dlcBTC Investor Update 2024-01

Dear Investors,

As we approach the initial launch of dlcBTC, we’re making progress on all fronts.

In this month’s edition of our newsletter, I will focus on our business model, the dlcBTC Merchant network and the advantages of dlcBTC over the incumbent wBTC.

It often surprises investors that, similar to wBTC, dlcBTC cannot be minted by retail directly.

Instead, it is only minted by Merchants, who are institutions that act as wholesalers.

Comprising our initial set of Merchants, we’ve received verbal commitments from Luke Liu (co-founder of Amber Group) as well as from trading heads at FalconX and Galaxy.

To put it in perspective, these three firms have traded around 400,000 wBTC since wBTC inception in 2019, representing over $15Bn in value.

To further bolster our sales efforts, we’ve brought on Dae Lee, former Managing Director of APAC for BitGo, as our sales advisor.

Dae was closely involved in building out the wBTC program and has tremendous expertise in the space. Dae is based in Singapore and will help represent us in Asia.

In terms of the product itself, dlcBTC represents a significant leap forward from wBTC.

In the words of David M, head of trading at FalconX, dlcBTC is “better, faster, cheaper” than wBTC. Let’s break down each of these features.

First, unlike wBTC, which is subject to regulatory risks and government actions, dlcBTC is “self-wrapped” or minted from self-custody.

This enables a safer wrapped Bitcoin. Smart contract risk is generally considered less severe and more manageable than counterparty risk, especially in web3, where assets in custody are not backed by federal depositor insurance.

Second, the minting process of dlcBTC is fully automated. Minting wBTC requires manual steps to move BTC held in BitGo’s custody, which can take 3-12 hours.

In contrast, dlcBTC is locked and minted by smart contracts and can be issued in 3-6 Bitcoin block confirmations.

This agility is crucial to traders, especially in volatile market conditions. 

Finally, cost. To hold the BTC backing wBTC, BitGo incurs various fees, including vault fees and other overhead.

In contrast, our cost drivers primarily depend on BTC and ETH (L2) fees. This allows us to offer lower rates, which offer a significant cost advantage, especially at high volumes.

As our next step, we are excited to begin testing dlcBTC with Amber and others in March.

Overview

• We are implementing FROST, a cutting-edge Bitcoin technology, to enable more flexibility in our Attestation network

• In March, we will be starting our second security audit with MetaTrust (a fellow ABCDE portfolio company)

• Our Engineering team has redesigned our platform to be compatible with a majority of Bitcoin wallets that already support Taproot

• Amber Group will be our initial market maker, both for dlcBTC and for $DLC token (targeted for Q3). We are also in early discussions with token listing teams at CEXes

Sales and Business Development

• Our BD team is focusing on signing up dlcBTC Merchants as well as pursuing partnerships with OTC desks, exchanges, hedge funds, trading firms and lending desks that can benefit from using dlcBTC

• For our initial DLC Attestor network, we have verbal agreements with HashKey Cloud, Dextrac, Republic and several other node operators

• We’ve hired two advisors to help define tokenomics for $DLC. Launching in Q3, $DLC will help further decentralize our DLC Attestor network

Marketing and PR

• We’ve launched a Mandarin version of our website! To switch, visit and click Languages in the top-right

• Both OKX and Bixin are preparing to publish press releases detailing why they invested in dlcBTC. Bixin’s article is launching in early February, while OKX’s is slated for Feb 18

• We are soon bringing on a web3 public relations firm to support our earned media presence

• I was recently interviewed on Epicenter, one of the longest-running crypto podcasts. If you have invested in DLC.Link, I highly recommend you take an hour and listen to it here: https://youtu.be/lp-AW11vHQ4

• Check out the Media section on our website! This section contains blog posts, case studies, videos and a newsroom where we highlight PR features. See: https://www.dlcbtc.com/media

• We invite all investors to join our Telegram community at English: https://t.me/dlcbtc

• For native Mandarin speakers, you can join our Chinese community at https://t.me/dlcbtc_cn

• Follow us on Twitter at https://x.com/dlcBTC

Testimonials

A few recent quotes from our fans:

• “You’re a better, faster, cheaper version of wBTC” – Head of Trading at a leading prime brokerage

• "We see DLC.Link as a foundational building block in DeFi, with the potential to become a multi-billion-dollar business. " — Nicole Liu, Comma 3 Ventures

• "DLC.Link 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

Product

• The testnet demo of dlcBTC is now live! View it here: https://x.com/DLC_Link/status/1730591180667170950?s=20

• We have been documenting security protocols, focusing on technical vulnerabilities and economic risk management

• In preparation for the launch, we are in early discussions with risk managers, insurance carriers and regulators. Their feedback will help inform our design decisions and will stress-test our assumptions

Team

I am delighted to announce that Peter M Moricz (PMM) has joined us full-time as our Partnerships Lead! Peter has been a professional trader for over 20 years.

He joined crypto in 2016 and has been involved with ICOs, the creation of various stablecoins, investment funds and other projects.

I’ve been working very closely with Peter and am excited to see where this collaboration will lead.

Finance and Fundraising

• In January, we closed the Strategic funding round that we began last fall. The round was led by OKX Ventures with participation from Foresight Ventures, Animoca Ventures, Web3.com Ventures, Hailstone Labs, Cryptogram Ventures (enabling access to the Japanese market), Lotus Capital (enabling access to the MENA market) and influential angels Michael Jin (OP Crypto), Mr. Block (Curve expert), and Allan Matheson (token fund trader)

• As we move forward, dlcBTC is gearing up to raise a $5M seed round in March 2024. This funding will be instrumental in scaling our operations, enhancing our product offerings, and solidifying our position as a leader in the DeFi space, offering a secure, efficient, and user-centric platform for Bitcoin holders to engage with DeFi

How You Can Help

We are actively looking to form partnerships with a wide variety of financial institutions, including hedge funds, over-the-counter (OTC) trading desks, prime brokerages, trading companies and institutions that hold Bitcoin. 

If you are in contact with any institutions that trade or use wBTC, please introduce me directly.

Best,

Aki

PS – Missed any of our previous Investor Updates? Read past editions here: https://bit.ly/dlc-link-investor-updates