gm. Set up your mining rigs and huddle up close...it looks like a crypto winter is upon us.

FRESH POWDER

Looking at three funds that recently topped up their coffers.

STABLECOINS

The great unraveling

Over the past few days, the prominent stablecoin TerraUSD hasn’t been very stable causing widespread fear, uncertainty, and doubt throughout the crypto ecosystem. Here is everything you need to know.

How stable coins work

Stablecoins are a type of crypto whose value is pegged to that of another currency like the US dollar. There are 2 types of stablecoins:

• Algorithmic: Backed by an algorithm, not assets.

• Fiat-backed: Backed by tangible assets like $USD

TerraUSD (UST) is an algorithmic stablecoin that utilizes another token, Luna (LUNA), to peg UST to a $1 price. An algorithm manages this relationship to theoretically keep 1 UST = $1 USD.

How LUNA supports UST

There is an arbitrage process that is supposed to maintain the relationship between UST and LUNA.

• If UST is trading at less than $1, say, $0.99, an arbitrageur can come in and redeem that $0.99 worth of UST for $1 of LUNA, pocketing the extra $0.01.

• Theoretically, if enough arbitrageurs do that, the price of UST will rise back to $1 because of, ya know, supply and demand.

That relationship has been broken though.

The meltdown

Arbitrageurs are stepping in to sell LUNA, but less and less people are willing to buy. So there's a flood of sellers on the market, but not enough buyers. This mechanism, known as a “death spiral,” is sending LUNA’s price plummeting.

• LUNA was trading at under $0.02 as of the time of writing, down about -98.96% in 24 hours and -99.98% from last week.

How does this all end?

Terra has a foundation called the Luna Foundation Guard (LFG) which has a chunk of change on hand it can use to defend the peg of UST to the dollar.

It's currently doing that…but it's unknown how much powder LFG has in reserve. The general sentiment is: not much

Zoom out: Confidence in Terra and investor faith in LUNA are severely shaken and won’t be fully restored if and when the peg can be restored.

VENTURE

SoftBank and Tiger are bearish, oh my!

On SoftBank’s earnings call yesterday, Masayoshi Son said the firm may cut its investments in half for the next fiscal year as it “looks at a stricter selection of investments.”

Softbank? Cutting back on investments??

The firm famous for its big, bold, and sometimes bad (*cough* WeWork *cough*) investments is course-correcting after a rough 12 months—its famous Vision Fund lost a record $27 billion for the year ending March 31st.

Not far behind them in the L department is the hyperactive hedge/VC fund, Tiger Global. Hampered by over $17 billion in losses from their hedge fund division—perhaps the biggest dollar decline for a hedge fund in history—the firm's VC activity is slowing down as well.

• Tiger has all but abandoned late-stage venture deals since February of this year, per The Information.

Zoom out: Mega funds like SoftBank and Tiger Global are getting hammered with private tech valuations plummeting across the board. However, it’s only fair to judge them on a longer time horizon. What looks like a horrible investment now may look genius in ten years down the road.

QUICK HITS

Seed Round

Stat: Women-led venture funds have raised $4.5 billion in 2022, already more than the total amount raised in 2021 and over 2x the amount raised in 2020. The jump comes mainly from Forerunner Ventures and Haun Ventures, which raised $2.5 billion between them.

Story we’re watching: Instacart is nibbling at the edges of IPO despite cutting its private valuation from $40 billion to $24 billion in March. The move is a bit of a surprise considering the NASDAQ is down 30% this year and most of 2021’s splashy IPOs, headlined by Rivian and Coupang, are down% since going public.

Rabbit hole: The cities of the future (Blue Labyrinths).

WHAT ELSE IS GOING ON

• Parag Agarwal fired both the GM of Consumer and the Head of Revenue at Twitter. He also froze hiring across the company.

• Snap acquired KeyDB, the developer of an open-source, high-performance database to reduce operating costs.

• The baby formula shortage in the US is expected to worsen over the coming weeks.

• Disney+ added 7.9 million subscribers in Q2 2022, the same period that saw Netflix lose subs for the first time in 10 years.

GUESSTIMATE

Let's put your guesstimation skills to the test.

A. What was the total global crypto market cap at its peak in November of last year?

B. What is the total global crypto market cap currently at as of last night?

FUNDRAISING FRIDAY

Some great advice for those looking to raise.

NEWS FROM THE HOUSE

Balaji, Paul Graham, and Marc Andreessen all chose to build on the same platform — Twitter.

If you want to unlock the platform for yourself, check out our 1-week Sprint course on all things Twitter for Investors.

You’ll learn to:

• Increase your deal flow

• Grow your following to 10k+

• Connect with founders

• Post memes that don’t suck

If that sounds like a great time, hit the button below.

FOUNDERS CORNER

The best resources we came across this week that will help you become a better founder, builder, or investor.

🚀 The 11 go-to-market metrics to care about as a B2B startup

🎨 A guide to influencer / creator marketing

📦 How to scale containers on AWS in 2022

GUESSTIMATE ANSWER

A. $2.8 trillion

B. $1.6 trillion

A nice little 42% drop 😬