3AC’s Demise Predicted By ENVELOP’s New Fundraising Model

You are probably aware that Three Arrows Capital (3AC), a well-known cryptocurrency venture capital firm, is in deep financial trouble due to a combination of overexposure, greed, excessive leverage, and inadequate risk management, which has sent shockwaves throughout the financial and cryptocurrency markets.

How could the 3AC catastrophe have been prevented or at least limited by adopting the ILAO ( Initial Locked Allocation Offering) model created by DAO ENVELOP?

Let’s start with some background on 3AC and what happened.

Su Zhu and Kyle Davies created Three Arrows Capital Ltd. in 2012, a hedge fund that focuses on “delivering better risk-adjusted returns”

Their company tagline hasn’t aged well, but Davies and Zhu developed 3AC into one of the largest crypto VCs, betting everything on price appreciation.

Despite their successes 3AC had put a lot of money into a number of troubled cryptocurrency projects, such as Terra, Axie Infinity, a “play to earn” game that was hacked by North Korea last year and lost almost $700m.

3AC backed Terra Luna. Before Terra’s bankruptcy a month ago, 3AC bought Locked Luna for $559.6 million. It’s now worth as low as $670. Luna’s massive losses prompted revenge trading.

From the 3AC margin call to the Celsius illiquidity to the Terra implosion, everything happened virtually at once. Many funds lost up to 90% of their money.

As many tokens had been vested and locked, they were unable to add collateral or pay off debt because of the lack of liquidity. An orderly liquidation ensued as a result of this. As the market began to fall, many holdings were left exposed, prompting many to describe their excessive use of leverage as irresponsible.

3AC is said to have built a 9-figure $UST stake in the Anchor protocol with counter-party funds, which its creditors didn’t know about before the company went bankrupt..

3AC participated in the seed rounds of a number of the most notable Crypto protocols. Nonetheless, they still go bankrupt. The DAO ENVELOP team has been working hard on a mechanism that VCs and Startups can utilize in the future to avert such massive catastrophes.

A broader view of 3AC’s parabolic ascent and decline can be gained by zooming out and examining older models that have underpinned cryptocurrencies over the past decade and Later, we can introduce DAO ENVELOP’s new NFT-powered market model : ILAO / SAFT wNFT

ILAO = Initial Locked Allocation Offering

SAFT = Safe Automated Future Tokens

By utilizing DAO Envelop new model, projects are able to convert NFTs into financial instruments. This tool enables a smoother interaction between venture capitalists and startups in an efficient, low-risk, and cutting-edge manner while simultaneously providing on hand liquidity and increasing chances of successfully raising funds.

All of these benefits are attainable with the utilization of Dynamic NFT technology, which DAO Envelop refers to as wrapping. Despite the fact that project tokens are wrapped and locked according to their vesting durations, the new wNFT itself can be traded.

Less time will be spent on the creation of hype, freeing up more time for projects to concentrate on the development of actual utility. In order to avoid any kind of 3AC situation, venture capitalists will have greater flexibility and will be able to reduce risk more effectively.

Scotch.sale is an over-the-counter market for wNFTs that will be beneficial to all projects and VCs because all listings can be filtered by time locks, royalties, amount of tokens, and value in preferred currency.


Contact info@envelop.is

Telegram: @interfaxz @DmitryDemeshko @ashcash



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