Each week we ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and we throw in a few random zingers to keep them on their toes!
This week our 6 Questions go to Paul Veradittakit, a Partner at Pantera Capital.
Pantera Capital is one of the earliest and largest institutional investors in digital currencies and blockchain technologies, managing over $1B at one point, and Paul focuses on the firm’s venture capital and hedge fund investments.
Since joining in 2014 Paul has helped to launch the firm’s venture and currency funds, executing over 100 investments. Paul also sits on the boards of Alchemy, Staked, and Blockfolio; is a mentor at The House Fund, Boost VC, and Creative Destruction Lab; and is an advisor to Ampleforth, Origin, and Audius.
Prior to joining Pantera, Paul worked at Strive Capital as an Associate where he focused on investments in the mobile space, including an early stage investment in App Annie. He graduated from the University of California, Berkeley.
1 — If you were investing in startup companies right now, what kind of blockchain-based business opportunity would catch your eye?
I would love to invest into a consumer-facing application that could get blockchain-usage into the mainstream. Initially consumers wouldn’t know that blockchain is actually powering the application, thus removing the friction and education necessary.
One recent investment that is a great example would be Audius, a decentralized platform for content creators, starting with music, basically a decentralized Soundcloud. Centralized parties are able to censor content and take extremely high fees from both artists and listeners.
Imagine a decentralized version where content can be censorship-free and more economic value goes back to both artists and listeners. Audius provides this decentralized platform where the content is hosted on IPFS and where identity, listen tracking, and payments are executed on smart contracts… and arbitration is handled without an intermediary.
Whether it’s music or any type of marketplace, decentralization allows lower fees, better incentives, increased access, and more resilience.
2 — If you didn’t need sleep, what would you do with the extra time?
If I didn’t need sleep, I would be continuing to find ways to improve myself. For example, I had been traveling quite a bit to China for business and figured it would be both fun and useful for me to learn and study Mandarin. It’s been a little over 6 months and I can’t wait to travel again to test myself.
If anyone wants to practice with me, I’m game!
3 — Looking at the top 100 projects in crypto by market cap, which ones stand out to you – and for what reason?
Recently, I’ve been a big fan of Ampleforth. I’ve known Evan Kuo, the CEO, since college, and he’s one of the smartest guys I know. The cool thing about Ampleforth is that it is strictly a money — not a token acting as a placeholder for the value of some other service.
When you think about the pure monetary-assets we’ve seen, most of them came from forks of Bitcoin. And they’ve all been pretty much the same. There hasn’t been much innovation in the “money-crypto” space. AMPL is the first differentiated money innovation we’ve seen in a long time, which is exciting.
These guys have been thinking about how they would improve upon Bitcoin as a collateral asset from the start, they’ve viewed Bitcoin more as a building-block for future banking systems than as a substitute for dollars. And they’ve really hit the nail on the head of two massive problems in the space that everyone else has ignored until now:
2) Supply inelasticity
Their protocol translates volatility from price to supply which has a couple of really interesting effects.
1) It counteracts liquidity crises (like what we saw on Black Thursday with DAI and what we saw under Bretton Woods with gold).
2) It creates a diversified movement pattern that’s unlike any traditional or crypto asset. Which makes it interesting as a collateral asset or as part of a portfolio of crypto-assets.
3) It can be used for contract denomination (lots of people prefer borrowing only against stablecoins on Compound because they don’t know what their debt obligation is with things like ETH or BAT).
If AMPL gets adopted as a major DEFI collateral asset, that could bootstrap it to compete with (or complement) Bitcoin in a differentiated way.
4 — What makes you angry… and what happens when you get mad?
I get angry when people make assumptions without doing research or having all the facts. It motivates me to work harder to help educate people. I look forward to these motivations because I’m a competitive person and these provide further goals and milestones to strive for achievement.
5 — When you tell people you’re in the blockchain industry, how do they react?
Decentralization means that there is not a central point of failure and governance is spread throughout the community instead of residing within a controlling party.
It is important to me because it can enable financial access and freedom for the emerging markets and the unbanked, the main reason why I initially got interested in crypto. Looking at areas like Southeast Asia and Latin America, there are more social media accounts than bank accounts in some of these countries and they are ready to leapfrog from fiat to programmable money.
We’re seeing cryptocurrencies providing cross-border rails for money movement, serving as stores-of-value during this pandemic, and being used for e-commerce transactions.
With the rise of decentralized finance, we see consumers and businesses in the emerging markets participating in decentralized lending/borrowing to achieve strong yield.
6 — What should we be teaching our kids?
I believe we need emphasize to our kids to focus on what makes them happy and cut out everything else. Life is too short to not enjoy it, whether it’s hobbies, work, or friends. I walk into work each day loving my job and what I do. I get to help entrepreneurs achieve their dream and disrupt legacy financial systems. Values such as racial equality, philanthropy, and innovation should also be instilled.
Silicon Valley Bank down, USDC depegged, FTX billed $34M in Jan.: Hodler’s Digest, March 5-11
SBF sent home, FTX heads plead guilty, and Binance gets Voyager assets: Hodler’s Digest, Dec. 18-24
SBF to enter plea deal, Mango’s exploiter arrested, and Celsius news: Hodler’s Digest, Dec. 25-31
‘Account abstraction’ supercharges Ethereum wallets: Dummies guide