Greetings Rainmakers! ⛓️🌴
Welcome to the latest edition of the Chainforest Weekly Recap, where you’ll find up-to-date information on upcoming Chainforest DAO programming and industry events, the community feature of the month, a round-up of the most exciting happenings in our Discord this week, and a welcome to our new Rainmaker’s!
The top three channels were: 💬│general-chat, 🔵│ethereum, and 💰│real-world-assets.
Upcoming Chainforest Programming ⛓️🌴
Women in The Forest Bi-Monthly Meeting: WTF is a community of women passionate about blockchain and crypto, providing a supportive and inclusive environment for collaboration, learning, networking, & personal connections in web3
When: March 17th, at 1:00 pm EST in our Discord
Set a reminder: here
For more details: click here
Previous Events & Recordings
Monthly Town Hall (March 2023): Did you miss our March Town Hall meeting? Check it out here!
Covered during the Town Hall:
New member onboarding: If you recently joined Chainforest DAO, we highly encourage you to attend and introduce yourself to the community
Community and event updates: Review the recent updates to the Chainforest Proof of Teamwork tool and receive the latest information regarding our March schedule, including the WTF Bi-Monthly meeting and monthly workshop
Brainstorm and workshop session: Update Amit's working document on the current thinking of each sector of cryptocurrency, including what has been proven, the core challenges, and what we need to see to prove real value, and discuss during the town hall. Check out the document here
Monthly Workshop (February 2023): Did you miss our February Workshop? Check it out here!
On February 17th, Vasanth Thiruvadi (Head of Finance at Chainforest) & Sugam Sharma (Founder of Clearbooks, CPA), hosted a Taxes 101 workshop to help our members get ready for tax season! Topics include NFTs, DeFi, DAOs, airdrops, loss/theft, mining, and a Q&A session
Monthly Town Hall (February 2023): Did you miss our February Town Hall meeting? Check it out here!
Covered during the Town Hall:
Introducing our newest members to the community
Providing exciting updates on our upcoming events, including the Chainforest ETHDenver meet-up and Tax 101 Workshop
Engaging in a lively discussion with the community, sharing progress, and receiving valuable feedback on recent changes
Exploring potential investment opportunities with Amit Mukherjee and Regan Bozman, who presented a promising deal to the community, known as IYK
IYK bridges the physical and digital worlds by using NFC and blockchain technology. By tokenizing physical items and IRL experiences, they are building the tools necessary for brands, companies, and creators alike to deliver new, innovative experiences to their fans
To view the entire duration of the Town Hall, download the file
Twitter Space: A discussion with Jason Badeaux, Co-Founder of React Networks, on Decentralized Energy! (listen here)
Panel: Amit Mukherjee, Nick van der Vick, & Jason Badeaux
Discord Highlights 👀
Over the past week, the focus of the discussion in our Discord has been on the recent collapse of Silicon Valley Bank (SVB). Here's a summary of the situation and the conversation within our community ⭐
What is SVB?
SVB was a top commercial lender for the tech and venture capital industry, with 50% of US venture-backed startups as clients and $209B in assets as of last year
The lead-up
SVB and clients thrived during low-interest rates but became vulnerable as rates rose. The bank's 2022 financial statement showed no red flags. Despite positive recognition from analysts, the bank announced a need for $2 billion to reinforce its financial position on March 8th
Why did it fail?
Multiple factors led to SVB's failure, including the Fed's interest rate increase, the decline of venture capital, and the collapse of Silvergate bank. Customers withdrew $42 billion, leaving SVB with insufficient capital, and its negative cash balance of $958 million made it unable to obtain enough collateral, ultimately leading to its failure
What happens next?
The Biden administration announced on March 12th that customers of Silicon Valley Bank and Signature Bank, which recently failed, will have access to their money starting Monday to restore confidence in the US banking system. With over $110 billion in assets, Signature Bank is now the third-largest bank to fail in US history
Company Disclosures:
Circle reveals $3.3B exposure to Silicon Valley Bank
Circle assures that the $3.3B USDC reserves will be fully available on Monday
Coinbase had a $240 million cash balance at Signature Bank (View Coinbase’s statement)
Paxos had $250 million deposited with Signature Bank, with private insurance covering amounts exceeding FDIC insurance (View Paxos’s statement)
View some of the Chainforest community discussions on the Silicon Valley Bank collapse below ⛓️🌴
Amit notes that SVB’s balance sheet was not in terrible shape, but we are not going to know for sure until FDIC releases more info and/or the government communicates acquisition and bailout information
Camillus responds: Absolutely. SIVBs wasn’t either though. Bank runs are death spirals for even the strongest, most well-capitalized, and regulated entities. It’s built into the model. The only thing that can stop a bank run is the Fed stepping in and saying “I’ve got this”
Amit follows ups with two questions:
1) When USDC is burned, how is USD retrieved by a USDC holder?
2) Any thoughts on what % of SVB assets are recoverable and what the worst-case scenario is, given their stated balance sheet health?
Camillus answers:
1) You have to have an account with Circle. You send them USDC on chain, and they wire or ACH you cash to your linked bank account (see how this itself could prove problematic with more bank failures)
2) No one knows yet. It doesn’t look like the ALM mismatch is too bad (shortfall should be minimal… I don’t know, maybe 0.90 on the dollar at worst?? Will check to see where claims are trading. Their debt is trading 0.30 on the dollar) the problem is how long it takes to process it all if there isn’t an acquisition in place by Monday morning
Camillus notes that USDC is back at par but Signature bank closed. How do people expect Circle to make redemptions without banking rails?
Shawn says as of Friday, Circle was using Signature Bank to process redemptions. They were using Silvergate to mint, but since Silvergate went down that hasn’t been available. The only other way to mint new USDC was through Signature’s Signet. Now all mint and redeem might be off
Nemo asks since they have access to the SVB fund, can’t Circle just wire the money back to all depositors?
Shawns adds that Circle doesn’t wire funds from SVB. they use Signature Bank. Not sure how it would work Monday but I’d guess it would take time for them to set up a new payout method that works with their APIs etc.
Camillus adds that Circle doesn’t have rails to process at all. Normal cash accounts are limited by how many third-party wires they can do
Jeremy Allaire (Co-founder and CEO of Circle) writes that with the closure of Signature Bank, Circle will not be able to process minting and redemptions through SigNet, they will be relying on settlements through BNY Mellon
Camillus responds that if BNY Mellon onboard w this plan then Circle is golden and USDC is 1.00. I’ll believe that when I hear a statement from BNY
After Silvergate and SVB went down, where Circle holds $USDC cash reserves, Jason asks if anyone knows USDC exposure?
Vasanth says that USDC is definitely more transparent, Circle executives are public-facing and close to the watchdogs as they prepare to go public. However, I still think if you're an org that has the majority of your assets in USDC, you should have a contingency plan for a worst-case scenario or implement some sort of hedge now that's free or low cost (for example: offramp the majority of your USDC to fiat, keeping only what you'll require for 2 months of operations)
USDC and DAI have repegged after Circle states the $3.3 billion it held with SVB will be fully available on Monday, March 13th 🙌
Learn about the significant impact of Silicon Valley Bank's failure on the USDC and DAI peg, and its potential recovery in Amit Mukherjee's informative Twitter thread:
Shaan asked the forest, what are some easy opportunities available today that can implement RWA tokenization and have a profitable business model? 💰
Alex notes that things are experiencing early signs of fast growth:
Equity in companies (both crypto-native startups and traditional orgs that are turning to crypto for liquidity)
Funds (ETFs, index, VC secondaries)
Tokenized debt (corporate, gov, and municipal bonds, usually packaged with equities; like in the case of WisdomTree's 9 fully tokenized new funds)
Carbon credits - particularly interesting because this segment's main problem is the lack of a marketplace (i.e. there's no dashboard, and every trade happens between parties that already know each other). Crypto is seen by them as attractive because it can provide a marketplace that already has liquidity
Investment properties - Roofstock On-chain does this really well with USDC Homes - they let you buy a house using an NFT (regulatory compliant, KYC/AML, legally binding, etc.) Mortgages can be provided using Teller finance.
Alex shares a piece on the potential future of tokenizing funds and other private placement assets 🔥
Two things stood out to him:
Franklin Templeton and WisdomTree are both building their own proprietary trading apps, assuming they will be adopted
He doubts crypto-native investors will want to be locked into an antiquated model. An entirely different approach is needed.
Chainforest DAO is excited to announce our partnership with the Proof of Teamwork team (Ben Gusberg & Jim Zheng, both Rainmakers!) to bring you an invaluable new community tool for the Chainforest community. The current version of this tool contains a member database, accessible via the link below. The database includes information on each member, including current company, role, expertise, contact information, Core Ecosystems (L1/L2), social media profiles, and more 🥳
Goal: Strengthen bonds and drive business prospects within our network, especially during these turbulent market times. We envision this database as a catalyst for forging partnerships, fostering friendships, amplifying deal flow, and unlocking new hiring opportunities
Note: Stay tuned for exciting updates on our community tool! We are committed to continuously enhancing the Chainforest community experience, which is why this tool will be updated periodically with new features and improvements
Link: access the tool here (Members only)!
Upcoming Events 🗓️
Paris Blockchain Week - Regarded as one of the most influential gatherings in the blockchain industry, the Paris Blockchain Week Summit attracts leaders, investors, entrepreneurs, and developers from around the globe to explore opportunities for advancing the technology
When: March 20-24, Le Carrousel du Louvre, Paris, France
Details: here
WOW Summit - This global event will bring together industry leaders, government officials, digital artists, entrepreneurs, companies, and enthusiasts
When: March 29-30, AsiaWorld-Expo, Hong Kong
Details: here
Consensus 2023 - Consensus is the world's largest, longest-running, and most influential gathering that brings together all sides of the cryptocurrency, blockchain, and Web3 community
When: April 26-28, 2023, Austin, Texas
Details: here
Community Feature of the Month🎉
Our Community Feature of the Month for March 2023 is Ben Gusberg, Co-founder & CEO at Supercharge; and Professor at the University of Southern California!
Connect with Ben Gusberg:
Interested in joining Chainforest? ⛓️🌴
How to apply: You can apply to become a member by completing our application on Typeform. We will review your submission and grant access after approving your profile.
Why join Chainforest?
Becoming a Rainmaker means accessing our Discord, our IRL events, our deep dives, and our complete programming. Most Rainmakers love the community because it offers the best environment for web3 learning and exploration on the Internet today
Rainmakers also have the opportunity to support Chainforest's VC fund. Rainmakers have the opportunity to earn $RAINDROP, our token backed by carry in our VC fund, in exchange for identifying, evaluating, and supporting investment opportunities. Note that Rainmakers are not required to invest in order to participate, but also do not have a vote on investment decisions.
Apply here: https://chainforest.typeform.com/apply
I hope you enjoyed this week’s edition of the Chainforest Weekly Recap!
Till next week,
Sloan (@sloan0_0)