Why Did We Invest in Diva? -A&T Capital
01 Financing Information
The Decentralized Staking Protocol, Diva, has successfully completed a $3.5 million seed round of funding, with A&T Capital leading the investment, and participation from Gnosis, Bankless, OKX Ventures, Metaweb, DCV Capital, Alphemy Capital, Very Early Ventures, Stake.vc, and others.
Diva plans to establish a cooperative decentralized staking pool. Diva CEO Pablo Villalba stated, “Diva is a super light client that connects to existing Ethereum execution and consensus clients through a standard API. Stakers can pledge any amount of ETH with no minimum and without having to run any nodes. A standard Web3 wallet is all that is required.” Those who wish to operate nodes and receive rewards on Diva need to hold 1 ETH and the protocol is compatible with any system meeting the minimum requirements to run an Ethereum full node.
Diva is scheduled to launch on the Ethereum mainnet in late January 2023.
02 Why did we invest in Diva?
- The Ethereum Staking Market has huge potential and is a non-monopolized market
Huge Potential: Assuming ETH reaches a token price of $10K in the next bull market, and 50% of the ETH in the network is staked, the annual revenue of the ETH staking market would exceed $35B. For a service-based platform like Diva, the annual revenue scale could reach $3.5B, leaving massive room for growth.
Non-monopolized Market: If staking service platforms are monopolized by Lido, it would pose a significant risk to the decentralization and security of the entire Ethereum network node, which is not desirable for the Ethereum community or Lido itself. This leaves room for competition like Diva in the market.
2. The industry’s technological transformation, coupled with the Ethereum 2.0 upgrade, creates a significant window of opportunities.
The window of Opportunities: DVT, as an optimized technology choice for Ethereum at the node operation level, has recently entered the users’ view and is currently in the stage of updating market share. It represents a one-time opportunity for platforms that adopt new technology. Furthermore, the Ethereum 2.0 upgrade will open up a channel for staking unlocking and swapping, providing another massive one-time opportunity for new entrants.
II、Industry Trends and Status
1. The status quo tends to be monopolized, and new opportunities are bred:
Lido dominates the Decentralized Liquid Staking track：
The total value of ETH staking through Lido reached $6B, accounting for 30% of all staking ETH, far exceeding the second place Rocket by an order of magnitude;
DVT and Shanghai upgrade contain new opportunities: The architecture of DVT is an excellent solution to the current over-centralization of staking service providers, and it is expected to become the long-term standard in the direction of Ethereum staking; as a brand-new technology (Lido has not yet been implemented), DVT provides new players in the staking track is an opportunity; The same opportunity also has the inherent $20B staking ETH opportunity brought about by the Shanghai upgrade to re-select service providers.
1. Liquid Staking: As a Liquid Staking platform, there are two types of participants on Diva: Staker: Allows users to participate in ETH Staking with a low threshold (no minimum participation amount, no need to run nodes themselves) to obtain a certain stable income, and at the same time enjoy 1:1 liquidity (dETH);
Node Operator: Allows users to become the operator of the Ethereum node with a minimum pledge amount of 1 ETH (instead of 32 ETH), and at the same time lowers the threshold for running nodes through the DVT technical framework (e.g. higher fault tolerance rate).
2.DVT: As the latest staking optimization technical framework, DVT is designed to have multiple operators jointly run an Ethereum node. As long as more than a certain number of operators are working usually, the Ethereum node can run normally. (It reduces the risk of being punished due to abnormal operation due to unexpected situations during the operation of a single operator); In addition, DVT also makes running a node from a technical task as easy as installing an SDK.
Pablo Villalba, Co-Founder, A serial entrepreneur who founded the mobile fitness app 8fit from 2014 to 2018, built a team of ~500 people, and raised $10M in funds.
Paul Calvo, Co-Founder, as a lawyer, he began to provide legal services to several Web3 companies in 2019; he was the Partner Middle East Office of Grupo RLD before.
About A&T Capital:
A&T Capital is an early-to-growth stage venture fund for emerging disruptive technologies. Led by three founding partners based out of Berlin, Singapore and Shanghai, we are supported by a global dynamic team of researchers and analysts. Our varied backgrounds in high tech, TradFi and venture capital help us understand what is essential for a startup to succeed. In 2021, we raised 100M pool of funds. Our portfolios include Amber Group, Cobo, Gnosis Safe, Nestcoin, Infstones, Consensys, and Commonwealth.
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