Republic democratizing access to digital securities ??; Mastercard teams with Bakkt to bring crypto to the mainstream ??; Another creamy DeFi hack ??

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Last week (25-29 October) was a really hot and super exciting week in Blockchain & Cryptocurrency space.?We will look at the Republic’s quest to democratize access to digital securities; Mastercard teaming up with Bakkt to bring crypto to the mainstream; another DeFi hack,?and other interesting news and developments.

Without further ado, let us dive into what has happened in Blockchain & Crypto sector last week. Let’s connect the dots.

Republic’s quest to democratize access to digital securities ??

The funding???The US-based private investing platform?Republic?has raised $150M in new funding to expand its geographic reach and develop new investment products. One of the key bids following the fundraiser will be to offer access to digital securities— tokens traded on a blockchain that derive value from real-world assets like company equity or real estate.

Valor Equity Partners led the Series B round. Also participating in the round were Galaxy Interactive, Motley Fool Ventures, HOF Capital, Tribe Capital, CoinFund, Pillar VC, Brevan Howard, Atreides, and executives at GoldenTree Asset Management.

The USP ???Since it launched in 2016, more than 1 million individual and institutional investors have used Republic to invest in startups, real estate, video games, and crypto projects. Retail investors can start investing with just $10, and the fintech also holds $1 billion in AUM from accredited investors.

It’s worth mentioning that the retail brokerage giant Robinhood (which went public earlier this year) has raised $11.2M in funding on Republic from small investors in its earlier years. Other notable companies to have raised money on Republic include SpaceX Inc. and GoPuff.

Uncharted waters ???It’s still unclear when a digital asset constitutes a security under US law, which can lead to unexpected and costly fines. Republic yet sees a gap in the US market for a platform that can offer this product while complying with SEC regulations.?Its CEO, Kendrick Nguyen, brings his experience to the table, having started his career in securities litigation.

?? THE TAKEAWAY

Digital is a new way forward.?Republic sees digital securities not only as a way to increase trading activity on its platform but also to further strengthen its position in the market. Private investments such as company equity or real estate tend to come with high price tags that discourage a lot of buyers. Blockchain-based digital securities solve this thanks to tokenization: the expensive real-world asset could be hence divided into digital security tokens that represent a percentage of ownership. This effectively opens up the assets to a much larger pool of investors without having to discount their prices making it close to fractionalized shares on digital brokerage platforms. As an effect, digital securities investing will boost not only retail investing activity but also institutional activity. Being at the core of it all, Republic would massively win here.

Mastercard teams up with Bakkt to bring crypto to the mainstream ??

The partnership ???Card network behemoth?Mastercard?and digital asset platform?Bakkt?have just announced they are partnering up to allow merchants and banks to build cryptocurrency into their offerings. The two plan to also shake up the way consumers can collect loyalty rewards.

The WHY of the deal ???The aim of the initiative is to reportedly offer “quick access to cryptocurrency capabilities”. This effectively means that with the help of Bakkt, Mastercard’s partners – that includes banks, merchants, and FinTechs – will be able to roll out crypto investment tools for their users through custodial wallets. They will also be given a route to issuing branded crypto debit and credit cards.

More interestingly, Mastercard also plans to integrate crypto into its loyalty products, meaning rewards points can be spent in crypto rather than loyalty points.

?? THE TAKEAWAY

This is huge.?A perfect illustration of that is the fact that the shares of Bakkt were up more than 100% in early afternoon trading on Monday, at which point trading was halted amid exceptionally high volume. And the company went public via a SPAC only last week. At the core, this move is another step towards bringing the universe of cryptocurrency closer to bridging the gap with the traditional payment industry. Given the rising demand for crypto, this is a?no-brainer?move by Mastercard. More importantly, it seems that the credit card company is very bullish on the digital asset space as a whole - one can remember that recently it agreed to acquire?CipherTrace, a firm that analyzes blockchains for illegal transactions.?Visa, what’s your move? ??

Another?creamy?DeFi hack ??♂?

The hack ???Decentralized finance (DeFi) money market and lending service?C.R.E.A.M. Finance?appears to have been the target of a devastating exploit Wednesday morning that drained over $260M in funds.

This makes it the second-largest exploit to date.

Not much left… ??♂??According to Cream’s native?front end, most Ethereum-based pools are now empty with the exception of a $40M $CREAM pool. As of October 23, the protocol’s Ethereum?markets?had $300M worth of assets.

According to DeFillama, the protocol has an?additional?$460M in total value locked (TVL) across Binance Smart Chain, Polygon, Avalanche, and Fantom. It is unclear if those funds are also at risk.

But how? ???The funds appear to have been taken using a flash loan in a notably?complex?transaction that involved 68 different assets and cost over 9 ETH in gas. Of the $260M lost, the attacker netted roughly $130M in various cryptocurrencies, of which $40.6M may be in illiquid crETH, a staked ETH derivative that may prove difficult for the attacker to sell.

?? THE TAKEAWAY

We’re still very early.?As noted?earlier, DeFi is still a?very very young?space, both in terms of user adoption and overall infrastructure. Therefore, it’s not surprising that it is being exploited by the wrongdoers. It will obviously take time for the security and overall infrastructure to improve, and unfortunately, hacks are part of the price we all have to pay, whether we like it or not. Nevertheless, the upside of DeFi is massive, so there’s a ton of positivity to be bullish about this space in general.

Extra Reads & Quick Bites for Curious Minds??

• Crypto demand ?? Robinhood?has a waitlist for its cryptocurrency wallet that now amounts to over 1M customers, CNBC reported. CEO?Vlad Tenev?told CNBC that the development has shown the importance of crypto. “We’re very proud of our cryptocurrency platform and giving people more utility with the coins they have,” Tenev said, per the report. “We rolled out our wallets waitlist. A lot of people have been asking for the ability to send and receive cryptocurrencies, transfer them to hardware wallets, transfer them onto the platform to consolidate, and the crypto wallets waitlist is well over a million people now.”?Should Coinbase worry????
• Crypto ATMs ???US-based retailer giant?Walmart?has partnered with coin-cashing machine company Coinstar and crypto-cash exchange CoinMe to set up 200 Bitcoin ATMs in its stores across the US. Even though the pilot features only 200 kiosks, the wider launch aims to eventually see the installation of 8,000 bitcoin ATMs across the country, as reported by Bloomberg. For now, there are no more details available about the timelines of these installations.
• New leader ???The Chicago Mercantile Exchange (CME) has replaced Binance as the world’s biggest bitcoin futures platform, thanks to the strong investor appetite for the recently launched ProShares Bitcoin Strategy ETF. Now the CME accounts for?22%, or $5.68B, of the total global futures open interest of $25.7B, while Binance is contributing $5.66B to the worldwide tally.
• into LaCore’s enterprise platform which allows merchants to implement installments at checkout as an alternative method to traditional credit card options.

Money Moves??

• zkLink, a cross-chain DEX that utilizes zk-rollups technology, has?raised $8.5M?in a seed funding round.
• XanPool, a Hong Kong-based payments infrastructure firm that provides crypto on and off-ramp services, has?raised $27M.
• Visa has joined Mastercard as an investor in?Deserve, the startup that offers a credit card with?bitcoin rewards in partnership with BlockFi.

Continue reading by subscribing to?Linas's Newsletter.?You will receive fresh news about FinTech, Blockchain & Crypto with hot takeaways every day.

P.S.?You might enjoy my earlier pieces as well:

???A Wise pitch deck that led to London’s biggest and most successful direct listing ever

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About: I am?a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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