I just published "Decentralized Finance Is a Continuum." The financial services sector is at the dawn of a new era of network-based finance — an era characterized by transparent, trustless, secure, and programmable financial products.
We are in the midst of crypto conference season here in the U.S. So expect the normal "the institutions are coming" or "what do we need for institutional adoption" panels to permeate them all. The fundamental problem is that too much gets wrapped up in the term "institutional"
Imagine if all these people worked for you:
Vitalik Buterin
Justin Drake
Stani Kulechov
Rune Christensen
Andre Cronje
Joe Lubin
Tim Beiko
Hart Lambur
Hayden Adams
Fernando Martinelli
Well, if you own Ethereum, they already do…
That’s the power of aligned incentives.
A lot can be applied from the traditional VC framework to DeFi investing - team, g2m, product depth / differentiation / defensibility.
But so much is unfamiliar - community, token design, formal verification. I keep coming back to network effects as the vector most will miss.
As a VC, we get a far amount of stalker activity. Random calls from unknown #'s, cold walk-ins at the office, etc...
Was complaining about it to a good looking female friend of mine. She said that's cool. You just got a tiny sliver of what it's like to be a girl in NYC...
When my email and all my stuff got hacked I had to use my 67 year old mom’s AOL email. It’s actually still linked to my phone.
I have to say her social life is legit 🔥 - mahjong games, bowling leagues, book clubs, beach club days, birthday, and NYC theatre nights.
#jealous
Can't stop thinking about the joyous 6 year old boy who was just gifted a cute new Pudgy Penguin from Walmart, nonchalantly configuring his custom RPC to the zkSync network on MetaMask after he has funded said wallet with its needed digital gas ETH.
Arrive in Bogota, Colombia. As always, have to wait 15 minutes because not a single 🚕 is equipped to take 💳. Digital payments still only 10% versus cash 90%.
Always nice to have your investment thesis for a new deal you are leading confirmed by just stepping off the plane...
@stormXBT
This tweet will get a lot of hate but really shouldn’t. Everyone should know their own risk tolerance and appetite - especially if you’ve made what is life changing money for yourself. Good job mate! 👏
I just published "The Future of Institutional Digital Asset Management Has Arrived." Why FinTech Collective led a $50m round into NYDIG.
The institutional adoption of digital assets represents an opportunity that is measured in the trillions.
Oh, the dichotomy of what's important this post-LDW Monday.
Facebook: Endless parade of children going off to their first day of X grade.
Instagram: Check out my bathing suit pic from the weekend.
Crypto Twitter: Still chatting about the anonymous Chef that exit scammed us.
i) The
@MakerDAO
ongoing drama is emblematic of a larger question that all DeFi protocols will inevitably face over the coming years. What cost is palatable for achieving scale?
Crypto native & reflexive vs. real-world connected
Fully anonymous & private vs. pseudo-anon
@TheTennisLetter
Chat from someone who recognizes the window has likely closed, and expectations were above what his mental + physical could deliver. Nothing wrong with that. But lets call it what it is - COPE.
Loving these personal and financial data privacy commercials during this year’s MLB World Series.
Thanks for doing our crypto and Web 3.0 movement’s marketing for us Tim Apple.
@Apple
Same conversation on repeat everyday on text:
- Them: Sean!!! Long time no speak. What cryptos should I buy?
- Me: Just buy ETH.
- Them: But I heard XYZ coin can cure brain cancer while orbiting Mars’ metaverse and be an 100000x from here!
- Me: OK. Just buy ETH.
Had to hold my tongue to get through US Customs.
Agent: Purpose of your trip to Colombia?
Me: I invest in new tech startups.
Agent (with racist undertone): Because they have those there..
Me: Yes. Actually they are about to have real-time payments before the US. Thoughts?
Ahh, January 1st. The day I most relish at the gym. 25-50 new faces silently united in their resolution.
Over half are unadept with the equipment, so fun fails are guaranteed. And by Spring Equinox, only 1-2 remain.
It’s like my own private ‘Survivor’ showing for 10 weeks...
(1/4) One of the biggest hacks I've made as a VC since starting 5 years ago is my meetings:proactivity ratio (caveat: all jobs are different, but it's likely applicable to any).
I used to pack my entire day with meetings 9AM-7PM back-to-back with entrepreneurs, co-investors,
As always, pay attention to relative strength in this bloodbath for signal of what will likely bounce hardest off the coming local bottom.
Solana extremely resilient into this sell-off (SOL / ETH, SOL / BTC pairs actually all up nicely on the day).
Why was CoinMarketCap valued at $400m?
Because even as you are reading this, you are resisting the mechanical urge to pop open a new web browser and enter it into the text field.
Ooops, there you go...
Hate on
@coinbase
all you want and say they are not “institutional.”
But Coinbase Custody sure is capturing a whole lot of institutionally-held digital assets...🤷🏼♂️
A continued question out of my "DeFi is a Continuum" piece has been given the spotlight I placed on EM, why hasn't there been more EM crypto adoption? Outside of the Phillipines, markets such as Colombia, Argentina, and Indonesia seem ripe. A few thoughts on why below. (Thread)👇
A $50m exit, with nearly that much raised in total equity capital🤔
If this is what exits are going to look in a space that's still this early, don't know why anyone would invest in a crypto custody solution..we haven't even begun the real competition and race to the fee bottom.
(8/35). DeFi is Unbothered. Moisturized. Happy. In Its Lane. Focused. Flourishing. - As a bank equivalent, at $195.6bn, DeFi would currently rank 19th as one of the U.S.'s largest banks by total assets.
A DeFi protocol:
- Is already generating > $400m of revenue
- Has been live and battle tested for 7 years
- Actually connects to the real world
- Is the Federal Reserve / liquidity faucet for the entirety of DeFi
- Distributes its surplus profits via token buyback
-
Most point to the shuttering of bank branches as the most visible sign of digitization across financial services.
But the end of massive trading floors is even more emblematic to me.
I'll never forget being 20 yr old (w/ trader aspirations) and overlooking UBS's Stanford one.
So now TD Ameritrade and Schwab restrict what their users can trade,
@UniswapProtocol
would never (and could never).
Just more evidence that DeFi will beat the old guard.
The very long poker playing hiatus has come to its end. Finally feel the itch again.
For the first time since 2016, I will play in the World Series of Poker Main event.
We shall see if I still got it or not...here's to hoping I'm not just a one dimensional VC investor now 🤣
@CryptoHayes
Only thing acceptable, if you actually care about the crypto ecosystem (which obv you don’t), is to shut down with an apology letter and not return
The
@krakenfx
acquisition of Crypto Facilities is big outside of the 9 fig price tag. The improved UI, tech, and permitted leverage of FCA blessed listed derivatives should strike a nice balance between the unregulated world of Bitmex and the overly regulated one here in the US.
Shoutout to the West Village police department and specifically 👮 Officer Rodriguez (who is also a Columbia student) for helping me work through a complicated situation.
Long road back to restoring post hack / phone port, but we are getting there...
@verizon
balls on you.
I can confirm I will not be winning the WSOP Main Event this year. Great to be back at the tables though after so long. The earthquakes not so much 🤣...
$300m from
@a16z
on a $1.7b valuation. 700k shareholders, 11k companies, and 143 VC firms (us included).
With this dense of a two-sided network, a war chest, and VCs who espouse crypto, got to believe that
@cartainc
will soon emerge as the leader for startup equity tokenization.
Was super heads down this week with things outside of crypto for the portfolio. Stark reminder that missing a week in DeFi / crypto is not created equal with missing a week in traditional fintech...feels like I missed *months* worth of action. Stop doing so damn much!
We're super excited to share that we are growing our team at FinTech Collective and looking for a bright, motivated individual to join us as an Investment Associate.
Job description below. Interested candidates should send a resume and cover letter to recruiting
@fintech
.io.
If you are trading on
@arbitrum
, I think
@SlingshotCrypto
(now launched not just on Polygon) is probably the most seamless experience.
Cheap trades, and no hiccups on order execution / connecting into the chain that I am seeing on other DEXs on Arbi.
Happy trading!
Just pulled up the Gavin Wood Unconfirmed podcast on Polkadot / Parachain to listen. Couldn’t get past the first 10 minutes.
This is what’s gonna beat Ethereum? I’ll take the “it’s not gonna happen.”
Have seen many on CT contend that OTC trading venues are the "unsung heroes" of the crypto market.
ErisX (maybe selfishly) thinks its opacity, exclusivity and lack of oversight hampers broader participation.
Either way, it draws good parallels on the market structure debate👇
Highlight from my panel yesterday
@GtownLawIIEL
on “Valuations” for
#DCFinTechweek
.
Question from audience (mad scientist looking founder 👨🏼🔬): “So how much value do you ascribe to proprietary tech?”
All panelists almost in unison (includes a VC, PE, strategic): “Ummm, zero”
In these times, we are reminded once again as a Jewish person living anywhere in the world how lucky we are today to have access to a tool like crypto.
May seem obtuse on the surface today, but never been easier to gtfo of somewhere if needed with your self-custodied wealth.
As digital assets look to scale adoption from millions to billions of users, the check-the-box deposit and theft insurance solution offered by
@Coincover
to retail and enterprise users will be a critical component.
Onwards and upwards! 🚀
Ok, last tweet about Sam (with a great meme ofc).
This is FAR worse than the Celsius/Voyager/etc collapses. FTX had far higher brand recognition in DC and among institutional allocators. A lot of pension funds were in the FTX equity rounds bc it was "safe" versus scary tokens.
Being in venture for nearly a decade, I am consistently in awe of the amount of already well-funded + now raising early stage startups in DeFi (2020 - 2023) versus what I remember in fintech in (2014 - 2018) for any given "good" or "obvious" idea, or still uncaptured market
(35/35). I hope you enjoyed this mega-thread 🧵. I had to put together something substantial to culminate my "DeFi is a Continuum" ppiece which is now nearly 3 years old 🤯.
Now back to doing what I do best and gets way more engagement - shitposting!
Walk in for a $2 Gatorade, walk out with 10 feet of useless coupon paper. Everytime. Completely absurd.
@cvspharmacy
Please do something about this travesty finally. What do you have against our 🌳🌳🌳🌳?
#savetheplanet
#digital
#payments
#fail
Straight from the man himself
@AndreCronjeTech
based on the empirical data...
"I don't understand the anti-VC narrative. If you want an an anti-narrative, it should be an anti-unlock team tokens one, not an anti-VC narrative."
There are now 41 fintech unicorns 🦄 representing over $154bn of aggregate Enterprise Value.
In 10 years time, can’t wait to see how much larger the aggregate Network Value will be of the leading DeFi protocols and apps that are just starting to be be built today...
The next
@Dharma_HQ
update is gonna blow some minds. I’ve been lucky enough to be testing it the past few days.
Prepare yourself for point and shoot
#DeFi
actions that your boomer parents can even use 🤯
The tale of MakerDao's $MKD death are greatly exaggerated.
Wonderful to see the
#DeFi
O.G. double its AUP in the past two weeks and slam right through the $1bn mark...
I continue to believe governance is overplayed as a value driver for tokens—and overall by the crypto community.
Just look at the latest Maker vote participation (or lack thereof). Most stakers / holders don’t vote or do so by proxy. It won’t look much different than equities.
Bagged about 27k of chips for Day 2 of the WSOP Main Event. About half my starting stack so not so amazing. But feel great about how I played, super aggressive and put on max pressure, was just super card dead all day.
Onto Day 2 on Sunday morning 😎
(12/35). a full middle and back-end rewrite of the entire financial system are only at a $31b fully diluted network valuation today (1.5% penetration / market capture).
I don't think its crazy to assume we have 100x+ growth ahead of us in DeFi based on these metrics...
“The things you own end up owning you. It's only after you lose everything that you're free to do anything.”
- Fight Club, released exactly 20 years ago today.
Still the best minimalist quote out there...
There are four types of drawdowns for DeFi tokens:
"Down bad" - 85% - UNI, LDO, MKR, AAVE - the leaders with unsubsidized PMF
"Down real bad" - 90% - CRV, BAL, COMP, 1INCH
"Down horrendous" - 95% to 100% - TOKE, RGT, SPELL and most DeFi 2.0
"Down & out" - LUNA, USDT, Titan
(2/35). The Trough of Disillusionment - We are now nearly two years after
#DeFi
summer ignited the 2020 - 2021 bull run. Today, blue chip DeFi (what many call DeFi 1.0) is squarely in the trough of disillusionment.
Great prez by
@aztecprotocol
at tonight’s
#DeFi
meetup in NYC.
As institutional capital looks to partake in the budding DeFi ecosystem, privacy for financial primitives will be critical. Modularity, gas efficiency, and simple implementation of these ZKproofs doesn’t hurt either!
Passing is tough on VCs too. It’s the worst part of the job. Please don’t carry on. Please don’t send back weird / cryptic emails.
I go out of my way to be transparent and provide feedback. I could just do what every other VC does and ghost - but I choose not to. Thanks 💜 🙏
Since the worst of it is now over (knock on 🪵) - the DeFi blue chips, including $UNI, $MKR, $AAVE, $COMP, $BAL all ended down ~70% peak to trough in just 2 weeks.
Should be no question now that no one should be running DeFi vaults at a sub 300% collateralizion rate.
As both a VC / DeFi enthusiast and former pro poker player, I like to make analogies between the two.
"Yield farming" is "bonus hunting" from online poker's early days.
Ultimately, the subsidies were not LT sustainable - but were the needed hook to drive the massive poker wave.
If you missed this summer's initial
#DeFi
token bull run, this is 30 - 50% pullback (depending on the name) you were waiting for.
So the question is, are you taking advantage of it?
Seems like every other week we are having a watershed moment for the institutionalization of the digital asset class.
Your savings & checking account stood up right next to your
#BTC
account is another one.
Congrats to portfolio company
@NYDIG_BTC
!
(7/35). But DeFi TVL is Unbothered - Total value locked (TVL) continues to experience unfettered growth on both a notional and absolute basis. Total notional value locked in Ethereum DeFi is $115b. Including all other smart contracting blockchains, DeFi's TVL is near $200b.