Growing up in poverty in Suriname, Etiënne vantKruys was told by his teacher he’d never succeed — but it only made him more determined to not follow in the footsteps of his parents. Thanks, in part, to crypto, he’s now living the dream.
Despite his high-flying crypto VC lifestyle today, vantKruys keeps at least one foot on the ground by remembering his hungry past. He grew up dirt poor in Suriname, where his father was a drug addict who was often in prison.
“I was always hungry — like, dude, always hungry. Always like, ‘Fuck, I need to eat.’ Always, always, always — it sticks with you. I don’t care if I’m in Singapore at a famous crypto conference at a high-flying restaurant, I would still order food from right to left. I would start with the price, like, ‘What can I get?’ You’re aware.”
Back in 2017, anyone could easily get in on highly public ICOs raising $30 million to $50 million with a white paper full of dreams just because it had the word “blockchain” in it. Things are different today, with venture capitalists having to network and clamor to get a small placement of $250,000. Cap tables that track investor allocations fill up fast, and investors are lucky to get a pitch before needing to decide.
“In this cycle, with the speed of things, you don’t have time to consider,” notes vantKruys, who heads New York-based digital asset fund TRGC. Often the only investors who have the privilege of doing full, proper due diligence are the “alpha dogs” like Coinbase Ventures and Binance, for whom he says room will be made even after a round has closed.
The short stick
As vantKruys, 45, stepped out of his Uber upon arriving in San Francisco from Amsterdam for Blockchain Week in 2018, he saw a sight that brought him back to his childhood. The vast homeless population, often suffering from mental health issues, reminded him not only of his father but of the life for which he too was thought to be destined. The reality on the street of the city of technology startups was little different than those of his native Suriname, a former Dutch colony in South America where the average income is under $400 per month.
VantKruys had a difficult childhood and bounced around foster homes before ending up at a residential institution for 80 other disadvantaged children. He was born to teenage parents, and when not in prison, his father could be found “walking around the city in his underwear, dirty and unshaven — lost on heroin.” If his start in life were a poker hand, it looked much like a 2-7 offsuit — the worst possible combination.
On his first day of elementary school, his classroom teacher told him and five other peers from the facility that “People don’t escape their circumstances.”
“You guys have a 99% likelihood of repeating your parents’ lives,” the teacher lectured them in front of the whole class. VantKruys asked if that meant that he still had a 1% chance of making it. Some students began to giggle. “In Suriname culture, that’s a no-no. You never contradict or say anything smart to teachers. I got smacked as hell, like, ‘Know your place,’” he recalls. At eight years old, he knew there was a very hard journey ahead.
But vantKruys had a plan. He believed in that 1% chance, even if no one would allow him to dream of it. “I thought of it like a boxing match in my head. I’ve got to beat 99 Mike Tysons to get where I want to, for that one shot,” he remembers. He worked hard, often getting the best grades.
Homelessness was just one of the “Mike Tysons” he had to defeat. After high school, he managed to get into Utrecht University in the Netherlands to study pharmacy. He wanted to become a doctor, and his uncle covered his airfare. However, without money, he had to make do with sleeping in the central railway station, where he kept his things in a locker, and washing up at a local gym before heading to his morning classes.
“This is just another Mike Tyson fight,” he thought to himself as he lived life in survival mode, convinced that one day there would be a final battle, and that he would make it.
VantKruys’ uncle lived nearby, and in 1998, his uncle introduced him to stock trading. The concept of buying portions of a company was entirely foreign, but he was enthralled. He went to one of his professors for advice, who suggested that “If you’re really interested in the funding of the biotech markets, you should look into the hedge funds on Wall Street.” VantKruys was off to the races.
By using his knowledge of pharmacy to compare clinical trial data with public statements put out by companies, vantKruys managed to find an edge that “made a bit of money.” He dropped out of university so that he could focus full time on trading, developing a strategy around short-selling biotech stocks that seemed to overpromise without hard evidence.
“I treat everything as a short — everything is bullshit until proven otherwise.”
When the financial crisis hit in 2008–2009, vantKruys recalls going down the rabbit hole of endless questions: “What the fuck? What the hell is value? What is money? What is banking? What is finance?” the part-time stock trader remembers thinking as he investigated “all these conspiracy theories surrounding money.”
When vantKruys read about Bitcoin on a forum around 2013, calling “bullshit” was his first instinct. However, many in his circle soon started talking about it, even at his birthday party in November 2013. “One of my colleagues came to the party and had everyone install the Blockchain.info wallet. Bitcoin, at that time, was like $300,” he recalls.
By 2015, he was convinced that cryptocurrency was the future. He even left behind basketball, a passion that he had cultivated as a coach for the better part of a decade. “I have that ‘all in’ mentality,” he says, explaining that he needed laser focus and resilience.
He began moving cryptocurrency around in 2016 while participating in various early ICOs, such as Lisk and Stratis. “They raised so many Bitcoins,” he reminisces. “They weren’t all raising Ethereum yet, so these were mostly Bitcoin raises.”
Crypto-trading transactions saw his bank flag his account as suspicious, and he was grilled on the activity. VantKruys then introduced the banker to crypto: “Hey, listen, there’s something special here. Open up your laptop. That is CoinMarketCap — that’s my new home.”
The banker had some advice: Incorporate, as that’s how he could remove some liability and make things easier for everyone. That’s how TRGC, vantKruys’ investment firm, was born the following year.
Today, the New York-based firm resembles a traditional investment fund with its standard “two-and-twenty” fee structure, implying a 2% annual management fee and a 20% cut of profits. This means that with the $20 million dollars in capital that vantKruys suggests is currently in play, the firm is earning $400,000 per year in management fees to “keep the lights on,” even in a bear market when performance can be negative. In a bull market with a 100% annual gain (yes, this is both too high and too low, don’t @ me), the firm would look to pocket a cool $4 million from presumably happy clients.
“90% were referrals,” vantKruys says regarding the sources of his early investment opportunities, with referrers split between other VCs, developers and a few dedicated scouts. According to vantKruys, networking is the key to success as a crypto VC. He relies on ABN — “always be networking” — traveling to blockchain conferences in about 25 countries, meandering through the crowd while joining conversations.
“The market insights you will get from these conferences is insane.”
Brian Kerr, CEO and co-founder of Kava, says vantKruys is a well known and highly active investor in the space: “At the start of every good crypto deal, you will likely find Etienne. He is one of the most active investors in the space and is solely focused on elevating up and coming projects to the world stage.”
How to pick a token
When it comes to selecting an investment, vantKruys relies on a four-pillar model: founder, product, token economy and the ability to reach users.
The first pillar is the founder with a “maniac drive” who will defeat their own lineup of Mike Tysons and stay with the project “even in the most horrible bear market, find that product-market fit and scale.” “I must say, it’s the hardest part,” he says. “You’re trying to find out if the CEO has that character trait to stick to a trench war and come out on top.”
The product itself is the second pillar, with vantKruys looking for projects with the goal and ambition of getting to the top 100 in market capitalization. That’s not easily done, as “Even cracking the top 200 is like winning an Olympic gold medal right now.” Getting into the top 200 today would require a $250 million market capitalization, whereas the top 100 now calls for more than $1 billion. Each step along the way, even the 1000th spot — which is valued well above $10 million — is just another Mike Tyson the maniac founder needs to defeat.
The third pillar is tokenomics, also called token metrics. VantKruys views tokens as “a representation of everyone’s interest” in the project, from VCs, founders and developers to users and traders. He wants to understand where tokens are going, and who benefits from them. “You’re looking for specific stuff, like ‘Does this make sense?’ ‘Where is the accrual of value? Is it skewed toward the team? Is it skewed toward the community?’” he says.
This issue of tokenomics, he explains, is behind the recent trend of “fair launches,” which do not offer private allocations to investors or developers. VantKruys suggests that Bitcoin is the best example of this, with others like DOGE, SUSHI, YFI and more also fitting the bill. These fair-launch coins have recently outperformed in the market.
Despite the rise in fair-launch projects that effectively cut out VCs like vantKruys, he is confident that the VC industry will survive as long as people want to take risks on projects that are not yet able to get funds elsewhere. “I think the venture capital model is still going to be there, and it’s going to stay as long as people take risks early on,” he concludes.
Fourthly, there is the question of marketing. No matter how good a project is, there will be neither users nor investors if there is no narrative about the use case by which to get heard. For Bitcoin back in the day, immutable peer-to-peer cash was the attention-grabbing headline, whereas Litecoin promised faster transactions, and Monero offered true anonymity. There should be a ripe, ready group of “fanatical early adopters,” he says.
“Can we evangelize the product to the world? Can we get people to join this product, this revolution, this solution? How do we bring this product to people that need it? They might not even know they need it yet!”
At the end of the analysis, there are two final questions that vantKruys asks himself before investing. The first is “Would I hold this token during a bear market?” and the second is a simple “Is this a good investment?”
With the latter, he is referring to the big picture of whether the investment “checks all the boxes” and if there is real substance underneath the “beautiful makeup” that might include an attractive pitch deck and sleek website.
“Even after those standard due diligence questions, you got to ask yourself again: ‘Is it still a good investment?’ Because like I said, I treat everything as short — let it prove itself.”
Gelato Network launches ‘G-UNI’ Uniswap v3 management token
While Uniswap’s highly-touted v3 has been racing to the top of TVL charts as of late, the need for active management has kept some retail participants out of their pools — a problem that a new product from the Gelato Network is aiming to fix.
First teased in a community call last week, the Gelato Network has released today the details of their “G-UNI” Uniswap v3 management system. G-UNI aims to perpetually maintain a liquidity range of 5-10% within the current price of an asset pair, with an oracle network checking prices and rebalancing liquidity pool position ranges every half hour. G-UNI also automatically re-invests trading fees for compounding returns.
“Passive G-UNIs work by just providing very broad liquidity, similar to Uniswap v2 that never has to be changed,” an announcement blog post reads. “It thus can be completely free of anyone’s control as it does not require changes in its price range.”
While Uniswap v3 allows liquidity providers to earn more fees by concentrating their funds at specific prices, it opens them up to risk of impermanent loss if the prices of the trading pair moves beyond the provider’s specified range.
Update: REKT ☠️ https://t.co/0MF0gCd9sm
— ameen.eth (@ameensol) May 29, 2021
The blog post notes that G-UNI’s auto rebalancing brings the benefits of concentrated liquidity, but with the option of passively managing the position in a manner more in line with Uniswap v2.
“The advantage of this includes that users can sit back and relax as all the difficulties that come with monitoring LP positions are taken care of.”
Composability and incentives
While the new tool will be a boon to passive liquidity providers, the real benefits of G-UNI might be for other DeFi protocols.
A self-described “Legendary Member” of Gelato, Hilmar, noted that projects can now incentivize concentrated liquidity in “pool 2” liquidity pools. Pool 2 is a colloquialism for a native governance asset paired with a popular base asset, such as ETH or MATIC.
3) Having an ERC20 wrapper around Uni V3 LP positions is extremely powerful, as this enables teams like Instadapp to offer “Liquidity Mining” incentive schemes on top of G-UNI.
This means you can now incentivize your community to provide liquidity around specific ranges
— Hilmar X 冰淇淋 团队 (@hilmarxo) June 16, 2021
Projects often have to provide ample liquidity mining incentives for participants in pool 2s, as liquidity providers take on the risk of the native governance token collapsing in price. Concentrated liquidity rewards may help stabilize native asset prices to a more regular range.
Additionally, G-UNI is a ERC-20 token as opposed to a NFT, which opens it up to a broader number of possible applications in DeFi. Many lending platforms accept liquidity pool tokens as collateral, but aren’t yet widely prepared for positions represented as NFTs; G-UNI will allow them to onboard v3 liquidity positions faster. Likewise, yield vaults like Yearn.Finance, which has been planning to incorporate exchange positions for some time, may find it easier to integrate ERC-20s.
G-UNI will be used out of the gate as part of the launch of Instadapp’s governance token. The team is setting aside 1,000,000 INST tokens for INST/ETH liquidity mining, with 3/4ths of the rewards focused on a higher INST price liquidity range.
Per the Instadapp dashboard, the incentivized pools are currently live and offering 2,200% and 1,800% APY respectively.
Here’s why one analyst says Bitcoin will outperform Ethereum in the short term
In terms of price potential, Bitcoin (BTC) is staring at the possibility of outperforming Ether (ETH) in the short term.
So believes David Lifshitz, the chief investment officer at ExoAlpha, a Paris-based investment management service, who noted that Bitcoin’s upside potential in the near-term is higher than that of Ethereum. He said so after spotting a recent shift in the BTC/ETH ratio.
In detail, BTC/ETH compares the trend momentum of Bitcoin and Ether. A lower reading suggests that the Bitcoin price is rising slower than Ethereum’s. Conversely, a higher BTC/ETH ratio indicates that the Bitcoin price momentum is gaining an edge over Ethereum.
Of late, Ethereum appeared like a heightened version of Bitcoin. When the BTC/USD exchange rate spiked, the ETH/USD exchange rate rallied but with higher margins. Similarly, when BTC/USD went down, ETH/USD plunged more.
The difference in price momentum sent the BTC/ETH ratio declining inside a descending channel range. In doing so, the ratio offered traders a way to gauge which token — Bitcoin or Ether — would return better profits in terms of short-term relative strength momentum. Lifshitz weighed:
At the current level, the ratio suggests that BTC is underpriced vs. ETH, so an astute trader may buy Bitcoin and sell Ethereum in the same dollar proportions, betting on the potential upcoming bounce of the ratio from the lower channel bound toward the upper channel bound, and then revert later when the ratio gets close again to the upper bound.
Ratio flattening after Musk-led crash
The comparison between Bitcoin and Ether price momentums came as the Federal Reserve officials announced Wednesday that they expect to start raising interest rates in 2023, earlier than the previous forecast of 2024.
Bitcoin and Ethereum’s first reaction to the Fed news was negative. The BTC/USD exchange rate closed the day 4.51% lower, while ETH/USD went down by 6.91%. In comparison, on May 19, after Elon Musk launched a tweet war against Bitcoin, BTC/USD had fallen 14.29% and ETH/USD by 27.61%.
The readings pointed that the dramatic difference between Bitcoin and ETH price momentums started flattening after the May 19 crash. Lifshitz called it as yet another sign that Bitcoin would become more valuable than Ether.
“Over the last 3 weeks, the ratio of BTC/ETH relative prices seems flat and if we take a closer look at the last few days, the ratio is getting higher, meaning that BTC tends to become more valuable than ETH.”
Meanwhile, Lifshitz reminded that the BTC/USD ratio’s relief bounce would do little in offsetting the descending channel pressure. Therefore, the ratio may continue to head lower after it tests the channel’s upper range.
Bitcoin, Ether trade setups
The scale of Bitcoin and Ether’s next trends — whether upside or downside — depends on their idiosyncratic technical and fundamental factors.
Lifshitz said Bitcoin, which remains range-stuck between $33,000 and $39,000-40,000 area, would need to break above $42,000 to confirm a short-term bearish bias. In doing so, the benchmark cryptocurrency could rise to $50,000, a level coinciding with the local bottoms of April 26 and May 12.
But for a bullish move to happen, the executive added that Bitcoin miners would need to exhaust their selling or be convinced that they would later sell their BTC reserves at higher prices. Meanwhile, Dip buyers and institutional investors such as MicroStrategy would provide further upside tailwinds to the $50K-price target.
“And of course in the middle of this battle between bulls and bears, there’s Elon Musk tweet-factory, being one time supportive of Bitcoin, one time not, which shakes the price each time,” Lifshitz reminded.
As for Ethereum, Lifshitz expected the cryptocurrency to surge to $2,850 in the coming sessions. It is the same level that ETH hit before popping up higher on May 3; meanwhile, it also served as resistance as ETH attempted to recover fully from its May 19 price bottom.
Ethereum bulls continued to grapple with a symmetrical triangle indicator on the flip side and its tendency to send prices further lower. Symmetrical Triangles are continuation patterns. Therefore, they tend to send the prices in the direction of their previous trends.
“As the price approaches the apex of that triangle, some resolution is expected either up or down from the $2,500 level,” said Lifshitz.
Meanwhile, one big takeaway from both Bitcoin and Ethereum charts concerned their volumes. While BTC/USD reported higher trading volumes after the May 19 price crash, Ethereum’s were more or less the same.
“This comforts the potential reverse of power between Bitcoin and Ether,” Lifshitz stressed.
Alchemix patches ‘Reverse Rug’ exploit, address $6.5 million shortfall
It’s as miraculous as Aladdin taking off on a magic carpet: in a possible first, some of the users of a decentralized finance protocol were the ones to benefit today from an exploit, turning the concept of a ‘rugpull’ on its head.
A colloquialism for when liquidity is drained from a project (often an unscrupulous founder or developer draining the funds themselves), depositors and DeFi users are most often the ones holding bad debt and/or worthless tokens — left to hope for compensation plans that can take months or even years to fully vest.
In an exploit today, however, the users are the ones who got to pull at the seams for a change.
This morning, Alchemix announced that the contracts for one of their synthetic assets, alETH, had experienced an “incident.”
There has been an incident with the Alchemix alETH contracts. Together with the fantastic team at @iearnfinance, we have identified the error and are both working on a post-mortem and a solution to the problem.
Funds are safe.
— Alchemix (@AlchemixFi) June 16, 2021
In a incident report published later in the day, Alchemix developer “n4n0” said that “an issue with the deployment script of the alETH vault accidentally created additional vaults,” some of which the protocol used to incorrectly calculate outstanding debts, which in turn meant protocol funds were used to “pay off user debts.”
As a result, for a short window of time users were able to withdraw their ETH collateral with their alETH loans still outstanding — a rugpull by the community to the tune of $6.5 million.
Alchemix innovating again… this time with the reverse rugpull.. a ‘rugput’
Joking aside there was a little incident with the new alETH vault in which nobody lost any funds but some users actually gained@n4n084191635 with a great incident report herehttps://t.co/Vo3cWRnZPx pic.twitter.com/68G3y1s3x0
— ⟠ toast.eth (@intocryptoast) June 16, 2021
Per the incident report, the team paused the mint contract for alETH two and a half hours after the exploit was discovered. The report notes that no users lost funds as a result of the exploit, and that Yearn.Finance — whose yield vaults automatically repay Alchemix’s synthetic loans — suffered no loss as well. Additionally, a “conservative” initial debt ceiling prevented the protocol loss from being more extreme.
The team, including incident report author n4n0 appear to be taking the loss in stride:
— n4n0 (@n4n084191635) June 16, 2021
A trio of solutions is being deployed to cover the shortfall, including a temporary increase in protocol fees, a injection of ETH liquidity from Alchemix’s treasury, and a sale of DAI from the treasury for additional ETH. The team says they will be deploying an entirely new vault to address the flaws of the original.
Further changes may be on the horizon for the alETH asset as well. Alchemix currently has a alETH/ETH pool live on Saddle, a VC-backed fork of Curve Finance, following Curve reportedly turning down creating a pool for the synthetic Ether. However, in the past 48 hours the Curve social media account has been making overtures in an effort to bring Alchemix’s latest synthetic asset back.
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Not sure if the bulls are back? Here’s how the golden cross spots trend reversals
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Bulls aim to reclaim $40K ahead of Friday’s $520M BTC options expiry
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