Launching an insurance company is tough. Launching one focused primarily on digital assets? That’s a level of difficulty few founders would touch. Yet, J. Gdanski did exactly that when he founded Evertas in 2017. Today, Evertas has scaled to tens of millions in annual premiums and secured capacity at Lloyd’s of London—becoming the first dedicated crypto insurer. In this interview, J. explains how he discovered the insurance gap crippling institutional adoption of crypto, and shares hard-won lessons on building a niche startup in a highly regulated industry.

From Early Blockchain Endeavors to the Insurance Gap

J’s crypto journey began in 2015 while working at major banks on emerging “enterprise blockchain” initiatives like R3 and the Enterprise Ethereum Alliance. During that time, he noticed a three-pronged requirement for large-scale institutional custody:

1. Custody tech (wallets, key management)

2. Legal/regulatory frameworks

3. Insurance coverage for digital assets

That last piece—insurance—didn’t exist in any meaningful form. Institutions needed coverage, but Lloyd’s underwriters were wary, citing the novelty and technical complexity of crypto. So in 2017, J teamed with co-founder Raymond Zenkich (who had both McKinsey and Accenture experience) to start Evertas. Their mission: become the go-to insurance provider for all things crypto.

Building a Company Under Insane Constraints

From the get-go, Evertas faced massive challenges:

• Highly Regulated, Slow-Moving Market: J. jokes, “Never start an insurance company.” It took two years of patient relationship-building, risk modeling, and constant education for Evertas to convince large underwriters in London to back a crypto policy.

• Technical Depth: Evertas had to define (and legally codify) terms like “hot,” “warm,” and “cold” wallets—since existing policies used them colloquially but never clearly.

• Lean Team, Deep Expertise: Rather than hiring a big staff, Evertas invested in “absolute experts” across cybersecurity, blockchain, and underwriting. For years, Evertas stayed under 5 employees. Only once they secured major capacity at Lloyd’s did they scale to ~15 people.

Despite these hurdles, Evertas eventually became a Lloyd’s coverholder (allowing it to write policies directly) and expanded its policy size from $5 million to $400 million within a single year.

Hard-Earned Lessons for Founders

1. Know When to Kill Your Idea
   J. learned early to avoid “sunk cost” traps: “Wake up every day and ask if you should kill the company. Time is the one resource you can’t get back.”

2. Hire Slowly, Fire Fairly
   Employees are your biggest cost—and your biggest potential driver of success. Be meticulous in hiring and don’t hesitate to part ways if the fit isn’t right. “Always treat people humanely with notice, severance, and respect,” J. says.

3. Focus on Revenue, Not Vanity
   Evertas refused to scale prematurely. They were laser-focused on proving their underwriting model to Lloyd’s. That meant few marketing dollars and no fancy “swag.” But once they landed capacity, premium revenue soared 30x in a year.

4. Cultivate the Right Partnerships
   Securing buy-in from major industry players takes time. “Make sure you’re talking to actual decision-makers,” J. advises. Corporate politics and internal misalignments can waste months (or years) if you’re stuck with the wrong champion.

The Road Ahead: A Crypto Insurance Giant

Now profitable (or nearly so) and well-capitalized, Evertas is ready to expand:

• Bigger PolicySizes & New Products: They aim to handle even larger policies for custody, hot wallets, and eventually multi-chain or DeFi setups.

• Cyber Coverage & DAO Solutions: J. sees huge gaps in specialized coverage for DAOs, smart contracts, slashing risks, and more. Evertas is exploring how to structure these next-gen policies.

Boring, though it may sound, Evertas’s “insurance-first” approach could unlock major institutional participation in crypto. When a custodian or exchange can point to robust coverage at scale, regulators and enterprise customers breathe easier. It’s the type of behind-the-scenes infrastructure that every disruptive sector eventually needs—but few founders take on.

“Boring businesses can make big money,” J says with a grin. “And they can also support truly innovative ones. We’re proving that every day.”

Look forward to what the future holds for Evertas, let me know if you’d like to be connected with them!

From Facebook Bonuses to GameStop Realizations

Jay’s first taste of crypto came in 2017, watching friends dump $100k Facebook signing bonuses into ETH at $40. “I thought it was the worst idea ever,” he laughs—until they made money. Then lost it all. Still, it showed him the financial power of crypto speculation.

But the big turning point came at Robinhood in early 2021. Jay led an engineering team there when the platform halted buys of meme stocks like GameStop, angering users nationwide. “I felt powerless,” Jay recalls. “People wanted a decentralized Robinhood—so we started building it.” That impetus led to Sei, originally aimed at being a next-gen DEX. Over time, he and co-founder Jeff realized the real problem was infrastructure: existing blockchains lacked throughput and developer tooling to sustain true high-frequency trading.

A Contrarian L1 Amidst a Rollup Craze

“It wasn’t easy convincing investors to back another L1 in 2022,” Jay admits. Terra had collapsed, and everyone was hawkish on rollups, not layer-ones. But Multicoin saw potential and funded Sei’s contrarian approach. “Everyone else said no,” Jay says, “but you only need a few believers.”

Sei’s early days used CosmWasm exclusively, but they quickly pivoted to the parallelized EVM after discovering 85–90% of devs were EVM developers. “We realized if we want dev adoption, we can’t ignore EVM.” The result: a chain that offers both the EVM’s developer mindshare and the speed of a cosmos-based infrastructure.

Lessons in Fundraising & Team Building

Jay endured countless rejections while raising. “Every fund that passed was basically saying, ‘We don’t believe in you.’” The key, he notes, is pushing forward. “Investors can be wrong. If you believe in your mission and keep shipping, the right partners will come along.”

For team building, Sei took a part-time first approach. Their founding engineers—ex-Googlers, Facebookers, Databricks devs—contributed nights and weekends, so both parties saw real working relationships before signing on full-time. “Interview processes are shallow; actually coding together is how you truly vet people,” Jay insists. This method also helped reduce flight risk. After two months of shipping code, new hires rarely looked elsewhere.

The Performance Obsession

Sei’s push for a “decentralized Robinhood” requires near-instant finality and throughput that dwarfs existing EVM chains. “Ethereum or its rollups might do 50 TPS,” Jay says. “We’re already at around 5,000 TPS. But to compete with a Web2 giant like Google, we need 100k TPS.”

Why Google-level performance? Jay points out that in Web2, large-scale applications routinely hit tens of thousands of operations per second. True DeFi and real-time trading could demand similar throughput. “We want developers to build anything on-chain without clunky, capital-inefficient designs just to work around throughput constraints.”

Yet high throughput alone won’t lure devs. They come for opportunity—the chance to be early in a chain’s growth and reap the rewards. Sei now sees “killer app” adoption as the final step to proving product-market fit. “We have narrative market fit and community fit,” Jay explains. “What’s missing is that breakout DApp that onboards real users and traffic.”

What’s Next for Sei

Jay’s vision is to blur the line between Web2 and Web3 until “building on-chain” feels identical to “building in the cloud.” That includes:

• Low-latency finality (~100 milliseconds) so users see instantaneous confirmations.

• High throughput (tens of thousands of TPS) to handle real-world user loads.

• Developer-friendly: EVM compatibility + minimal friction. Tools for debugging, block explorers, and user login solutions akin to “Sign in with Google.”

• Open ecosystem: Let the broader community tackle improvements like caching, user onboarding, or bridging solutions.

Ultimately, Jay says, “If users can’t even tell they’re on a blockchain, that’s when we’ve succeeded.”

Takeaways for Founders

1. Ignore Most Investor Rejections: One partner who truly believes can outweigh 99 that say no.

2. Test Drive Hires: Working part-time first ensures deeper vetting than any interview can.

3. Pick EVM’s Mindshare: If dev adoption is the goal, meet them where they are.

4. Build For Real Throughput: Don’t settle for 50 TPS. Aim for scale that can handle tomorrow’s “Google moment.”

5. Wait for the Killer App: True product-market fit for an L1 (or L2) crystallizes once a breakout DApp emerges.

For anyone eyeing the next wave of crypto infrastructure, Sei stands as a bet that performance does matter—and that bridging EVM devs with cosmos-level speed might birth the chain that handles crypto’s “GameStop moment” at global scale.

From Cryptography at MIT to Algorand
Sergey’s journey into crypto started in an MIT PhD program. Studying advanced cryptography put him on the radar of friends fascinated by the potential of Bitcoin and Ethereum. He quickly recognized the limitations of early blockchains—scalability, fragmented ecosystems, and lack of infrastructure. So, he teamed up with MIT Professor Silvio Micali on the founding team the Algorand blockchain – alongside Georgios Vlachos, who would become the co-founder of Axelar protocol. As Algorand grew, Sergey and Georgios discovered a larger issue: blockchains need to communicate. Bootstrapping each chain’s user base and liquidity in isolation isn’t sustainable. “We ideally would have just found a secure, plug-and-play system to connect Algorand with other chains,” Sergey recalls. “But there was nothing available.”

The Birth of Axelar
Four years ago, Sergey and Georgios realized that if the blockchain ecosystem kept growing, it would grow horizontally—leading to fragmentation. User experience would suffer, and developers would face a spaghetti of bridging solutions. So, they wrote the white paper for an interoperability layer that works for any chain or rollup, whether it’s EVM-based or uses different smart contract languages. The idea: one universal “translator” that can route messages and assets between blockchains in a secure, permissionless way.

Today, Axelar connects over 70 chains—including Ethereum, alternative layer-1 blockchains, Cosmos-based chains, layer-2 rollups, and more. Sergey is the CEO of Interop Labs, the initial developer of Axelar and one of several teams now working on the open-source protocol. “Our goal,” Sergey says, “is to make launching multi-chain apps as easy as launching on a single chain. No matter where your users come from—or which wallets they use—Axelar will handle the behind-the-scenes bridging, messaging, and translations.”

Why Interoperability Matters
Sergey points to examples like stablecoins, decentralized exchanges (DEXes), and cross-chain NFTs. A stablecoin shouldn’t fracture into 16 different versions—users simply want “one stablecoin” that works anywhere. The same is true for DEX protocols like Uniswap, which could gain more liquidity and a better user experience by seamlessly supporting multiple chains. Axelar’s “general message passing” approach even allows an app to have one “home” contract while deploying “edge” contracts across other chains. This unifies logic, liquidity, and user access.

Building for the Long Haul
Of course, building secure infrastructure in an industry notorious for hacks and exploits is no small feat. Sergey’s team at Interop Labs has taken a rigorous, layered approach to security. Axelar has run for years without losing user funds—a significant achievement given how many bridging solutions were hacked in 2021–2023. “It takes solid engineering and occasionally slower go-to-market to ensure things are done right,” Sergey explains.

He also cautions founders not to chase short-term market narratives. Trends like NFTs or Real-World Assets might look hot now, but real infrastructure takes years to build. “You can’t pivot your entire roadmap every time the narrative changes,” he says. “Pick your core convictions, validate them, and make sure you have the runway to survive the cycles.”

Advice for Founders

1. Secure the Funding Window: “If you have a chance to raise, take it,” Sergey advises. Markets turn fast.

2. Hire for Staying Power: Don’t overspend on hype. Keep your burn rate reasonable, because the industry’s boom-and-bust cycles can be brutal.

3. Serve Real Needs: The Axelar ecosystem grew by meeting developers’ fundamental pain point—true cross-chain interoperability—rather than chasing the latest fad.

4. Plan for Distribution and UX: Users shouldn’t need 30 minutes to set up new wallets or bridge tokens across multiple chains. “If you lose people at the first step, they’ll never come back,” he says.

Looking Ahead
In Sergey’s words, “Chains will be abstracted away. You’ll specify which assets or logic you want, launch your dApp, and let users from any chain jump right in. They won’t even know or care about bridging.” Axelar is the invisible glue connecting it all—so developers focus on building great products, not stitching together incompatible blockchains.

Want to hear more about Sergey’s path, Axelar’s architecture, and how they once helped save Cosmos liquidity in under 24 hours? Watch the full interview for an inside look at how Axelar is shaping the future of multi-chain Web3.

From Academia to Frustration with Crypto UX
Henri’s journey began in graduate school at Stanford under the legendary cryptography professor Dan Boneh. After diving deep into distributed systems and applied cryptography, Henri joined Protocol Labs (the team behind IPFS and Filecoin). Despite loving the foundational aspects of crypto, he was disheartened by one reality: developers rarely focused on usability. “Every crypto app I used felt clunky,” he recalls. “If we can’t onboard mainstream users, how can we expect true adoption?”

So, he left the industry. But the vision of an “open ownership layer for the web” still captivated him. Over time, Henri realized that the friction users faced—managing Metamask, storing seed phrases, bridging assets—was exactly the kind of technical problem he was trained to solve. Privy was born to lower the barrier and make crypto-based products accessible to everyone.

What Is Privy?
At its core, Privy is developer tooling that allows projects to onboard every type of user—from crypto natives with multiple wallets to absolute newcomers who don’t even know what a seed phrase is. With one simple library, developers can:

• Let experienced users connect existing wallets

• Generate and orchestrate embedded wallets for new or non-crypto-savvy users and companies alike

• Customize security and UX flows (multi-factor authentication, email sign-ins, or advanced cryptography)

Henri likens Privy to a “customizable interface” for wallet creation, key management, and user communication. This eliminates the typical slog of downloading browser extensions, remembering seed phrases, or juggling multiple accounts. The result? A frictionless way to buy, sell, or interact with on-chain assets—much like you’d use any Web2 app.

Real-World Examples

1. OpenSea: Today, a new user can simply type in an email, verify it, and—under the hood—Privy creates a self-custodial wallet. Then they can purchase an NFT with a credit card. This means no more fumbling with extensions or bridging ETH.

2. Courtyard: A platform digitizing physical collectibles like Pokémon cards. Newcomers join with just an email, trade or bundle digital cards instantly, and never realize they’re interacting with NFTs behind the scenes.

3. SukuPay: An international payments app where users can instantly send stablecoins across borders. Privy handles the wallets and security, so folks can focus on transactions, not the complexities of crypto rails.

Security Without Overwhelming Complexity
“But is an email-based wallet really secure?” Henri points out that security is not a binary but a spectrum. Privy helps devs choose the right level of security (e.g., multi-factor auth for every transaction vs. quick one-click approvals) based on their use case. For higher-value transactions or power users, Privy can integrate robust cryptographic setups (MPC, enclaves, etc.) and user-owned recovery options.

The key is flexibility: new users might start with an email-based flow, but as they evolve (and store more assets), they can seamlessly transition to more advanced setups.

Building Products, Not Tech Demos
Henri’s frustration stemmed from crypto’s obsession with underlying protocols at the expense of user experience. Privy’s mission: help builders focus on product-market fit, user feedback, and real-world utility—rather than wrestling with the basics of wallet management and key custody.

A second insight from Henri? Don’t chase shiny technical developments at the cost of shipping. While zero-knowledge proofs or new L2s might be revolutionary, your product won’t matter if it never launches. “Much like NASA stuck with older compute tech for the Apollo missions, you sometimes have to settle on a workable tech stack, ship, and then iterate,” he says.

Advice for Founders

1. Know where to innovate: Decide which parts of your product truly need novel solutions vs. where you can rely on existing frameworks.

2. Listen to customers: Privy builds features only after seeing real demand. “We never chase a feature that doesn’t solve a tangible problem,” Henri emphasizes.

3. Hire slow, hire right: In a volatile market, bring on versatile, experienced folks who can adapt as your startup scales.

4. Eat when dinner is served: Whether you’re raising capital or shipping features, seize opportunities when they present themselves.

The Road Ahead
Henri sees two overlapping waves: crypto-native products going mainstream (like NFTs or prediction markets that anyone can use) and traditional industries adopting stablecoins or on-chain rails. Privy aims to be the trusted “bridge” for both. “If we can give devs a single library that handles everything from embedded wallets to advanced security, we remove friction—and open the door for real-world apps to take flight.”

Want to dive deeper into Henri’s story and the future of frictionless crypto? Watch the full interview to learn how Privy is making Web3 as easy as opening an email and clicking “buy.”

From Debanked Teen to Crypto Believer
Before college, Dariya was creating iOS games and apps, trying to earn a bit of money online. But at just 14, he was locked out of PayPal—no explanation, no recourse. That taste of censorship lit a spark. By 18, he was exploring Ethereum as a “world computer” and dreaming of a new digital landscape where user data was both open and pseudonymous.

What hooked him on Ethereum was the possibility of transparent, user-owned data—the dream that targeted advertising could be more efficient and less predatory if all activity was on-chain. Instead of trusting walled gardens to share or sell user data, a protocol could simply reference open on-chain transactions to find the right audience.

The Genesis of Layer3
Fast forward a few years, and Dariya found himself deep in DeFi Summer, collaborating with token-based projects struggling to acquire and retain users. Having spent a fair bit of time managing ad campaign dashboards for the apps he had built, it was easy for him to see the similarity. The many protocols that issue tokens as “customer acquisition dollars” in search of metrics and users. Often these projects had scattershot approaches with limited success—airdrops, liquidity mining campaigns, one-off promotions. Dariya realized these tokens could be deployed more strategically to drive real, desired actions on-chain. That insight became Layer3: a performance-marketing platform where protocols can reward users (or even automated agents!) for specific blockchain interactions.

As Dariya explains, “There’s going to be 100,000 of these companies, each with their own tokens, all trying to bootstrap liquidity and user activity. Layer3’s mission is to connect them with the right users at the right time—ensuring tokens are distributed for tangible protocol goals.”

Tokens as Fuel for Behavior
One of the most compelling aspects of Layer3 is that it cuts out the noise of vanity metrics. Rather than simple airdrops based on wallet addresses, Layer3 helps protocols define meaningful actions—like providing liquidity on a new chain, testing a new DeFi product, or engaging in NFT marketplaces. Users who perform these tasks get rewarded, and protocols only pay out for genuine conversions.

This aligns well with what Dariya calls the “action–reward primitive”: the idea that tokens should be used to pay for valuable on-chain actions, not just as speculation. Over time, as AI agents and real users interact with smart contracts, this on-chain marketing loop could become the new standard.

Lessons in Building (and Fundraising)
Like many startup founders, Dariya’s journey came with setbacks. Early on, he learned to “take the capital when it’s available,” recalling a moment in 2022 when a post-Luna crash and FTX upheaval made fundraising tougher. He also discovered the importance of selective hiring. Rather than scale a massive team quickly, Layer3 grew deliberately—ensuring each new hire was a 10x contributor who enhanced the entire culture.

Another big lesson? Don’t overbuild for a single ‘big logo’ customer. In crypto, the real objective should be repeatable, productized solutions. Chasing custom requests too eagerly can derail the roadmap and erode your broader vision.

The Road Ahead
Where is Layer3 heading next? Dariya envisions a hub much like Google or Facebook Ads—except here, the “ad” is an on-chain incentive. Whether it’s a chain wanting to boost liquidity or a DeFi protocol introducing a new feature, they can tap into Layer3’s distribution network, define a desired action, and reward successful takers. Over time, a native token will power these interactions, allowing communities to govern how tokens are spent and who gets to launch campaigns.

Ultimately, Dariya hopes Layer3 becomes the top-of-funnel for all on-chain actions. Just as you might “Google” something before you shop, you might check Layer3 for the best incentives or newest opportunities before you make a move in crypto.

Closing
In an industry driven by hype cycles and speculation, Layer3 stands out by focusing on tangible, user-driven utility. Dariya’s story—starting out as a teen app developer who just wanted fair access to online payments—reminds us why crypto matters at its core: empowering individuals with open infrastructure. If you want to see how crypto marketing and user acquisition might evolve in the coming years, check out our video interview with Dariya and learn firsthand how Layer3 is reshaping on-chain engagement.

Watch the full interview to hear Dariya’s insights on fundraising, team building, and the future of token-driven marketing.

I had the distinct pleasure of interviewing Sunny Aggarwal, Co-Founder of Osmosis Labs a while ago. Sunny and the team are focused on building, you guessed it, Osmosis.  Osmosis was and still is an app chain that serves as the DeFi hub of the Cosmos ecosystem. Today, the same team is about to launch Polaris. I wanted to share with the world this founder spotlight from over a year ago, because it is indicative of the Osmosis team’s dedication to setting out a vision, and building user-centric products that Web3 needs.

So, lets start at the beginning..

Sunny’s Origin Story

”DogeCoin just sponsored the Jamaican Bobsled Team”. This bizarre headline was the first spark that ignited Sunny's curiosity in the world of Bitcoin and other digital assets during his final year of high school.    

Upon arriving at Berkeley, Sunny and a few friends signed up to teach a class on Bitcoin, the community that eventually became the Blockchain at Berkeley Club. Later that summer, Sunny interned at ConsenSys, where he developed an interest in proof-of-stake for its ability to address certain incentive systems and mechanism design challenges that proof-of-work couldn’t solve. Preferring Tendermint, he explored further and came across the Cosmos SDK, realizing it could more effectively address many of his existing issues with Ethereum. Excited by the idea of bridging multiple app chains around Bitcoin to build even more applications, he quit his internship with ConsenSys to join Cosmos full-time, ultimately dropping out of Berkeley before starting his second year in 2017. Here, he met another intern, Dev, who would later become one of his co-founders for Osmosis. 

Founding Osmosis

“We really wanted to do something with privacy”. 

At the time, front running was a growing problem, which occurred due to privacy breaches in the mempool. Letting the whole world know Alice is about to buy and Bob is about to sell something meant that others could beat Alice or Bob and take their place. To build privacy in the mempool, he settled on building a threshold encryption scheme using a Tendermint chain but realized this was a feature but not a product.   

On the other side of the world, Josh and Tony, the creators of the Keplr Wallet, were unsure how to monetize a wallet. They had just started at a Hackathon—building a DEX (Decentralized Exchange) on the Cosmos SDK—where they were introduced to Dev and Sunny, who initially thought they’d be their first customers for their shared sequencer. However, after a joint project, all four of them realized they were better off merging and focusing solely on Osmosis as the DEX.

The Untapped Market

“Being as close to the user [as possible] is very important”

The initial aim within Osmosis was to develop a privacy-focused DEX, but the announcement of Cosmos IBC presented a new opportunity.  The Cosmos ecosystem assets, with its high-value and numerous assets—second only to Ethereum by market cap at the time—faced difficulties getting listed on centralized exchanges.  The Osmosis team saw an opportunity to address this issue. Launching the dex, as soon as Cosmos IBC went live, they got product-market fit almost immediately. Even after the collapse of Terra in 2022, Osmosis remained resilient, retaining many developers and continuing to build within the Cosmos ecosystem. 

Innovation and Prioritization in Blockchain Development

“Many projects you see are forks of the same three codebases. We really wanted to set ourselves apart." 

Osmosis’ commitment to originality required knowing what to prioritize in the complex landscape of innovation, particularly in deciding between the “intellectually cool and innovative” ideas versus features that actually cater to the “direct demands” of the market. For example, Sunny noted that while superfluid staking was extremely exciting, they pondered whether it was the “most important” product-facing concept, and felt it didn’t significantly improve the trader experience at the end of the day.

Another major issue that the Osmosis team addressed was that existing blockchains need to pay gas fees with a specific token, which negatively impacts user experience. Why should you have the token of the chain you are trying to get an asset in for the first time? Osmosis addresses this by modifying their chain to allow transaction fees to be paid in any token.

Today Osmosis is able to provide its users, cross chain, fast, gas-efficient settlement. The developments shipped as features today are the result of the constant balancing act between the intellectually stimulating features and pressing market-needed features. 

Osmosis Labs remains dedicated to enhancing user experience by enabling transaction fees to be paid in any token, addressing privacy concerns, and taking users for chain A to chain be as fast as possible. 

Before I dive into the latest and greatest with what the Osmosis team has been upto..

Take aways from Sunny for other founders from our spotlight:

• Launch when you said you would - but with caveats

  • Launching as scheduled demonstrates responsibility and legitimacy to your followers, but it's important to communicate that timelines may need to adapt in response to changing market conditions. 

• Build the culture  

  • Being a fully-remote company, it’s even more important to host regular team meetups, supporting repertoire between co-workers and mentorship

• Know when to drop or pause a project. 

  • Intellectual curiosity can distract from building features with more direct user-facing value. 

• Hire the best people

  • A blend of senior and junior talent combines the certainty and expertise of experienced professionals with the fresh perspectives and bold bets of the younger generation, fostering a supportive and dynamic environment.

The “since”

What can I say? The Osmosis team has been shipping faster than my editor that went MIA for a couple of months so there has been so much happening that I need to close with a segment on the latest and greatest.

What else happened at Osmosis:

Its hard to give a snippet on what this productive team has shipped but I’ll highlight two major things. Osmosis has spearheaded the development of a novel cross-chain security model termed “mesh security” since 2023. This model aims to combine staked assets from two or more blockchains, thereby bolstering the security of the Cosmos ecosystem against potential security breaches or validator staking takeovers. According to Sunny, “With the introduction of mesh security, we can approach security bidirectionally, meaning that two chains, like Osmosis and Juno for example, can provide security to each other.” Mesh security allows Cosmos chains to consolidate their token security. This leads to significantly higher economic security than what a single chain can offer. Also recently, Osmosis has announced their intent to be a Bitcoin Layer 2 app. By allowing users to stake “alloyed Bitcoin,” a derivative of the Bitcoin liquidity pool, Osmosis will simultaneously strengthen the appchain’s robust security and emerge as a frontrunner in the race to become the premier Bitcoin layer 2.

The hot stuff:

Oh gosh, where to begin.. Polaris is going to be awesome, but let me try to explain in two paragraphs what deserves a post all onto its own.

As a user, Polaris will enable you to actually go from any chain asset to any chain asset. Actually. Period. Ok, that deserves a wow. Beyond that, it will enable you to pay for the transactions with the token you already have and take the most effective route along the way. And get this! Even if the path involves making pit stops on chains for which you don’t even have a wallet, Polaris will enable users to execute the trades on the best paths (identified through multiple APIs like that of LiFi) and create ephemeral wallets for the users. It will ask for your signature on all transactions involved along the way. It will spin up the necessary wallets for you, and get you to the asset you wanted. 

Example for illustration purposes: Imagine you are trying to buy a memecoin on Solana and you have ETH on base. And don’t tell me you will never do that, you just might sound like you will never use a website in 1995. You will, it just has not been easy enough for you. 

Ok so today, your transaction would require you to take your ETH on base to Polygon, swap it for USDC, bridge your USDC to Solana and then buy the memecoin. Now, that would mean you would need to deal with 4 transactions each requiring a separate signature, 15 mins, and a lot of patience unlocking your ledger. If you remember what you were trying to do, that is. With Polaris, you will start with the asset you have, select what assets you want on which chain, sign once and get your tokens. Just make sure you don't close your browser as your signatures get broadcast and bingo, you got what you wanted. For the record, I understand that This is mostly for MVP scope reasons, in a few months you'll be able to shut off everything and it'll still run on autopilot!

Closing Thoughts:

Sunny's early career experiences, sharp market insights, technological expertise, and intuitive leadership with a magnetizing effect on talented builders tell me there is so much more to come from this team.

I am excited about the Polaris launch as it is poised to deliver a decentralized exchange portal with 1-click trading, safe session keys, gas fee abstraction and privacy innovations. The multi-chain nature of Polaris will deliver on all the needs of asset holders that have made centralized exchanges popular. Oh please get me safe unstoppable execution, without the annoying KYCs, logins, and fund deposit flows (!) 

Ultimately, unlike VCs, users are not necessarily loyal to a chain. They want to be able to make their trades easily. Polaris is poised to deliver that. Finally, I should mention it will be a net gain for the ecosystem. The cross chain functionality will allow for the very pockets of liquidity whose fragmentation we have been complaining about, will be building blocks of a now antifragile infrastructure.

As proud partners of Osmosis Labs, we look forward to supporting Sunny and the team in the journey ahead.

Hello friends,

We are hosting the Third annual BCVC Web3 Founder Summit on Friday, November 8th at the Harvard Club of New York City.

The event will bring together a select group of 100+ founders representing over $100B+ in digital asset market cap and executives from institutions like Fidelity, BlackRock, FT, VanEck, Goldman Sachs, State Street, Federal Reserve as well as politicians, regulators, and thought leaders. We intend this event to be a platform for founders to meet each other and participate in discussions on the post-election outlook for digital assets in 2025 and beyond.

Past events’ speakers included founders like: Joe Lubin (ConsenSys), Sreeram Kannan (EigenLayer), Steven Goldfeder (Arbitrum), Richard Ma (Quantstamp), Emin Gün Sirer (Ava Labs), Sunny Aggarwal (Osmosis), and other leading builders in our space. 

We also heard from other influential industry participants like: Rep. Wiley Nickel (Member of Congress- NC 13th), Haseeb Qureshi (Dragonfly), Seth Ginns (Coinfund), Scott Stornetta (Scientist and Cryptographer referenced in the Bitcoin White Paper), ​Cynthia Lo Bessette (Fidelity Digital Asset Management), among others.

We want to inform the agenda based on what matters most to founders. So, would you kindly take a 3 min survey on what are the most existential challenges you are facing in Web3 right now? 

BCVC Web3 Founders Survey

The first ten people to fill out this 3 min survey will receive an automatic confirmation to the event.  We will also randomly pick an additional five respondents to receive Bloccelerate swag. Every respondent will receive the report with the final results of the survey and key insights.

Thanks for your support, and hope to see you in NYC!

Best,

Sam

I had the distinct pleasure of interviewing David Tse, Founder of Babylon, a groundbreaking project that aims to revolutionize Bitcoin by bringing programmability, staking, and decentralized finance to the world's oldest blockchain. You can see the full interview here on my YouTube channel.

The Bitcoin Renaissance

"With over 18 million Bitcoins in circulation but minimal developer activity, the world's oldest blockchain is poised for a renaissance. Enter Babylon , a project set to revolutionize Bitcoin's programmability and security."

In a recent founder spotlight we sat down with David Tse, the visionary behind Babylon, to delve into the journey and vision of this groundbreaking project. Babylon is at the forefront of the effort to bring programmability, staking, and decentralized finance (DeFi) to the Bitcoin blockchain. The Bitcoin Renaissance event at ETHDenver marked a turning point, reigniting developer interest in Bitcoin and showcasing innovative projects like Babylon. This conversation highlights the challenges and triumphs faced by David and his team in pioneering this innovative space, shedding light on how they plan to transform Bitcoin's capabilities by leveraging the massive amount of unutilized capital on the network.

A Conviction, a Spark, the Genesis of Babylon’s Vision

David Tse's journey into the crypto world began with a deep fascination for Bitcoin's unparalleled security, inspired by Nakamoto's white paper. As he explored Bitcoin's potential, he noticed a significant gap: Bitcoin's robust proof-of-work security was being underutilized within the broader crypto ecosystem. "I got into the crypto space studying Bitcoin's security properties, and it struck me that while Bitcoin was incredibly secure, it was isolated," David explained. This realization sparked a vision to bridge Bitcoin's security with the dynamic proof-of-stake economy, giving birth to Babylon .

The pivotal moment came at the Bitcoin Renaissance event in ETHDenver. "This event was a showcase for projects building on Bitcoin, and it was clear that the developer community's attention was shifting back to Bitcoin," David recounted. Engaging with investors and developers at the event solidified the idea that Babylon could harness this renewed interest to bring programmability and staking to Bitcoin. The conversations and excitement at the event marked the beginning of Babylon’s mission to transform Bitcoin's capabilities.

Strategic Partnerships, Investors Fueling Babylon’s Growth

The evolution of Babylon’s fundraising efforts continued  at the Bitcoin Renaissance event, which culminated in a significant partnership with Paradigm. "We really want to have one sort of flagship investment in this Bitcoin renaissance movement," Paradigm's team shared, highlighting their interest in long-term, research-driven projects like Babylon.

Polychain Capital and Hack VC, co-leads in Babylon’s previous round, demonstrated their continued support, with Polychain actively incubating projects within the Babylon ecosystem. Bloccelerate also invested in this round, and we committed to staking all of our Bitcoin in the fund. Bullish Capital, a new investor with a strong alignment to Bitcoin, brought additional excitement and resources to the table.

Technological Innovations and Mainnet Launch

Bitcoin Staking and Security

Babylon’s core innovation is Bitcoin staking, a protocol designed to bring staking functionalities to Bitcoin without compromising its security. Utilizing Bitcoin's simple scripting language and time-lock opcode, Babylon creates staking contracts that lock Bitcoin for specified periods, providing security to Babylon’s proof-of-stake chain while allowing users to maintain full control over their Bitcoin.

Mainnet and Testnet Progress

Babylon has now launched the Bitcoin staking mainnet, following the successful deployment of the last testnet. The testnet phase focused on testing the locking mechanism and gauging community interest. "We're using this phase to give stakers the confidence that this is a very secure protocol and to gauge the level of interest from the community," David had explained. This first phase of the mainnet referred to as cap 1 will effectively serve as another way for market participants to stake smaller amounts of BTC. Then Babylon will scale up the BTC that can be staked per transaction in the following phases, up from the .05 BTC max for the moment.

Future Directions and Use Cases: Maximizing Bitcoin’s Potential

Babylon’s  vision is twofold: securing supply through Bitcoin staking and fostering demand by onboarding projects that utilize Bitcoin staking for security. The goal is to create a vibrant ecosystem where Bitcoin's vast liquidity can be harnessed to support a wide range of decentralized applications. Drawing parallels to Ethereum's thriving ecosystem, David highlighted the significance of aligning with Bitcoin's asset size and liquidity, which can reduce security costs for decentralized applications. Specific applications, such as managing miner extractable value (MEV) on Bitcoin, present unique opportunities for innovation. "Bitcoin staking provides a unique alignment to the Bitcoin ecosystem, making it a natural choice for projects built on Bitcoin," David noted.

Closing thoughts

David Tse's insights into Babylon reveal a visionary approach to enhancing Bitcoin's capabilities and security. By bridging the gap between proof-of-work and proof-of-stake, crypto’s two primary consensus mechanisms, Babylon aims to unlock new potential for Bitcoin, fostering a more integrated and secure crypto ecosystem. For those interested in participating, David invites developers and stakeholders to join the journey through Babylon.

My whole reason for existence at my role at Bloccelerate is to save you some frustration, some time and scar tissue; so let me sum things up.

The big story - if you think market movements need a story:

There is a country- Japan. They have a central bank- Bank of Japan. 25 years ago, because Japanese people were not consuming enough, this central bank said “lets keep interest rates low that people will borrow, build businesses and sell cheap products, plus there would be no incentive to save an inflationary currency.”

Last week, the Bank of Japan decided to change this. This created a problem for those who had borrowed the 20 Trillion dollars worth of cheap Yen, a good chunk of which is in the US. These speculative asset buyers that used the borrowed Yen, woke up to the reality their assets would now be more expensive to own. They felt they had to sell assets to eliminate having to pay off interest (SAEHPOI). And also, they had to try to sell if before the next person who owned the same assets that would have to SAEHPOI, as well.

People will debate if and when this is true, but I’ll say it as I see it - Bitcoin and crypto acted as a store of value over the weekend. One that the owners could use wherever and whenever they like without permission. Their crypto saved the day for the fearful folks that thought this shift interest rates will create a crash in so many markets and assets. To be fair, 20 T is a big number. To be fair, .25% wont break most banks even if its 25x higher than .01% interest.

So they sold. They over-sold. Now we are back-ish after 1.2 B of crypto liquidations.

If you don’t need to hear stories for the market moves:
This is the 30% correction we needed before the big parabolic advance could be unlocked. Yay!

Any way..with a narrative or without. Today is a good day to BUIDL. Keep calm, carry on. And if you need to help on being able to do that well into the future “let me know how I can be helpful”.

While some men ran on yen, honestly I’m here so you don’t have to run on Ramen. HMU.

Cheers.

#WW3 #treasury management #governance #fundraising #PMF #first-principles thinking #vision-setting #co-founder alignment #anxietyrelief #uselesshistory

Dennison's adventure into the world of DAOs alongside his co-founder, Raf Solari, began amidst the fervent atmosphere of Crypto NYC in 2017. Their early fascination with reimagining societal structures on the blockchain found concrete direction with the advent of Compound's COMP token. Compound had built a successful lending and borrowing platform that functioned autonomously, but it still required governance in making operational decisions. This moment marked a turning point, highlighting a tangible need for DAOs to govern smart contract protocols with real revenue and user engagement. 

A Standard Emerges: The Path to Tally

Dennison and his team foresaw the importance of standardization in DAO governance, akin to the pivotal role of the ERC-20 token standard in DeFi’s expansion. They committed to supporting the Governor Alpha framework, betting on its standardization as the catalyst for DAO tooling and ecosystem growth. Tally was envisioned as the nexus for this burgeoning world, providing a platform that seamlessly integrated governance across the decentralized finance landscape.

Challenges and Triumphs: Pioneering DAO Infrastructure

Tally's journey wasn't without its challenges. Identifying the diverse personas within DAOs and tailoring all aspects of the DAO to meet their evolving needs required a delicate balance of innovation and scalability. By making Tally permissionless and self-serve, Dennison and the team presciently addressed the need for dynamic DAO operations. This created a platform where any DAO could tailor governance components to their specific requirements.

Vision for the Future: A DAO-centric World

Looking ahead, Dennison envisions a future where hundreds of DAOs have hundreds of thousands of members engaging in a broad spectrum of operational, financial, and strategic decisions. By making Tally permissionless and self-serve, Dennison and the team presciently addressed the need for dynamic DAO operations. This created a platform where any DAO could tailor governance components to their specific requirements.

In the latest edition of our Founder Spotlight, we delve into the visionary work of Steve and his team at Offchain Labs, the masterminds behind Arbitrum. From its academic roots at Princeton to its emergence as a key player in scaling Ethereum and solidified position as the de facto home of DeFi, Arbitrum's journey is a testament to foresight, innovation, and persistence. 

Arbitrum's Academic Beginnings

Before Ethereum even existed, Steve, alongside co-founders Ed Felton and Harry Kalodner, recognized the critical need for blockchain scalability. Their work, initially an academic venture, sought to expand blockchain capabilities which then primed them to anticipate the future demand that Ethereum would face. Their prescience allowed them to spend years developing a robust yet versatile scaling solution that seamlessly adapted to evolving market needs. 

Transitioning from Academia to Industry

Steve's journey with Offchain Labs exemplifies the transition from academic theory to practical application. The foundational technology utilized by Arbitrum, developed under Princeton's roof, required meticulous negotiation to bring into the open market in a way that aligned with the ethos of the Ethereum ecosystem.

Embracing Open Innovation

Steve and his team made a bold decision to forgo patent protection for Arbitrum, staying true to their beliefs in the principles of openness and accessibility. This move not only fostered Arbitrum's rapid adoption, but also reinforced the ethos of decentralization in the Web3 space. It is also a great example of how university technology transfer offices can enable innovation by remaining flexible on their policies and unlock potential of intellectual property that would otherwise remain dormant.

Committing to a Fair Launch

While other scaling solutions were opting to allow major DeFi protocols to launch on-chain before other developers, Arbitrum supported a fair launch and allowed all builders to begin developing months before the mainnet went live. Steve reflects on the early days when GMX, now Arbitrum’s top derivative project, was a humble team of just a few engineers requesting to build on Arbitrum’s testnet.  Had they maintained a “red carpet approach” GMX may never have been there. Their commitment to equality paid off in the success of their native protocol, which makes up over 15% of the chain's 3.7B in TVL. 

Building for the Future

As Arbitrum continues to evolve, its focus remains on lowering fees, speeding up transactions, and ensuring high security, while continually supporting a thriving ecosystem of developers and users. Offchain Labs continues to work on expanding developer accessibility through projects like Arbitrum Stylus, inviting a broader pool of talent to contribute to a growing network of builders.

Steven's narrative is not just about technological breakthroughs but also about adhering to core values, navigating complex legal landscapes, and fostering a community-driven approach to innovation.

Hope you enjoy the full interview! 

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Foobar's entry into the crypto world via the DeFi sector highlights the concerning divide between increasingly complex protocols, immature tooling, and the broad spectrum of end-user expertise. This gap sparked the conceptualization of Delegate which now empowers both users and projects alike to access powerful, programmable, and decentralized digital asset self-custody. Delegate has been broadly adopted with over $1 billion worth of assets and more than 180,000 wallets. 

Delegate's Mission: Empowering Users Beyond Traditional Safeguards

Unlike the prevalent focus on creating "crypto antivirus' ' solutions that merely monitor transactions for potential red flags, Delegate endeavors to empower end-users to ensure their underlying assets are safe no matter what. The goal was to enable a more proactive stance—granting users the autonomy to define and control permissible transactions, thus fostering a safer, more user-centric ecosystem. Delegate features a  vault or cold wallet that houses valuable assets and a delegate/hot wallet that signs messages on behalf of said vault. This empowers individuals to stay safe despite the uncertainties of transacting on-chain, ranging from smart contract risk to phishing to exploits.

Simplifying Complexity: A Balancing Act

Foobar eloquently detailed the challenges in reconciling the intricate mechanics of crypto protocols with the varying levels of user sophistication and the importance of building simple, powerful, and composable generalized architecture. The pursuit wasn't to oversimplify nor create a brand new proprietary standard but to construct a robust framework where safety and usability coexist harmoniously with the standards (ERC20, ERC721, ERC1155 etc.) and tools (EOA Wallets, Hardware Wallets etc.) that end-users are accustomed to today. This initiative has positioned Delegate as a crucial intermediary, making self-custody accessible and comprehensible to a wider audience without diluting the essence of crypto's decentralized promise.

Insights on Scaling and Team Building

A particularly resonant topic for founders emerged from Foobar's reflections on growth and team dynamics. Echoing the sentiments of the "Mythical Man-Month," Foobar cautioned against the allure of scaling teams too rapidly, instead preferring to stay lean and mean. The emphasis was on the quality of hires over quantity—a lesson learned through Delegate's journey and one that Foobar credits to their selective recruitment strategy.

Foobar stressed the importance of building a network with a high level of distribution, from which one can recruit selectively. This approach not only ensures a team of high-caliber individuals but also aligns with the pragmatic realization that the right team composition is critical for navigating the unpredictable waters of the Web3 space. An opinionated, dedicated, and mission-driven team is able to deliver quickly and outperform bloated competitors.

A Founder's Perspective: Embracing Challenges and Learning

Foobar's journey underscores a path paved with trials, learning, and adaptation. From grappling with the cyclical nature of the crypto market to mastering the art of strategic integration and community engagement, Delegate's story is a testament to the resilience required in the Web3 domain to build projects that truly stand the test of time. Delegate’s story is particularly worth learning from as the product focuses on true value generation without tokens, and is widely beloved by all who have used it

For fellow founders, Foobar's narrative offers invaluable insights into the essence of building a startup in the volatile yet exhilarating world of crypto. The conversation sheds light on the importance of empowering users, the intricacies of team building, and the relentless pursuit of innovation. Delegate is a small team with big ambitions, and the track record to match.

Looking Ahead: Shaping the Future of Web3

As we conclude our enlightening discussion with Foobar, it's evident that Delegate's journey is far from over. Delegate’s emphasis on security and enabling seamless experiences through composability and think it will serve as the go-to codebase for others to build around and integrate, leading to positive-sum network effects.With a vision set on redefining digital asset management and fostering a safer, more inclusive Web3 ecosystem, Delegate continues to inspire and lead by example.

Foobar's experiences, from the inception of Delegate to its ongoing evolution, provide a rich tapestry of lessons for current and aspiring founders. In a realm where change is the only constant, embracing challenges, valuing quality over quantity in team dynamics, and focusing on user empowerment emerge as crucial pillars for success. Delegate has set a new standard for what best-in-class projects look like.

Stay tuned for more insights as we continue to explore the journeys of those at the forefront of the Web3 revolution, sharing stories and lessons to inspire, educate, and propel the community forward.

At Bloccelerate, we have found that the best entrepreneurs come from varied backgrounds, and the best way to solve big problems is to think laterally. Sometimes it helps to think cross-domain and frame business problems in other terms. To that end, having recently conversed with founders with a scientific bent, I thought putting principles of business in the language of chemistry could be a helpful thought exercise. 

In addition to conversations I’ve had, a recent founder survey we conducted for content to cover in our last BCVC summit in NYC, indicated that product-market fit (PMF) had  risen to the top of the concern list (25%+ of responders named it THE single biggest existential problem faced by their company)

Poll results of 2023 BCVC Web3 Founder Survey  (n=102)

So, I set out to think and outlined a metaphorical framework for this challenge of product market fit, which seems elusive to most founders. 

I imagined, What if we approached it from something tangible or physical that could serve as an analog to guide the journey of finding a PMF ?

The principles of physical chemistry came to mind. Although chemical reactions may not be ‘tangible’, the facility of experimentation in chemistry lends itself to be a model, and fortunately, the analogies don't actually require more than a year's worth of college chemistry to understand. I thought this metaphorical exercise could help inspire original thinking and accelerate the path to PMF, and make it more precise. As I dove deeper, I found that chemical reactions offer a unique lens through which we can understand and navigate finding PMF faster. 

So, here is my honest attempt to produce an analogy for finding PMF,  inspired by tangible, observable, and manipulable analogs found in chemistry.

The Reaction Equation as linchpin in analogy:

 A + B ↔ C

In the language and logic of chemistry, we study reactions at large. Usually they are notated with reactants (A and B) coming together on the left, to form product (C). The reactions are usually notated with a bi-directional arrow to indicate there is a flow in both directions. Reaction happens from left to right and right to left. The speed at reaction transpires in each direction varies due to a variety of factors and when the speed at which the forward and backward reaction reach equivalency the reaction reaches equilibrium.

For example, in the Haber Process - Hydrogen and Nitrogen reacting to form Ammonia.

If we borrow this or any other chemical equilibrium equation as your sales process, it takes us one step closer to finding a physical analog to “product market fit”. Let your product or service  be analogous to reactant A that will meet a customer need. Then, let the ‘customer need’ be reactant B. If A and B react to form C, then we can say that the resultant is your product or service in use. Your service that reacts with customer needs forms your service in use. Guess what? Product market fit means that the product or service you are building will meet a need in that market and will be sustainably in demand. In that regard, we now have the foundation of the analogy. We want a lot of C. When A and B react faster to form C in the forward direction, than the rate at which C will churn back to A and B, we achieve the goal. That is equivalent to shifting the chemical equilibrium where independent A’s and B’s will react to form C and in any given solution you will be more and more likely to find C instead of free floating A and B.

This analogy of a chemical reaction  in a state of equilibrium is important, because it helps you frame your venture not just as a one-time exchange, but a continuous process that can go in both directions. Your company sells a service meeting a need, in one direction. Then clients churn, and your product is  now ready to react with the unmet need of another client out there.

Until your product offering or the customer needs evolve, there’s a basis for how much reaction you can expect, a specific rate at which a reaction will happen in one direction or the other, as a function of how much of A, B, or C exist in a given set of conditions of the environment.

So, in my case, I run a venture fund. My fund’s PMF  C would be a result of my product  A - investment returns via good portfolio investments- continuously meeting the financial needs of investors B to create a successful, repeatable, and scalable sale to investors. If a VC firm is successful at finding PMF, it produces a lasting multi-generational venture firm, pairing the investment services with investors’ need for returns, adding more investors over time until a saturation point is reached.

Let’s look at more specific physical chemistry concepts to help us think about getting more C - “your product sustainably in use” - and in parlance, PMF. Goal here is to develop a mental framework over chemistry to be able to ask questions like How can I ensure my product isn't just a 'flash in the pan,' but instead becomes an integral, sustained part of the customer's life? Or more specifically, what features or services can I add to make my product indispensable over the long term? What are the ways in which the customer's needs may evolve?, or What are some catalysts, conditions, temperature changes that may shift the equilibrium to the right? - all of which are different ways to ask, “How do I get more of C instead of A + B?” 

Gibbs Free Energy & Ease of Sale

Chemistry teaches us the fundamental equation for the ‘spontaneity’ of reactions: ΔH - TΔS = ΔG. This equation ties together three main factors: change in enthalpy (ΔH), change in entropy (ΔS), and the temperature at which the system operates (T). The beauty of this as is applicable to entrepreneurship is that we want our product to be just so that our offering reacts with the market need spontaneously and grows to scale.

Enthalpy (ΔH) reflects the change in energy when new bonds are formed during a reaction. For PMF, the change in enthalpy becomes the strength of the bond between your product and the customer. The stronger the customer's desire or 'affinity' for your product, the greater the value generated by their reaction. If the product is tightly bound to the client, it releases more energy when they choose your service. Instead of customers investing more of their resources elsewhere, a stronger bond with your product liberates their energy, funds, and time. Ah! What a relief to spend less energy to maintain an aspect of your life!

Entropy (ΔS) represents the number of different ways or configurations the new molecules, the resultant particles can adopt. It's the freedom of movement or, more broadly, the 'choice' that a system has in the number of different configurations it can sample. For PMF, change in entropy is analogous to the options or configurations that your product allows the customer while using the service. Just as molecules have varying degrees of freedom to change their state or configuration, your product should offer customers flexibility.

Temperature (T), while not our main focus here, acts as a multiplier, determining how influential the change in entropy will be. (respond in comments if you think our “average busy-ness or global warming has anything to do with it)

Thus, if you can enhance your product's appeal (greater ΔH) and provide versatility (greater ΔS), the effort required in your sales process (akin to ΔG) will be considerably reduced. The more energy you liberate and the more flexibility you offer, the smoother and more "spontaneous" your sales process becomes. And just as in chemistry, where a more spontaneous reaction is always favored, in business, a product that naturally and effortlessly fits the market will always be preferred. So, when optimizing your product-market fit, think of it as a chemical reaction: aim for it to be as spontaneous as possible, releasing the most energy forming stable bonds and allowing lots of degrees of freedom!

In optimizing your value proposition, the equivalent of change in Enthalpy, you might ask, "What can I do to enhance my value proposition so that my customer will walk away with more value, more energy liberated?" or “How can this service release more funds, energy, and talent to be used elsewhere?” In optimizing for configurability, Entropy, you might ask, “What are the different ways, configurations, conformations I could enable my customers to utilize the same services?”

Conclusion

By adapting the principles of physical chemistry to the business landscape, entrepreneurs can gain fresh perspectives. The goal here was not to offer advice, but to stimulate a line of questioning. Inspired by a domain that’s well understood and lends itself more easily to experiments we may be better able to strategize, scale, and sustain a venture. The fact that chemical reactions take minutes or hours instead of weeks also is an added benefit. Who knows maybe we’ll find the answer to the next strategic question looking at a microcosm of chemical reaction. I should also mention that the analogy lends itself to more lines of inquiry than I outlined here; such as the analogy of competing products (substitute goods) is akin to competing reactants; or how improper incentives like corrupt bribes are akin to exogenous short term effects without sustainable results and inevitable churn. Although I did not go into these, I suspect scientifically oriented founders who enjoy deep thinking will find these lines of thinking particularly rewarding. For further extending the analogy, additional ideas and inspirations you’d like to share with me or other founders feel free to share input in response to this post. Feel free to like or subscribe for more edge-giving insights and mental frameworks that can give you a new perspective to our daily entrepreneurial hustles.

Where to Next?

Up next, I am thinking to share more on a couple more ideas. Which would you like most? DM me.

a) How principles of kinetic barriers relate to UX and sales process

b) How polymerization methods relate to GTM and land-expand strategies

c) How Zeolites inform us on how to select for BD avenues

d) How chemical indicators help select relevant business metrics to track

e) How temperature and pressure help us understand the effect of market cycles and timing

f) How competing reactants in chemical equilibrium help us understand substitute goods offered by competition

Leading up to our Annual Web3 Founders Summit, to gauge the audience and founder pain points of the time, we surveyed over 140 Web3 founders. We are pleased to share the results of the 2023 BCVC Web3 Founder Survey with you.

We asked respected web3 founders to share their perspectives on the biggest challenges facing their companies and our space in general. The survey covered 13 questions, meant to elicit both open-ended qualitative responses, as well as structured rankings of common challenges previously mentioned by web3 founders.

Thank you so much to the founders who took part in the survey. We really appreciate their willingness to share their time and your insights with us and with the broader Web3 builder community. The aim for this survey was to spark better conversations about what is truly important and needed for founders and our space to flourish. Their responses have already contributed to that. 

A few quick highlights to share from the report:

• Struggling to find product-market fit was the most common existential problem for our space by vote concentration. 20% of founders voted that it was the largest problem (more than 2x the next closest category).

• Managing product-market timing was the second most challenging issue. Founders are struggling to time their marketing, their launches, and their fundraising efforts. 

• Despite narratives that we’ve been hearing this year, compliance, fundraising, and the underlying scalability of the tech were less likely to be considered existential issues.
  

Please share the survey results with other builders, investors, or friends in the space. Help us make sure that these founder insights help both experienced web3 operators and newcomers to the web3 community. Feel free to share your own take on the results or share one of our recent posts on the subject made by the Bloccelerate team

Let's BUIDL!

View the Results

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In our ongoing exploration of the ever-evolving Web3 landscape, I recently had the pleasure of interviewing another one of Bloccelerate portfolio founders, Hilmar Orth. You can see the recording here.

Hilmar is a co-founder of Gelato and an influential figure spearheading innovation in the Web3 space. This discussion offered enlightening insights into Gelato's remarkable journey, its core mission, and the exciting challenges they have confronted along the path to progress.

Fast forward, Gelato has grown into one of the most prominent Web3 infrastructure projects empowering builders to create augmented smart contracts that are automated, gasless & off-chain aware on all major EVM-compatible blockchains. Over 400+ web3 projects rely on Gelato for years to power the execution of millions of transactions across DeFi, NFT and Gaming.

**Hilmar's Background & The Genesis of Gelato**

Prior to immersing himself in the crypto universe, Hilmar began his journey studying finance, mathematics, and economics, This provided him with a solid financial & analytical foundation. 

But it was his fascination with the DAO and the boundless possibilities of blockchain technology that ignited his passion to explore further. A pivotal moment occurred when Hilmar and his cofounder Luis found themselves deeply inspired by a project with Gnosis, which subsequently let the co-founders to create Gelato, a protocol for automating interactions between smart contracts on Ethereum

**Gelato's Story: Automation Without Compromise**

The brainchild of Hilmar and his team, Gelato offers an innovative solution: a decentralized system that provides automated execution of these contracts based on predefined conditions. 

Prior to Gelato, such systems relied on external services known as “keepers” which were centralized external servers that could fail due to error, downtime, and could even be vectors of attack. 

Recognizing a critical flaw in this centralized approach, and driven by the conviction that there was a pressing need for a more developer-friendly solution, Hilmar and the Gelato team became fixated on addressing this problem. 

This led them to create a decentralized automation tool for Dutch Auctions on Gnosis. 

Once they built this use-case specific project, they knew they could generalize the tech and create a product that would be valuable for the entire industry.

Lo and behold, Gelato is now at the forefront of simplifying complex financial actions by enabling smart contracts to be automatically triggered by price movements or time-based events. With their innovative Web3 Functions service, developers can securely fetch data from any API, running custom logic to reliably push data on-chain. Gelato is taking a monumental leap forward in bridging the gap between Web3, the broader internet, and the physical world.

Ultimately, Gelato is paving the way in providing reliable, robust and scalable gasless transactions via a simple to use API with it’s Gelato Relay offering. Together with the Safe team, Gelato is championing Account Abstraction enabling developers to provide a world class UX by combining Gelato Relay + Safe's Smart Contract Wallet.

**Challenges & Triumphs: Charting Uncharted Territory**

As with any groundbreaking endeavor, Gelato's journey was not without its challenges. 

Hilmar openly acknowledged the complexities they navigate in building an intuitive product. Gelato’s first users took weeks to integrate their general purpose smart contract protocol, prompting the need to reevaluate their team’s approach. 

To refine their offerings and make their product more practical and valuable for users, Gelato shifted its focus to identifying crucial use-cases and pain points of their user base. The key takeaway of this experience was that building an infra in a vacuum is very difficult. Working closely with users and building in tandem with developers proved to be immensely more beneficial in navigating these obstacles.

Through trial and error, Hilmar and his team have made significant strides. They learned using   Gelato’s own products and services  is pivotal in  understanding  friction or gaps in the user experience. 

Along this journey, it became clear that decentralization is not enough to bring users on board. The product experience is as important and must yield a significant improvement to attract and retain users. By relentlessly innovating and iterating, the Gelato team have built a battle tested infrastructure, forge key partnerships with other projects in the space, and build a thriving ecosystem of developers who are now creating their own dApps using Gelato's infrastructure.

**The Road Ahead: Building the Decentralized Web3 Back End**

As for the future, Hilmar envisions Gelato continuing to push the needle, thereby making dApps more accessible, efficient, and versatile. His dream is to see a fully decentralized Gelato, where if the team were to step back, the network would continue autonomously (though he likely won’t be stepping back any time soon given their roadmap). 

Hilmar also wants Web3 builders to have an accessible and truly decentralized backend to build the next generation of exciting Web3 projects. 

Hilmar envisions Gelato as an essential infrastructure every Dapp developer needs in their stack:  a production ready, composable, abstracted Web3 infrastructure, seamlessly plugging into various data availability and execution layers accelerating Dapp development process and driving mass adoption through feature rich UX.

***

My conversation with Hilmar was both inspiring and illuminating. It's clear that his pioneering work with Gelato is playing a significant role in shaping the future of Web3. I'm excited to see what new innovations he and his team will usher in next.

As the saying goes, the best way to predict the future is to create it, and with Gelato, it's evident that the future of Web3 is bright.

Stay tuned for more founder spotlights as we share the stories of leaders.

P.S. If you haven’t already done so, please take 3 min to complete this BCVC Web3 Founder Survey 2023. In return, you will receive the full report with the aggregate findings and a chance to win Bloccelerate swag. 

Best,

Sam

I recently interviewed another visionary Web3 founder, Philipp Zentner of LI.FI. 

We discussed his origin story, the tech they’re building, and how he went about solving the pervasive compliance, talent, and go-to market challenges facing every Web3 founder. 

It was an engaging conversation, peppered with insights from a seasoned veteran - I'm sure that other founders will find this helpful as they blaze their own trail in the "Wild West" of Web3.

Origin Story:

To understand LI.FI, it is helpful to look at Philipp’s background and prior experiences. 

Philipp spent the past 10 years building B2B SaaS companies. Back then, the (pre-Stripe) Web2 payment landscape was fragmented and cluttered. This was even before PayPal offered service to SaaS providers. The abundance of APIs offered marginal utility in such a disjointed payment systems landscape. 

When he entered the crypto space and analyzed blockchain throughput rates, he realized that the future had to be multichain.

Looking at market dynamics, he saw an influx of money poured into different chains, distributed ledger technologies, cryptography, etc. He realized that this research and development would be productized at some point and saw massive economic incentive to get ahead of this trend.

Knowing how fragmented the Web2 payment space was, he posited that in order for Web3 payment systems to find mass adoption, blockchains would have to deal with the "fragmentation problem", both for infrastructure and liquidity. 

In order for this space to grow and mature, he realized that someone would have to aggregate and abstract away the fragmentation. In so doing, they would strip away complexity and interlink the most important DeFi infrastructure for both builders and users. 

He realized that his core offering was “linked finance”; the idea for LI.FI was born.

What Is LI.FI:

LI.FI is an aggregator of aggregators. To Philipp, that means offering on-chain swaps, cross-chain swaps and a combination of both. They've aggregated bridges, DEXs, and DEX aggregators. 

By aggregation, he means taking the most important underlying services (data services, oracles, cross chain bridges and interoperability solutions to move assets from one chain to the other, decentralized exchanges, and even other aggregators like DEX aggregators) and aggregating their APIs so they can provide one API that gives access to all of the afore-mentioned services, utilizing a smart order routing algorithm.

LI.FI is aggregating  core financial infrastructure, so that both DeFi projects and traditional finance businesses have a simple multi-chain transaction rail to build on.

How to Solve Existential Challenges Within Web3:

GTM Strategy

LI.FI’s go-to market strategy hinges on solving the big problems that major financial institutions face moving large sums of money in Web3.

Philipp elaborated that LI.FI is focused on aggregating core financial infrastructure to make blockchain tech more accessible to traditional finance and banking institutions such as Robin Hood, Revolut, JP Morgan, etc. Large institutions face significant risk relying on blockchain tech due to potential sunk costs and the pace of infrastructure change. 

LI.FI provides a stable platform that these institutions can rely on, enabling them to take advantage of DeFi opportunities while limiting infrastructure risks and counterparty concentration.

When asked about his interactions with large financial institutions, Philipp states that the JP Morgans and Goldman Sachs’ of the world struggle to identify which blockchain services to offer and which use cases to apply them to. 

To that end, the broader GTM strategy revolves around being known as the fastest, safest, and most cost effective option.  They are able to achieve this by aggregating the dozens of APIs and scores of bridging providers between chains. Their customers realize it's much smarter to rely on LI.FI for the best and latest bridging and swapping options versus developing and executing their own routes. LI.FI’s team of 40 people have developed the best tech to navigate the complex and ever-changing blockchain landscape. 

There are a number of directions LI.FI could go, but the plan is to spend the next two years staying true to their message, refining product-market fit, and adding features that help institutions move larger sums of money in a seamless and risk mitigated way. 

Talent

As a fully remote company, with >40 employees distributed across 14 countries, LI.FI has fought hard to find the right resources with the right competencies and mindset. With that in mind, LI.FI optimized for two concerns: finding world-class talent, and creating processes that allow them to work well together.   

Having spent ten years building remote companies, he knew that the key to building a high-functioning remote team is to optimize internal processes and  knowledge sharing. 

The second challenge is familiar to anyone in tech; a constricted labor pool. Philipp shares the story of the massive demand for talent, specifically smart contract developers. Over time, he realized that many developers were taking advantage of the high demand for their skills and were working multiple jobs - simultaneously. Philipp challenged the team to be wholly focused on their mission. 

He searches for people who are inquisitive and ask questions without fear of being viewed as "the idiot in the room". 

In terms of finding and screening candidates, he shared, "We hire no one without a full test week during the screening process. It doesn't matter if you're applying as a team assistant, if you're applying in marketing, if you're applying to be a developer, we give you a test. We have a test week, and we give you a task and just by looking at how you solve it, not only tells us how does your brain work, but also the details and work ethics and how much they want the job." A person expresses themself through their work, and attention to detail is a reflection of their standards for themselves.

LI.FI navigated growing to a team of >40 people in 18 months without losing focus on the mission at hand. In the process, he learned to hire very aggressively and take fast, decisive action if a hire is not a fit.

Compliance

I asked him about compliance, specifically the laws he needed to comply with and how they stayed within the parameters of the law across the multiple jurisdictions that they straddle. 

The first and most important element of compliance for LI.FI is staying secure and protecting funds. In the past 9 months, LI.FI has been audited by three independent firms, including a continuous auditing contract with an auditing firm. The security that comes from these audits subsidizes the overhead costs that they incur because it makes clients feel safe to move massive amounts of money. 

In terms of technical compliance, they are prepared to acquire necessary certifications (ISO 27000, etc) as soon as an enterprise client demands it. But as a founder, he can’t allow the unbridled pursuit of compliance to divert attention from the core product.

He sees a difference between being compliant and enabling compliance. 

To give an example, LI.FI could easily make sure that their products are OFAC compliant by paying for and plugging in Chainalysis or Elliptic. But they could also easily integrate their API and allow their customers to pass the API key. In this way, Li.FI enables “compliance on demand” for customers when they need it.

Closing Thoughts:

Being the connector between the growing web3 user base and the increasingly complex web3 infrastructure positions LI.FI as a category defining company. They are positioned for growth benefiting from expanding use cases and the increasing technical sophistication of infrastructure.

LI.FI empowers developers to build applications that serve a customer irrespective of the asset or chain that it's built on. Dapps that leverage LI.FI are more user friendly because users can come to a Dapp regardless of the asset they have. Developers also have more choice, as they can use LI.FI to build on the chain most suited to the technical needs of their applications without having to "follow the crowd" to a specific chain or chain ecosystem like Ethereum or Cosmos.

LI.FI makes it easier for builders and users to succeed in Web3. This helps the ecosystem grow and also allows all of us to realize the value of the many diverse chains that are changing the future of the internet.

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What fascinated me about the crypto space for many years is that, beyond the hype and speculation, there has been a core group of builders who persevere through multiple cycles. 

These founders join the space not because they see this as an opportunity to make a “quick buck,” but rather as an opportunity to change the world for the better. 

They persevere because they have a deep philosophical alignment with what crypto has to offer - be that frictionless value transfer, auditability or open-source coordination of novel service delivery. 

Joe Lubin, co-founder of Ethereum and CEO of ConsenSys, is one of such founders.

What kept Joe going has been trustless accountability via unstoppable code. 

Founders like him, who build to last, stay in this space no matter how “unpopular” or “uncool” the space becomes during the bear markets. 

***

Last November, we were fortunate to host Joe during the opening of our BCVC Web3 Summit. 

A lot has transpired since our interview - FTX was blowing up literally the day this interview was taking place. Subsequent months of FUD followed that were only exacerbated by regulatory enforcement despite ambiguity. 

To get a sense of the “alleged clarity” (despite no real answers), watch the next three minutes of this video. 

As the worst is likely behind us, we thought to revisit this conversation in the spirit of reminding you, the founders, that in the darkest moments, you can follow the footsteps of those who have come before.

What was the inflection point for Joe to co-found Ethereum? 

Joe’s journey to Ethereum began with an interest in broader economic history. 

Like many immigrants, Joe has a keen focus on the stability of economic systems. Specifically, around 2008, he began to have concerns around debt supercycles, i.e. periods of prolonged, outsized debt growth relative to GDP brought on by countercyclical fiscal and monetary policy administered by central banks. 

These supercycles have destabilized nations and monetary systems. This started his initial interest in blockchain, but it took meeting his co-founder, Vitalik, to gain conviction that the ecosystem was mature enough to create alternatives to “traditional” financial systems.

What was Joe’s motivation for starting ConsenSys?

Initially, the goal was to create applications that could help jumpstart the “developers → applications → users → more developers” flywheel. 

What the team ended up finding was that key infrastructure for the space was clearly missing. That led to the creation of projects like MetaMask, Infura, Truffle, the recently developed Linea and others. With these projects, it was important to focus on security BEFORE optimizing for decentralization. 

This is critical. Security must come first.

What were the challenges that Joe and the Ethereum founding team faced?

As strange as it seems today, the team struggled to raise money while building the technology from scratch in the early days. They had to overcome a lot of rejection. Joe reiterated that being a founder in the blockchain space requires a lot of perseverance and resilience, as the industry is still in its infancy and there are many unknowns.

How did Joe think about the decentralization of Consensys?

The organizational structure of ConsenSys likely deserves a separate post of its own. It has gone through many iterations over the years and could be a subject of a Harvard Business School case study one day. 

While not entirely decentralized at the outset, the team operates in an extremely flat and non-hierarchical way, with a number of internal founders and entrepreneurs serving as department (aka “spoke”) heads. 

Decision making is supported where it is most relevant. Objectivity is key to teams staying aligned and productive now that the team has grown to over 780 people. 

With that said, At ConsenSys the teams are getting progressively decentralized, along with their core products like Infura and the broader Ethereum ecosystem.

What does Web3 need for mass adoption?

Always ahead of the curve, Joe, Gavin Wood, and others on their founding team started using the term Web3 early on. Specifically, the term they used referred to the semantic web. Since then, the space has changed dramatically in scale, complexity, and awareness.

It is no surprise to anyone that regulatory uncertainty and the lack of standardization in the industry holds us back. As a founder, it can be challenging to understand the legal and regulatory landscape, and to ensure that your project is compliant with various regulations.

Joe acknowledged that while there has been significant progress in terms of adoption and awareness, there are still many challenges that prevent mainstream adoption; scalability, interoperability, and usability. 

There is still a long way to go in terms of making blockchain technology accessible to the masses. He encouraged all founders to focus on creating solutions that are easy to use and understand in order to drive mainstream adoption. 

The growing interest from institutions and governments is a promising sign for the future of the industry.

What role does decentralization play in creating more equitable systems?

It is no surprise that Joe views decentralization as a powerful tool for creating more transparent and accountable systems, which is what attracted him to the space initially.

With that said, he believes that it is also important to “right size' intermediation. 

In existing economic models, intermediaries (e.g  record labels, investment banks, etc) are able to extract an outsized share of value from other stakeholders. Decentralized systems allow for more transparent, fair, and competitive dynamics.

However, creating and launching decentralized systems can present a whole new set of challenges around speed and scalability. It’s a balancing act to handle with care - managing decentralization with the practical realities of building and scaling a solution the market needs.

We closed with the ever-bullish sentiment that perseverance and resilience in the face of the many challenges facing founders is the key to success in the blockchain industry. Even in dark moments and bear markets, it is important to remember that there is still enormous potential for blockchain technology to transform the internet and the world.

Closing thoughts

I still remember those early days of crypto when Vitalik was contributing to Mastercoin, the first attempt at a scalable “smart contract” platform. I remember when he pitched our then 300 member angel network and how most were skeptical at that time. 

I was a skeptic myself. It took me the whole year to buy into the vision Vitalik and Joe had shared in 2014. I didn’t buy my first ETH until 2015. But as the saying goes -  better late, than never.

We have come a long way since those early days of crypto experimentation. I saw first hand the difference between being early and being right. Many projects have come and gone, but a few ones - like Ethereum and ConsenSys - found product-market-fit, by prioritizing security and adoption first.

Thanks to builders like Joe, I know that crypto is here to stay.

The full length video and other founder interviews can be found at my youtube channel https://youtube.com/@cryptonaut

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At the end of 2022, I met up with visionary president of Ava Labs, John Wu.

With over $1.63B in TVL,  Avalanche is one of the top contenders to become the platform of choice for Web3 developers, looking for scalability and EVM compatibility. Ava Labs is the company behind the development of the Avalanche blockchain, as well as a backer of many projects in the avalanche ecosystem. Ava Labs last raised in 2022 at a $5B valuation.

As a serial entrepreneur and a successful operator, John shared invaluable insights that apply to Web3 founders at large. I joked, Web3 founders have to be CEOs, politicians, anthropologists, ethnographers, game theorists, and product experts - all at once. John certainly ticks all of those boxes. Let’s learn about John’s entrepreneurial journey that led him to Ava Labs

What Are Ava Labs and Avalanche?

Ava Labs is the company behind Avalanche, which is positioning itself as the fastest smart contracts platform in the blockchain industry. It promises to be blazingly fast, low-cost, and eco-friendly and is a solution to the problems he saw back in 2018 (more on that later).

John's Origin Story

Prepared mind

John is a serial founder who has been involved in launching three diverse companies.

John’s first venture was an investment management firm (Sureview Capital) that focused on tech investments. Next, he started a Web2 firm enabling compliant token trading of private shares (SharesPost Digital Assets Group). As a tech investor and Web2 entrepreneur, John made it his mission to provide more access to hard-to-find, private, illiquid securities to private individuals. This history made John extremely familiar with the challenges in the existing or “TradFi” systems. 

Then, John learned more about a  project by Emin Gun Sirer. John and Emin were both advisors to the Cornell Blockchain Club (John's alma mater), so he took interest in the new consensus protocol that Emin was creating. 

He realized that while Emin saw the problem from a technology perspective, he saw it from a commercial perspective due to his prior ventures. Together, he knew they could solve the scale, speed, and cost problems he experienced in his past venture.  Though he's not a founder of Ava Labs, he was there from the very beginning and is now President. 

What started as ten people in a shared office space has since grown to a team of 200 people and one of the top blockchains. Today, Avalanche has >$300M daily volume, a fully-diluted market cap >$12B, >$1.6B TVL, and >1.5M daily transactions over the past year.

John’s Web3 "Aha Moment"

Like many, his journey into Web3 had a few distinct iterations. Even as a successful, semi-retired tech investor, he didn't immediately see the utility of Bitcoin at inception. After studying the space more closely, he saw that the incremental demand dramatically overshadowed the incremental supply. He knew he had to go long and build on the core technology - blockchain. His first role in the space was as CEO of SharesPost Digital Assets Group, a marketplace that enabled compliant token trading of private shares and funds. Before we had the term “web3” John was trying to enable other-ledger assets to be on chain.

When he first witnessed the ICO boom in 2017,  as a financial services veteran, he was amazed at how quickly companies could raise money, gain resources, and get input from the community. He was used to IPOs where founders routinely gave away 5%-6% to investment banks - this is after months and months of road shows. The process was painfully inefficient and costly. 

The ICO construct had the potential to be a more efficient IPO mechanism. He realized that if he could create a way to make this process regulatory compliant, he could create more access to private shares and private funds through a security token offering.

What Existential Challenges Did You Face Along the Way?

Building the Community 

The main challenge for Ava Labs was finding product-market fit. John had the benefit of being the founder of a tech focused investment firm. He had tried to tokenize private securities on the blockchain and understood the value proposition of Avalanche, but this was not immediately obvious to everyone. John and the Ava Labs team had to make inroads with Web3 founders, developers, and users to gain early traction on the network. 

Now, as president of Ava Labs, he's not just a leader of the core team. He has to be in touch with the overall community. That translates to not only setting a purpose with the core team, but to setting a purpose and engagement with the wider community. To embrace Web3, founders have to become leaders for the entire community. That is a key lesson.

Scalability and Infrastructure Challenges

John and the team also realized that in crypto specifically, there's a lot of belief in potential upside over the horizon. One limiting factor was that the technology wasn't capable of handling the sheer scale of transactions. 

He recounts running calculations with his engineers and concluding that if they were to perform an IPO-level volume and speed of transactions, it would have been as cost-prohibitive as doing a traditional roadshow and paying away 6% of a company’s value to an investment bank. This led to the team’s relentless focus on scalability and data availability while maintaining EVM compatibility to be able to leverage existing Web3 ecosystem talent.

Navigating Regulatory Scrutiny/Satisfying the Regulators

In late 2017 when this all started, the regulatory environment was murky - to say the least. Another challenge was to launch the marketplace and take the concept to market while remaining compliant. Ava Labs team had to work with the SEC, FINRA, and multiple law firms to finally create something that satisfied regulators.

These existential challenges shaped the direction of Avalanche and informed the core value it offers to users - throughput, fast finality, and immutability of a distributed network. 

Closing Thoughts:

We are all building towards a future where identities, assets, and workflows will be on-chain. As interoperability is enhanced, developers will be empowered to make the choice on what protocol to build on, driven more by technical chops than perceived network effects. 

With the scalability, throughput, and flexibility offered by Avalanche’s subnets, I anticipate we will see greater growth than most other EVM compatible smart contract networks. The team at Ava Labs has shown a thoughtful, community-driven, and technically sophisticated approach to developing Avalanche. 

We are excited by all that John and team have done, and we are looking forward to what the future holds for Avalanche.

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In today's video, I interviewed another amazing founder, Michael Carter, from Storyverse (a blockchain spinout of Playco). Storyverse is one of the leading Web3-native creator economy companies backed by Blocktower and other leading funds.  

He shared his insights with us and talked about some of the complex problems that he's solving in the Web3 space. 

Michael's Founding Story

Their origin story is one that every founder can relate to. Michael and his co founder, Justin, had a strong background in gaming tech and social games. Justin is most known for founding Zynga (formerly traded on NASDAQ: ZNGA and acq'ed for $12.5B by Take-Two Interactive last year). The problem that they consistently saw was getting the product into users’ hands. 

They looked at the Web3 landscape and realized that the problem is compounded in the Metaverse. Users start on a desktop, transition to their mobile device, and end up on social media.

They wanted to create something that easily brings the Metaverse into users’ daily lives by merely tapping a button and being immersed in an experience. 

So What Does Storyverse Do?

Storyverse helps creators tell collectible stories on the blockchain, allowing them to collect royalties on IP that they have come to create and own. 

Their hypothesis was to combine storytelling with an absolutely frictionless user onboarding experience in the Web3 space. To do that, they built a fully immersive, animated, and interactive onboarding process that users would enjoy using. 

They realized that the "fun and engaging" factor was the most important factor in building a product that sticks. Similar to a "Choose Your Own Adventure" book that we grew up with as kids, Storyverse allows users to progress down a myriad of predefined paths. They saw this as the biggest opportunity for onboarding in Web3, especially for games and entertainment. 

How Storyverse Helps Creators?

Michael shared the massive opportunity to create and own intellectual property for non-visual artists and creators in Web3. Despite fears of the internet eroding artists' ability to make a living, Web3 and blockchain is creating one of the most sustainable business models that artists have ever seen.

But it's not just visual artists with NFTs that can benefit from Web3 - content creators and storytellers can also take advantage of this massive opportunity. They can now not only create one story, they can create an entire universe of stories, allowing their readers to traverse down different paths, almost like Neo choosing the red pill versus the blue pill in The Matrix.

Storytelling is the original Web3 use case because the most resonant stories, that have lasted for millenia, have no attributable author, yet everyone knows them; these are the folktales and fables that we've all grown up with. The lesson is clear, the story is more important than who's telling it. We don't fall in love with the art work because we loved the author first. That means our content is our most powerful weapon as creators, not our perceived status. 

How is Storyverse Onboarding Web3 Users?

So, Michael and his team started looking at the go-to market problem through the lens of Web3. That meant integrating the Metaverse into users' daily lives. From desktop, to Twitter, to Discord, to your mobile phone, Michael and his team wanted a user experience that conforms to how users behave. 

That's the secret to transitioning from being exclusive tech built for early adopters, and something that normal people can easily transition into.

In that process, they stumbled into two core problems. The first is to build a product that is easy to use and engage with on a daily basis. 

No thinking. No downloads. No friction. Just tap, and it works. Across any device. It needed to be ubiquitous and easy to use. 

The second problem was to enable storytelling. 

Michael and his team realized that storytelling is the most powerful form of communication history has ever experienced. It transcends time, location, and culture and is at the very core of the human experience.

The lesson for founders, especially in the Web3 space, is to build something that users value and engage with before layering on the compensation and Web3 tokenomics on top of it.   

How is Storyverse Finding Product-Market Fit (PMF)?

Michael and his team realized that product development needed to be tightly linked to marketing, so they were intentional about incorporating customer feedback into every release. That tight feedback loop allowed them to focus on product-market fit and gain traction before getting too far into the weeds on the product side. 

To help rapidly deploy the product to users, the team decided to build a non-Web3 version of the product and build a fan base of true believers that appreciated the value prop. This move allowed them to create a vibrant community of creators that were willing to create stories and share them on Twitter, which further validated product-market fit. This has accelerated their product release cycle and allowed them to project sustainable economic forecasts - not only for themselves, but for the creators that they serve.

Connecting with customers and baking their requests into the product is setting them on the path to their goal of serving 1 billion users one day. They reverse engineered their product development strategy to incorporate fun and intrigue so that they could not only grow like wildfire, but also sustain high levels of engagement.

What Compliance Challenges Have They Faced?

As Storyverse entered the Web3 jungle, they had to quickly understand laws from corporate tax laws to securities laws, to liabilities, and everything in between. Luckily they had access to a large base of investors, a sophisticated board, and world-class legal counsel, all of which helped steer them away from landmines. 

The takeaway was to get good counsel, but not to get hung up on perfection to the point that it takes away from the core product. He said "If you're wasting more than a few months on compliance, you're probably going a little too far into the weeds and will start losing sight of what you're actually trying to do" which for him is to build the number one story based company in the Metaverse. 

Closing thoughts

Blockchain is the new building material of the “palace of agreements'' we call civilization. Blockchain is poised to hold many more assets, identities/credentials, and workflows than it does today. This is especially true for non-tangible properties. In fact, these “new assets” are frankly easier to make and declare the rules around completely digitally. This makes IP well positioned to be an on-chain asset. 

Regarding compliance, the statement “good is good enough” rings true. 

Storyverse proves that creating something that’s easier to use is more useful than building something that’s subjectively “better”. Storyverse is an excellent play in bringing co-creation, co-ownership, following, voice on-chain.

If you are building a company that supports the new Web3 media landscape, please reach out to Sam@bloccelerate.vc. We would like to connect, learn more about what you're building, and support in any way possible.

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Last September, I met up with another visionary Web3 founder, Sid Powell, the CEO of Maple Finance at the Harvard Club of NYC. We talked about his founding story, the growing client base, while navigating the existential challenges he faced while building the businesses. Things were looking up. 

Then the FTX saga happened. With that, the Web3 world turned upside down for every crypto company. Maple was no exception. Over the last few weeks, the protocol had to face a defaulting client - Orthogonal Trading failed to repay $35M worth of loans from a pool. Even though Maple is not the direct lender, it was indirectly impacted and had to control costs and ruthlessly set product priorities. 

This is a story that most Web3 founders can likely relate to today. Even the Web3 behemoths, like Coinbase, had to cut more than a fifth of their workforce to adjust to this new economic reality, after a prior similar scale cut in the middle of last year. But as everyone knows, now is the time that will make the winners stand out from the losers. Let's see together why Maple is likely to come out on top.

First, what is Maple? 

Maple Finance is one of the leading decentralized capital markets platforms, built on Ethereum. Specifically, it serves lending to institutions via credit pools that are settled on chain. 

The problem of running a credit fund in TradFi (Traditional Finance) has to do with bifurcation of asset rules and records. In other words, the rails over which most financial transactions are happening are disjointed from the ledgers that keep track of those rules pertaining to the assets and transactions. This results in complexity when setting up and running a credit fund.

Just like Shopify made it easy for small businesses to launch online stores, Maple is making setting up a credit business easy - eliminating the need for a credit manager to invest in legal, compliance, expensive loan systems, and onboarding with banks. In simple terms, Maple is turning the fixed costs of running a credit fund into a variable cost, making setting up a credit fund-like business easy.

What was Sid’s founding story? 

Prior to starting Maple, Sid spent a number of years in traditional finance, specifically in securitization - dealing with lender-facing financial products. As a treasurer, he had to source loans from the banks, manage the reporting systems, and coordinate with 3rd parties. It was clear that there was a way to leverage smart contracts to automate these activities and create value for all involved parties.

Financial back-end systems were almost exclusively excel spreadsheets, or slightly glorified versions thereof. These siloed systems were often not talking to each other. This lack of connectivity created a problem of operationalizing the running of a credit fund - especially getting capital and managing the repayment of loans. Sid set out to solve the frequent discrepancies hindering operational efficiency in lending businesses with Maple Finance.

What are the existential challenges that faced Maple Finance since inception?

The first existential challenge Sid faced was finding Product- Market Fit (PMF). 

As a founder, you have a very particular idea of what will work. But in reality, most of the time what you think will work is not actually what works. It is like flying a plane, you have to constantly course correct. For that reason, you always have to talk to your potential customer. 

Sid and his team spent a lot of time with their potential customers, while working with a design firm to prototype their suggestions. Tools like Figma were particularly helpful to prototype and get direct feedback from the customers. It is only when you put rubber to the road that you can see what works.

Then, as the business started to take off, attracting and retaining top talent became the key priority.

Getting early people right is very important. Sid found that it is best to go with a good recruiting agent, especially for the core hires. Ads and job boards would undersell your company and the opportunity. 

Early on, they had a hire who was very good at independently executing, which was great for their individual productivity. As the team scaled, they were finding that we need people who are better at coordinating with teams, in order to get the same productivity boost. Going back to the recruiter for evolving needs has been an accelerant.

Last, but not least, were the legal challenges. 

People often assume that all lawyers will have the same opinion. Even years into starting Maple, Sid is still getting very different opinions from various lawyers he is working with. Some legal partners are more or less flexible than others. His piece of advice here: don’t totally reposition your offering or customer experience based on the opinion of one legal partner!

This is where the story would have ended, if it wasn’t for the FTX demise.

So, what exactly happened to Maple since November 9th, 2022?

Like most Web3 companies, new existential crises emerged after the FTX collapse. Businesses were no longer able to count on venture funding to power their growth. They had to prioritize revenue. They also had to cut costs and make difficult decisions to let go of team members. Maple was no exception.

In times like these, it is clear that the founder's most important role is to bring revenue in. For Maple, it meant shifting focus to lower risk products and starting to address features of their existing products. They had to ruthlessly prioritize people’s time. 

Nowadays, with a change in ecosystem venture funding, companies were having to be much more deliberate with their planning and forecasting. Now you have to think hard if your product is actually priced appropriately, when you release it. If you continue to create products that cost more to operate, you are hurting your runway. 

To bolster stable revenues, Maple took measures to diversify into real world assets, such as tax credit receivables, reinsurance pools, treasury yield on chain. They also began actively managing collateral that secured the loans to protect lender value locked in protocol. 

Maple executed a headcount reduction in mid-December. Sid’s goal was to be transparent with his people so that they were not suddenly surprised, and be expedient with decisions so that everyone could get back to building. Everyone who remained was given extra time off following Christmas to recharge. 

Closing Thoughts:

As we see the winds of the market shifting, companies that prioritize effective growth and efficient utilization of existing capital are the most likely to survive long-term. This often leads to difficult decisions and may even cause negative short-term market reactions. However, discipline and focus in bear markets allows companies to take advantage of growth in the long-term.

We commend Sid and the Maple team for decisive, intentional action to overcome adversity and come out stronger.

Watch the interview here