Summer is unofficially over! Labor Day weekend has passed, the kids are back to school, and the days are getting shorter.

But getting back to the grind and a consistent schedule isn’t all bad!

Here’s the latest in the world of Deep Ventures:

• Portfolio company of the month - The Interfold

• Industry insights - SEC proposes token safe harbor, Starkware executes first quantum-resistant BTC transaction, and 21 financial institutions form a stablecoin consortium

Let’s go!

Portfolio Company of the Month - The Interfold

The Interfold, formerly Enclave, is a protocol for verifiable, private compute that allows developers to run programs on encrypted data from multiple sources without exposing inputs or relying on trusted hardware. The Deep Ventures syndicate invested in The Interfold in April 2024.

The Interfold team had a very busy August!

They held a successful token generation event, making the FOLD token transferable alongside the rollout of Network Alpha.

The project used Uniswap’s continuous-clearing-auction format for public distribution, followed by a cooldown period. General transferability began around August 19, with FOLD subsequently available for trading on Uniswap v4, Kraken, Gate, Upbit, Bithumb, BingX, KCEX, and Bitvavo.

More importantly, FOLD is intended to be a truly functional token. It is used for Ciphernode staking, payment for encrypted-computation requests, and protocol governance within Interfold’s confidential-coordination network.

Since launch:

• 512.1K+ FOLD has been bonded across ciphernodes

• 4.53M+ FOLD has been delegated for governance

The Interfold made a lot of progress on technical development and community growth as well.

Read more about all of their activity in their September Community Update.

Lots more to come from The Interfold, but this is an amazing start!

Interested in investing with us? We’ve launched Deep Ventures Fund 1 and we’d love for you to be involved. Please take a look at our deck, ping me at [email protected], and schedule a chat!

Industry Insights

SEC proposes safe harbor for tokens

SEC Chair Paul Atkins has proposed a crypto framework that would include a startup exemption for token offerings up to $5 million over four years, a fundraising exemption for offerings up to $75 million annually, and an investment-contract safe harbor.

This would be massive for early-stage crypto protocols operating in the US.

This proposal could create a clearer route from token issuance to a functioning, independently operated network. Teams would have a better basis for raising capital, making disclosures, structuring token allocations, and planning decentralization. And once the network is sufficiently decentralized, the token would move outside SEC oversight.

I've experienced this as both an early-stage crypto operator and investor - I can't tell you how much time, effort, and money has been wasted on dealing with unclear token regulations in the earliest days of building a crypto project. Teams should be focused on building a product and community, not wondering whether they will be fined or jailed for no good reason.

A great bi-product of this could be more standardized project transparency - clear and transparent whitepapers, tokenomics, governance, roadmaps, employee compensation, custody, and risk disclosures.

Hope this proposal gets pushed through!

StarkWare executes first quantum-resistant Bitcoin transaction

StarkWare researcher Avihu Levy completed what the company calls the first quantum-resistant Bitcoin transaction on mainnet!

Bitcoin transactions are briefly exposed to quantum attacks when waiting for confirmation. During this time, signatures reveal mathematical material that quantum computers could exploit to forge signatures and steal funds.

StarkWare used "signature grinding", a technique that brute-forces millions of signature candidates to find one that doesn't expose vulnerable public key data while transactions sit in the mempool.

The biggest problem is that this method is super computationally expensive and can take hours per transaction.

Regardless, this is a major milestone for crypto's post-quantum transition, proving Bitcoin can be secured against quantum threats.

There's a lot more work to be done, but this is a huge step in one of the most important technical issues in crypto's history.

21 financial institutions form stablecoin consortium

A group of 21 financial institutions, including Goldman Sachs, Bank of America, Citi, UBS, Wells Fargo, Fidelity, Deutsche Bank, and PNC, plans to launch a stablecoin.

These global banks will start with a USD stablecoin in 1H 2027 and follow up with those backed by the Euro and other G7 currencies.

Distribution is a huge strength here. These institutions already serve corporate treasurers, asset managers, exchanges, merchants, and affluent consumers. If the consortium can make its token broadly redeemable, usable across major chains, and cheap to move internationally, it could become broadly adopted.

But they certainly have a lot of competition because the stablecoin ****market is getting ridiculously crowded.

Banks, exchanges, fintechs, payment companies, asset managers, and crypto-native issuers all want a piece of onchain dollars.

Liquidity and interoperability will be concerns. But more competition and choice is always good for end users.

Let a million stables bloom!

Conclusion

We hope you enjoyed this edition of the DV monthly newsletter!

Hit me up at [email protected] or @mikewchan on Telegram with your thoughts about the newsletter, what’s happening in crypto, or anything else!

Talk soon!