/ Featured
Over the past two years, the scaling debate has narrowed and fixated on the central question of modularity vs integration. (Note that discourse in crypto often conflates “monolithic” and “integrated” systems. There is a rich history of debate in technology over the last 40 years about integrated vs. modular systems at every layer of the stack. The crypto incarnation of this dialogue should be framed through the same lens; this is far from a new debate).
/New Investment Partners at Multicoin
Today I’d like to announce that two of our longest standing members of our investment team, Spencer Applebaum (LinkedIn, Twitter) and Shayon Sengupta (LinkedIn, Twitter), have been promoted to Investment Partner. Both of them have done great work in finding lucrative trades in public markets, and in sourcing and winning competitive deals in private markets. But most importantly, both have also worked closely with many of our founders over the past several years to help them succeed.
Today we are excited to announce our latest venture fund, Venture Fund III, a $430M fund that invests $500K-$25M in early-stage opportunities all the way up to $100M+ for later-stage projects when combined with our evergreen liquid fund.
One of the most powerful features of crypto-economic protocols is their ability to create incentive structures that allow anyone in the world to permissionlessly contribute to a set of shared objectives. These incentive structures can be finely tuned to facilitate large-scale coordination to achieve specific goals. This represents a step-function improvement in capital formation.
Over the last year, Fortnite has pushed the boundaries for large scale synchronous online virtual worlds via concerts (Travis Scott and Ariana Grande on Fortnite). In hindsight, these concerts will be looked back on as the first mainstream precursors to the full blown Metaverse (shout out to The Sims and Second Life for trying this before the world was ready).
A blockchain is a database with unique trust-minimization properties. Like all databases, there are two kinds of operations: reads and writes. Most of the discourse to date around scaling blockchains is about writes. This is often measured as transactions per second (TPS). For example, Ethereum supports 15-30 TPS, Binance Smart Chain supports up to 160 TPS, and Solana supports up to 50,000 TPS. Investors have invested billions of dollars to scale blockchain writes.
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.
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.
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.
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.