Block.one Invests A Big Amount For Bullish Global
Block.one, the creator of the public blockchain EOSIO, has revealed plans to launch a new cryptocurrency exchange with $10 billion in funding, $9.7 billion of which will come from Block.one.
Nomura, Peter Thiel’s Thiel Capital and Founders Fund, Alan Howard, Louis Bacon, Richard Li, Christian Angermayer, and Mike Novogratz’s Galaxy Digital have invested $300 million in the company.
During the last cryptocurrency bull market, Block.one held the largest ever ICO for EOSIO, raising $4 billion. EOS, which was once one of the top five cryptocurrencies, is now ranked 23rd with a market capitalization of $9.3 billion.
Since most of the Bullish financing comes from 164,000 bitcoin estimated at $9.1 billion at current rates, Block.one would have spent a significant portion of the EOS proceeds in Bitcoin.
The new exchange, which will launch this year, aims to combine the best features of centralized exchanges, such as efficiency, privacy, and enforcement, with the advantages of decentralized finance (DeFi).
According to the Bullish announcement, “the Bullish exchange would provide new automated market making, lending, and portfolio management tools to its users to provide functionality that has previously been monopolized by dominant players in conventional finance while driving deeper liquidity to digital assets.”
As described by Block, vertical integration is one of the main advantages of a DeFi-like approach. Traditional finance tends to categorize properties, while DeFi allows for greater versatility, allowing a cryptocurrency to be exchanged or used as collateral for derivatives or loans.
Instead of a non-yielding fund, the investor should contribute digital assets to a liquidity pool that can be used for market making or lending.
A centralized strategy has both advantages and disadvantages. As previously mentioned, it is more compliant, private, and performs better. DeFi smart contracts are prone to bugs that can wipe out investor funds, while a centralized exchange will almost certainly be held legally responsible.
However, centralized exchanges have power over the user’s private keys, making them more vulnerable to hacking.
Bullish isn’t the first company to provide DeFi-like services. Binance, the world’s largest cryptocurrency exchange, for example, offers liquidity pools.
The EOS blockchain can be used to provide a transaction audit trail. Since last Wednesday, the price of EOS has increased by more than 70%.
“Bullish has a solid balance sheet, and its vertical integration provides the cryptocurrency room with stability and liquidity. I’m excited to join Bullish as an investor and advisor as the company embarks on a long and fruitful journey,” Thiel said.
The importance of cryptocurrency exchanges has become more apparent after Coinbase’s April listing. The market capitalization of Coinbase is currently $57 billion.
Blockchain.com, a cryptocurrency wallet and business based in the United Kingdom, recently closed a $300 million Series C fund with a $5.2 billion valuation.
Why does Bullish need so much cash is a significant issue. Since its inception in 2012, Coinbase has raised a total of $547 million. Is bullish capital going to be used to seed liquidity pools?
Nomura, Alan Howard, and Galaxy Digital, three strategic investors, also invested in Komainu, the institutional digital asset custody project where Nomura was a co-founder.
One of the other Komainu co-founders, Alan Howard, is also an investor in Coinshares.