Did A Single NFT Purchase Change Washington’s Mind on Crypto?

The NFT Unicorn e0b271283c3daa1bc01fd7979c4169e1b3b4d23f Did A Single NFT Purchase Change Washington's Mind on Crypto? NFT News

Valentin Pletnev is far from the best-known name in cryptocurrencies, but a scheduling snafu that kept him away from Donald Trump’s recent Mar-a-Lago NFT gala might’ve dramatically rerouted U.S. cryptocurrency policy.

Only select holders of Trump’s NFT collection were allowed into the exclusive May event. Pletnev purchased one of those tickets as soon as he learned of the gathering – earning it by purchasing 100 Trump “Mugshot Edition” digital trading cards.

“I thought it was hilarious because I’m not American,” Pletnev, the German co-founder of Quasar Labs, which builds a decentralized finance protocol on the Cosmos blockchain, said in an Interview with CoinDesk.

Then the gala was moved to a time when Pletnev wasn’t available, so he gave his ticket to Ryan Selkis, the founder of crypto data and analytics platform Messari and a vocal pro-crypto policy advocate.

Selkis ended up on stage and touted the crypto revolution. So did Polygon’s Mihailo Bjelic.

Trump gave his own full-throated endorsement of crypto at the Palm Beach, Florida estate. The former U.S. president had previously derided cryptocurrencies as playthings “based on thin air.”

Pletnev insists that his NFT purchase – which let Selkis speak – played a key role in the events that followed: Within a few days, a vocal contingent of the crypto and blockchain industry rallied around former President Trump and then the notoriously crypto-averse U.S. Securities and Exchange Commission granted a surprise approval to the first exchange-traded funds that own Ethereum’s ether (ETH).

Following the gala, a widely circulated meme on X identified “Trump NFTs” and “Ryan Selkis Goes to Mar-a-Lago” as the first two dominoes to fall in a chain that ultimately culminated in the long-awaited approval of ether ETFs, a watershed moment for the melding of digital assets and traditional finance.

While some close to crypto policy say the approval was likely no matter what, others viewed it as capitulation from Joe Biden’s administration – proof that the crypto industry was finally being taken seriously by both parties as a political force.

Within two days of the SEC approval, the Republican-controlled House approved the industry-friendly FIT21 bill with significant Democratic support. It even earned support from Senate Majority Leader Chuck Schumer, a Democrat who days earlier expressed skepticism towards the legislation.

“What else must have changed [Schumer’s] mind in five days,” Pletnev asked, if not “Ryan Selkis on stage with Trump, Trump saying ‘I’m pro-crypto, crypto needs to stay in this country,’ and all of Crypto Twitter realizing they might be team Trump?”

Quasar’s new vision

Buoyed by the recent policy hype, Pletnev is revealing a top-to-bottom rebrand for his Quasar protocol oriented around simplifying decentralized finance, or DeFi, investing.

“Fundamentally, crypto is only a big success if we increase the number of beneficiaries compared to traditional finance,” Pletnev told CoinDesk. “If we don’t achieve this, we risk replacing the financial oligarchy with a technocracy, which would be a sad outcome.”

Central to Pletnev’s “Yield for All” vision will be the introduction of layered staking assets, or LSAs, which will combine staking and DeFi yields into a single token that accrues interest.

Staking is one of the most popular DeFi strategies today. It involves parking digital assets with a blockchain to help “secure” it in exchange for a steady stream of interest. Frequently, users will stake assets and then re-invest them into other yield-generating DeFi platforms at the same time. Users can, for instance, stake assets into a platform like Lido, “restake” them into EigenLayer via a platform like EtherFi, and then borrow against their stake as a way to maximize their overall returns.

Read more: Crypto Staking 101: What Is Staking?

If this all sounds complicated, that’s because it is. Quasar aims to simplify things through its LSAs—assets that represent specific trading strategies and can be traded outright. Behind each LSA will be a basket of crypto assets that have been deployed across a variety of DeFi protocols. The assets can accrue yields from these protocols, and they will be managed according to investment strategies built into Quasar’s smart contracts.

“DeFi is complicated. If it keeps fragmenting, it becomes a full-time job,” said Pletnev. “We need to make DeFi work for the people by wrapping it in a simple, easy-to-use way.”

Quasar Finance launched its mainnet in 2023 as a “decentralized asset management” protocol based on the Cosmos blockchain ecosystem. The platform used – and will continue to use – Cosmos’s Inter-Blockchain Communication (IBC) protocol, which facilitates interoperability across various blockchains.

Quasar’s approach isn’t dissimilar from existing yield protocols like Yearn – all-in-one trading platforms that simplify DeFi by deploying user funds into premade trading strategies. The current Quasar protocol operates similarly: Users can deposit crypto into “vaults” that follow certain trading strategies and don’t require much active oversight from users.

With its LSAs, Pletnev says Quasar is taking extra steps to add fungibility, decentralization and ease of access to the platform.

Yield for All?

Despite the “Yield for All” pitch, Quasar, like many DeFi protocols worried about violating U.S. financial regulations, is not available for use in the United States—hence Pletnev’s decision to become involved in U.S. politics.

“I went to Draper University in the Bay Area, Tim Draper’s private school,” said Pletnev, referring to the Silicon Valley venture capitalist. “I would not be where I am without the United States. There is no other way of phrasing it.”

“The fact that the people of this country cannot benefit from what exists because of their country is insane to me,” he said, “so I bought the [Trump] NFT because I thought someone should advocate for crypto.”

Quasar Labs has raised a total of $11.5 million from investors including Polychain Capital, Blockchain Capital, HASH Capital, CIB and Shima. The most recent funding round, disclosed in January, valued the company at $70 million. The platform’s QSR governance token is trading at $0.11 cents, with a fully diluted value of $67 million.

Source: Crypto News