Ep.91: Filling the Voids in the Crypto Market—with Joey Krug of Pantera Capital

The Boost VC Podcast

An Amazon study revealed that 100ms in latency cost them 1% in sales. Meanwhile in crypto, it can take as long as a week to set up a CoinBase account! Imagine how conversion rates would skyrocket if the industry tackled latency and solved for the two greatest voids in the market: fiat on-ramping and scalability. So, what blockchain startups are making progress toward these goals? And how is the blockchain landscape likely to shift in the next few years as we work toward large-scale adoption?

Joey Krug is the CIO of Pantera Capital, an investment firm focused exclusively on digital currency and ventures in the blockchain space. Prior to Pantera, Joey cofounded the Forecast Foundation, an organization that contributes to the Augur Project, a decentralized prediction market protocol owned and operated by the people that use it. He also started an AngelList syndicate that backed the popular 0x protocol.

Today, Joey joins us to explain how he balances his work for Pantera with his ongoing involvement in Augur. He offers insight around the early days of the Augur Project, discussing the decision to pursue an ICO, his method for building the team, and the hurdles he faced developing Augur on Ethereum. Joey also shares why he took on the oracle problem at Augur and gives advice on building for chains other than Ethereum. Listen in to find out what recent investments Joey is most excited about and how those companies address the current voids in the market, fiat on-ramping and scalability.

Topics Covered

Joey’s path to Augur and Pantera Capital
Came across Bitcoin in 2011 on Overclock
Started Augur to disrupt financial system
Joined Pantera as technical partner in 2017

The Augur reporting system
Designated reporter selected to submit answer
Stake tokens (reputation) on real winner
Disputes end OR split into two universes

Why Joey financed Augur through a crowd sale
Project rather than company (no equity to sell)
Needed own token due to forking concept

Joey’s take on how the market has changed
Pendulum swing from ICOs to equity deals

The voids in the market Joey is looking to fill
Fiat on-ramping
Scalability problem

NFT ideas Joey finds interesting
NFTs with video games
Buy electronic artwork

How Joey balances work between Pantera and Augur
Most of time at VC firm
Oversee that Augur running smoothly

Joey’s advice to his younger self at Augur
Fully think through what you’re building

How Joey built the Augur team
Skype crypto discussion groups
Open communication on Reddit, Discord
No org chart but defined responsibilities

Joey’s thoughts around building for future chains
Likely compatibility with EVM, WebAssembly
Build on Ethereum now (high odds of porting code over)

Recent investments Joey is most excited about
Wyre likely to increase conversion rates exponentially
Bakkt (institutional grade exchange for crypto)
Synthetic Minds makes secure smart contracts easier

The hurdles Joey faced in developing Augur on Ethereum
Making smart contracts secure
Writing decentralized UIs

Joey’s insight on the oracle problem
Design for incentive compatibility
Still slow (takes one week to resolve markets)

Joey’s thoughts on the scalability timeline
2K transactions/second in next 18 months
10K TPS in 4 years (many sidechains necessary)

The difference between fiat and Dai stable coins
Fiat = same drawbacks as existing system
Dai backed by Ether as collateral (fewer limitations)

Why Joey took on the oracle problem with Augur
Maintain decentralization, remain P2P

Connect with Joey

Pantera Capital https://www.panteracapital.com/
Pantera on Twitter https://twitter.com/PanteraCapital
Augur https://www.augur.net/
Augur on Twitter https://twitter.com/AugurProject
Augur on Reddit https://www.reddit.com/r/Augur
Augur on GitHub https://github.com/AugurProject
Joey on Twitter https://twitter.com/joeykrug

Resources

Overclock https://www.overclock.net/
Zeppelin https://zeppelin.solutions/
0x https://0x.org/
MakerDAO https://makerdao.com/en/
MetaMask https://metamask.io/
Cosmos https://cosmos.network/
Polkadot https://polkadot.network/
Guesser https://www.guesser.io/
Discord https://discordapp.com/
StarkWare https://www.starkware.co/
zk-SNARKs https://z.cash/technology/zksnarks/
EVM https://www.mycryptopedia.com/ethereum-virtual-machine-explained/
WebAssembly https://webassembly.org/
Wyre https://www.sendwyre.com/
Amazon Latency Study https://blog.gigaspaces.com/amazon-found-every-100ms-of-latency-cost-them-1-in-sales/
Bakkt https://www.bakkt.com/index
Synthetic Minds https://synthetic-minds.com/
IPFS https://ipfs.io/
Oraclize https://provable.xyz/
Chainlink https://chain.link/
TLSNotary https://tlsnotary.org/
Gnosis https://gnosis.pm/

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