🥛 A look inside the biggest crypto fund ever raised

GM. This is the Milk Road. We’re the Old Spice of Crypto - we make you look good and smell good.

Estimated read time: 2 minutes and 46 seconds

• 🤑 A16Z raises a new $4.5B crypto fund

• 🖼️ We just minted our first NFT

• 🍪 Bite-sized cookies

• 📊 Chart of the day

THE LARGEST FUND EVER

Yesterday A16Z announced their 4th crypto fund. It’s a gargantuan $4.5 Billion and is the largest crypto fund, ever.

They’ve now raised 4 crypto funds. Only six away from matching the Fast & Furious franchise.

Here’s the math behind a fund like this.

1/ Management fees. In VC land, there’s usually a ~2% annual management fee.

For a $4.5B fund, that comes out to $90M/year in fees alone.

The office better have quadruple ply toilet paper.

2/ Carry (aka profit sharing) Funds typically have 20% carry.

That means if the fund returns 1.5x, that’s $2.25B in returns. 20% = $450M. (!!!)

Not to be overshadowed (but in reality, totally overshadowed) were these other crypto funds that announced their funding too:

• Volt Capital Fund II: $50M

• NGC Ventures: $100M

The Milk Road’s Take: We might be in a bear market, but the VCs are loaded with cash.

As we say, it’s building szn.

Look at how fast funding has been ramping up ($9.2B so far this year)

WE MADE ONE OF OUR EDITIONS INTO AN NFT

Have you ever read a blog post that you just loved?

Have you ever found a writer you love and want to support?

In web2, we have Patreon. We have Substack. You charge a bunch of people $5/month.

In web3, we have Mirror. You let your biggest fans mint your article as an NFT.

Like most NFTs, we ask: what’s the point?

1. Your biggest fans can “collect” your work

2. Instead of charging everybody a small amount of money, a few superfans can spend $$$ to show their love. (whales)

3. As the creator, you now know who your superfans are, and can connect with them at a deeper level.

Creators get money. Fans get access/status.

This sounds irrational.

Will people actually do this? A few examples from other spaces:

1. Over $100M+ every year is “tipped” on Twitch from viewers to creators. They don’t get any perk except the creator saying “Thanks Steve!” and the warm fuzzy feeling of supporting their favorite creator.

2. Music fans like Deadheads and sports fans spend thousands of dollars collecting memorabilia of their favorite bands and teams.

3. OnlyFans creators have earned over $3B from their fans… although I suppose there are other…benefits.

The big question here is - will people collect blog posts?

One of our rules from the Milk Road is: “Try it before you judge it”.

This keeps us open-minded to new things. It also gets us into trouble if we’re around ghost peppers.

Well, let’s try it out. We’re minting one of our favorite Milk Road editions Billions, Money Laundering, YC & Rappers as an NFT on Mirror.

You can mint the NFT here, and it's the price of the four Chick-fil-a chicken biscuits I ate for breakfast this morning (0.005E). And yeah, really did eat four!

The good thing is Mirror is using Optimism, a Layer 2 solution that makes transactions super cheap. So you’ll be paying ~$1 for the transaction.

But wait, there's more! Optimism has mentioned another future airdrop for users. So by using it now you can potentially be part of the next airdrop list, all while getting your own piece of Milk Road history. A win-win.

And if you've never minted something on Optimism, click here for how to do it.

This is how we picture our Milk Road readers later tonight. Make sure to tuck that NFT into bed!

JPMORGAN IS TAKING CRYPTO OVER REAL ESTATE

JPMorgan wrote a note to its clients yesterday that's been making some noise around cryptoland. Here are a few things they said that got our attention:

1/ They give Bitcoin a "fair value" of $38k. This means they think BTC is massively undervalued and currently at a 30% discount.

2/ Real estate investment has "potential lagged repricing" (meaning they predict real estate value will go down). Because of this, JPM has taken it off their "alternative assets" list.

Alternative assets are investments that JPMorgan thinks are good outside of traditional things like stocks and bonds.

3/ Digital assets (aka crypto) are their new preferred alternative asset. Out with real estate, in with crypto.

4/ They predict we won't go into a long bear market as long as VC funding doesn't dry up. Which by the looks of it, isn't happening anytime soon.

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P.S. Use MILKROAD at checkout in the next 24 hours for a 50% discount on your 1st month

BITE-SIZED COOKIES

The National Football League (NFL) is launching a new play-to-earn game called NFL Rivals. Details are slim (shady) right now, but we’ve got our eye out for this one.

LinksDAO, the DAO that is trying to buy golf courses, has partnered and got an investment from Callaway, one of the biggest golf brands in the world. Callaway is now the “official” equipment provider for LinksDAO and will offer discounts and deals on branded swag to NFT holders.

DraftKings, the fantasy sports & sports betting company, hints that making sports bets using crypto is coming sooner than you think. Jason Robins, the CEO, jumped on the latest GM podcast to give more hints at how DraftKings will use crypto in the future.

Portugal’s parliament rejected the most recent bill to tax crypto profits in excess of $5k. Portugal continues to be the tax haven for crypto!

JPMorgan officially replaces Real Estate with Crypto as their “Preferred Alternative Asset”.

CHART OF THE DAY

It's crazy to see how far we've come...

Shaan aka “Elon’s chocolate milk” & Ben "2% Milk" Levy

See ya tomorrow!

A Review from the Road...

We'd say it's more like bearshit but we feel you, Raj. Hang in there.

What'd you think of today's email?

• 🥛🥛🥛🥛🥛 F**king great

• 🥛🥛🥛 Meh, do better

• 🥛 You didn't bring the heat

DISCLAIMER:

None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.