- Nestcoin set up a parent company whose primary function was to create, build and invest in products that would introduce crypto-evolving uses to newbies within Africa’s crypto ecosystem
- With the FTX collapse, many crypto traders and companies have lost their money
- This sudden loss of capital has forced the hand of the Nigerian startup to take drastic measures. Its has currently employs at least 30 employees from sub-departments, including Breach, its media arm, and Brunch.
Crypto volatility is no new concept to those who dabble in the ways of crypto. In most cases, it’s the first concept that newbies in Africa’s crypto ecosystem meet. They understand that crypto volatility is the bread and butter of cryptocurrency.
The difference between the highs and lows of value gives crypto that necessary edge allowing traders to make a provide. However, it is also a significant flaw within blockchain technology. The slight drop in any major crypto exchange platforms causes a ripple effect on other crypto coins.
Losses within the crypto space are shared as much as profits. FTX recently proved this fact as its sudden fall from glory affects millions of crypto users and individual crypto exchange platforms. Nestcoin, a Nigerian-Startup, is among the many who have significantly suffered the titan’s plummet from glory. So much so that Nestcoins I forced to take drastic measures to stay afloat.
A brief overview of NestCoin
Africa’s crypto ecosystem has caught the eyes of many potential aspirants. The fame and glory acquired by African startups who ventured into Web3 inspired local talent to take up the mantle. This need for consistent improvements led Yele Bademosi and Taiwo Orilogbon to pioneer the start of a Nigerian startup, Nestcoin, to promote cryptocurrency in Africa.
Bademosi and Origlogbon previously had some experience in the world of crypto and Web3 from Bundle Africa, a crypto exchange platform catering to Africa’s need for crypto. Yele was the director of Binance Labs in Africa and oversaw the various incubation and development of blockchain projects. He even played a significant role in Bitsika’s origin story. Orilogbon was the company’s chief technology officer.The main goal behind their Nigerian startup was to build a franchise that could smoothen the road for Africa’s crypto journey. The crypto exchange platform set up a parent company whose primary function was to create, build and invest n products that would introduce crypto-evolving uses to newbies within Africa’s crypto ecosystem. According to t an interview with Quartz, he stated the first issue that requires attention is making crypto easier to understand. Using something you do not know or understand is an unlikely fact in Africa and globally.
The Nigerian startup soon gained some level of recognition and was able to raise $6.45 million in the pre-seed round. This happened when the startup was barely six months old, and it mainly owes its sudden surge of fame to Yele Bademosi. His reputation pre-seeds himself since he gained various qualifications as a director at Binance Africa. Nestcoin has different investors backing it up, one of them being Microtractions.
Aside from being a crypto exchange platform, the Nigerian startup dabbles in NFTs and DAOs.
Nestcoin Suffers from FTX
Despite the Nigerian startup’s hype and attention, it still fell victim to FTX’s sudden collapse. Yele Bademosi stated that Nestcoin held various digital assets within the crypto exchange platform, which they used to manage operational expenses.
It is no secret that with the FTX collapse, many crypto traders and companies have lost their money. Some examples include Galois Capital, a hedge fund with half of its capital stuck at the collapsed crypto exchange platform. Genesis Trading stored $175 million in FTX and is now unable to access it. Nesctoin became its recent victim and is currently struggling to stay afloat.
In an interview with TechCrunch, Bademosi revealed that Nestcoin was one of the few ventures that received capital from FTX. Thus, naturally, they would trust most of their assets in the crypto wallet. “We used the closely associated crypto exchange platform, FTX as a custodian to store a significant portion of the stablecoin investments we raised, ” said Bademosi in a tweet.
This sudden loss of capital has forced the hand of the Nigerian startup to take drastic measures. It currently employs at least 30 employees from sub-departments, including Breach, its media arm, and Brunch.
Unfortunately, the bad news does not end there as the remaining employees will receive a massive deduction of almost 40% in total salaries. Luckily for the Nigerian startup, it was yet to hold any customer funds since it was currently focusing on DeFi protocols and non-custodial. Thus not affecting its customers.
FTX collapse has had more effects on many crypto exchange platforms and blockchain startups, and its ripple effects are also felt here in Africa’s crypto ecosystem. Nestcoins is one of the many startups that are diversely affected by the sudden influx in crypto volatility. Despite this sudden shift, Yele Bademosi reassured his customers that this is just a minor setback. Restragetising and taking the steps to better position organisations until the tides settle. Their goal to promote Africa’s crypto ecosystem is still full; they need to readjust.