The Evolving Landscape: Building Foundations and Unlocking Real Value in Web3

[Music] hello everyone my name is Ryan uh founding partner at hash uh hash is like a crypto fund since uh 2016 always positioned as a like a bridge between the uh Eastern Market and Western Market um today we will talk about like how web stre application can bring a real value real value is a little bit meaning is a broad but we will elaborate what is the meaning so today uh Stefan from all adventures and Christopher from uh TR liquid fund so uh can you introduce yourself yes absolutely Ryan and uh thanks everybody for attending this panel I know it's the fourth day of the conference it's not easy a lot of people have left already after the second day but it's good to to see that interest in the future uh in particular here on the Venture stage thank you so much for staying and paying attention um thanks to everybody so I'm Stefan CEO and founding partner of outlier Ventures we're the world's largest web 3 accelerator and unlike VC funds accelerator have a slightly different function in web 3 um or in general for startups and in particular in web 3 they are critical they are critical to produce startups that are projects that are covering all the areas of expertise that are required to successfully launch a web 3 project which is very different to a sus business or a platform Marketplace um we've now worked with 350 companies that we have in our portfolio 50 listed tokens we an 80 people team and those uh 350 companies have created a value combined value of around 12 billion so we we've been doing this for 10 years we know what we are doing and I would I'm glad to you know look forward to this discussion and see where the real value is in web 3 thank you Christopher yes uh I Echo that thank you all for attending um my name is Christopher kesen I'm the CIO and founder of Triton liquid um so what Triton is is effectively a liquid VC fund um and we'll we'll dig into what that means over the course of this panel but but uh what our fund does is we um effectively combine qualitative and quantitative research to construct a portfolio of liquid assets um and then balance that portfolio according to data metric so on the qualitative side we um we do about 20 page writeups on average um e are VC style deal memos uh they go through comprehensively effectively how Venture Capital firm would look at one of these early stage companies uh we then divide those into sectors so we track uh 254 different verticals um across the industry uh and for each vertical we create regression models to understand um what onchain data we can pull that will allow us to uh understand what the primary price drivers are for each um uh asset in the cat atory each of those 24 categories that we track uh so with that qualitative and quantitative research we construct a portfolio and then monitor the data to um actively rebalance that portfolio um so uh similar to venture capital but with the added element of liquidity which we'll dive into on this panel um that uh allows us to manage that portfolio real time um also we are uh as of yesterday the uh second licensed Fund in the adgm uh so we behind brevan Howard uh we are the only other uh liquid crypto focused fund uh in adgm so we went out with that uh press release today so exciting time and uh very appropo for me to be on the panel today thank you yeah very long introduction we um we'll talk about the real value so I want to hear like uh how you define real value you should be maybe a number of user or like maybe tvl or like maybe market cap so how you define the real value be you start so while you were while you were hinting at quantitative parameters um which yes we can discuss about which of these are good indication for the activity happening in web 3 real value gets created when the digital economy is running on web 3 rails and not only when the digital economy is running there but in particular and that's the next level if we can connect the physical the actual the physical economy to the digital economy when we can represent the physical economy in a digital world and we've just released a new thesis that we are currently rolling out it's called the post web thesis and I would love to talk a little bit more about that what that means and how we see this or the internet to be shaped uh in the new era we adding a fourth pillar to uh read write and own and this fourth pillar now is delegate so it's read write own and delegate and we call this the post web and our thesis is that more and more of the internet as we know it today is actually disappearing and I would love to come back to that later Christopher yeah so just to build on that um to take a big step back uh what's meant by read write own so um web one uh was technically read only you could visit a website look at the content you could read it right when people refer to web 2 that's read right that would be something like Facebook where you can read what is posted but also interact with that post to it um and write to uh these public interfaces um and then web three is a Step Beyond that that is uh effectively crypto um where you can uh read write and then actually own components of the uh underlying protocol around which you are operating so that that's what's meant by uh read write own and effectively what people refer to as web 3 so when we talk about real value what do we mean by um that uh so it's it's effectively what do you own what do you own as an investor uh when you have this own component of web3 and that is an actual token uh and what is interesting and unique about this space uh that sets it apart from other asset classes is all of these companies are early stage compan companies right so they should be vetted effectively like a VC would from a qualitative perspective um but rather than having your ownership represented in private Equity that's locked for you know until the comp until the next fundraising round or an IPO any sort of liquidity event uh instead of that what you have is a liquid token that represents ownership in this early stage company that is tradable from the beginning right so uh what this emerging asset class is in essence is some combination of venture capital but with public Equity Dynamics where uh you have in essence a stock that represents ownership in a a company um that is early stage that's why you have all the volatility um and so uh the actual value is in that token right the real value that we're discussing on this panel today is the uh the token that that you are holding that should increase in value proportional to the growth of the company that uh that backs it and launches it yeah so both emphasize like uh read WR own and delegate and maybe uh Christopher emphasized like a owning from the beginning so definitely the the environment should be very very different from uh web 2 so as a web Street founder how do you think about like uh like the challenges from web stre Founders which is not no encountered in web 2 Christopher maybe you can sure yeah so I think the primary challenges for web 3 Founders is um uh regulation right um again this is a new asset class this is not public equities uh this is early stage Venture that is tradable uh and so that's why you see all of these lawsuits and um Wells notices from the SEC uh and so from a from a Founder perspective what you have to Grapple with I think first and foremost is a lack of clarity on the regulatory front uh in the US what has been attempted to date is to uh um basically uh fill in uh existing Securities laws to try to fit this new framework and and what I believe is that a whole new regulatory framework needs to be developed around this asset class and and Founders do not have Clarity on that um in the US specifically uh I know many Founders who have gone to the SEC and asked for clarity as to how they can launch in a compliant manner and no clear guidelines have been given um here in the UAE and the reason that I domiciled my fund here is because uh there is an actual Progressive regulatory regime that is interested in and um actively attempting to create that Clarity for Founders and so I believe the UAE uh and and and specifically the adgm and Fs will be a place that leads this uh creation of a novel framework for regulation that will allow Founders to come here with clear guidelines be able to launch a project and not be at risk of of being served some sort of well Wells notice expost and Ryan let me answer your question by partially coming back to what I've mentioned before already I see two main challenges for Founders in the web 3 space the first one is as an relatively early stage project how do you cover all these different areas of expertise token design and Engineering Regulatory and legal was just mentioned the different Lang programming languages each each uh Network or layer one has a often a very different programming language how is your goto Market strategy who are your community your end clients and how do you approach them there are so much to cover and most early stage teams don't have while they cover some of those areas of expertise they they cannot afford very early to cover all of those and this is where we as an accelerator come into play we help them with depending on where across these Dimensions they need more help our 80 people team of world leading experts that have now done this for 10 years can jump in and and Hands-On help those Founders so that's how one of the key challenges for Founders and how we are helping the founders to overcome this now the second challenge for Founders is a little bit where is it going where's the internet going where where is this technology developing towards to and we've seen a lot of you know people trading meme coins and and focusing on the attention economy and um you know but I don't see that much real value there it's it's it's it's a lot you know it is about this attention but it's I think it's it's a way to compete with the current web 2 on its on its current on the current paradig times but when looking a bit further ahead this is where our thesis comes into play we think that more and more of the internet and this is both including apps as well as websites are going to be replaced increasingly by conversational AI we see this already uh it's happening and there are lot of centralized models and there will also be decentralized Solutions coming up to that but now the next uh question is this AI makes in particular sense and is very uh has a significantly increased usability and Trust if it does run on decentralized Rails so only AI in combination with web 3 rails is the real powerful thing that enables adoption and scaling of the use of this AI in a trustful uh environment we've been writing about this since 2016 we invested accordingly we incubated fetch.ai we were the largest Beckers of ocean protocol they've now merged into ASI there are various other AI related projects in our portfolio for the past eight years already and slowly the world is waking up towards that but there's one level further that this now goes and this is where the fourth pillar of you know after web 3 delegate comes from we see most of the digital economy in the future and also the combination of the digital and the real economy the physical economy being represented by aend networks agents dealing with each other on behalf of the user on behalf of the the client whether it's a corporate or an individual and this turns this attention economy now into an intention economy where I as an owner of a particular you know via my conversational AI I can program my bards that are acting on my behalf to follow my directions represent me in the digital and real economy not only buy certain nfts for me but also buy cars buy houses enter into mortgage transactions all types of things that we can cover with with with this technology increasingly over time and this second challenge where increasingly also the very Innovative people around the globe are you know seeing and sharing this this thesis and this development and we are clearly trying to help them see this um this is where we can also help them we have this portfolio of 350 projects there's so much value creation potential as being part of our ecosystem and our larger portfolio most of this technology is modular can be applied different layers and verticals um and and this is the second challenge for Founders and we can also help with that one yeah both are are mentioning like a very meaningful uh challenges like regulation wise also like know found cannot do everything like a web 2 so they have to collaborate each other in the decentralized network and we obviously know we have to talk about like a the attention economy the market speculation so right now like even know a lot of Founders around me and investors they know talk about this decentralization esos and blockchain esos since 2016 actually know ISO started but still no uh speculation attention economy works and the founder who can get attention from the market they can lead to uh centralized exchange as early earlier as earlier than any other project which is making rear rear product and rear adop adopted application so how do you see this attention economy and how Founders get a benefit from this uh this phenomenon so when we look at the past you know 8 10 years in in web 3 um we've all seen the ups and Downs of listed prices and listed prices are you know very good and also good for for funds you know and people to be able to get access to certain aspects this ownership aspect of web 3 being part of a movement is critical and is is fundamental but they also distract right and and a lot of we've seen this a lot over the years with the founders you know the price goes up times 5 or times 10 and you know everything looks very different to 6 months later when it's again down 85% uh it it drives people crazy and so having having a very early stage projects listed is not just a blessing it it can also be a curse sometimes if people are not disciplined enough to be able to you know abstract a bit away from the listed price and its movements but what web 3 uniquely does is it enables Innovation and it enables Founders who are Innovative no matter where they are based and no matter whether they have a large uh access or large access to large resources or not web 3 enables Founders to immediately compete globally and that's that's a key aspect here in particular for Founders based in growth markets as we call it and whether that's the Mina region Latin America Asia across the world Africa um it enables people with a laptop to immediately have a global stage if you come up with a technology solution it's in web 3 applicable globally now the second aspect is because of these listed prices and this speculation a lot yes it's good you can get attention if you have a very good vision and this vision is not only two or three years ahead but 7 10 15 years ahead yes that Vision might be reflected in a price uh of your listed asset and now you can on on the back of that price you can actually make that Vision happen so without we see this a lot that web 3 Founders don't need 50 100 million $300 million of venture capital in the classical sense because with that with that uh listed price you can incentivize your end users and other participants in your ecosystem to to make that Vision come real with with without just you know having to spend a lot of money on on user acquisition it's that listed price that helps you to get there and it's uh it's it's about being able to manage this in a sustainable way and trying to avoid with your particular project but also across in Market Cycles trying to avoid this extreme volatility as much as possible by communicating well yeah very well said and and to add to that so this speculative aspect of this asset class the attention aspect is again as uh was mentioned is both a blessing and a curse right um one you can raise Capital uh from the public market effectively uh with a white paper right um and then uh what investors like I am doing is uh is looking at this project and saying Okay can this fulfill its vision and will the token price increase proportional to the growth of the company and will they be able to execute right um so that is definitely a plus uh the the other side of that double-edge short is that then your company is viewed based on your asset price uh so that can be great in a bull market everyone's making money uh your asset is going up uh but um you in traditional Venture you don't see the the volatility of what's happening right because it's not Mark to Market in crypto you do uh and that can be problematic for Founders for a couple reasons one they have a liquidity event far earlier meaning they can effectively raise the capital for the project um cash out to some degree without building anything and walk away which is hugely problematic um and then and then the second is that again your you're company is viewed based on how your token is performing uh and that is driven by myriad factors that are have nothing to do with the fundamentals of your company it can be a hype around the vertical that you're operating it in it can be just Traders uh pumping your token for some reason there's a lot of um speculators fast money in this space uh so that adds a myriad comp complicating factors so um I think that uh you know whether it's good or bad is is irrelevant it is this is a component of this asset class and it's um it's the prerogative of of the founders who launched this asset to uh handle that with care and um your token price can be a phenomenal marketing um effort on your behalf if it runs but then you are expected to grow into that valuation and if you don't it tanks and it could um it could drastically impact your business so uh it it's a is a new fundamentally new paradigm that we've not seen before uh so um it comes with all these problems but I think there's both problems and opportunities on the behalf of Founders yeah I think there's uh risk and opportunity risk obviously like a Founder after no K cash out and they can just run away there's a possibility there a huge problem at the same time like if you have a you can deliver really good vision and you can spread out the vision to the community very fast then the financing is really really easy and they can they can make a easier way to make a business and as a VC I think that we need to verify this founder can deliver the product in time and I think the more smart money uh have to come to the market to like like fil out like a lot of like uh the fla so I think the last question it would be uh the maybe Market sector so uh early stage accelerator and Le fund so what type of uh the sector will be uh flourish uh uh shortterm midterm uh in crypto like maybe next year and like within next three years yeah absolutely so I think the the the greatest product Market fit to date has been stable coins right you can send billions of dollars in a matter of seconds globally 24/7 bypassing the banking system uh and I think that that has truly reached product Market fit um so that is immediate um I think that some interesting uh future applications and and what I'm excited about is the ability to decentralize the entire Tech stack meaning that you are um storing your data on a decentralized platform that cannot be uh um censored or removed uh you are putting compute on a decentralized uh infrastructure rendering on a decentralized infrastructure and then you of course have the front end that the user interacts with um and and I think that is uh a beautiful um new paradigm where uh you can create an application that uh cannot be um pulled uh effectively which we've seen a lot um and uh yeah I think we have very limited time so I'll stop there I have a lot more to say on this but find me after if you want to hear more and for us it's it's all about this new thesis this combination of how AI in combination with blockchain is going to shape the new internet there are a few infrastructure tools that are required for this to happen as well one of them is deepin a decentralized physical infrastructure all these agents tapping into different resources being available across the globe and digitally um the second one is the tokenization of real world assets either real assets or intangible assets or financial assets uh and that for me includes also identity and data um the the intersection of those three areas Ai deepin and real world assets that in combination is going to be the new internet uh as we will see it in 5 to 10 years yeah today today um I will wrap up our talk thank you for coming here and listening our our panel's talk thank you thank you thank you thanks everybody [Music]