of December, stuck in a rut after the crash earlier this month that sent its price dropping from $57,000 to just above $48,000. But this might change over the course of the holiday period, according to two notes that came out today.



London-based GlobalBlock argues that some on-chain metrics are beginning to look bullish for bitcoin, after altcoins had some dramatic upwards moves earlier this week. The firm argues that the number of coins going unspent by miners is indicative of a belief by miners that upwards price action is on the horizon.



“On-chain metrics continue to be bullish as the unspent miner supply closes in on all-time-highs. These are the coins that are issued to miners as a reward for solving a block but have never been spent on-chain,” GlobalBlock’s Marcus Sotiriou wrote.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“This shows the sentiment of miners and, by holding their mined Bitcoin, this suggests that they anticipate significant price rise in the short to mid-term.”</blockquote>



<img loading="lazy" decoding="async" width="624" height="359" src="https://lh5.googleusercontent.com/euvtIMFH-dVYUZ3eQyDDwT-cfqk7hOWybgs5EAxaEVEykF1SOzuELoh-Q8LeWIgywM4p7XCvhkttN8heohN7YwiA634F05L9VpwUJdvzI9WLJWCo3TWhkP4PvcP1uA4FENiNauPH"> 



Sotiriou added that he believes that <a href="https://cms.blockworks.co/visa-launches-crypto-advisory-unit/" target="_blank" rel="noreferrer noopener">Visa’s recent announcement</a> that it was doubling-down on crypto adoption via its new crypto advisory division is also quite bullish for asset prices.



“Crypto being incorporated into the network effects of giants like Visa is how I think the crypto industry will on board billions of users over the next decade and hence avoid a multiyear bear market as seen in previous cycles,” he wrote.



In a note published Wednesday, Singapore’s QCP capital wrote that it was “surprised at the massive volume of option selling across the board.”



The firm said it believes that liquidity will thin out into the holidays and into 2022, and there will likely be a topside squeeze during that time.



Bitcoin started the Wednesday trading session in the US at about $49,200, up 0.3%, according to <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.




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Bitcoin

Is There a Holiday Bitcoin Rally in the Works?

<div id="highlights-block_61bafd723fd38" class="highlights">
 <ul>
 <li>Round comes six months after its $12 million Series A, since then the platform’s user base has risen over 400%</li>
 <li>Nansen expects 10% of its annual recurring revenue growth to be generated by its institutional segment this quarter, as its use cases grow</li>
 </ul>
 
</div>



Blockchain data analytics platform Nansen raised $75 million in a Series B round, the company’s CEO and co-founder Alex Svanevik said to Blockworks.&nbsp;



The round was led by Accel, GIC, Andreessen Horowitz (<a href="https://cms.blockworks.co/a16z-launches-400m-seed-fund-to-expand-into-new-technology/" target="_blank" rel="noreferrer noopener">a16z</a>), Tiger Global, SCB and 10X. Other angel investors and venture capitalists also participated in the round.&nbsp;



This Series B comes six months after it raised <a href="https://cms.blockworks.co/andreessen-horowitz-leads-12m-funding-round-for-nansen/" target="_blank" rel="noreferrer noopener">$12 million for its Series A</a> in late June. Within that time frame, the company has expanded with 55 new employees across 28 countries and its user base has increased over 400%. In total, Nansen has raised $88.2 million, Svanevik said. 



“To accelerate Nansen’s next phase of growth, we intend to use the fresh capital to hire more team members across product, engineering, operations, finance, sales, and marketing,&#8221; Svanevik said. &#8220;Furthermore, we are now in a position to make strategic acquisitions that are complementary to Nansen,&#8221; he added. The funding will also be used to expand the platform’s features and multichain integrations internationally.



Its <a href="http://nansen.ai" target="_blank" rel="noreferrer noopener">platform</a> integrates on-chain data with a database of activity and movement across 100 million blockchain wallets, so that users can monitor real-time insights and transactions. Nansen also analyzes billions of on-chain data points and thousands of entities on blockchains like <a href="https://cms.blockworks.co/podcast-bitcoin-vs-ethereum-in-2022-avi-felman/" target="_blank" rel="noreferrer noopener">Ethereum</a>, <a href="https://cms.blockworks.co/polygon-acquires-mir-in-400m-deal-to-scale-ethereum-and-web3/" target="_blank" rel="noreferrer noopener">Polygon</a>, Binance Smart Chain, Fantom, Avalanche and Celo.&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-16-Nansen-founders-1024x654-1.jpg" alt="" class="wp-image-12738"/><figcaption>Alex Svanevik and Evgeny Medvedev, co-founders of Nansen&nbsp;</figcaption></figure>



The one-year-old company has experienced rapid growth and user adoptions among retail investors and <a href="https://cms.blockworks.co/wave-financial-ceo-institutional-adoption-of-bitcoin-defi-and-nfts-will-increase/" target="_blank" rel="noreferrer noopener">institutional investors</a> including Three Arrows Capital, DeFiance Capital, Genesis Block Ventures, Not3Lau Capital, Polychain, YBS Capital and Acheron Trading.&nbsp;



Additionally, the platform is used by crypto teams at <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">Axie Infinity</a>, Polygon, and Lido, and has had over 20 times increase in subscribers over the last year, it said.&nbsp;



“95% of Nansen users were individual innvestors before our Series A and the creation of an institutional team at the end of the summer,” Alexandre Caillol, the company’s head of institutional sales said to Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“During Q4 2021, the team has met 100+ institutions from crypto-native [or crypto-curious] asset managers and banks, to DEXes and NFT-syndicated investment communities,” Caillol added.&nbsp;</blockquote>



During this current quarter, Nansen expects 10% of its annual recurring revenue growth to be generated by its institutional segment as its use cases grow beyond being a tool for “retail yield farmers and legendary NFT collectors,” Caillol said.&nbsp;



Going into 2022, Svanevik said the company plans to introduce new product lines such as Nansen API and Nansen Query, which will allow institutional clients to access its on-chain data programmatically.&nbsp;



“Nansen is building institutional-grade tools to support the future of finance, and we&#8217;re hiring actively for it,” Caillol said.



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Alex Svanevik

Blockchain Data Analytics Platform Nansen Closes $75M Series B Round

<div id="highlights-block_618ae9053dbb9" class="highlights">
 <ul>
 <li>Nansen is seen as one of the most powerful analytics suites for blockchain, allowing users to deep dive into whales’ and institutions wallets for trading data</li>
 <li>Alexandre Caillol, head of institutional sales at Nansen, told Blockworks that the platform is looking to onboard five new ecosystems every quarter going forward</li>
 </ul>
 
</div>



Breakpoint 2021, Lisbon, Portugal — Nansen’s very specific brand of on-chain market intelligence, which allows its users to monitor the wallets of whales and institutions for actionable intelligence, is coming to Solana in the first quarter of next year, the company announced at Breakpoint. 



At the core of blockchain technology is transparency. But to the uninitiated, the data on-chain is effectively a foreign language. That’s where Nansen steps in, giving users the ability to identify wallets that belong to whales, institutions or VCs and track the flow of funds to identify trading opportunities.&nbsp;



Speaking with Blockworks during Breakpoint, Alexandre Caillol, the company’s head of institutional sales, said that the $15 billion of value locked into Solana’s decentralized finance (DeFi) projects meant that Nansen’s customers were demanding the toolset be ported over — especially with the burgeoning non-fungible token (NFT) ecosystem taking place on the chain.&nbsp;



“We integrate new chains from the demand of our user base. Solana was a long time coming,” he said. &#8220;Toward the end of the summer, we saw a massive influx of users mainly coming from the &#8216;NFT summer.&#8217; The DeFi users are pretty active.”



Caillol said that his goal is for Nansen to become a multichain platform, adding new protocols as the user base demands it. However, porting to Solana is a first for the company as Solana doesn’t use the Ethereum Virtual Machine like Avalanche, Binance Smart Chain, or Polygon. Instead, it uses its own consensus mechanism.



Porting Nansen over won’t be an overnight process, but rather something that takes time Caillol explained.&nbsp;



The plan, Caillol said, is to onboard five new ecosystems every quarter going forward to allow users to stalk the smart money no matter the platform.



“Our goal is to become multichain, and with our recent raise we can do that now,” he said.



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