Alastor Weekly: Episode 3
Alastor Weekly: Episode 3
Quiet crypto weeks still feel pretty loud
1. Wonderland Invests in…Sifu?
Crypto continues its march into the upside-down. Let me recap:
Back in January, Sifu, the treasury manager of Wonderland, was doxxed as Michael Patryn, otherwise known as Omar Patryn, otherwise as known as Omar Dhanani, otherwise known as the co-founder of Quadriga, a Canadian crypto exchange that rugged its customers to the tune of $250M when its other co-founder mysteriously disappeared.
Fast forward 6 months, and Sifu is back with a proposal for Wonderland to invest $25M in SIFU Vision tokens. The proposal was to re-establish a relationship with Sifu, with the expectation that the $25M investment would be managed for profit. Surprisingly (or maybe not so surprisingly), the proposal passed.
Sentiment on the forum was overwhelmingly positive, and some commenters even suggested that Wonderland should buy more SIFU tokens. On the snapshot proposal, Sifu voted with 51k tokens. There were only 39k votes against the proposal. That means that if no one who voted yes on the proposal flipped their votes to no, Sifu’s proposal only needed Sifu’s vote to get passed.
Now look, maybe Sifu doesn’t have ill-intentions. Maybe it’s unfair to “black-list” him because of his connections to money laundering and identity theft. But of all the people for Wonderland to delegate their treasury, they picked this guy?
Only in crypto…
2. Meanwhile, More Celsius…
Celsius celebrated the fourth of July by paying off another $120M of its DAI loan to Maker before knocking out the remaining $80M over the following couple of days.
The Etherscan receipts read equal parts comedy and tragedy. Maker released the ~$450M of wBTC collateral following the final repayment on Thursday and over the next four hours the wBTC took a journey through five different wallets before meeting its final resting place on FTX, likely to never be heard from again.
This all comes on the heels of Celsius paying back large loans and retrieving collateral (mostly ETH) from Aave and Compound as well. In all, Celsisus has paid down nearly $400M in debt over the last three days to retrieve collateral and (presumably) begin paying back customers.
Maker, Aave, and Compound. What do those all have in common? They are true DeFi and they have been paid back by Celsius.
Oh and also…
Yikes.
3. Porter Finance Shutting Down Bond Issuances
Porter Finance announced earlier this week that they are shutting down their bond issuance platform
Porter Finance was targeting the undercollateralized lending market (specifically for DAOs), and they concluded that the lack of investor demand for bonds + associated legal risk wasn’t worth it. A key difference between Porter and other lenders like TrueFi, Maple and Goldfinch, is that Porter was lending to DAOs, while the others are lending to investors and financial institutions.
Undercollateralized lending is one of the most promising areas in crypto given its clear connection to the “real world,” so stay tuned.
M&A Roundup
FTX acquires BlockFi (sort of)
Last Thursday CNBC reported FTX was “closing in” on a deal to acquire BlockFi for $25M, whoops.
The next day BlockFi published a press release containing the actual details of the deal: a $400M credit facility with a $240M option to buy based on performance triggers, with the ability to kick that price up an additional $440M (presumably a sliding scale based on additional performance triggers).
Despite what many have tweeted - this is not a $680M deal… I obviously don’t have the definitive agreement in front of me but this reads like the gnarliest convertible debt instrument of all time.
Layman’s terms: FTX is giving BlockFi a credit facility to guarantee customer losses (and hopefully to restore some degree of confidence) and effectively keep them alive. My guess at above market terms, too - terms that more or less guarantee them a decent return and a fair amount of downside protection. If BlockFi survives and performs well enough, FTX gets to trigger their acquisition option to buy them at terms negotiated at their most dire hour. Worst case? Collect some interest payments and call back your capital when and if debt covenants are breached, and recoup some of that equity check you invested last month. Best case? You now own all of the equity of an entity that’s worth a bunch more than it was when the deal was struck. Must be nice
WonderFi acquires Coinberry for $30MM.
WonderFi has been quietly making moves (in Canada) to offer a full-stack product suite for crypto,
In January of this year, they purchased Canadian crypto exchange Bitbuy, for $162MM
Coinberry was a crypto exchange in Canada and will bolt-on to their Bitbuy exchange with clear cost synergies (i.e. firing people)
CeFi is becoming the tale of the haves vs. the have notes. The haves (most noticeably, FTX) are on a buying spree, while the “have nots” are being acquired or struggling to survive
About the Authors
Sam Bronstein and Jordan Stastny are co-founders of Alastor, a crypto-native strategic and financial advisory firm for the Web3 world. They were previously M&A advisors at Qatalyst Partners, where they advised leading technology companies on significant M&A transactions, including the sales of Slack, LinkedIn, Mailchimp, Qualtrics, Glassdoor, and others.
0xb1 connection to Celsius is somehow not surprising. Shoulda known when they stopped lping and started flipping NFTs.