Host Frank Chaparro – The Block
Guest Kyle Samani – Multicoin Capital
Hedge fund founded in 2017
Funded Solana, FTX, Helium
How he survived through 17-18 bear
Founders worked hard, he supports them
Parents were immigrants – taught him persistence & grit
NFTs don’t have pieces of state with relationships with each other (yet)
eg, Bored Apes are individually isolated
Designing relationships between NFTs, and letting them evolve over time
Beeple’s 5000 Days should be 5000 separate NFTs that are related to each other, have games to collect and combine them
Recombining NFTs into social games
Fan clubs – Bieber’s new song, letting first 1000 listen to it early
Where they’re investing?
3 layers to NFT stack:
1. Primitive / infrastructure – eg, Arweave (storage), Render (distributed graphics rendering), Metaplex (Uniswap of NFTs on Solana)
2. Exchanges – Hakku (NFT exchange on Polygon), invested in at least 3 now
3. Buying NFTs directly – invested in Loot, but will be small (less than 1% of assets), hard to do this at scale
NFT exchanges will segment – doesn’t make sense that apes are traded in same way as .eth names as metaverse land, there will be many exchanges, they’ll vertical-ize
How are valuations justified?
Just assume every musician will issue a 10K NFT collection – why can’t that be sustained? Most of them have several Ks of fans and some have much more
People underestimate scale the internet brings, TAMs have gotten way way way bigger
Web3 will be less disruptive to society than web2
Web3 = Permissionless flow of value (web2 = permissionless flow of information)
Who will win? Majority will be net new protocols and businesses (not web2 / traditional industries)
NFTs = let superfans self identify and spend
Patronage models for creativity will evolve
Power law distribution happens everywhere, will also happen in NFTs / web3
Multicoin’s alpha is identifying new theses, what new tech enables
Growth in users, revenues, have really accelerated
Why? They all have smartphones, they all have internet, they’re all comfortable (now) spending money online
New inventions will be made regardless of what happens in global macro
Is there froth in venture?
It does feel frothy, easier to be crypto VC bc time to liquidity is shorter
Absolute $ in crypto VC is still much smaller than trad VC
Valuations won’t come down for high quality teams
Once product market fit established, rate of growth / adoption will be faster than ever – viral and reflexive nature in crypto is extraordinary and still deeply under appreciated
How many investments so far in 2022?
5-10 investments
Deploying capital as fast as ever
Doesn’t know or care bitcoin price, really avoids checking crypto prices
Park City, Utah is now his home base
Loves snowboarding
Public pension funds are buying top layer 1s – that’s the bid – not just btc / eth
Most investors no longer have regulatory risk as the main reason not to invest
Many investors in 2010, 2011 were skeptical of internet / software, now everyone sees that power and transformation. What’s next? A lot are looking at crypto as one of the future’s big platforms
What investments is he looking for?
Metaverse (infrastructure, defi broadly, Graph, Render, Fluid) – prefers those that are working on credibly neutral
Social media – soon something social will break out that will be crypto native
True crypto natives today – closer to 1M than 10M
Large enough to bootstrap meaningful social network
In 24 months, these users will move off Twitter onto something crypto native