Kraken Ventures - What to expect when expecting (a stablecoin)?

good morning and I assume many of you here are defi Builders marketers Etc so what to expect when you are expecting a stable coin so us stable coin Geeks we think about how to design a stable coin like this we think about fundamentals you know we're thinking about how to solve the stable coin trilemma what are the financial metrics behind our design um we're we're really thinking with a sense of Elegance right and then as we get closer to going to Market we realize that this is how they invest in stable coins they think about Market signals they're thinking about K endorsements right they're thinking about the Daily News and honestly a lot of fomo so now a great go to market cannot outrun um incentive structures and design however a great design will not survive without a go to market strategy so I think you are going to get great advice today on how to design a stable coin so I'm going to focus this presentation on something else so how can we actually harness the power of Market signals in order to develop a great go to market strategy so this is premised on the idea that attention begets liquidity which begets attention we get which begets more liquidity this is the flywheel that in very simple terms drives TV growth it also works in the opposite direction as well so what is this one weird trick to bootstrap attention signals so let's talk about how to use these signals to actually Kickstart your flywheel and use it as an advantage in your go to market so this is the signal waterfall and it's premised on the idea that certain groups look above to other groups when they're thinking about how to give a project their own attention and liquidity so first you have the philosopher Builders these are the prolific writers Builders of crypto they are the high priests they are the public intellectuals they are the people that I think we in the room really look up to for inspiration you know some examples is a going to Arthur Hayes you know when they are coming out of the gate spark going to run from maker Dal um generally in crypto you know a great very predent example is Mega eth launching with vitalics um support next you go to the VCS the VCS these are the Blue Chip funds they're the investment influencers the super Angels um they're the whales some examples of this is frack going out of the gate with dragonfly and electric it's a Athena coming out with dragonfly and ourself at Kraken Ventures um even liquidy you know I think they're very well respected for how they think about design they came came out of the gate with polychain third we're going to the D5 Builders and apps so this is extremely important for crypto native adoption when we are designing for this ecosystem we have to be thinking in terms of composability and leverage these are key factors so you need to First of even just be able to sell your vision and collaborate with other def Builders so when you go to this category it's really also looking for validation on the design of what you're building for example when you think about you know fracks kicking off their growth flywheel they really leaned on curve and convex for that think about Athena coming out of the gate they had relationships with synthetics with Pendle with maker and in this category you can also start to think about l2s in our current meta right l2s are access to new community and new branding with the same product so fourth these are the crypto institutions these are your centralized exchanges they're your market makers they're even um Blue Chip conferences such as this for example and the idea is this this category generally doesn't underwrite their own conviction so philosopher Builders definitely underwrite their own conviction VCS mostly do or they would like to think they do but they're definitely open to leaning on the signals that these philosopher Builders give crypto institutions generally co-sign conviction with one of these other Blue Chip categories right so some examples are you know Athena coming out of the gate also with a bunch of centralized exchange relationships um you had Circle USD with this relationship with binance or sorry with coinbase and then binance with FD USD uh fifth you have the dii Deens so these are your defi natives they kol's they are often mercenary Capital but we can accept that right crypto doesn't have a model of paid advertising so this is essentially your paid advertising the thing is these this group they are really open to being first movers to a protocol so they start to give your protocol tvl which then gives your protocol implied validated security as the later groups start to come in and here are some examples of how protocols have used this um to their advantage the idea here is that the strategies you use for this group I can't really give you a specific framework that might still be pertinent you know a year or two or like three Cycles later these strategies tend to be very generational right right now we're in the points meta so maybe that's what um Protocols are going to do but maybe at another point it was the airdrop meta finally we are going to the general consumers these are your organic users they are the ones that give your protocol monetary premium when you pull out the incentive structures they're the ones that still stick around right so these are actually the people engaging in your use cases so now you have thought of a great design you've thought of a great go to market and you want to start engaging with VCS I want to tell you about what you should be looking for an investor and what an investor might be looking for in you so first here are some questions to be asking them what is their thesis what kind of projects do they invest in what stage are they investing in what kind of tickets are they writing what is their fund structure are they independent or are they strategic right this gives you a little bit of info about their incentive alignment third what kind of value are they actually adding like when you're selling Venture Capital money is cheap everything else is what matters then ask about their portfolio are there synergies does it show a sense of expertise what kind of network do they have that might be helpful for you now let me tell you about how do I think about evaluating stable coin and adjacent projects I have a framework where first I realize that as a VC I have asymmetrical information on edge the kind of edge I might be looking for is in team regulatory distribution cost structure then I consider how would a smart consumer or like a defin native consumer approached this table coin and I'd say the the two things they probably care the most about are composability and incentive engineering however they might also be looking at risk profile Peg stability mechanisms Redemption mechanisms and use cases so then I look at this category of A and B kind of do a art not science scoring and I asked myself what are actually the unique strengths of a project from A and B you know as this Market is becoming more saturated this is very important to start to distinguish yourself but that's not enough can a deep well of liquidity actually form underneath these unique strengths because you can have a very unique stable coin but if it doesn't appeal to enough people it's not really going to be a venture case right and then finally how does long-term value actually acrw especially to the VC when you are pitching to VCS we are not Farmers we're looking for long-term returns but now what is the ultimate signal encouraging speculation from signals is definitely a growth great growth strategy but there is also a very long zombie yard of stable coins hundreds in fact so in order to truly survive a stable coin needs to ultimately find utility and nail use cases this is the ultimate signal that people are willing to use your stable coin without being subsidized to do so thank you [Applause]