Multicoin Capital

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Technical Scalability Creates Social Scalability

By Kyle Samani

May 25, 2021 | 16 minute read

This essay assumes familiarity with Nick Szabo’s essay on Social Scalability, Vitalik Buterin’s essay on Weak Subjectivity, and Haseeb Qureshi’s essay on Why Decentralization Isn’t As Important As You Think. This essay is not a rebuttal of Szabo’s essay.

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Technical Scalability Creates Social Scalability

This essay assumes familiarity with Nick Szabo’s essay on Social Scalability, Vitalik Buterin’s essay on Weak Subjectivity, and Haseeb Qureshi’s essay on Why Decentralization Isn’t As Important As You Think. This essay is not a rebuttal of Szabo’s essay.

Announcing Venture Fund II

Building on the success of our first venture fund, we’re proud to announce that Multicoin Capital has raised a new $100M venture fund to back entrepreneurs building companies (equity), and protocols (tokens) in and around the crypto space. We have been investing out of this vehicle for several months already.

Our Investment in REALY

Today, I’m excited to announce our investment in REALY, a platform that trades the legitimacy of streetwear and other real world collectibles. Our friends at Alameda Research and SNZ Capital also participated in the round.

The Helium Flywheel

Helium is a new crypto economic protocol that underpins a new business model deploying and managing wireless networks at about 100x lower cost than traditional top-down telecom business models. The first wireless technology supported by Helium is LoRaWAN, a popular technology for IoT devices. Multicoin Capital co-led the Series C round in Helium Inc in 2019 along with USV.

THORChain Analysis

Multicoin Capital has accumulated a large position in RUNE, the native token of THORChain, a decentralized cross-chain automated market maker (AMM). RUNE represents one of our largest public positions.

The Perpetual Protocol

There’s a long running joke that all financial innovation can be boiled down to two things: figuring out ways to take on more leverage, and (un)bundling risk to more efficiently price assets for investors. The first major financial innovation was the separation of debt and equity back in the 1400s. This innovation unbundled risk, creating two classes of risk holders: debt (lower risk, lower returns), and equity (higher risk, higher returns).

Our Investment in Swivel Finance

Today I’m excited to announce that Multicoin Capital has led a $1.15 million seed round in Swivel Finance, a new decentralized protocol that enables fixed-rate lending and interest-rate derivatives. Electric Capital, CMS Holdings, Divergence Ventures, and DeFiance Capital also participated, as did several angels including Ash Egan, Stani Kulechov of Aave, Alex Pack, Imran Khan, Qiao Wang, and Thomas Klocanas.

The DeFi Stack

Open Finance is one of Multicoin’s three Crypto Mega Theses, wherein Open Finance is a superset of DeFi. Over the past 12 months, there has been an explosion of activity in DeFi on Ethereum: there is $13.6 billion in capital participating in DeFi, up more than 20x over the last year.

Our Investment in OXIO

I’m excited to announce Multicoin Capital’s investment in OXIO. We led OXIO’s $3.5M seed round last year, and now the company is emerging from stealth following a $12M Series A financing led by two of the top VCs in Latin America, monashees and Atlantico Capital.

Watch Fireside Chats with Solana, Helium, Ribbit Capital from the Fall 2020 Multicoin Summit

With another successful summit in the books, I’m delighted to share three of our most popular fireside chats from our fall summit. This year, we held our first virtual event, the first of hopefully many more to come. It was a great format that afforded us the opportunity to reach more people around the world and go deeper than we ever have before.