Jack Kubinec

Venture production studio Thesis* has raised $21 million for a Bitcoin layer-2-like product called Mezo. The round was led by Pantera Capital and drew participation from Multicoin Capital, Hack VC and others.&nbsp;



Dubbed a “Bitcoin Economic Layer,” Mezo is focused on providing fast and cheap Bitcoin transactions so the asset can have more real-world utility. Mezo lets participants in its network lock up their bitcoin in exchange for yield — a system Mezo calls “Proof of HODL.”



Mezo is the latest in a recent proliferation of so-called Bitcoin layer-2s that allow Bitcoin to be put to use beyond trading. Other prominent examples include Babylon and Stacks, which both attempt to offer Bitcoin users features like staking. BitVM has also emerged as a network scaling-focused layer-2. 



Read more: <a href="https://blockworks.co/news/bitcoin-halving-impact-on-layer-2s">How will the Bitcoin halving impact Bitcoin L2s?</a>



Thesis* founder Matt Luongo told Blockworks that Bitcoin experienced brain drain following the block size debate that raged between 2015 and 2017, causing app developers to grow frustrated with Bitcoin and begin working on other blockchains. 



But the recent rise of Bitcoin Ordinals has signaled a shift in Bitcoin’s “overton window” where developers are once again interested in broadening Bitcoin’s utility outside of buying and selling, Luongo said. 



Read more: <a href="https://blockworks.co/news/ordinals-impact-on-bitcoin-network">Ordinals are driving up Bitcoin fees — but that may be good for the network</a>



Luongo said he became interested in Bitcoin utility when he was told off by a mortgage lender for trying to use his bitcoin while buying a home.



“I have the hardest money in the world, and this feels like a criminal discussion just because I&#8217;m trying to buy a house,” Luongo recalled. He listed mortgages, payroll, credit card points, treasury yield and decentralized social media as use cases that could be connected to Bitcoin through Mezo’s network.&nbsp;



Thesis* is a venture production studio, meaning it builds some startups like Mezo in-house. Its other projects include bitcoin cashback app Fold and bitcoin bridging platform Threshold. Threshold offers tBTC, a tokenized version of bitcoin <a href="https://thesis.co/blog/thesis-portfolio-threshold/">held</a> on the Ethereum blockchain, which will be supported on Mezo at launch.&nbsp;



Calling Bitcoin projects layer-2s can get touchy, since some such solutions are actually sidechains that connect to Bitcoin through a two-way bridge. Mezo calls itself an economic layer for Bitcoin to avoid the “circus” around protocol nomenclature.&nbsp;



“The entire terminology debate around L2 is completely irrelevant. Users don&#8217;t care,” Luongo said.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Bitcoin

Venture studio Thesis* debuts Bitcoin utility product Mezo with $21M raise

Jacquelyn Melinek

<div id="highlights-block_60f984feadca5" class="highlights">
 <ul>
 <li>In September, Thesis will launch its fifth studio project, a Web3 wallet, to the public.</li>
 <li>Investors in the round include: ParaFi Capital, Nascent, Fenbushi Capital, Polychain Capital, Draper Associates, Kain Warwick, James Prestwich, Viktor and Lisa Bunin, and Josh Cincinnati.</li>
 </ul>
 
</div>



Cryptocurrency venture production studio, Thesis, has completed a $21 million Series A fundraising round. The company plans to expand its venture capital to a wider audience in the future and launch a new project to the public in September.&nbsp;



Investors in this round include ParaFi Capital, Nascent, Fenbushi Capital, Polychain Capital and Draper Associates, and individual investors like Kain Warwick, James Prestwich, Viktor and Lisa Bunin and Josh Cincinnati. Existing investors from previous funding rounds include Polychain Capital, which participated in this round, Andreessen Horowitz, or a16z, and Paradigm.



The seven-year-old company’s portfolio includes a consumer payment app, Fold; a privacy layer for public blockchains, Keep; an automated market maker, Saddle; and an open-source initiative like tBTC that serves millions of its users and holds over $300 million in total value locked.&nbsp;



Fold was the world’s first bitcoin-backed rewards card with over $20 million in sales activity a month. Fold raised $20 million total as it partnered with Visa to bring bitcoin to consumers and drive mass adoption of cryptocurrencies, the company said.&nbsp;



Across the company’s whole portfolio, Thesis has raised about $75 million to date, CEO Matt Luongo told Blockworks in an interview.&nbsp;



The company plans to use the investment as a catalyst to further ecosystem growth and launch new Thesis projects. “This investment validates the Thesis model and will enable us to scale the studio and ultimately allow our operation to be self-sustaining in the years to come,” Luongo said.



In September, Thesis will launch its fifth studio project, a Web3 wallet, to the public, Luongo said. The project began because Thesis saw a gap in <a href="https://cms.blockworks.co/mizuho-securities-digital-wallets-poised-to-disrupt-traditional-banks-over-next-decade/" target="_blank" rel="noreferrer noopener">wallet experiences</a> and wanted to create a better experience and infrastructure for crypto-based wallets.



“The wallet ecosystem is a wreck. This has been a theme since 2014,” he said. People want a cross-chain experience that makes sense with decentralized finance across their wallets, so they don’t have to constantly work with a bunch of applications to do basic single wallet activity, Luongo said.&nbsp;



Luongo also believes wallets should be community and user owned. The Web3 wallet is “not about enriching [Thesis] behind the curtain, but enriching users,” he said. As new infrastructure continuously fills the crypto space, Luongo said he wants to make sure people building in this space create open sourced products with a focus on communities and users owning it, not the companies. “If everything is close-sourced, it’s just a glorified bank,” he said.&nbsp;



Up until this round, Thesis <a href="https://thesis.co/" target="_blank" rel="noreferrer noopener">raised</a> funds independently for each project, Luongo said. “For me, a lot of this round is being able to stop fundraising,” and be “large enough” that the company can invest in itself, he said.&nbsp;



“We’ve raised for individual projects, but with Thesis we find people who care about the values in the space and won’t have control over (the products)” because the users will have control, Luongo said.