DeFi is the future of the blockchain? See what the top international investment institutions say

Blockchain investment truly enters the public view from 2015 through the understanding and participation of many professional investment institutions. In the past five years, we have seen more and more professional organizations and professional investors join. What are their strategies for investing in blockchain? What is the expected trend of the future?

On the afternoon of September 17, Deng Chao (host), Kyle Samani, Paul Veradittakit, Sam Rosenblum and John Ng Pangilinan participated in the 5th Global Summit on Blockchain sponsored by Wanxiang Blockchain Lab. The new track: the future investment trend" roundtable forum.


Guest introduction:

Deng Chao, CEO of HashKey Capital

Kyle Samani, co-founder of Multicoin Capital

Paul Veradittakit, Partner, Pantera Capital

Sam Rosenblum, Partner, Polychain Capital

John Ng Pangilinan, founder of Signum Capital

Round table content selection (English to Chinese):

Deng Chao: People who have passed the Internet bubble in the investment field will say that the blockchain is like the initial Internet, so what is the era of the blockchain now?

John Ng Pangilinan : I think it should be 1999. In 2017, if I go to a big company and say that blockchain technology can solve your problem, they will ask what is the blockchain. It's different now, the term blockchain is used by most companies, but I don't know what it means, so I hope this stage will eventually pass. Because everything we use now is based on blockchain, but you don't know what the blockchain is. So large-scale promotion is still a problem.

Sam Rosenblum : I think the Internet is like the end of the 80s, but the development of the blockchain will be much faster and will soon enter the Internet in 1993. Many people talk about a concept. We can make the mainstream service use the blockchain by providing simplified services. For developers, this moment will come sooner than the average user, and it is not enough now.

Paul Veradittakit : I didn't invest in the 80s and 90s, so I can only say it in the early days of the Internet.

Kyle Samani : I don't have a specific year to judge. Just like a mobile phone, mobile phones now run many times faster than before, and the number of developers has increased a lot. The current technology has developed a lot compared to decades ago.


The picture shows Deng Chao

Deng Chao: What is your investment strategy and what is the current investment area?

John Ng Pangilinan : In terms of investment strategy, because I am a traditional bank, we first pay attention to the underlying facilities, then the team, to see what kind of solutions the team can provide, and secondly, the compliance issue, we will carry out the project. survey. In terms of investment, we will look at the architecture of the target company's Layer1 and Layer2, hoping to have more sustainable Dapps and DeFi.

Sam Rosenblum : In terms of investment strategy, we hope to help the entire ecosystem without short-term or hedging investments. Regarding the type of investment, it is mainly concerned with the agreement of Layer1. The main direction is the technology that can be promoted or the underlying architecture, which means that it is easy to build applications on such an architecture. We are also very interested in DeFi.

Paul Veradittakit : We are long-term investors and I have been a venture capitalist for nine years. We will look at all aspects, we hope to help invest in the target, and establish a five to ten year investment relationship. Whether it's a blockchain project or a non-blockchain project, we have this strategy.

Kyle Samani : Some companies will study blockchain-related technologies and see how they are applied. In this regard, we have also made some investments, such as cooperation in the field of telecommunications. In the next two to four years, all infrastructure will be taken for granted, it is an invisible existence.

Deng Chao: There is a cycle of blockchain investment. In the period from 2015 to 2019, the technology, investment, market and regulatory environment will change. What changes are worthy of attention?

Kyle Samani : We have not changed our investment strategy in recent years. There may be some shifts in thinking, and the previous focus was on DeFi, which made the blockchain work better. The major changes we have seen recently are in the United States, Latin America, Asia, and some central banks or fiat currencies institutions have begun to focus on the blockchain.

Paul Veradittakit : In 2017, many projects received some financial support. In terms of regulation, especially in the United States, we will also change the structure of investment. For example, the SEC and other regulators have already issued some new rules. The other is hedge funds, analyzing different protocols and using our data and resources. We are diversified in the area of ​​hedge funds, and we hope that some hedging behavior can be carried out to better cope with the changes in this market.

Sam Rosenblum : Coinbase is a good company in 2014. Many things have changed in the past few years, such as operations. We hope to invest in blockchain startups earlier. For example, in terms of agreements, we are very optimistic about the PoS mechanism.

John Ng Pangilinan : We saw that 2017 was the outbreak of the project, but by 2018, the situation has changed. They can't apply technology to the enterprise. We hope to learn more about these companies, understand their business and help them improve. Help these companies grow.


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Deng Chao: John, how should investment institutions help blockchain companies develop better?

John Ng Pangilinan : We have set up a fund, some projects and companies in Singapore that have used the certificates we have obtained. For example, the certificate of remittance, so that people in the network can use these things, which is very good. It's just that you have to design it at the beginning. If you can work together, of course, there is still a lot of work to do, which is not easy. We have a lot of work on our own, and we have to spend more time doing this. There is currently no way to share a lot of information. If you can do something together, why not? Not only with people on the cryptocurrency side, but also with people from large groups. We will work with large group companies to draft work authorizations.


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Deng Chao: Sam, can you share with us the experience of encryption asset management?

Sam Rosenblum : Actually we are not active traders, and the current position does not do much work. In the past few years, there has been a lack of infrastructure, and the current situation has not changed much. Therefore, traditional asset managers do not need to consider the issues that need to be considered. Once you invest in these assets, you must hold them for a long time to ensure its security.

Investment in this area is quite special, and many investment companies are like this. If you want to increase your position, you will trade in the secondary market. Generally, resources are allocated through major investments. If you want to increase your position, you will work with exchanges that have long-term relationships.


The picture shows Paul

Deng Chao: Paul, you said in an interview at the beginning of this year, in the blockchain project financing, from the issuance of Token to equity financing. Why is there such a change?

Paul Veradittakit : We are investing in a team. They do one thing, change their business model, or use a currency to do a business model, and change a business model to issue digital currency. We still want to stand in line with these companies. Now it makes a lot of sense. Many capital configurators will return to traditional VCs. Many family businesses have joined in, and even some university endowment funds have invested in these projects.

There are investment areas that see long-term investors entering this area, and they definitely want to invest in the final results of these teams. So we also want to be able to guarantee flexibility and keep pace with these companies. Whether it is Token or equity financing, there are many mixed transactions. I also made equity financing and helped them issue Token. I think this is better and should be a trend in the future. In the end we still want to make sure that we can benefit from whatever value they create.


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Deng Chao: Kyle, you recently wrote an article saying that the world's computers should be logically centered, but this deviates from the mainstream view of decentralization. What do you think?

Kyle Samani : There are usually three types of “decentralization”: decentralization in architecture refers to how many nodes in the system; political decentralization refers to how many people can exert control, including rules. And the choice of transaction; logical decentralization, there is no end point, after the logic is formed, others can use this system.

In general, logically decentralized systems tend to be cumbersome. Because there is no way to integrate such a system. If you look at cryptocurrencies and look at the challenges of scaling, many solutions are very clever, including Layer 2, zero-knowledge proof, sharding, etc. These technologies are likely to disrupt logically centralized networks. Although not a perfect split, it will slowly erode such a system. For example, there are some states, channels, and it is very difficult to run on the system. In fact, it brings very unnecessary complexity to the application logic, especially for developers. We are very supportive of architectural and political decentralization, but logically we feel that this system should be as central as possible.

Deng Chao: In the next one to two years, what technologies do you think will be discussed and will continue to invest?

John Ng Pangilinan : I work in Southeast Asia and Singapore's financial industry is very strong. I am still very confident about finance, such as DeFi.

Sam Rosenblum : This industry is growing fast, and the infrastructure of the entire market will continue and it will remain our investment opportunity.

Paul Veradittakit : We hope that the intermediary can be removed, that is, de-intermediation, and hope that the decentralized vision will continue to develop. We will continue to invest in these aspects, no matter what form it will take.

Kyle Samani : We will continue to invest in agreements like the excellent blockchain team, whether it is a hedge fund or a public fund, and will actively explore these aspects in the primary and secondary markets.