“Change is an opportunity to do something amazing.” - George Couros
So we are finally back in Asia after an eventful week in New York for Consensus 2018. This week’s newsletter is a slightly long read, but probably worth the effort.
Introducing 108token, our cryptocurrency index
As markets mature, passive investing outperforms active investing, as a number of great minds keep reminding us. We are therefore excited to announce the launch of 108 token
, a cryptocurrency index that tracks the top 15 supply adjusted market-cap weighted cryptocurrencies
. You can read all about it on our 108 token Medium channel
, and find more details at www.108token.com
, and also subscribe to our telegram
channel, which we hear, is apparently de rigeur for such efforts. Go figure!
One (ERC20) to own them all.
Decentralized exchanges might be super exciting but a number of folks are focusing on traditional exchanges and OTC businesses, betting on the fact that the institutional opportunity is far more lucrative near-term.
Narrative funding is done! People want to see real protocols and real development. A ‘yet another ethereum’ project will find it difficult to raise funding if the only marketing strategy is a pie-in-the sky whitepaper, even if it has a bevy of MIT/Stanford PhDs and a Fields medal winner advising it.
The profusion of ‘boutique ICO advisors’ /shill-meisters’, that has worked on ‘40 ICOs’. Steer clear of such entities. More often than not, hiring such entity will be negative virtue/credential signalling to the increasingly sophisticated, increasingly jaded token/ICO investor.
There is a certain seediness to this mid/late stage of the bubble, a certain sense of ‘deja vu’. Some of the parties had all the essential cocktails that gave a number of the other cycles (the junk-bond predator’s ball
in the 80s, dotcom in the late 90s, the structured finance boom in the last decade) a certain bad name, especially around the time they were about to pop. Plus ca change
and all that.
Corridor Track - as always the most useful. A number of folks we met did not even bother to buy tickets to the conference properly, instead choosing to just stay on the sidelines making conversation and building out their network.
- All the ‘cool kids’, the early pioneers and the whales and the cypherpunks are increasingly staying away. Someone threw an ‘anti-consensus’, a one-day event with some decent speakers, $100 entry fees and a great after party. For a limited number of participants. Great idea and we expect this to be the norm, especially as the Consensus machine now starts juggernauting
around other parts of the world.
Love them or hate them but security tokens are here to stay. Lowest hanging fruit, but there is a lot of roadmap uncertainty, very much an evolving field. Likely one reason why Wall Street is getting in in a big way.
OTC trades are the new ‘private tech secondaries’. Over the last few weeks, we have had around 20 entities reach out to buy ‘blocks’ of BTC, and another 20 willing to ‘sell’. Highly attractive prima facie, but the vast majority of these trades will fail because of the degree difficulty in establishing trust across a daisy chain of brokers. A small cluster of execution-focused entities will capture a lot of value from this froth.
A necessary dose of skepticism from some smart folks around the whole idea that the Blockchain will cure everything that is wrong today!
Special shout out to XSQ (HongZhuang Lim)
, Dhruv Bhansal (Unchained Capital), and Market Protocol
(Seth and Phil), just what the crypto world is missing right now; focused, under-the-radar execution, with the emphasis on building a great product or a service rather than a self-aggrandizing narrative with little underlying substance.
It was also a pleasure catching up with Daniel Wang of Loopring
. This could be a real, viable ZRX competitor in the decentralized exchange space.
And now, onto this week’s main course.
This is the third time this year we are visiting the highly debated topic of smart contracting platforms and potential winners. Such is the pace at which we are seeing innovation in this space. In our previous posts, we talked at length about the scale of disruption that smart contracts are bringing to bear and the key differentiators between some of the early big boys in the space - Ethereum and NEO. You can read them here
Almost every crypto-related construct can be viewed from the optic of the Scalability Trilemma
. To provide a quick recap, what this essentially means is that for any blockchain project, it is practically infeasible to hit the trifecta of Scalability, Consensus and Decentralization, with trade-offs across these three axes being the norm. Trying to reach a perfect solution on any one of the three fronts will inevitably lead to trade-offs on the other fronts. For example, Bitcoin found it almost impossible to achieve maximum decentralization and high scalability at the same time. So, the core team decided to make decentralization their primary goal and everything else got relegated to secondary solutions such as Lightning Network, SegWit, etc. You can read more about it in an earlier post