Its Second Fund? Not So Much
Pantera Capital, a cryptocurrency investment firm known for its blockbuster bitcoin returns, has been on the upside when investing in startups, though the returns have been falling below or closer to other types of equity investors. The venture funds Pantera Capital raised in August 2013 and August 2014 have returned 46.5% and 15.9% from their inception to September 2019, respectively, according to firm data obtained by CoinDesk. The returns underperform index funds most retail investors can buy into and outperform venture funds limited to smaller pools of accredited investors. Subscribe
By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . Up to September 2019, the S&P 500 index, for example, has returned, adjusted for inflation, 62.6% over the first Pantera venture fund and 40.8% over the second Pantera venture fund. United States funds included in the 2019 Cambridge Associates Venture Capital Index have returned on average 12.08% on a five-year timescale and 14.55% on a 10-year time scale. Why the drop? Paul Veradittakit, a venture partner at Pantera Capital, attributed the dramatic gap in performance to the different focus and size of the funds. The closely aged funds’ returns slid as the second fund ramped up investments in 36 companies and counted in diverse companies building mostly supplemental cryptocurrency products — a more than fourfold rise from the first fund’s eight companies dedicated to cryptocurrency services catering to the bare essentials. While the first Pantera venture fund has invested in digital asset developers like Ripple Labs and basic exchanges and payment processors like Bitstamp, Xapo, Circle and Ripio (formerly known as BitPagos), the second venture fund has invested in exchanges with peripheral financial instruments like cryptocurrency options broker ErisX, scattered cryptocurrency platforms that include Shapeshift, Abra, Brave, Civic, Starkware, BitOasis and BitPesa, and even another cryptocurrency fund manager, Polychain Capital. Information was not provided on Pantera Capital’s third venture fund, which has raised $164.7 million as of August, just slightly under a $175 million ceiling sought since 2018. But if strategy and volume is any indication, the third Pantera venture fund has mirrored the approach of the second fund, putting more money into ErisX, Starkware and at least 16 in-the-weeds companies. Among these newer startups are The Block, a cryptocurrency research site; and Bakkt, a New York Stock Exchange corporation-connected bitcoin futures exchange. In all, Pantera Capital’s assets were valued at over $448 million in financial filings this year, covering $249.3 million in the venture funds. The venture funds take at least $50,000 and $100,000 sums from investors and spend about $1 million to $3 million on 10% to 20% equity stakes in seed-stage investments. For Series A venture investments, Pantera Capital commits somewhere from $3 million to $8 million to 3% to 15% stakes in companies. Hits and misses
Exits – mergers, acquisitions and listings on public stock exchanges – are how venture capital funds realize returns, positive or negative, on their investments, depending on company financials and investment timing. The seven-year-old cryptocurrency investment firm has had 14 exits make $66 million on $16 million of capital invested in its venture companies, according to the firm data dated to this month a year ago. While not counted in realized returns, companies that do not exit still contribute to a venture fund’s value. All companies considered by last September, Pantera Capital grew the value of capital in the first venture fund from $12 million to $92 million, in the second venture fund from $26 million to $41 million. In the first fund, the venture data says Pantera Capital in 2018 took away $50.5 million from a $9.2 million investment and 6% stake in Bitstamp when 80% of the bitcoin exchange sold to Belgian investment holding company NXMH. Pantera Capital also stands to make $22.3 million from the remaining 20% Bitstamp equity should it be bought, making it one of the fund’s more lucrative investments. Less remarkable than the Bitstamp exit, the second Pantera venture fund drew in one of its notable exits in Korbit – $6 million from a $603,205 investment –  when the Korean digital currency exchange was acquired in 2017 by Korean gaming developer NXC Corp. Unlike the second fund, the first Pantera venture fund has not had a company end in a bankruptcy or a closure that did not involve a buy-out. At least two cryptocurrency apps backed by the second fund have shut down, bringing its value down along with them: Basis, a $133 million-funded coin that planned to back itself with fiat currency, and TruStory, a crowd-sourced crypto-offering fact-checking site that raised $3.3 million. Exits with unknown returns
Five other acquisitions have also contributed to Pantera’s venture returns, but the data does not specify how much money they made, if any. Acquired in the first fund was promotional site Earn.com. In the second fund, there were security token issuer Harbor, trading platform Paradex and virtual currency portfolio tracker Blockfolio. The third fund invested in Blockfolio again and the digital currency brokerage Tagomi. What is known is that two of the acquisitions, Harbor and Earn.com, sold for around or below the respective $38 million and $121 million they raised, suggesting some investors may have lost money or written them off. Many investors backed Earn.com when it was a bitcoin mining chip producer, 21 Inc., a business model and name that was subsequently scrapped and rebranded. Virtual currency exchange Coinbase in 2018 acquired Earn.com for about $100 million and Harbor sold for around $38 million to cryptocurrency custodian BitGo in 2019. On the flip side, Blockfolio sold at significant premiums for some investors from the $17 million it raised and Paradex’s acquisition was profitable for most, if not all, investors, according to investor data from other sources seen by CoinDesk. Coinbase bought Paradex in 2018 for more than its seed-only funding, and it added Tagomi for about $150 million in May. Cryptocurrency derivatives trading market FTX Exchange purchased Blockfolio for about $150 million in September. Read more about...
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Pantera Capital’s First Venture Fund Did Pretty Well. Its Second Fund? Not So Much

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Coinbase, the world’s largest crypto exchange, brokerage, and wallet platform has announced  its intention to list Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX), causing the price of tokens to surge, while bitcoin has struggled to demonstrate any major price action. The release of the statement of Coinbase was taken aback by the crypto community, as most investors considered the company’s acquisition of decentralized crypto exchange Paradex as the substitution for direct token listing. However, the Coinbase team emphasized that despite the additional approval and verification work required to list the five digital assets, the company decided to list them. BAT and 0x
Coinbase emphasized in its statement that the plans to list the five digital assets have been finalized, but there exists a possibility that the company fails to integrate the above mentioned assets due to regulatory and compliance-related issues. Still, the price of BAT and 0x surged by around 25 percent and 15 percent respectively, allowing the valuation of the crypto market to increase slightly by $3 billion. BAT Price on Binance, Chart by TradingView
The price of BAT surged by a larger margin than 0x because while the listing of 0x was highly anticipated by the crypto community, given the involvement of Coinbase founding members in the 0x Protocol and the company’s recent acquisition of Paradex, BAT wasn’t being discussed as potential candidates for Coinbase listing. In its statement, Coinbase explained that the reputation of Brave creator Brendan Eich, the founder of JavaScript and Firefox, as well as the fast adoption of the Brave browser, which currently has more than 18,000 verified publishers that receive incentives via BAT, as the reasons for the listing of BAT. The Coinbase team said:
“The initial purpose of the BAT is to allow advertisers to pay for user attention when they view ads via Brave, but it can potentially be used as a general digital currency for Brave user interactions with arbitrary websites. Brave announced that they have recently passed 3 million monthly users and are in the top 10 list in the Google Play store in more than 20 countries. More than 18,000 verified publishers are using Brave across 4,500 websites and 13,500 YouTube and Twitch streamer accounts.”
Almost instantly, the volume of BAT surged massively on major crypto exchanges such as Binance, quickly becoming one of the largest trading pairs of bitcoin. Currently, as of July 14, BAT remains as the 11th most traded cryptocurrency against bitcoin on Binance, above major digital assets like Bitcoin Cash, Binance Coin, NEO, and Litecoin. XRP Investors Outraged
Throughout the past year, the price of XRP, the native cryptocurrency of Ripple, surged on several occasions as rumors about potential Coinbase listing emerged, and time and time again, Coinbase denied those rumors. On social media, users and investors of Ripple reacted negatively to the announcement of Coinbase and their decision to integrate small tokens ahead of XRP. One investor said:
“The fact that you did not include XRP which is a top 3 crypto shows your bias and that the news about you trying to strong arm Ripple to pay millions for a listing are true.”
Featured image from Shutterstock. Charts from  TradingView . Follow us on Telegram or subscribe to our newsletter here .

Bitcoin Price Struggles but 0x and BAT Surge Upon Coinbase Announcement

Megastar (TSX-V: MDV; Frankfurt: M5QN) to Acquire 100% of Two Additional Epithermal Au-Ag Projects in Oaxaca, Mexico
 
Vancouver, British Columbia - June 4, 2018 (Newsfile Corp.) (Investorideas.com Newswire) Megastar Development Corp. ("Megastar", the "Company" or "MDV") (TSX-V: MDV; Frankfurt: M5QN) is pleased to announce that further to signing a Definitive Option Agreement to acquire 100% undivided interest in the Rama de Oro project, located in the state of Oaxaca, Mexico (see press release dated May 10, 2018), the Company also signed two (2) additional option agreements with the same groups (Paradex and Minera Zalamera) pursuant to which Minera Zalamera has granted the Company the sole and exclusive option to acquire all of its rights, titles and interest in the Yautepec concession (the "Yautepec Option") and the Magdalena Concession (the "Magdalena Option"), both located in the state of Oaxaca, Mexico. "This deal continues us on our path towards establishing a strong presence in the Oaxaca region of Mexico," said Dusan Berka, CEO of Megastar Development. "Coupled with our earlier announced deal, Megastar has put together a strong portfolio of prospective exploration assets situated in between two currently producing mines. As well, working with David Jones, a geologist with a long history of success in Mexico, gives us a strong technical base upon which to commence our activities down there." Yautepec Option
Under the Yautepec Option, in order to acquire a 100% interest in the project, the Company shall:
Pay to Minera Zalamera USD $5,000 (within 15 days following the execution of the option agreement but subject to Exchange approval);
Issue to Minera Zalamera a total of 1,550,000 Common Shares (200,000 within 15 days following the execution of the option agreement but subject to Exchange approval, 450,000 on the 1st anniversary, and 900,000 on the second anniversary); and
Incur work expenditures totalling USD $310,000 (USD $40,000 after Year 1, another USD $ 80,000 by Year 2 and USD $190,000 by Year 3 of the signing of the option agreement). The Yautepec Project comprises 4,861 hectares of Tertiary volcanic rocks highly prospective for hosting epithermal precious metal mineralization similar to that in the nearby producing Arista and Switchback mines at Gold Resources El Aguila project (20 km to the WNW) and Cheaspeake Gold's La Gitana project (8 km to the east-southeast). The project lies along a prominent northwest-southeast structural trend defined by small volcanic centers which include numerous identified Au-Ag prospects as identified in regional mapping by the Mexican Geological Survey (Servicio Geológico Mexicano (SGM)), none of which have been systematically explored by modern methods. The mapped altered rocks along this trend are part of a nearly 100 kilometer-long structural-volcanic corridor that extends from the San Jose mine (Fortuna Silver) to the northwest, to Chesapeake Gold's Gitana project to the southeast. Outside of areas of active mining, the region has seen little to no systematic exploration, and the Yautepec project is inferred to represent one of the most prospective segments of the trend. Magdalena Option
Under the Magdalena Option, in order to acquire a 100% interest in the project, the Company shall:
Pay to Minera Zalamera USD $5,000 (within 15 days following the execution of the option agreement but subject to Exchange approval);
Issue to Minera Zalamera a total of 1,550,000 Common Shares (200,000 within 15 days following the execution of the option agreement but subject to Exchange approval, 450,000 on the 1st anniversary, and 900,000 on the second anniversary); and
Incur work expenditures totalling USD $230,000 (USD $40,000 after Year 1, another USD $ 70,000 by Year 2 and USD $120,000 by Year 3 of the signing of the option agreement). The Magdalena Project comprises a single 480-hectare property centered on highly altered volcanic rocks approximately 20 kilometers ENE of Gold Resource Corporation's (GRC) producing Au-Ag-base metal deposits. Extensive felsic tuffs mapped by SGM are interpreted by Mr. David Jones, President of Paradex and Minera Zalamera, as a caldera setting, similar to that of the GRC mine area and Megastar's recently acquired Rama de Oro Project. Historical sampling of strongly clay- and silica-altered rocks at Magdalena reported values up to 0.705 g/t Au, 15.2 g/t Ag, 2700 ppm As, 53 ppm Bi, 357 ppm Cu, 12,780 ppm Hg, 38 ppm Mo, 2730 ppm Pb, and 147 ppm Zn. The area of coincident metals anomalies, clay and silica alteration, sulfate (gypsum) deposition, and minor rhyolite diking, lies along a prominent NW-SE structural trend (SGM mapping) adjacent to an inferred caldera margin. The presence of various types of chalcedonic and vuggy silica, elevated pathfinder metals (Hg, As), and extensive sulfate deposition (gypsum) indicates exposures at the highest levels of an anomalous Au-Ag-base metal system of excellent exploration potential. Upon the successful completion of the Yautepec Option or the Magdalena Option by Megastar, as applicable, Minera Zalamera shall retain a royalty equal to 2% NSR on the project subject to the option. Megastar shall have the right to purchase 1% of the NSR, at any time and at its sole discretion, for a purchase price of USD $1,650,000. All securities to be issued in connection with the transactions will be subject to a hold period of 4 months and one day from their date of issuance. Furthermore, the Transaction remains subject to regulatory approval. Stephen R. Maynard, M.S., C.P.G. Consulting Geologist, a qualified person in accordance with NI 43-101, has reviewed and accepted the technical information in this news release. ABOUT MEGASTAR DEVELOPMENT CORP.
Megastar Development Corp. is an emerging resource company engaged in the evaluation, acquisition and exploration of mineral properties. Megastar currently owns mineral property in Quebec. For further information, investors and shareholders are invited to visit the Company's website at www.megastardevelopment.com or call the office at 604-681-1568, or toll free at 1-877-377-6222. ON BEHALF OF THE BOARD OF DIRECTORS
"DUSAN BERKA"

Megastar (TSX-V: MDV; Frankfurt: M5QN) to Acquire 100% of Two Additional Epithermal Au-Ag Projects in Oaxaca, Mexico

31 mins ago
Last week, the major cryptocurrency startup Coinbase acquired a company called Paradex . This company is known as a “decentralized exchange” (or a “DEx,” if you want to be down with the crypto cool kids). This new type of exchange is said to be a safer way to trade crypto coins—which is pretty useful, given that over $4 billion worth of cryptocurrencies have been stolen from exchanges between 2011 and 2017, according to a Reuters estimate . What makes a decentralized exchange decentralized? First it’s helpful to understand what the status quo for a normal crypto exchange is. It works like this: A customer wires money to an exchange’s bank account, and then waits a few days for those funds to be credited to her exchange account. Once the funds are in, she can buy or sell crypto coins with those funds. During this time, the exchange holds her funds—whether in fiat or crypto currency—and is responsible for keeping them safe. When she’s done trading, she can also swap those funds into fiat currency and have that amount wired back to her original bank account. The chief benefit of a decentralized exchange is that a trader doesn’t have to entrust her funds to anyone. Instead, she trades directly with another party, using a blockchain to finalize the operation. She holds her funds in her digital wallet and trades them using the decentralized exchange to find a buyer or seller for her coins. This eliminates custody risk, which is the risk that something bad happens to the customer’s funds while the exchange operator is in charge of them. That includes losing funds to hackers or having to trust that the operator isn’t doing anything suspicious with your money. Both of those scenarios have happened regularly in the short life of the crypto exchange world. Famously, Mt. Gox, once the world’s largest bitcoin exchange, was hacked for hundreds of millions in 2014. Last year, two of the world’s biggest exchanges, both based in China, used $150 million of idle client funds to buy wealth-management products , triggering an investigation by the central bank. Coinbase says its purchase of Paradex will pave the way for its customers to trade “hundreds” of tokens in the future. Given Coinbase’s substantial customer base of over 20 million users, this could lead to a significant uptick in activity in the token markets. But this raises the question: If an exchange is decentralized, how could a corporation have acquired it? If the very nature of a DEx is that it disperses trading activity, what exactly did Coinbase buy? It’s partly down to semantics. Critics would be correct to say that Paradex is indeed a singular, centralized entity. This entity is responsible for taking orders from customers and matching up buys and sells. It takes a cut of the trade for doing this work. It’s doing stuff “off-chain” in crypto parlance, meaning those trades don’t interact with a public blockchain. It’s an approach that’s possible because Paradex is built on another protocol called 0X , which is a kind of open-source toolkit for people to build decentralized exchanges on ethereum. Ethereum may be mostly known for being the second-most-valuable cryptocurrency, but it also allows users to program applications on it, giving rise to decentralized apps like CryptoKitties or, indeed, token exchanges. Someone can use 0X to form an entity that accepts and matches orders for trades from customers, ultimately settling them on the ethereum blockchain. Such an entity is called a relay, and that’s what Paradex is. Relayers run their own order-books and then relay matched orders to a blockchain to be filled. Other decentralized exchanges like EtherDelta or Kyber take different approaches, some performing more actions on the blockchain. But a decentralized exchange like Paradex outsources the actual payment and fulfillment of a trade to the ethereum blockchain, which is the decentralized bit. Customers of a decentralized exchange never actually send their funds to the exchange to be traded, which is the case with traditional crypto exchange. This is “on-chain” settlement, in the language of the crypto world. So DEx customers hold their own funds in their own wallets, and only move the funds out when the trade is settled. The downside to a DEx is that it’s limited to trading between crypto tokens, so you can’t trade between a token and, say, the euro—although so-called stablecoins that mimic fiat currencies are being developed at a feverish pace . Customers are also wholly responsible for securing their funds. That means your wallet could still be hacked (in some cases just by using your phone number ), or, more likely, you could lose or forget your private key. And if that happens, there’s no one to blame but yourself. So there’s no real contradiction between a big centralized exchange operator like Coinbase acquiring a decentralized exchange like Paradex. It’s really Coinbase acquiring a new way to get crypto traders to pay one another. Time to bone up on your private-key security routines. Most Popular

Coinbase bought a “decentralized” crypto exchange. How does that work?

Bitcoin Magazine’s Week in Review: Expanding Exchanges and Investors
Bitcoin Magazine’s Week in Review: Expanding Exchanges and Investors
Cryptocurrencies and exchanges were the focus this week. Coinbase is getting into the decentralized exchange business with its acquisition of Paradex, potentially opening up thousands of ERC-20 tokens to traders, depending on what the SEC ends up doing with regulations. The parent company of the New York Stock Exchange, Intercontinental Exchange, continues work to implement a system to allow large investors to trade bitcoin directly. And Germany’s Deutsche Boerse is looking at getting into the cryptocurrency game. Finally, the city of Memphis had its first blockchain conference, which included keynotes from FedEx and a hackathon for various market segments that included some great prizes. Featured stories by Amy Castor, David Hollerith and  Nick Marinoff
Stay on top of the best stories in the bitcoin, blockchain and cryptocurrency industry. Subscribe to our newsletter here . Cryptocurrency exchange Coinbase just made an enormous play by acquiring decentralized relayer Paradex this week. Paradex bills itself as a decentralized exchange (DEX), meaning no third party is involved in holding the funds. Instead, users can use the platform to trade ERC20 tokens directly wallet to wallet. Paradex is built on top of the 0x (pronounced “zero x”) protocol . Right now, Coinbase trades four coins: bitcoin (BTC), bitcoin cash (BCH), ether (ETH) and litecoin (LTC). Adding ERC20 tokens could significantly boost the number of digital assets it carries. Due to the ICO boom that has taken place over the last few years, thousands of different ICO tokens are now available. Frankfurt Stock Exchange parent company, Deutsche Boerse AG , appears to have begun work on technology that will allow them to offer their clients bitcoin and cryptocurrency-related products. Speaking at an industry event in London on May 23, 2018, Jeffrey Tessler, head of clients, products and core markets for Deutsche Boerse, said they are considering offering cryptocurrency products: "We are deep at work with it." As reported earlier by The New York Times (NYT) and Bitcoin Magazine , Intercontinental Exchange (ICE), parent company of the New York Stock Exchange (NYSE), is developing an online trading platform that would allow large investors to trade bitcoin directly. As news about the ICE platform continues to develop, Bitcoin Magazine spoke with lawyers Ben Sauter and Dave McGill of Kobre & Kim, a New York City law firm which specializes in disputes and investigations, to examine the regulatory issues surrounding the launch of such a platform, including swap contracts and the implications the ICE platform might have on cryptocurrency trading in the future. In its first year, EthMemphis distinguished its place on the blockchain conference circuit for displaying an under-the-hood glimpse at what actually moves this young industry forward, specifically on the Ethereum network. The focus was on blockchain topics and projects applied to supply chain, healthcare, tourism/hospitality, education and law. While Verge executives are claiming a DDoS attack is responsible for the recent serious delays on their blockchain, it appears that the problem may be more serious than the company is implying. The attack lasted more than a few hours and has resulted in over 35 million XVGs (worth approximately $1.7 million) being stolen. The theft occurred when hackers exploited a specific glitch in Verge’s technology by mining multiple blocks virtually one second apart using the same algorithm. This was the same tactic used in a hack just last month that saw over 250,000 XVGs disappear into thin air, forcing Verge to prepare a subsequent hard fork .

Bitcoin Magazine’s Week in Review: Expanding Exchanges and Investors

Banking is only the beginning: 65 big industries blockchain could transform

Once Hyped, Decentralized Exchanges Lose Steam In 2019

Acquired

Paradex is a peer-to-peer trading platform focused on speed, reliability and non-custodianship.

Date	5/23/2018
Round	Acquired
Amount
Investors	Coinbase
Valuation
Revenue	0 FY undefined
Sources	2

First funding	5/23/2018
Last Funding	5/23/2018
Investor	Coinbase
Rounds	1 Acquired
Board Seats
Type	Corporation
Location	California

Wells Fargo Success Story

3M Success Story

Platform Overview

Paradex

Investors Count

Paradex Funding, Paradex Valuation & Paradex Revenue

Paradex Investors

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