Liquid Meta Capital Holdings Ltd. (“Liquid Meta” or the “Company“) (NEO: LIQD) (FRANKFURT: N5F), a decentralized finance infrastructure and technology company focused on bridging the gap between traditional and decentralized finance, today announced the financial results for the three and nine months ended February 28, 2022. All amounts are expressed in U.S. Dollars unless otherwise stated.
Third Quarter Financial Highlights (Three months ended February 28, 2022)
- Revenue of $1,108,946
- Net loss of $4,539,656
- Net loss of $1,025,050, excluding share-based compensation and listing expenses
- As at February 28, 2022, the Company had total assets of $26,558,562
Management Commentary
Jonathan Wiesblatt, CEO commented, “Since our public launch in December 2021, our team has made important strides toward the achievement of Liquid Meta’s core objective – the development of the proprietary terminal platform MetaBridge technology. During the quarter, the Company developed and implemented several important MetaBridge modules, which are currently being used in our daily liquidity mining operations. Subsequent to the end of the quarter, we announced the addition of an experienced Chief Technology Officer (CTO), which we expect will accelerate the building of critical applications and development protocols for the commercialization of our platform.”
Mr. Wiesblatt continued, “As we continue to build MetaBridge, our team is committed to deploying capital in a prudent manner to maintain balance sheet strength, build shareholder value and ensure the ability to accelerate our core technology roadmap. Liquid Meta has successfully deployed the capital on its balance sheet across a select group of blockchains, DeFi applications (Dapps) and liquidity pools (LPs). Our all-weather liquidity mining strategy has generated consistent daily revenue despite elevated volatility in the crypto market during the fiscal third quarter. I am pleased to report that in the third quarter of fiscal 2022, Liquid Meta generated revenue of $1.1 million on its capital base, which was only fully deployed for two months of the quarter. 2022 will be an important year for Liquid Meta as the team continues to build what we believe will be the premier gateway for institutional access to DeFi.”
January was one of the most volatile months in recent years across all risky assets including cryptocurrencies and adjacent crypto markets like DeFi. During the month of January, certain crypto assets including the largest crypto tokens BTC and ETH lost ~20% and 30% of their value during the month. A basket of layer 1 tokens that Liquid Meta uses in its staking and liquidity mining operations lost an average of 42% in the month of January. Although global asset values plummeted during January including most crypto tokens, Liquid Meta was able to preserve its balance sheet through an active hedging program, a diversified liquidity mining strategy, and limited exposure to unhedged assets. The overall impact to Liquid Meta’s balance sheet was less than 2% of total assets deployed. Furthermore, market conditions normalized in the second half of February and March, with yields on the portfolio rising to pre-January levels.
At its core, Liquid Meta is building a technology-enabled liquidity mining company focused on the next generation of blockchain-based protocols, platforms, and applications. Liquid Meta has assembled a comprehensive engineering team that is building proprietary technology in order to access, automate, and operate across a variety of DeFi protocols and applications at scale, which can then be used to onboard third-party capital, or be licensed as software to institutional investors. Major attributes of Meta Bridge include asset monitoring, performance analysis, reporting & accounting, pre-trade compliance and network security.
One of Liquid Meta’s key priorities for 2022 is to advance and commercialize a technology stack specifically developed for institutional investors to access DeFi. During the third quarter, Liquid Meta made substantial progress towards achieving this goal by strengthening the engineering team, and subsequent to quarter end, the Company appointed Daniel Opperman as CTO to oversee the build of development protocols for the commercialization of MetaBridge.
Key Developments – Third Quarter
- On December 22, 2021, Liquid Meta began trading on the NEO exchange under the symbol LIQD
- On December 23, 2021, the Company announced the appointment of Stephen Harper and Tom Kang to the Company’s Board of Directors
- On January 10, 2022, the Company announced the appointment of Clara Bullrich to the Company’s Board of Directors
- On January 13, 2022, the Company announced a partnership with XLD Finance to provide liquidity to XLD’s stablecoin-based ecosystem
- On January 25, 2022, Liquid Meta announced a partnership with Civic Technologies
- Liquid Meta has now deployed over US$20 million dollars across various blockchains, Dapps and LPs
- Incorporated direct node integration to 9 different blockchains on our search engine. These integrations represent the foundations of MetaBridge enabling Liquid Meta to automate our operation and capture DeFi transaction activity. Blockchains include Ethereum, Binance Smart Chain, Polygon, Avalanche, Fantom, Ronin, Solana, Terra and Arbitrum
- Developed proprietary applications that capture transaction activity and financial performance across blockchains, Dapps and LPs
- We have completed the first phase of our comprehensive liquidity mining hedging strategy. Liquid Meta is currently using internally developed software to test and deploy hedging strategies across different tokens and market environments. We continue to deploy more of these technologies across a greater number of liquidity pools (LPs)
Outlook
- Over the next 12-months Liquid Meta will be focused on advancing the development of tools and software products for the commercialization of MetaBridge. and scaling its liquidity mining operation
- Liquid Meta has now deployed greater than $20.0 million of liquidity across DeFi. The additional capital deployed is expected to produce daily revenue that will exceed the run rates produced in the Q3 results
- Will focus on developing partnership opportunities across DeFi
Update on Ronin Network
As previously disclosed, Liquid Meta has provided liquidity to an LP on a decentralized exchange (DEX) that exists on the Ronin Network, and which is interconnected to the bridge that experienced the security breach. The Company is pleased to share that this DEX has now been restored and reopened following an update by Sky Mavis and the Ronin team. LPs such as Liquid Meta are now able to freely and securely enter or exit the DEX.
On April 6, 2022, Sky Mavis announced that it has raised a US$150M funding round to reimburse user funds affected by the Ronin Network breach. Led by crypto exchange Binance, this combined with Sky Mavis and Axie balance sheet funds, should ensure that all users are reimbursed. The Ronin Network bridge will open once it has undergone a security upgrade and several audits, which can take several weeks. In the meantime, Binance is supporting the Ronin Network by providing ETH withdrawals and deposits for Axie Infinity users, allowing most of them to operate freely. Further updates from the Ronin Network can be followed here.
“We are pleased to share that the DEX with approximately $2 million dollars of Liquid Meta’s funds has now been fully restored and we are now able to access funds and continue to mine our liquidity position. At Liquid Meta, we remain cognizant of the risks within the digital currency industry and have in place a robust set of criteria we utilize to select Dapps and LPs where we deploy our liquidity. These include a thorough analysis, overview of teams, founders of the exchange, audited Dapps, Total Value Locked (TVL) on platform, liquidity as well as the quality of networks and blockchains, among others,” commented Mr. Wiesblatt.
Liquid Meta is focused on the DeFi segment of the digital asset ecosystem through its liquidity mining business. Every time a transaction occurs within the LP, the protocol generates a service fee for the transaction, a portion of which is distributed to liquidity providers in the form of fees for providing a service to the protocol. Additionally, in some cases, liquidity miners can also earn protocol reward tokens by protocols and applications, which are offered as incentives and additional revenue generating opportunities for liquidity miners for interacting and providing liquidity to various protocols.
