Dear Current and Prospective Investors,
Happy New Year! Wow. It’s been an eventful year, to say the least.
With major exchanges and lenders going bankrupt, Web3 saw major setbacks in terms of its scope, reputation and overall capitalization.
But in the ashes of the carnage, there is clear evidence that well-engineered technology persists.
Bitcoin is of course down YoY, but some smaller countries (such as Fiji) and some larger countries (Nigeria) are investigating its adoption.
Well-designed stablecoins continue to grow in popularity. And, while many centralized lenders went bust, the decentralized lending platforms such as AAVE and Compound continued to operate without a hitch.
As we count our losses, let’s also be sure to look at the immense power of decentralized, safe ways of conducting finance.
After all, it would be a mistake to try to copy-and-paste traditional business models onto the blockchain.
In building a decentralized financial system for the future, we need to break new ground and implement automated, human-proof and, well, “greed-proof” design.
Meanwhile at dlcBTC, we’ve had an amazing 2022. In less than a year, we took a theoretical idea and built it into a functional alpha product.
At my first startup, MarketMuse, this initial R&D phase took three years. Here, we’ve been able to get there in one, all the while building a product with “near-infinite Total Addressable Market” to boot!
With the latest developments listed below, we are now closing our pre-seed round. If we haven’t spoken in a while, do message me and let’s catch up!
This year, we’ll be commercializing our product and will be generating real revenues. I’d love to walk through our growth plans with you.
Overview
We’ve completed our alpha! Our integration into Arkadiko, a lender on Stacks, will be launching in January. Hats off to both teams for finishing a project that Arkadiko’s CEO calls “a game-changer” for them
We are working on beta integrations into BenQi (Avalanche), Sonne (Optimism), Arcade (NFT lending on Ethereum) and MARS Finance (Cosmos)
We are starting our first wallet integration, Xverse, in January. Xverse will be integrating our DLC signing extension and will support BTC and STX (Stacks)
We are also integrating into D’Cent, the leading wallet in Korea! D’Cent supports 50 chains and have a hardware wallet as well, so it’s a perfect testing ground for both mobile and cold storage
Chainlink is interested in partnering to take us to “over 160 blockchains” in their network. Our partnership will also provide early access and custom development support with their Proof of Reserve and CCIP (Cross Chain Interoperability Protocol) teams
Sales and Business Development
We’re in active conversations with prospects across multiple chains.
Prospective customers include lenders, custodians (Propine, NYDIG, Anchorage), insurance providers (Nimble Insurance, Bitcoin Mutual, Standard Re), DEXes (Velodrome) and wrapped asset providers (Algomint)
We are prototyping with Chainlink’s Proof of Reserve team. Chainlink is implementing Proof of Reserves into AAVE and Compound.
We are further enhancing their product by using a DLC escrow to actually lock the BTC reserve, making it fully lockable by Chainlink PoR oracles
We are deepening our relationship with Propine, a leading custodian based in Singapore. Propine will serve as a close strategic partner for liquidations.
They are interested in bringing in partners on their side as well, so as to develop more sophisticated joint offerings as well
We are in active conversation with two VPs at Foundry Digital, the largest mining pool in North America.
They are interested in exploring DLCs for non-custodial lending as well as to create a Bitcoin hashrate product targeted to miners
We are scoping a new product offering with Arcade, the #1 NFT lending platform on Ethereum. There is an opportunity to build a provably Bitcoin-backed NFT that can serve as stable collateral for lending
Recent Quotes
A few recent quotes from our fans. These comments have not been cleared for use in marketing, so please don’t share or post them publicly.
“I think what you’re doing is super-interesting. You’re taking risk out of lending and bringing in governance. I think it’s long overdue. I think this will be super-essential for custodians to get involved with” — Tuhina, CEO of Propine (leading custodian in Singapore)
“You’re enabling a money market on Bitcoin” - Ryan Terribilini, Algorand Ventures
“This statement is going to be pretty bold, but Discreet Log Contracts on Bitcoin will possibly be one of the greatest technological advancements ever. To combine digital energy for transaction (Bitcoin), with provable information, and automatic execution between multiple parties. Who knows what can be created from this.” – Kobie Williams, Bitcoiner
"The longevity of this solution is outstanding. This lets Bitcoin be used in so many ways. I think this is revolutionary." – An Executive at Chainlink
"Taking Bitcoin, which is decentralized, and giving it to centralized custodians to use in decentralized finance -- is stupid in so many ways" – Alex Baghdjian, Funday
“You’re making Bitcoin more composable & usable in DeFi. DLCs make it more transparent and secure so that AAVE/Compound uses it as a circuit breaker” – Michael Imperiale, Chainlink Proof of Reserve
"You're sovereign Bitcoin for everything else” – Kingsway Capital
Marketing and PR
After attending two Bitcoin conferences and speaking to both “Bitcoin maxis” and developers, I’ve come to understand the natural friction between “Bitcoin-only” and “Bitcoin-first” companies.
To help represent the latter, I’ve coined a new term: Bitcoin+. In short, Bitcoin+ people believe that Bitcoin should be used in Ethereum and elsewhere.
Read the full post here: https://www.dlc.link/blog/introducing-the-bitcoin-plus-mentality
We published an article detailing the security benefits of DLCs. My mentor Dug Song (founder of Duo Security, acquired by Cisco for over $2Bn) has connected us to Verichains for a security audit.
Read the article here: https://www.dlc.link/blog/the-security-benefits-of-dlcs-vs-bridging-or-wrapping
We’re also publishing our whitepaper, which should be ready next January.
Our whitepaper will build on the original DLC whitepaper from 4 years ago but details our entire platform.
We are soon publishing a blog post detailing all of the components of our platform, so stay tuned for that!
Product
We completed our integration with Arkadiko over the holidays. The team will announce and launch on testnet mid-Jan. Stay tuned for more!
Our demo is a generic lending application where users can log in with MetaMask or Hiro wallet (Stacks) and take a loan in a stablecoin.
The user supplies Bitcoin using our generic wallet and can take USDC in MetaMask.
Watch the demo here: https://www.youtube.com/watch?v=mGnVzd2y7W8
We are designing a dlcBTC “proof of collateral” deposit token that lenders and other applications can use to track how much BTC has been placed in escrow.
Stay tuned for more announcements on this front
Team
Elvie Kamalova joins us as our Business Development Advisor!
Elvie formerly served as Head of Ecosystems and Investments at Chainlink. Prior to that, she was a VC at several funds.
Read the press release here: https://www.dlc.link/blog/elvie-kamalova-joins-dlc-link-as-strategic-advisor
Finance and Fundraising
We’re finishing our participation in DraperX Bitcoin Studio and will be presenting to Tim Draper and two VCs on Jan 11.
As required by the program, we’ve set aside an $250k allocation for Tim Draper and his affiliates
Welcome new investors! Jonathan Sadlowe at Gossamer Capital is the most recent institutional investor to participate in our round
Since we now have 9 separate entities that have invested, with a few more on the way: I will be setting up a check-in call with our entire investor base. If you are an existing investor, you will receive an email from me later this month
Since our pre-seed round targeted $1Mn, we were unable to satisfy demand from funds that seek to deploy larger (i.e. $500k and up) checks.
We are going to be facilitating those conversations in a subsequent funding round later this year
How You Can Help
As Elvie and I plan our 2023 fundraising strategy, we’d love to meet new funds from your networks. We’d also love to meet portfolio companies who would be interested in programmable Bitcoin.
Please feel free to make any introductions to me directly. Thank you for your support!
Best,
Aki
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