Warren, Partner at SloganArkStream Capital, shares his experience in frontline investment, insights and thoughts on the bull cycle, public chain development and meta-universe, which hopefully will inspire you.
SloganArkStream Capital is the crypto investment fund of BlockArk Block Ark, they have been researching DeFi since 2019, they have invested in high return dark horses and missed early stage potential stocks, this time Chain Catcher had an in-depth conversation with its partner Warren, he shared his experience in frontline investment, his He shared his experience in frontline investment, his thoughts on bull market cycle, public chain development and meta-universe, and hopes to inspire you.
Interview | Dashu Wang
Chain Catcher: After the “519” and “622” plunges, the market seems to be too weak, what stage do you think the market is at?
Warren: Personally, I think the market is still in a long bull cycle, and the crypto market must be in an upward and downward spiral. There are three reasons why I say this.
One is the technology development itself. Once the creativity and technical strength of the developer team reach a certain level and bring a large number of applications to the ground, it is impossible for the industry to go back to the early and sloppy era.
Secondly, the big money continues to enter the field. The big institutions and big money keep entering the field after the properties of bitcoin from speculative commodities to commodity properties on the close, so that it is as close to gold as possible, become one of the investment institutions asset allocation of the subject.
Third, based on the above two points, the general public is gradually accepting Bitcoin and its related mainstream cryptocurrencies, so the overall trend of market development must be upward.
Chainfinder: The overall upward spiral downward is quite challenging for institutional investors, especially in terms of capital utilization, what are your thoughts on this point?
Warren: We do take this into consideration, but the cycle of each track is relatively different, so we do not adopt a fixed investment strategy to ensure capital utilization, but more of a flexible strategy, flexible plans, different investment rhythms for different tracks, specific analysis of specific projects.
For example, for example, if only 10% of the projects in the market are doing the underlying infrastructure, combined with the track’s characteristics of few optional projects and a long implementation cycle, our expectations for the capital turnover rate will be smaller; on the other hand, 90% of the projects in the market are doing applications, with many optional targets and a short implementation cycle, their products and users will be quickly verified, and our expectations for their cycle will be shorter. We need to consider the shorter cycle.
Chain Catcher: It seems that you are able to invest in the top projects in each track, what is your investment research methodology?
Warren: Actually, there is a misunderstanding here, not that we invest in all head projects, but we invest in these projects before they become head, so we are not that god.
If a project already has a strong competitor, then we will value it against its competitor. If what the project is doing is completely innovative, then we will go to traditional industries to find similar products and value them by comparison, so as to measure If the project is completely innovative in what it is doing, then we will go to the traditional industry and find similar products and compare the valuation to gauge whether the project is of high quality and the potential development space.
Chain Catcher: Aave’s TVL has exceeded $10 billion some time ago, what is its return as a member of your portfolio?
Warren: Aave was one of our more failed investments. Although we were involved in it back in 2017, we exited before it became a giant, and not only Aave, but we dumped many application layer projects in the last bear market when we thought it was more important to focus on the underlying foundation.
Chain Catcher: It’s common to miss quality targets in investing, and it’s important to draw valuable lessons to get new inspiration.
Warren: Yes, in fact, after reviewing the experience, we feel that we still need to hold a dynamic perspective in making investments. In the past, we have been static in our approach, focusing on the performance of a project or industry over a period of time, which is too superficial. So now we now focus first and foremost on the team’s ability to iterate and keep an open mind.
If they love the industry enough, can constantly adapt to market changes and adjust their own pace, constantly iterate and innovate, they still have a chance to explode.
Chain Catcher: You have previously researched a lot on algorithmic stable coins, but since FEI, there has been very little attention paid to it, why is this the case?
Warren: We have researched algorithmic stable coins a lot before, and we have gotten some dividends, so we believe that stable coins will explode in the future. But combined with the current situation, the overall market situation is not very optimistic, most of the existing algorithmic stable solutions are overly pursuing and anchoring between the dollar, very unrealistic.
Chain Catcher: What is the reason for the lack of development of the calculation of stability?
Warren: Frankly speaking, most of the calculating stability is now the capital plate. It needs a growing amount of money and a steady stream of new users to not collapse, but in reality there are not enough good projects to meet these two points, and even if they meet these two points, the project also needs to have the ability to resist risk and iterate to do so.
All in all, the development of counting stable needs a lot of subjective and objective conditions, and not the so-called model theory out to be practiced, the road ahead is still long, so if you participate in counting stable investment, or hold the attitude of participating in social change and social experiments to try, do not hold the mentality of obtaining a huge amount of wealth.
Chain Catcher: Totally agree, you have also invested in BSC and HECO ecology related projects, how do you understand the problems facing the development of exchange public chains?
Warren: The BSC ecosystem is doing well, the HECO ecosystem is doing a bit less well. But I think as more public chain ecosystems develop and more developers come in, it will definitely increase the competition among exchange public chains, but everyone seems to have a hard time attracting quality developers into the market at the moment.
Of course, from the level of investment, for these exchange public chains that are less innovative and more resource-oriented, we are more willing to participate when these ecologies really make their products and have data to follow, and will not enter the market at the earliest stage, even if it is not too late to take over after the potential stocks have become leaders and attracted a lot of funds.
Chain Catcher: Whether it’s BSC or Heco, or even Boca, it’s all in the infrastructure category. Now that the Kusama auction for the Boca test network has started, but the outside world has been full of doubts about it, what kind of psychological expectation do you have to judge its next development as an organization concerned about the Boca ecology?
Warren: We did invest in Boca and its ecosystem from the beginning, but we were very careful in selecting the bids because, as mentioned earlier, everything related to Boca cannot be verified in the short term.
The only concern about Poca is that it will replicate the EOS path and end up with a parallel chain auction. However, I think the misconception will be verified soon, and we will see if the technology is mature, if there are more new developers willing to step in, and if there are assets willing to cross-chain in about a month after the auction of Kusama, the first test network of Poca.
We will all work together to make the first wave of the ecology, and once these are clear, we will know whether the applications in the Poca ecology work well, and there will be no need to anticipate, but to verify directly.
Chain Catcher: What other tracks or targets do you think are currently undervalued in the market?
Warren: Personally, I think both the DAO and privacy protection tracks are undervalued. Regarding the DAO track, a more metaphysical view is that I think this wave of bull market outbreak has something to do with the rise of global individual consciousness. Due to national monetary overdraft, individuals are increasingly focused on their own asset growth and trust in centralized organizations is decreasing, and DAO forms of organization may be put into application by massive demand.
Regarding the privacy protection track, a more practical point is that I found that from the beginning of the outbreak of DeFi to now, we are increasingly aware of the importance of privacy protection, necessarily many people do not like their own address on the asset data is publicly viewed, based on a variety of related needs, the market will certainly need privacy protection products.
Chain catcher: Speaking of privacy protection, like Dfinity, PlatON, Oasis seem to be such a track, but so far we have not seen any relevant application scenarios, so will privacy computing be a pseudo proposition?
Warren: Personally, I don’t think it’s a pseudo proposition, these are all public chains you mentioned, each of them has their own area of focus, although the tokens are online, but the infrastructure is not yet played, so naturally they can’t see the application.
However, tokens like anonymous coins and hybrid coins are essentially relatively early application scenarios for privacy computing. It’s not that there are no application scenarios, it’s just that privacy computing is not a single application module, but a combination of multiple modules, not a separate existence.
Imagine when the Web3 era comes, data silos are interconnected, and people value data privacy more and more, so the information that needs to be verified is displayed, and the information that does not need to be verified is hidden, which must require privacy computing technology. Moreover, when there are more data and asset-based applications in the market, the more widely privacy computing will be applied.
Chain Catcher: The meta-universe has been hot recently and may be one of the big application scenarios in the future, and related concept projects are emerging one after another.
Warren: Personally, I don’t like to talk about metaverse and other NFT projects or chain tours together.
On the one hand, metaverse is more similar to the Internet of Things + blockchain in the early years, which will definitely become an indispensable part of the development of the whole Internet and usher in the explosion, while blockchain is only one part of it, if you are doing investment in related fields, you must distinguish the weight and priority.
On the other hand, although I am optimistic about the meta-universe and blockchain, but the meta-universe is not necessarily done by people in the blockchain industry, so I am not too optimistic about those blockchain projects that are hype gimmicks in the name of meta-universe.
Chain catcher: Some old people in the cryptocurrency circle have similar views to yours, but some of them also think that decentralized derivatives exchange is a pseudo-demand, because the main field of derivatives trading is mainstream assets rather than long-tail assets, and they can’t enjoy the benefits brought by no license and AMM at all, instead, they account for a lot of the disadvantages brought by decentralization, and they have to face the core problem of user activeness. Do you agree with this statement?
Warren: I don’t agree with this statement. First of all, the benefits of AMM are not just the liquidity of long-tail assets, as you can see by looking at the head pairs of Uniswap, the trading volume is still mainly concentrated on mainstream assets, not to mention the immediate need for stablecoin swaps like Curve. So, the core demand for decentralized trading is still on security and privacy.
Centralized derivatives trading has been criticized for a long time. First of all, some centralized exchanges do counterparty directly with users, which brings predictable results. This, in turn, is in urgent need of decentralized exchanges to improve; second, while decentralized derivatives trading is not trading enough now, it is not because there is no demand, but because the product is not good enough and limited by the underlying infrastructure. This will definitely see an exponential rise when better infrastructure and better product solutions come out.
Chain Catcher: Recently old man Saul wrote a piece on how we might as well start from scratch, he says he has a vested interest in crypto-capitalism and defines himself as a fringe person, curious what is your positioning for yourself?
Warren: I’ve positioned myself as a participant and witness in the industry, and I’ve been fortunate enough to see an emerging industry on the rise and about to have a huge impact on the world. There is no way many people would have thought a few years ago that the cryptocurrency market would thrive today, and it’s exciting for a young person to experience and witness it all.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/conversation-with-block-ark-warren-the-dao-and-privacy-tracks-are-underrated/
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