TTG 2Q22 Report

A. Introduction

As Threshold heads into the second half of 2022 as a newly minted protocol, Threshold has continued to pump on all cylinders despite overall weak sentiment in the market. In 1Q22, the community completed DAO inauguration and member elections, TTG/TIG/TMG guild creation and its committee appointments, an enhancement of T liquidity via the establishment of T-ETH pool on CRV. While we paint these accomplishments in broad strokes, a lot of behind-the-scenes work went into ensuring that our protocol’s foundation was built upon solid footing before continuing onto bigger and better initiatives.

2Q22 saw a number of large profile failures within L1/L2, Defi and Stablecoin ecosystems and other news headlines:

1. $600 million Axie Infinity hack - the biggest bridgehack in history (April 2022)
2. Terra’s/LUNA’s plans to “win” the stablecoin wars, subsequently erasing almost $60 billion of value (April-May 2022)
3. BAYC’s accidental $100 million waste on ETH gas fees due an error in its code (May 2022)
4. 3AC insolvency (June 2022) and Celsius collapse (June/July 2022)
5. Robinhood, Gemini, 2TM, Bitso, Coinbase, Crypto.com, Blockfi all reporting 10-20% headcount layoffs

While the overall crypto community may seem like it’s stuck in an echo chamber of “Doom and Gloom”, there were also many positive developments and strategic movements within crypto:

1. ETH completes Ropsten test Merge (June 2022) - The Merge/Surge/Verge/Purge/Splurge - ETH 2.0 migration over to PoS (from PoW) is expected to be completed by September 2022
2. ETH’s subsequent 70% bounce from the lows (~$980/token) to current prices (~$1,700/token)
3. Despite Crypto Winter, broad market believes the drawdown in the space has troughed

While overall crypto market sentiment has been weak (refer to the two charts below), Threshold as a protocol outperformed many of its L2 peers, and in some instances, its alt-L1 counterparts. Additionally, as overall TVL across all chains has declined ~52% since the beginning of the year, Threshold believes this is the perfect time for us to retrench, build and differentiate ourselves from the rest of the crypto pack in what has been a “baby out with the bathwater” environment. Our foundation to provide a truly permissionless non custodial BTC product (“tbtc v2”) and compelling cryptographic primitives, all supported by a ballast of dedicated Threshold stakers, and improved DAO construct and management capabilities will pay dividends once the crypto macroeconomic environment improves.

A review of 2Q22 markets (token prices and TVL) to conceptualize the recent drawdown: