Alkimiya, Dorado | Hidden Gems – DeFi
Review Date: April 11th, 2022
We scored over 50 projects this week, and these are 3 DeFi names we think you should know about:
- Alkimiya
- Dorado
- Ansible Labs
Please keep in mind that some of these projects have not yet been subjected to our code review process, but we want to call them out here for preliminarily catching our eye based on our fundamental analysis process.
Alkimiya (83%)
Website – Documentation
Alkimiya is a protocol that aims to create a new tool and market revolving around consensus producers (PoW miners, staking validators). There is a high degree of uncertainty surrounding the revenue of mining/staking due to multiple shifting factors – coin price, mining difficulty, and network fees, among others. To alleviate this, Alkimiya proposes a product named Silica, a smart contract that functions like a fixed-for-floating swap from traditional markets.
An agreement is struck between a buyer and seller of hash power where the seller promises to contribute a certain amount of hash power over a certain number of days, and the buyer deposits the total value of the rewards in USDT upfront. As mining happens, an oracle confirms the average amount of the underlying coin that should be created by the promised hash power, and the seller needs to deposit that amount of the coin. Upon depositing, they unlock access to a proportional amount of the USDT, effectively turning the variable value of the coin into a fixed cash flow. This benefits both sides of the market as miners can lock in earnings ahead of time and create smoother cash flows for their operations, and buyers of hash power have a new tool for market speculation.
Additionally, the plan is to release Hash Vaults soon, pools of Silica contracts with additional payout logic. These can be thought of as structured products, but with Silica contracts being the base layer. The vision is for any kind of baskets or yield-generating products to be built and invested in, with the key differentiator from other yield baskets being that Hash Vaults are secured by the underlying cash flows of mining/staking operations.
Why we like it:
There are multiple compelling reasons why Alkimiya is a powerful new addition to the DeFi space. Mining and staking are some of the most fundamental aspects of crypto – blockchains literally wouldn’t exist without them. However, there are multiple complexities and difficulties surrounding the entire enterprise. For most users, the hardware costs associated with mining are prohibitive, and interacting with the mining process is simply impossible. For those that have the upfront capital and knowledge to initiate mining, there are concerns about the exact degree of profitability that will be achieved and if the entire endeavor and opportunity cost will be worth it. And for more established miners, there are large fixed costs coupled with uncertain revenue, making it harder to identify how much capital will be available for further investing.
Alkimiya offers a solution to each of these scenarios: non-miners can swap into the uncertainty of mining outcomes to speculate on a new market, new miners can use swaps to evaluate and lock in income, and established miners can utilize swaps to directly offset expenses, capital expenditures, or fine-tune their degree of exposure to the market. This is the first protocol of its kind that provides a genuinely useful tool to the entire mining ecosystem that will only continue to get more desirable as the complexity and variability of operations increases. There have been previous attempts to trade hash power, but they haven’t taken off because they weren’t securitizing the mining properly.
Additionally, Alkimiya is already innovating past their base product. While they are on their first versions of the mainnet, they have a strong vision for what types of products they want to build out. The early versions already support ETH and BTC mining swaps and ETH gas fee swaps, with more to come.
Thirdly, as evidenced by Hash Vaults, Alkimiya is providing new “financial legos”.
Financial legos are one of our favorite features to see in protocols as it opens the door for further innovation to happen both within and on top of the protocol, as projects that develop down the road can leverage existing financial building blocks in new ways.
Investors:
Alkiya raised an early stage round of $0.45M from Dragonfly Capital, Castle Island Ventures, General Mining Research, Robot Ventures, and Derek Hsue.
The Team:
There are three co-founders, Leo’s background is two years experience in Equity Derivatives at Morgan Stanley and a Research Lead at Iterative Capital. Ricardo has 10 years of experience as a Software Engineer at the largest bank in Latin America and 1.5 years at Transfero, a crypto fintech company. Roberto was the Chief Blockchain Officer for two years also at Transfero, as well as acting as a Chief Technology Officer at BRQ Digital Solutions, a company with more than 3,000 employees.
Token Utility:
TBA. There will be a token further into development, but the current focus is on building the product.
Where can you buy the token?:
TBA.
Dorado (81%)
Website – Documentation
Dorado is a platform that provides retirement account services made for the digital age. The goal is to provide a platform that is simple, transparent, and easy to use while still retaining deep connectivity to many aspects of digital assets.
Why we like it:
The majority of competitors that provide crypto retirement accounts are antiquated and were founded as commodities platforms to add direct gold exposure to an IRA. Compared to them, Dorado is miles ahead in tech by building integration with other crypto platforms and services. The most notable one is their relationship with Celsius: you will be able to collect yield on your crypto holdings right through the integration between the two platforms.
Investors:
Beside the professional partnership, Celsius is also a direct investor in Dorado, further extending their vote of confidence in the platform.
The Team:
One co-founder has deep experience in tech e-commerce. He previously acted as a B2B launch lead at a startup where he hired and built a team out of more than 30 employees. The other co-founder recently sold a retail-focused company he had founded for $40M. After building connections with many of the largest firms involved in crypto exchanges, asset management, and tax software, they established there is a clear demand for a streamlined crypto retirement product.
Token Utility:
The project is still early in its development and utility details will follow. The current vision for the token is to reward long-term users of the platform and to unlock fee savings.
Where can you buy the token?:
TBA.
Ansible Labs (80%)
Website – Documentation
Ansible Labs aims to build the smoothest experience possible for transferring assets to and from web3 blockchain accounts. While there are smaller one-off plug-ins that facilitate the direct purchase of a coin (usually with high extra fees), this is the first bi-directional platform to also allow you to convert your crypto back into fiat into your connected bank account.
Why we like it:
Ansible will allow you to skip the hassle of interacting with an exchange when going through the asset conversion process. For those who might be crypto-curious but are put off by the complexity of managing an exchange account, this is an ideal solution to onboard those users. The vision is for the process to be as easy as using a Venmo account, while not giving up any privacy or security features. Finally, there is an extremely strong founder-market fit.
The Team:
Both of the co-founders each have more than 5 years of experience at Visa across multiple departments, including holding the titles of Product Lead of Crypto and VP of Visa Direct. This is the exact background that should help drive this product to success as they have keen insight into the technical and legal requirements that underpin the transaction process.
Token Utility:
TBA.
Where can you buy the token?:
TBA.
