ArkStream Capital Portfolio Report in Q4 of 2023
Investment Project Summary
ArkStream Capital invested in 3 projects in Q4 of 2023. We will disclose the details of these projects and explain why we invested in them.
Project Introduction
Merlin Chain is an exciting Bitcoin Layer 2 solution designed to build on the native assets, protocols, and products of Bitcoin’s Layer 1. The goal of Merlin Chain is to innovate and unlock Bitcoin’s potential, making it more versatile. It aims to bridge multiple Bitcoin Layer 1 native assets with Layer 2 and incorporates the MPC solution from Cobo Global, ensuring all funds are non-custodial and secure. Additionally, Merlin Chain’s solutions will be audited by multiple auditing firms and open-sourced for community use. Unlike other Bitcoin Layer 2 solutions, Merlin Chain will continue to support Bitcoin’s native wallets and addresses, allowing users to transfer, authorize, and receive assets using Unisat Wallet and OKX Web3.
Why Invest
Jeff, the founder of Bitmap, is one of the pioneers in the Bitcoin inscription ecosystem. As early as May this year, while many developers and investors were still questioning the viability of the Bitcoin inscription ecosystem, Jeff was already actively participating in its construction and promotion. Their team launched two major products: Bitmap and BRC420 Blue Box, and the upcoming Bitcoin Layer 2 Merlin Chain is their crowning achievement. Merlin Chain stands out by continuing to support Bitcoin’s native wallets and addresses, reducing the cost and effort required for users to switch and adapt. Merlin Chain will introduce multiple Dapps upon launch, including decentralized exchanges (DEX), bridge protocols, and Bitcoin native asset applications, providing users with diverse use cases.
Project Introduction
BitSmiley is a Bitcoin-based stablecoin and native overcollateralized lending platform. It has designed a BitRC-20 extension protocol, consisting of three main parts: a decentralized stablecoin protocol (bitUSD) aimed at addressing Bitcoin’s volatility and expanding its role in daily transactions and as a stable store of value. bitUSD is an overcollateralized stablecoin pegged to the USD, enhancing Bitcoin’s role in decentralized finance (DeFi); a native trustless lending protocol (bitLending), a fully decentralized peer-to-peer lending protocol allowing users to lend and borrow bitRC-20 tokens, including bitUSD, using Bitcoin and other high-value cryptocurrencies as collateral; and a derivatives protocol detailed in the whitepaper, based on bitLending’s credit default swaps (CDS) design, packaging multiple similar-risk loans into CDS asset portfolios. This protocol aims to enhance Bitcoin’s functionality and utility, especially in the DeFi sector, making the Bitcoin ecosystem more accessible and efficient.
Why Invest
BTCFi is an important upcoming topic in the Bitcoin ecosystem, with native Bitcoin asset interactions in DeFi being essential. As many developers vie for a leading position on Layer 2, BitSmiley competes by securing a stronghold in BTCFi. One of the keys to the success of Bitcoin stablecoins is their issuance on the Bitcoin base layer, as stablecoins issued at this level will naturally be compatible with all Bitcoin Layer 2 solutions, thus unlocking underlying liquidity. bitUSD, issued based on the bitRC20 token standard, successfully addresses this issue. Ultimately, bitUSD will become a source of liquidity for all Layer 2 built on the Bitcoin blockchain.
Project Introduction
Manta Network is an innovative multi-module zero-knowledge (ZK) application ecosystem covering two networks: Manta Pacific and Manta Atlantic. Manta Pacific is an Ethereum-based Layer 2 (L2) solution designed for EVM-native ZK applications, offering a scalable, low-cost environment. Manta Atlantic, on the other hand, is a high-performance ZK Layer 1 (L1) chain based on Polkadot, introducing programmable identities and credentials to the Web3 domain.
Why Invest
ArkStream previously invested in Manta Network in 2021, and this investment represents a follow-up. Manta has surprised us in many ways over the past two years, with its development speed and iteration capability far exceeding other projects of the same period. From its initial focus on zk-parachains to its current EVM-native modular execution layer, Manta has demonstrated strong iterative capabilities. Manta’s collaboration with Celestia and Polygon to launch the zkApp Accelerator aims to promote the development of the next generation of scalable, practical dApps on Manta Pacific, which is significant for the entire modular blockchain ecosystem. Users saved over $850,000 in gas fees in the past month through modular data availability (DA), proving Manta’s efficiency and cost-effectiveness in practical applications. With leading technology and an ecosystem, Manta’s recent launch of the New Paradigm with a TVL exceeding $1 billion is taking L2 competition to a new level. Additionally, ArkStream’s participation in the new round of investment was conducted through over-the-counter (OTC) transactions, with a valuation of $250 million, offering a high potential return relative to Manta’s development.
Project Introduction
Nibiru is a new public chain based on a smart contract platform, ensuring decentralized security while offering excellent throughput performance, user-friendly development experience, and sustainable ecosystem incentive mechanisms. Nibiru’s built-in DeFi super applications, along with native oracle and data indexing functionalities, significantly reduce the technical selection difficulty for many DeFi projects and decrease the likelihood of security incidents in DeFi products, allowing users to use Nibiru’s ecosystem projects with more confidence and boldness.
Why Invest
The Nibiru team has an outstanding track record in this field. Nibiru stands out from other Layer 1 technologies by not only providing solutions to reduce technical selection difficulty and lower security risks for DeFi projects but also by enhancing user confidence in Nibiru ecosystem projects through its built-in features and advantages, thereby further promoting the prosperity and development of the Nibiru ecosystem. We plan to set up validators for Nibiru through our validator company AzureNode, providing top-tier validation services, and promote the development of the Nibiru ecosystem through our investment portfolio in multi-chain DeFi, gaming, and consumer applications.
Hosting and Attending Events
Arkstream joined the Manta network as one of the first staking nodes.
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ArkStream co-hosted a live conference with CoinMarketCap, discussing the future of Layer 2 with Manta Network, Metis, and zkFair.
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ArkStream co-hosted “Pixelated Night” at ETHDenver with MH Ventures, Manta Network, Polyhedra, and Janction.
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