Identifying the Next Wave of Generational Crypto Projects - TOKEN2049 Singapore 2023

thank you two minutes all right um so very excited for this panel because uh uh we're going to discuss what the next wave of generational crypto projects is and for those who know me I love to invest in apps versus infrastructure so I'm gonna so I think we're gonna have a really exciting discussion but before I get started why don't we do some intros uh Alex why don't you start first yeah sure hey guys my name is Alex I'm the managing partner and co-founder of hack VC we're an early stage crypto fund we do unfortunately focus on infrastructure all right Jason uh I've been a crypto VC for about a decade um I started a couple crypto funds and practices before this mostly uh Silicon Valley and Asia over the years yeah I've been doing this for about 10 years so awesome my name is Paul bradach I'm a managing partner at Pantera Capital Pantera capital is one of the earliest investors in cryptocurrency and blockchain you know we started in the space about 10 years ago that's when I got into the space we do quite a few things I mean you know we started off on the infrastructure side of things but we do again both Equity tokens infrastructure applications seed all the way up to series B and you know Asian APAC has been a huge Focus for us we've done again 40 of our investments outside the US so we're really excited to be in the region again awesome um I'm Joey Krug I'm one of the partners at Founders fun um you know we we look for really big zero to one companies uh that are you know basically generational Founders so that's you would love to talk I mean hi everyone I'm Ben and I run a fund called ethereal Ventures which is and Global is a global investment firm focused on early stage crypto and it was founded in 2021 by the former investment team of consensus I'm actually Singaporean and just moved back recently so super excited to meet all the Builders of Asia this week awesome man my name is Jason I am the co-founder of an Angel fund called tangent I'm really excited to dive into this today because there's been a lot of new things happening in crypto I think one of the things that's been catching a lot of people's attention is this new social media app called friend tech for those who are not aware it's basically an app where you can buy shares in other people and it's really taken off but what's interesting to me is we've never really seen a lot of social apps take off in crypto before so I'm curious what the Giga brains here think about applying social applications on a blockchain I mean I feel like either me or you could start I mean look I can start it so I'll speak for myself I think Alex is awesome investing we invested pretty early on in diesel again you know we're early on in in not his last company and you know we think diesel uh is an interesting project started off with big cloud and so I think you know if you're able to sort of get folks into crypto in in two ways you know people want to go out there people want to speculate and do things that they haven't done beforehand and then of course being able to you know sort of obfuscate the crypto component you know have an easy way to sort of get onboarded and be able to sort of experience crypto with maybe not you know as much sort of crypto in the in the Forefront I think is really interesting uh so again I think friend.tech has done a pretty good job and of just kind of getting sort of like an early adopter movement and I think there's a lot of potential in general for social to be disrupted again there's the blockchain in terms of just like you know permanent storage um you know sort of like censorship resistance I think there's sort of of an ability to create an economic layer around everything where people can actually monetize the content and be able to get a better user experience through you know sort of incentivization and content modernization things like that and then be able to sort of expand the ability to monetize uh with you know something like nfts being able to sort of create more loyalty and then of course you know I think there's potential around sort of taking the data that gets accumulated and then being able to create your own sort of identity and of course that goes into many different other types of applications so I really do think that you know there's a lot of disruption to be had but it really you know takes the right entrepreneur to be able to find a wedge to be able to get user adoption like friend.tech but then be able to sort of innovate innovate in a way where crypto becomes maybe not at the Forefront but it enables things you can't do to be do beforehand I'm curious what you think is about Joey because before Founders funds were a Petron Before Peter you were known for starting auger which is the first predictions Market it's one of the very few apps back in those days that has a social element as well and it's not just D5 so how do you see kind of Social and crypto playing out yeah I mean uh I'll be straight up on it I don't really understand social that well um you know you know I think if you look at what what frantech has done probably to me the most interesting thing about it it's just like the UI ux around it um where they basically built this you know Progressive web app where you can add it to your home screen I think there'll be more of that uh going forward especially like given the regulatory environment around Apple um and so I think that's something that's going to be bigger in the future if you look at the very original iPhone uh Steve Jobs actually didn't want an app store he just thought everything would be web apps uh you know the the Web 2.0 stack was just too early for that but I think it's actually at a point where that sort of thing is feasible you can have notifications now as a web app you don't have to be native on the App Store I think that's probably the most interesting thing about it to me and then um in terms of Social and crypto more broadly I I think the main um the main thing that's needed for for it to really take off is like some kind of big zero to one uh difference versus the existing social media platforms I'm not sure anybody's really you know quite delivered on that yet and I also like don't know exactly what what that would look like but um those are my kind of high level views got it got it and Alex I'm curious uh what you think about investing in infrastructure forces apps as well because you mentioned earlier that a lot of your focus in on it is on infrastructure but it seems like lately there has been a lot more applications being funded so I'm curious like what do you think value a cruise between the two and how you spend your time yeah totally I'm going to go back to the friend Tech thing too because it's a great it's a great concept I think it's it's an incredibly fascinating application you guys should all try it if you haven't um uh yeah I think at least the user experience of how they sort of cleverly did onboarding in a way that got around having to deal with um the Apple Stores just like very onerous like iOS policies against crypto companies was very clever um yeah so we were early investors in uh in disa and still are um and uh and I think the the concept of like crypto social is really fascinating because you know what happened with social media companies you know Facebook and Twitter and everything a few decades ago is they they were sort of Trojan horses they came in and they created these networks uh for people to talk to each other and eventually for sort of fans to interact with follow their follower or you know like followers interact with leaders and creators and all this sort of stuff and then in in a sort of sneaky way in in the back door they they also bundled in they basically completely intermediated the way that like fans interact with their like leaders and creators and they did everything that they could to make it hard for you to understand who your followers are and how to monetize them directly and this was great for social media companies because then they could they could control the whole thing they could monetize you with clicks or Impressions or anything else they do and they could sort of disempower the Legion of fans and I think the opportunity for friend Tech and Diesel and all this stuff and this is the value of blockchain is you could sort of unbundle this again um and you could create like like a whole monetization layer to the Creator economy which is really big you know and actually I think like only fans is a great example of this like you don't need to have this whole like social network and text you know you could just like have this layer where people interact with the creators you know or the fans um YouTube takes 35 fees I mean that's kind of like how vultures these marketplaces are so yeah totally I think Tick Tock is the absolute worst too it's like you get like one percent or less if you're a creator of of what Tick Tock makes um the problem is like there's like a ton of like infrastructures to your question there's like a ton that has to get built before the vision and reality so um you know big clout kind of had like hundreds of thousands or millions of of users at one point I think um allegedly at least yeah and uh and you know I had like a New Yorker article that's pretty in the US like when you get a New Yorker article like you really made it in like pop culture like took Mark Andreessen and and like Peter Thiel like 10 to 20 years before they have like celebrity and notoriety before they got New Yorker articles so bickok got like a New York article three months in everyone's excited about it but you bought these Creator coins then like there wasn't really anything to do with them and they were just like Dogecoin meme coin kind of things right and so friendtech added this thing where it's like well you can you could be part of my group chat but I don't know how valuable being part of a group chat is I don't know if that's worth thousands of dollars for like per coin or something um so I think there's a lot that needs to be built at all of infrastructure it's like token gated communities and stuff like that and putting in like cash flows and royalties and like true true like economics like unit economics that that creators make from their fans into these tokens and coins um before we're ready and it's just like a lot of work to get done and that's also kind of my infrastructure thesis like there's just a lot of boring kind of stuff that needs to be built got it got it and here is min what do you think about investing in infrastructure versus applications as well yeah I think this stuff happens in waves really even in the early days of consensus when it was pretty near impossible to build an application I think consensus incubated a lot of very early stage startups really just like I think prototypes and experiments just to you know test like what was what the limits of the infrastructure was so you can actually work backwards to see what needs to be built I think we've had a few great years of funding a lot of infrastructure projects and especially on the ZK side on the scaling side which is at the level now we have a TPS that we haven't seen before and previously I think a lot of like you know the scaling ability of on chain was limited to trading right but we look at the real world you have this number of transactions for trading and it's like 10 20x for payments and a lot more for like social and content so we're going up the chain and it's definitely an evolution at least from our perspective we're pretty excited at this point to you know sort of harvest a lot of the seedlings that were plant it and have application developers actually experiment and provide feedback and iterate so what middleware is missing what Dev tools are missing and it is going to be pretty janky the ux is not going to be great there's probably going to be a lot of improvements we can make on security but I think it's very difficult for us to actually get to web free apps unless we start like you know intermingling between applications and infrastructure and I think one of the most humbling things about investing in crypto is also the table selection as well there's so many different verticals that are completely different from each other so I'm curious like across all these verticals that we have now be it defy you know nfts or decentralized physical infrastructure like file coin and so on what are some verticals that you guys are excited about that maybe not too many people are looking at yet I'm happy to start um you know on on our end we really look for like who we think are the strongest Founders and then you know they sort of pitch and start their vision and we decide whether we agree with that vision of the world or not um so not too opinionated on on like different areas I see there are some are some areas that are interesting that you know we're looking at right like we do do a lot of infrastructure investing as well um he looked kind of the zero knowledge proof space there's a lot of people recently trying to basically provide um storage proofs of either like historical data on chain which you could use for like bridging you could also use it for like say you're a D5 lending protocol and you want to calculate the historical volatility of some asset to set risk parameters you could do this in a trustless way versus having to use like a centralized Oracle um stuff like that is like theoretically interesting um I do think there will eventually be some intersection between crypto and AI but I think the kind of current wave of projects for the most part and if anyone has a contrarian view on it would love would love them to talk to me but so far a lot of what I've seen doesn't doesn't make a ton of sense um yeah people trying to do kind of distributed GPU compute and yes for like unit of compute time when you're actually running the model it's cheaper but then you when you add in the comms overhead of a distributed Network it actually ends up being many times more expensive to to run compute in such a setting I think there are ways to to solve some of these problems and and have some ideas on that if anyone wants to to jam on that that's an area um that I find interesting and then I think the last one is uh the DFI space kind of writ large sort of feels like in a trophy disillusionment right now um and I think it's an area that you know we're very excited about fundamentally long term and definitely looking to invest um more there as well awesome I guess I can go next so um you know in terms of areas that we're interested in I think number one like there's so many areas that that you could sort of look into right now and you mentioned again like already already four or five and so you know the space has gotten so big where it's not really sort of investing into crypto's investing into companies and crypto sort of is going to be the technology and economic layer that just spans across like so many different Industries and because of that you know at Pantera we've grown a pretty sizable team both on in terms of the investment side and also the portfolio services side so we are starting to have a bit more sort of specialization uh for instance like you know I started investing in 2014 and you know I know we've done some of these Investments too but like you know focused on you know how do you get into cryptocurrency first on the retail side and institutional side how do you make things secure and maybe some of the early applications of of cryptocurrency and so focus on the US but also expand it to other geographies knowing that you know this is going to be Global we need liquidity in each of these different areas so that we can actually provide you know the ability to do you know on-ramps into each of these areas and also cross-border payments and liquidity for other sort of applications like you know decentralized finance and so my areas of expertise has really been around these local brokerages and exchanges Financial infrastructure in each of these different areas and then it spanned a little bit into developer tooling you know me and Joey did Alchemy but you know I think for uh for for us we have other folks that are diving even deeper into developer tooling decentralized finance and then of course like when nfts and gaming started to come about you know I started to dive a bit more into that side because you know for me like my background has been investing into consumer mobile and mobile applications before Pantera so I have a little bit of experience there and I just think that it's maybe higher risk at higher reward to go after consumers so I think for me like that's it's pretty fascinating I like to be able to invest into things that I can try and be able to tell other people they can try and understand a little bit more I think the other thing to sort of think about too is you know especially with like changing regulations especially regulations between the US and Asia I do think that we take a slightly different approach depending upon jurisdiction so I think in the US and Europe we focus a lot around infrastructure and middleware and financial infrastructure but I think you know I just came from Korea and I feel like there's a lot of stuff around gaming game five uh you know sort of entertainment and I think you know in Hong Kong and Singapore maybe a lot more around Financial infrastructure non-blockchain applications so things around identity depend Etc and around payments and then of course in Japan I think stable coins are very interesting so I think for us like the most important thing is to really sort of dive into each jurisdiction what makes sense on the regulatory side make sure you have the right partners and then of course be able to sort of help these companies scale yeah um yeah I think for us we like defy a lot still I mean there was a whole panel on that before us so I don't have to do too much but the Kool-Aid already yeah yeah Kool-Aid but I do think it's you know you look at like the chart of stable coins which is like the enabling thing behind defy and it's like the most promising like most exciting chart in crypto still it's still up and to the right um and there'll be more real world assets and and that'll feed into D5 and it's a sort of positive you know feedback loop um I would say I'm I'm a little bit more bullish maybe uh than than Joey on sort of the crypto AI intersection um I still think it's very early but uh yeah we were we were early investors in a in one sort of really early generative AI company um call called Jasper AI which is sort of like Enterprise grade chat gbt and had nothing to do with crypto but they're being used by a lot of crypto companies now actually and they have an nft package and things like that and uh I do think there's this exciting opportunity of like um using defy and the sort of open composable transparent Financial system and economic system that we've built um in crypto as like an execution layer for AI agents so like you know today you go to chat gbt and it's like it's like a better version of Google it organizes the world's information and but it also does stuff like it's a it's your little servant you know it's an AI agent it writes your essays for you and helps you cheat on your homework and stuff and then uh but it can't do like economic stuff like it can't rebalance your portfolio it can't pay your bills uh it can't run your business for you that's really hard you have to integrate with like hundreds or thousands of different payment processors and they're all you know Banks and stuff or you could just like one click into defy everything's open API and so that's very cool I think like starting to get like AI agents that are like economically empowered is really really cool we'll see how long it takes um but sort of a Brave New World that will be fun to live in I think at the very least yeah yeah I added through I think we really try to think about what will drive adoption for the next cycle and how do we sort of you know be around 6 to 12 months ahead of my ahead of Market because we're focused on being first track and investors so on the application side we're pretty excited about payments now I'm a bit biased because that's my background but I do think that you know on the you know TPS side you know we can actually provide a pretty good payments experience and bringing payments on chain like you're truly delivering a great user experience where it's 24 7. it's Global by Design it's instant settlement and I think now that everyone has coalesced around sort of stablecoin being like the sort of you know the currency that people use to make payments with on chain like we can actually use that in the real world too and rather than sort of Bridging the Gap you're sort of just eliminating the gap between you know crypto and you know normal currencies if you will so whereas in in Europe and also in Asia where you know we think there there's a lot of favorable regulation towards this we're speaking a lot of teams would love to talk to more um I think you know another topic that we're pretty we are spending more time on is as more transactions and activity go on chain I think privacy becomes even more important and at the moment given regulatory pressures and what's happened with tornado cash it's not the most popular thing to like be thinking about but it's still super important because I think people aren't really realizing the cookie crumbs that they're leaving on chain that will actually compromise their own security and their own funds you know lastly we we also made an investment in eigenlayer you know we call that the seed and we do think that's a platform that will unleash a lot of innovation in the middleware and devtooling side so I can there is a restaking platform that allows you know new projects to utilize the economic security of ethereum when you don't really have to think about that like you know it sort of abstracts away a big I think a big Focus area that teams spend a lot of time on so they can actually focus on Innovation you know they'll be launching in Q4 and they have a lot of teams that are building on them so you know we're pumped to see what happens there in general I think we're all pretty curious on this panel what will drive the next sort of Bow Cycle but as we've seen in previous Cycles crypto always finds a way so all four of you touched on D5 and I know all four of your funds invest in D5 so I'm curious in terms of what are the next unlocks for D5 what do you see there because it does seem like a lot of the projects that came to Market over the past say 12 24 months they seem like marginal improvements on existing incumbents instead of the true kind of zero to one unlocks that we saw back in say 2020.

so what are the biggest areas that Founders should be digging into for D5 I I mean um so I actually agree with the AI agent thing I I gave a talk about that at consensus earlier this year and I think that's actually an interesting area where D5 will intersect a lot with um like the next wave of D5 we'll intersect there a lot I think like if you think about the the problems that um as sort of Alex mentioned you have these agents that you know are Global you don't necessarily know who the other person is um and if you think about crypto the the way it works is actually a feature here and and not a bug crypto's terrible if you want to like buy a coffee or buy a laptop but if you're an AI and you don't know who your counterparty is you really don't want chargebacks you want Push payments not pulling payments and you want it to process pretty quickly it makes no sense that I would have to use a text-to-speech model and a speech to text model to have my Ai call my bank send a wire transfer to some Ai and like Asia or Europe and then like trust that it settles and the person delivers the service and all this stuff it doesn't make any sense um so I think that'll be a big zero to one area it's probably on a few year Horizon you know three to five years versus like next year but I think that will be a really interesting one I think the other thing is just sort of a Resurgence in the existing kind of V1 old school D5 stuff like if you look at uniswap right now it often does volume on on par with coinbase um and I think you know going into the next cycle um especially given a lot of the kind of regulatory developments that have happened I think it'll see even more um volume relative to centralized exchanges so a lot of kind of that existing way of coming back [Music] um and then I think there's like kind of a whole unexplored um problem space that people just haven't haven't built any companies around yet some of these are small though they're not zero to one but like one easy thing I'm still shocked no one's really built is like a borrowing aggregator like yeah you deposit and Paul and I have talked about this a million times you deposit each borrow say usdc and it kind of continuously refinances you to get the best rate there's nothing that does that um I think there's a lot of kind of still open things to build and D5 yeah I agree with Joey I mean you know we're I know we're both huge fans of of unit Swap and you know I think for us like we've made some plays around decentralized derivatives you know we do feel that institutions are going to be coming into the space and we need you know those sort of Primitives uh I think we co-invest into a company recently around that too a great entrepreneur that used to be a Pantera but beyond that I guess the other area that we've been digging a bit more into so we're early investors in circle and circle is the um issue or a co-issuer of usdc and I think that's probably the biggest uh you know sort of thing that's happening in D5 now tokenizing a dollar and being have you know having it be interoperable within decentralized Finance uh what's interesting is you know we invest into a company called bitso and they are facilitating cross-border payments they're facilitating the on-ramp for Latin America to get into cryptocurrency and the tokenized dollar has been huge you know again like people see the dollar as you know starting off as a store of value and then of course I think it'll be you know very very instrumental around sort of FX and then I think more recently especially with what's going on on the global macro side treasuries has been you know a great way to get yield in the U.S and so we have companies like ondo and m0 either providing sort of the picks and shovel infrastructure that's what m0 is doing to ondo actually sort of going out there and providing a way for folks in the U.S to get access to tokenized treasuries and yields and then of course like outside the U.S kind of doing it through a stable coin I think there's going to be more of those types of projects that are going to be doing so hopefully in whatever way makes sense in terms of their jurisdiction from a regulatory standpoint but again if you're able to sort of bring these assets on chain it could be stocks and then be able to have the benefits of you know security being have having the benefits of transparency being having the benefits of 24-hour trading and then of course interoperability within sort of a larger open Financial Network it becomes really exciting so I think that's an area that we're keeping an eye on yeah yeah I I do agree with your premise it does seem like there's like especially during the bull market there was a defy app for every like Financial product that exit like if you go to Goldman Sachs and are like what are all the financial products you trade there was like an app for every one of them and there maybe didn't need to be one for every single one uh like every single type of option and all that um but uh but I do think I think the next unlock for Defy is like core Primitives and instructional innovations that just make every defy like app 10x better so yeah I think privacy is is one of those like obviously in every situation you want to have private transactions of your defy trading and so you don't get front run and any other reason right there's there's never a reason where you don't want like private transactions I guess unless you're like one of those people on venmo who like clicks the public like Levy I don't know I guess I don't know if it was that popular in Asia but but yeah it's like unless there's someone like that who wants everyone to see every payment you've made with your friends and every time you pay them back for something then usually privacy is a good thing and it just takes time there are a lot of trade-offs you had to make so it didn't make sense to have private smart Contracting up until maybe in the next year or two and then I think also just the the real world asset part that that Paul brought up is is so good so you know today you could think of D5 as like this crazy playground um and uh uh that's also sort of a Dark Forest it's very scary it's very intimidating but it works pretty well it doesn't shut down randomly like it did sort of last last crisis or last bear Market um and uh but it's it's just a really good like Jungle Gym playground for crypto assets Trading you know crazy rc20s and stuff like that uh but the only real there's very few real world assets so if we could just extend that and just add more real world assets Euros t-bills uh stocks stuff like that obviously there's regulatory constraints that's probably the biggest thing as opposed to uh like in big infrastructural leaps there um but once that happens you know I think you can 10 100 exercise of I mean just I don't like why does everyone even hold tether and usdc when it's like zero percent yield I mean every time the FED rates rates raises rates it's just even more ridiculous that we're holding these uh coins and they're giving up like five six percent interest um but it's a testament to the fact that these things are actually really useful and but it will be even better I mean the the amount of dollars in in crypto will be much higher once uh these very simple things like like yielding instruments come on chain I think yeah I think this might be slightly controversial but I do think that there's a bit of an identity crisis between D5 products and protocols at the moment so you know you sort of look at the existing Financial system you have people who are building B2B products for light Banks and then you know those like asset managers who are then Distributing the retail and in crypto and D5 is just everything is just collapsed into one um so you know I kind of like to bifurcate the two when I think about it and when as we sort of mature in defy Innovation I think there might be a strong chance that we start looking more like how Trad fire works and you know not the Perfect Analogy but for example like a lot of talks about talk about intents for example and you know that sort of looks quite similar to RFQ systems which you know all the banks operate on at the end of the day so I do agree there's a lot of core Primitives that still need to be built to actually make the experience you know faster like increase like you know improve latency and just make it like you know more similar to what users are accustomed to otherwise from like you know adoption perspective like you know it's challenging to see how we'll get more users on chain I think the same argument can be made for D5 products um I agree with Joey I'm really excited about boring um you know especially right now on-chain rates are kind of lower than real rates and there are a lot of people who are unbanked if you actually have people who want to keep their Savings in crypto want to get a payday loan in crypto there's not really any good products that are available for it and I don't think it's like you know hugely different from what we're doing on chain it's just not packaged in the right way where there's a right go to market distribution so we're quite excited to see like you know more teams building on that I think it's a bit of a harder grind because it's not a pure software play but one that's definitely pretty meaningful and I mean you mentioned that part of your investment mandate is to find projects that could bring on the next billion people so I'm curious this question goes up to all of you as well what are the main things that are preventing web free apps from having the same type of adoption that you know web 2 applications have you know like WeChat and so on I you know I you know taking a stab at it I think usability is still not quite there like um I love metamask I love the metamask team like my mom's not going to use metamask at the end of the day um I think there's a lot of innovation on mobile for example and especially on the hardware side where we can sign transactions on mobile and that will come soon and that will definitely be a big unlock for you know a lot of users going forward to some extent I think you know just there's just not that many apps at the moment that you know people who use on a day-to-day basis maybe you could see that like weekly Maus maybe even monthly but I think if we have a proliferation of applications if you believe that you know the industry is somewhat like Supply constrained I think you you will kind of solve that chicken or egg problem yeah I guess there's three areas that I can think of I think number one like security so you know especially if you're going directly to a Dap um without sort of like a an on-ramp uh you know with some of the hacks that are going on you know I think just kind of providing Comfort around going into something and you know feeling like you don't have to sort of like be on watch so I think we're gonna sort of evolve in that category I think that there's going to be just you know more and more sort of types of audits that can be done you know maybe even more decentralized type audits I think there's going to be Insurance products that provide a bit more sort of comfort around that so I think that's something that you know people sort of have to sort of get over I think another thing is around sort of accessibility um you know I think one of the things is really like if mobile is so big especially in a lot of different markets then you know being able to sort of get on the Apple store or being able to sort of it seems like Android is probably an easier path to kind of get on and be able to sort of access or maybe that's why like Salon is creating their own phone or there's other sort of folks that are trying to provide different ways to kind of get around it but you know mobile is going to be so big for this industry and so you know hopefully those platforms evolve we evolve to be able to provide access to a lot more people through that medium and I think the other thing that is going to be really important is really just like the infrastructure to on-ramp folks into these decentralized applications in a regulated way I know Joey was really involved with wire but again like if you are not able to onboard consumers and they drop off you know more than 50 because they can't go through uh sort of kyc AML there's not good sort of risk analysis to kind of figure out like whether you know this is a good person to onboard or not then you're not going to be able to get a lot of people in anything to add Joy or admit yeah I mean I think um I so I think there's like based on what I've kind of seen in the private markets and like whatever where companies are working on on their roadmaps and stuff I I think a year from now in my mind there's really only two like major barriers um assuming you have like a really good aggressive engineering team there's really two major barriers to adoption one is what Paul just mentioned so the Fiat on-ramp problem um it's really difficult to build a company there because if you you basically have to figure out how to like let people pay but also deal with the kind of Fraud and chargeback risk from customers and as you scale you kind of keep thinking you solved the problem and then as soon as you have someone figures out some other attack factor it's it's sort of a cat and mouse um game that's that's really hard to solve at scale you know coinbase has mostly salted but um no one in the like direct to decentralized app via on-ramp spaces solved it like Moon pay you're paying six seven percent that's not solving it that's just adding in a fat margin to cover the fraud losses right um so I'd love to find somebody who who actually has a solution to that problem and then I think the second thing which is actually a bigger issue is just there's not enough people building apps um I would love to fund uh you know great Founders at the application layer there's just not that many people building apps um and so you know we'll allowed to see more of that because I I do think the infrastructure is at a point where ignoring the Fiat on-ramp problem you could build something where it's really zero to one and people go wow when they when they use your app today like I don't think that was possible you know when we were doing an auger like you know six or seven years ago but I think the tech stack today is at a point where that's actually feasible if you're willing to kind of you know integrate stuff which is sort of clunky today but do it in a way that that you know works pretty seamless for your users I think it's I think it's actually possible yeah one thing I'll touch on is is um like Enterprise adoption uh which I think we always are focused on retail you know we're individuals ourselves right um but I think the biggest unlock for Enterprises is actually the Privacy story and specifically differential privacy so that's what like ZK Tech and homomorphic encryption are all about it's like you could share some information but not all to certain people and you could have guarantees if that's the case right and so the early way I think we all thought about privacy was in a very like comprehensive way like you're someone you don't want anyone to know who you are or what you're doing in any way right and that's like the very you know sort of libertarian early ideological uh conception of privacy but actually there's a lot of entities out there who are called businesses that uh they are fine being like known like who they are uh but they just don't want certain things that they do to be known by everybody right so you know if you're a business how how can you possibly put medical records on chain if it's open to everybody how can you possibly have your supply chain Logistics on chain if it's open to everybody how could you even do like payroll and payments if like it's all the transactions of of you know your the amount of money the salaries you're giving to your employees is like totally open for everybody and you could or you could game it for like on chain analysis or something right so that I think the differential privacy story is going to be really big for actually unlocking Enterprise use cases I think in the next couple years and I think we have one we have time for one more question so this question is for the founders out there so recently a Founder reached out and asked hey I'm building this application it's getting increasing users every month but the market itself is shrinking but if you look across all the markets in crypto nft volumes are going down D5 volumes are going down so what is your advice for Founders out there that are building growing products in a shrinking Market I mean I think my um you know my view would be like you know if you look at Peter he has this thing in zero to one where he says that if you if you can really kind of conquer a small market and get sort of Monopoly scale market share in that small Market um it tends to mean you have some sort of edge where you can then scale that into larger successively larger and larger markets versus it's much harder actually to go after a massive Market um like you say you're starting like a new ISP that's very difficult you know if you're Elon you can do it with starlink but but that's kind of an end of one situation and um and so I think that's it's not necessarily a bad thing like if you have a small market and you're gaining market share in that market you do need to figure out eventually how to expand into larger markets um whether that's like vertically or horizontally um but I would say you know one like I would I wouldn't be discredited by it necessarily as a founder and then two I also think like a lot of the drawdown and crypto stuff I think is temporary right like my personal view is that's gonna you know come back over the next few years so you could be both um gaining market share in a market that today is shrinking but in two years from now will actually be much larger so that's sort of my view there yeah I'm gonna I'm gonna piggyback off of what Joey mentioned but I guess expand a little bit so yeah I mean I guess two great examples of again starting off in in one particular area that just makes a lot of sense there's just like product Market fit and expansion would be you know one Alchemy you know starting off with nodes and then expanding over to sort of developer apis and infrastructure and another company that we invested into really early on staked around staking everyone was like oh my gosh like that's such a small Market why why go into it but I think once you are able to sort of create a a beachhead and a brand around staking then of course either the staking Market evolves where again like you know there's more proof-of-state protocols or liquid staking things like that or you can even go direct to Consumer and offer you know other sort of products or even going over to institutions so I think that's one way to sort of you know think about you know just kind of starting off in one area that just makes a lot of sense expanding the product line I think another way is really around geography so if you start off in one area that really just kind of resonates with that geography and then figuring out I have product Market fit find similar geographies that make a lot a sense or maybe even around a certain region like let's just say you start off in like you know you know we invest into like the leading Brokerage in South Africa you know they understand that environment they can expand to other parts of Africa and I think the other the last thing that I'll mention is around sort of go to market in general so right now I mean consumers are a bit hesitant to speculate or just kind of get exposure to crypto potentially I think it's a great time to be building though to kind of set yourself up for the next bull market where consumers will be a little more comfortable but going after Channel Partners you know B to B to C if you have a product that you know you think is really compelling to the end consumer why don't you go through a coinbase you know similar to what kind of optimism did with Bass But like go go through someone that actually has a distribution you know try to see if that idea has product Market fit and then sort of take that and go directly to Consumers afterwards yeah I do think this is actually a really tough question because our belief is like there are these like infrastructure unlocks that will like that once they happen within a few months still 10x or 100 exercise of the market but then not until then you know privacy rural assets whatever so yeah it's really it's really tough if you're a founder and one of these pre-unlock markets um and uh because you know the Peter teal line is like you go into a smaller Market that will eventually grow you know or you like move into other markets because it's all growing the pie so what if you're in a market that's just shrinking for for a year or two or multiple um yeah I don't know it's really it's really tough like there are some like famous D5 Founders including several who are on the last panel who kind of like almost work part-time on their projects or took time off like after starting it for like one to two years um and which is something that in Silicon Valley lore of just like work non-stop all the time you would never do but it was totally The Right Move uh they needed to like pay rent they had other jobs you know and sometimes you have to do that in crypto or you just have to be really long-term oriented and okay waiting years and years and really understanding your customers and really building market share and making sure your users love you and love it but it feels very incremental in the time right um and that's tough it's a really hard thing to do it's not for every founder you could also just go start an infrastructure company but it's like you know I don't know I don't think it's necessarily a uni swap's job to go launch other stable coins you know they just have to wait until they're more stable coins and and so forth um so yeah not the easiest thing to do uh but it might be a com you know there might be some waiting to do right yeah I think you know Echo what everyone said and I think this is a moment where you really think about you know survive to thrive basically people just hunkering down and bear markets and building being close to your users you know iterating as much as possible trying to find cheap and economical growth hacks wherever possible just so you can you ensure that you're actually around when the market does return I do worry that you know there are a bunch of teams that are just trying to squeeze growth too much at the moment and they might not make it to the next cycle which would be such a shame because a lot of them are building amazing products I think this Market is also probably not the market to be building derivative products like there's just not a lot of funding for it is my sense so you know if you're trying to build a better unit swap or a better Ave you need to have a really compelling reason as to why in sort of 12 to 18 months like you know you're really poised to gain market share when the market comes back because your product is so uniquely special and differentiated aside from that I think really it's just when the bull market comes back and everything's crazy again we might miss these times so no focus on building definitely I think that's a great note to wrap us up on so thank you so much to all the panelists for coming and thanks for coming out guys