Dear Current and Prospective Investors,
Normally, in this section, I offer my perspective based on our latest observations in the market.
For this edition, instead of sharing our view of the world, let me instead reference an interview published yesterday from Barclay’s Crypto & Blockchain Summit, where Chainlink’s founder Sergey talks about crypto’s benefits over traditional finance.
To paraphrase Sergey, the biggest driver of blockchain adoption stems from the desire to remove reliance on custodians.
Historically in banking, large brands with tremendous assets have "guaranteed" our deposits. The recent bank failures – by well-capitalized institutions such as Credit Suisse that dated back 150 years – have highlighted the shortcomings of this model.
Instead, Sergey sees blockchain’s greatest value-add in guaranteeing counterparty relationships.
In a trustless system – such as that of a DLC “escrow” between two parties – there is no need to depend on regulatory policy, legal enforcement or brand guarantees. Blockchains provide cryptographic guarantees that remove the need to trust custodians or intermediaries.
Sergey defines tokenization as “cryptographically-guaranteed ownership”, so tokenized assets such as our Bitcoin-backed NFTs provide a safe way to use Bitcoin in applications, especially compared to wrapping or bridging.
Unfortunately, today, even Bitcoin-only companies need to depend on intermediaries to execute financial transactions.
We feel as passionate about our mission as ever and are excited to see a future where on-chain Bitcoin escrow powers a sizeable portion of finance, across both DeFi and CeFi.
Watch Sergey’s interview here: https://www.youtube.com/watch?v=8ueUSd7Mb4Y
Overview
Xverse, a Bitcoin/Stacks multichain wallet, has announced their DLC.link integration! Although we don’t yet have a formal launch date set, the joint product will be available soon. This feature will let XVerse users utilize native Bitcoin in DLC-enabled applications
Project Orange is the codename for our first EVM integration: a demo app that lets Bitcoin be locked to mint a Bitcoin-backed “Proof of Collateral” NFT, which can be borrowed against.
We’re exploring various partners for this, with Arcade.xyz on Ethereum, Bridgesplit on Solana, and other NFTFi providers.
Watch a demo here: https://www.dlc.link/blog/minting-a-bitcoin-backed-nft-on-ethereum
To avoid confusion with other technologies, we are rebranding our “Bitcoin Oracle” offering to “Bitcoin Attestation Layer”.
Unlike oracle networks or validators that power bridges, our Attestation Layer does not require external validators to secure users’ Bitcoin. Instead, Bitcoin in a DLC is locked on-chain and is secured by the entire hashrate of the Bitcoin network.
Read more here: https://www.dlc.link/blog/the-difference-between-a-dlc-layer-and-a-decentralized-consensus-network
We’ve formed a strategic partnership with Chainlink and have been getting their help with customer and talent referrals, product integrations, co-marketing as well as white-glove support from their internal teams.
We are exploring joint product offerings and integrations with their Cross-Chain Interoperability Protocol, Proof of Reserve product, Functions, Keepers and more
Sales and Business Development
To set context: DLCs offer multiple value propositions within CeFi and DeFi. Within both, we work with a variety of audiences ranging from Bitcoin-only and Bitcoin-first companies, as well as with Multichain companies that are interested in adding support for native Bitcoin
On the DeFi side, we’re focusing on NFTFi. Escrowed Bitcoin is most similar to a Real-World Asset that lends itself extremely well to NFT lending and trading.
For example, a Bitcoin-backed NFT has a minimum floor price equal to the amount of Bitcoin locked, which makes it an extremely attractive asset to borrow against
More broadly in DeFi, we’re in conversations with a variety of financial and non-financial applications. Use cases for DLCs range from Bitcoin hashrate derivatives, sports betting, insurance and even ordinals lending and trading.
We’re keen to support a variety of developers, across both EVM and non-EVM chains, on our infrastructure
On the CeFi side, we primarily focus on OTC trading, prime brokerage, treasury and settlement.
Digital asset custodians are valuable partners that stand to benefit from extending their current service offerings to self-custodied entities such as miners and investment funds.
For example, Foundry Digital and NYDIG are both interested in exploring use cases focusing on institutional miners
Testimonials
A few recent quotes from our fans:
"An elegant solution that reduces counterparty risk and expands lending and settlement options" – Patrick McLaughlin, Founder, Brane
"dlcBTC is making Bitcoin more composable & usable in DeFi" – Oliver Birch, Global Head, Chainlink BUILD Program
"You're sovereign Bitcoin for everything else” – Leading Bitcoin Investment Fund
Marketing and PR
To avoid confusion with other technologies, we are rebranding our “Bitcoin Oracle” offering to “Bitcoin Attestation Layer”. Unlike oracle networks or validators that power bridges, our Attestation Layer does not require external validators to secure users’ Bitcoin.
Instead, Bitcoin in a DLC is locked on-chain and is secured by the entire hashrate of the Bitcoin network. Read more here: https://www.dlc.link/blog/the-difference-between-a-dlc-layer-and-a-decentralized-consensus-network
Stacks is soon launching sBTC, their wrapped Bitcoin token.
Read our case study that shows how DLCs and sBTC can be used in tandem to lock in large, long-running Bitcoin loans on mainchain while utilizing sBTC for liquidations https://www.dlc.link/blog/securing-bitcoin-loans-on-dlcs-with-sbtc-liquidation
Aki recently appeared on Matt Barby’s podcast where he discussed using DLCs to eliminate custody risks. Listen to the interview and comment here: https://twitter.com/matthewbarby/status/1640352420453658631
Recently, the dlcBTC team appeared on a Twitter space with Ken Liao and the team at XVerse. Listen to the episode here: https://podcasters.spotify.com/pod/show/xverseapp/episodes/Self-Custodial-Bitcoin-Escrow-with-DLCs-e219g35
If you haven’t already, read our two most popular content items: our Lightpaper at https://docs.dlc.link/whitepaper and our eBook “How to Enable Bitcoin on Ethereum Without Wrapping” at https://go.dlc.link/how-to-enable-bitcoin-on-ethereum-without-wrapping
Product
On March 21, we broadcasted our first DLC transaction on mainchain! We now are able to build Ethereum-powered DLCs on mainnet. Stay tuned for more!
We’ve completed our ERC-721 “Proof of Collateral” deposit token. Using this, we’ve launched a demo application that lets users lock Bitcoin on-chain and mint an NFT on Ethereum that can be lent against or traded. Burning the NFT unlocks the underlying Bitcoin.
We are also exploring other token standards, including the multi-token standard (ERC-1155), semi-fungible tokens (ERC-3525), soulbound tokens, vaults and various approaches to fractionalize NFTs
Team
We’re delighted to share that we’ve added a new advisor on BD: Rusty Mason.
Adelyn at Chainlink made the introduction, for which we’re extremely grateful. Rusty previously served as Head of BD for Thesis, the production studio behind tBTC on Threshold.
Prior to that, Rusty played a key role in establishing Deloitte’s blockchain strategy practice. Rusty holds a BA from Harvard College and an MBA from Harvard Business School.
Read the full announcement here: https://www.dlc.link/blog/dlc-link-appoints-rusty-mason-as-business-development-advisor
Last month, Seena Foroutan joined us to advise on CeFi and institutional sales. Seena formerly served as Global Head of Enterprise & Emerging Markets Development at Chainlink.
Prior to that, he served as GTM lead at Coinbase, which he joined through their Earn.com acquisition.
Seena is helping guide our sales strategy by focusing on institutional lending and trading markets including custodians, credit trading desks, banks and market makers
Finance and Fundraising
My presentation to Tim Draper at DraperX Bitcoin Studio’s Demo Day showcased us to 70 investors, including Fulgur Ventures, Matrixport Ventures and other strategically-relevant funds.
Watch the 8-minute recording of my pitch here: https://drive.google.com/file/d/1BXpvl3ehkFKIICnu-N4KbIKyM4DPYYSO/view?usp=share_link
We’re excited to share that two new investors have joined us. The first is Matt Barby, entrepreneur and DeFi expert.
I recently appeared on Matt’s podcast, which you can listen to here: https://twitter.com/matthewbarby/status/1640352420453658631?s=20.
Our second new investor will be Kieran Flanagan, the CMO of Zapier who is also a Sequoia Scout.
Prior to Zapier, Kieran served as an SVP at HubSpot where he led their product-led growth initiatives. Kieran’s perspectives will be uniquely useful as we grow our community.
Documents are out to Sequoia for signature and we look forward to soon formally welcoming Kieran to our community of investors
We are close to finishing our $750k Pre-seed raise. The banking crisis has caused some unexpected delay but we’re looking forward to closing our round shortly
For any funds that are looking to deploy $500k or greater checks, I look forward to circling back later in Q3 as we plan our next fundraise
How You Can Help
Please refer us broadly! We love to meet with CeFi organizations as well as DeFi developers interested in implementing native Bitcoin escrow into their Bitcoin, Lightning, EVM or non-EVM applications.
Best,
Aki
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