With Alameda's demise, crypto exchange GSR sees opportunity

This article comes fromThe BlockOdaily Translator | Nian Yin Si Tang

Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- GSR CEO Jakob Palmstierna said: "If you're really bullish on this space, now is an opportunity to really deploy capital."

- Palmstierna says he is particularly excited about investing in zero-knowledge proofs, decentralized options trading, lending protocols, and decentralized insurance.

- Palmstierna also detailed how the Binance-led industry recovery fund is actually working.

Against the backdrop of November’s cryptocurrency market “carnage,” Jakob Palmstierna, chief executive of trading firm GSR, appears eerily calm.

The soft-spoken 41-year-old, dressed in a blue-and-white plaid shirt, dark cardigan and tortoiseshell glasses, is eager to stress that GSR's more conservative approach to business is a challenge for ambitious rival Alameda Research (like GSR). , which also runs a trading and venture capital business) has gone bankrupt and collapsed in favor of the institution.

“Alameda artificially pumped up multiple crypto projects by injecting billions of dollars of assets into them using client funds,” Palmstierna said in an interview in London on Monday. He also referred to reports that the investment vehicle, founded by Sam Bankman-Fried (SBF), received funding from another of his firms, FTX. FTX did not respond to a request for comment.

Alameda closed its operations in November as sister company FTX filed for bankruptcy protection, and the agency is now out of the market. Valuations for crypto venture capital deals are starting to drop, Palmstierna said.

“If you’re really bullish on the space, now is an opportunity to really deploy capital,” he said. “There are a lot of assets that look very valuable right now. That means it’s probably not a venture capital investment, it’s a follow-on investment.”

Founded in 2013 by former Goldman Sachs executives Rich Rosenblum and Cristian Gil, GSR is one of the oldest market makers in the cryptocurrency space. The firm, which provides services from over-the-counter trading to risk management, has also been active in the crypto venture capital space this year, according to The Block Research.datadata

, GSR closed 29 deals in the first quarter alone.

Talking about the venture capital business, Palmstierna listed a few areas that he particularly wants to invest in at the moment: zero-knowledge proofs, decentralized options trading, lending agreements, and decentralized insurance. He added that decentralized insurance especially holds great potential in underserved emerging markets.

But despite these bright spots, and the recent absence of a serious competitor, Palmstierna acknowledged that it’s a challenging time for the crypto investing space.

On the one hand, rising interest rates have made returns on safe assets like U.S. Treasuries more attractive, reducing investor money for alternative investments like cryptocurrencies and venture capital.

Even before the FTX and Alameda debacles, the agency, which employs around 300 people in London, New Jersey, Singapore, Malaga and Zag, hadAnnounceAnnounce

A 10% layoff is planned for October.

Crypto Recovery FundDespite these headwinds, GSR still feels able to offer atake the lead

Backed by its $1 billion cryptocurrency industry recovery fund. In the words of Binance CEO Changpeng Zhao (CZ), the fund will “help projects that are otherwise strong but are in a liquidity crisis.”Palmstierna sheds more light on how recovery fund actually works, Binanceinsist

The fund is "not an investment fund".

Institutions such as GSR, which injected capital into the fund, did not hand over their assets to Binance, he said. Instead, independent contributors including Jump Crypto, Polygon Ventures and Aptos Labs will each decide which struggling projects to back.

“We need to coordinate the projects we focus on, and then the relevant parties make individual decisions.” He explained, “GSR may support projects that Binance does not support, and Binance may support projects that GSR does not support—or we may jointly support some projects.” project."

According to Palmstierna, GSR initiallysupplysupply

raised $5 million in funding and said it is not an investment fund because it does not look for newly created projects to back. Instead, its main goal will be to "revive" technologies that have been "underserved due to the current market downturn."

That said, investors can expect to earn some return on the cash they provide, and how capital is deployed may "change over time."

"You're not just sending money out. You might get something out of it," Palmstierna said.

And yet, in the turmoil of 2022 — with Terra’s algorithmic stablecoin collapsing, hedge fund Three Arrows Capital imploding, and FTX leaving more than a million creditors crippled — amidst all the hustle and bustle, the GSR CEO is plotting a stablecoin. the way.