Investment News – Valkyrie, Edge, Ionia
Time for an update on the recent goings-on at the DIF!
The DIF receives funding from Dash treasury proposals in Dash. Since our equity investments are typically denominated and transacted in fiat currency, we need to liquidate this funding to USD and potentially EUR or other fiat currencies. Rather than selling large chunks of Dash at once, incurring slippage and being at the mercy of the Dash price at the moment of investment, we liquidate Dash in normal operations through a bot that sells little by little over time in frequently adjusted limit orders aiming to maintain a roughly 70:30 USD:Dash balance. Any investor familiar with the concept of dollar-cost averaging (DCA) will recognize this as basically the reverse.
Unfortunately, we’re facing a market situation that supervisors felt does not allow us to actively pursue new equity investments. Our treasury funding at the current Dash prices does not bring in enough USD to build up a large enough fund for future investments in a reasonable time. So we’d rather let the DIF lay dormant for a few months and sit out the bear market. Not selling off Dash during this time also takes a bit of sell pressure off the market although the effect on price will be negligible. We’ll start liquidating Dash for USD again once we get more bang for the buck. Or rather, more buck for the Dash. 🙂
At our weekly meeting on May 24, we decided to move most of our Dash holdings into the Valkyrie Trust.
In addition, since we don’t need USD readily available for investments as explained above, we decided to also move some of our USD funds from our bank account to the Valkyrie Dash Trust, save for a reserve to cover standing commitments. This is actually resulting in us buying Dash, which is probably welcome news to the community, but again, the price effect will be negligible. It is simply a consequence of Valkyrie holding Dash, not USD.
This process is underway. Our Valkyrie trust account is set up and verified and we’re currently consolidating funds from the various sources. This is taking a while since our setup doesn’t allow individual supervisors to move funds. All in all, we expect to move ~3500 Dash into the trust.
This is a nice chunk of change and a strong signal of support, but more funding is needed to maintain the Valkyrie Dash Trust as a viable financial product. The availability of a traditional investment vehicle is a great advantage for Dash and we encourage the community to help out by storing more of your Dash in the trust.
As many of you have already heard by now from our press release, Edge was the “TBA investment” listed our last reported balance sheet. Yes, we closed the deal last year already and have been unable to share the news until now due to an NDA and news embargo. We’re very excited about this one as the deal brings Dash Direct functionality to a multi-coin wallet and thereby exposes a significant non-Dash user base to our features.
We recorded an interview with Paul Puey at La BitConf last November:
Watch Paul describe the fascinating concept of crypto investment going in reverse (2:43), Bitcoin companies as “trad-fi” (traditional finance), and promise to support Dash user names (5:10).
We recently received an update to our investment in Ionia, previously known as CrayPay. You all know them as the company behind Dash Direct.
Following standard accounting practice for long-term equity investments, we carry our investments on our balance sheet on a cost basis, even if we have reason to believe that the current value of our shares may be substantially higher.
Do we have reason to believe? You bet!
Our initial investments in Ionia were in the form of convertible debt notes. Ionia recently completed a Series Seed round of $2.5m at a $25m pre-money valuation. We also participated in this seed round itself and the round triggered the conversion of all convertible notes into equity. How did we do?
|Investment Tranche||Amount invested, USD||Interest accrued, USD||Conversion share price, USD||# of shares||Value at series seed valuation, USD|
|Convertible note, Dec 23, 2020||100,000||11,484.93||4.95||22,520||557,370|
|Convertible note, Jul 28, 2021||100,000||6,728.77||12.38||8,623||213,419|
|Equity Series Seed||100,000||24.75||4,041||100,000|
We almost tripled our investment so far! Not a bad beginning and we hope Ionia’s trajectory and growth will lead to further increases in valuation. Still, a word of caution: We’ve all seen in the last few days how quickly markets can turn and how unforeseen problems (e.g. with the card-issuing bank) can arise. A sustained bear market, with people less willing to spend their crypto at such low prices, will certainly also affect Ionia’s business model. We have full trust in Ionia’s team’s ability to find creative solutions, but we will be as conservative as possible in reporting higher valuations in our upcoming quarterly statements.
As these things go, no light without shadow. Ready Raider was the DIF’s first investment. At the time, investments and funding for them were still individually approved by the DAO. The investment is still carried on our books at a $47k value (cost method, as described above), but we have recently become concerned that the site looks abandoned. The last event listed was in March 2021. We have reached out to the founding team to get a clearer picture of the situation and any potential future plans.
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