Welcome to zero knowledge, a weekly newsletter showing you where the top venture funds are investing in web3.
*IMPORTANT*: To view embedded data on equity investments and tokens, view this post on our website.
This week, we break down a16z crypto. Here's what to expect:
- Recent funding news from a16z crypto.
- a16z's portfolio broken down by layer, blockchain, company type, and category.
- The most interesting portfolio company.
- The most interesting innovation in their portfolio (what Chris Dixon thinks is the future of blockchains).
- Entire a16z portfolio (data in Airtable).
- Available tokens from a16z backed companies.
Recent funding news from a16z crypto
Lido - lets users stake their ETH - with no minimum deposits or maintaining of infrastructure.
- Andreessen Horowitz invests $70M in Ethereum staking protocol Lido.
- Why a16z is investing in Lido.
- Andressen intends to stake a portion of their Ethereum holdings through Lido.
Below is a thematic view of a16z's investments by:
- Category (ex: infrastructure vs. finance companies)
- Company type (ex: payments vs. NFTs and digital ownership companies)
- Layer (ex: L1 vs. L2)
- Blockchain (ex: Eth vs. Solana)
Investments by category
Investments by company type
Investments by layer
Investments by blockchain
Most interesting portfolio company
- Elevator: allows anyone to be a lender, not just banks.
- Key insight: it’s expensive to be a bank today which limits the kinds of lenders and limits access to capital in emerging markets
- Key solution: By incorporating the principle of “trust through consensus”, Goldfinch creates a way for borrowers to show creditworthiness based on the collective assessment of other participants rather than based on their crypto assets.
- Example: People that want to take out a personal loan stipulate the terms they are looking for. These terms are checked by ‘backers’ who are people who access the terms of the loan and decide to provide the first capital or not. Other people like you and me put up passive capital that earns a more moderate APY which is allocated to the different borrowers depending on how many backers have already committed capital. This ecosystem creates automated consumer loans for borrowers, high yield for active 1st capital providers (backers), and moderate yield for passive capital providers, all without collateral.
The most interesting innovation in the portfolio
DFINITY's Internet Computer Protocol. Here's what Chris Dixon thinks:
So what is the Internet Computer (ICP)?
- Elevator: The ICP is a set of protocols that allow independent data centers around the world to band together and offer a decentralized alternative to the current centralized internet cloud providers.
- Key Insight: Other top blockchains like Eth, Polkadot, and Avalanche have innovated and improved on scalability, speed, and security, but no blockchain has successfully improved on all three. Improving one or two aspects comes with a sacrifice on the third – for example, improving scale and speed means a sacrifice of security in the cases of Solana and Binance Smart Chain. The ICP innovation is a vast improvement in all three aspects.
- Key Solution: The ICP's key innovation is its Chain Key Technology which includes several novel technologies making it superior to other blockchains in every measurable category: its consensus mechanism called 'threshold relay' solves known PoS issues, speed (10x faster than Solana), unlimited scalability (use of subnets that the Chain Key technology combines into a single blockchain that increases its capacity with demand, meaning unbounded capacity and a roadmap to infinite scalability), low fees ($.006 on average), and smart contracts (called 'canisters' on ICP).
- Example: The Chain Key Technolgy introduces several new technologies which are impossible to do justice in such a short post. For those that are interested in learning more, I suggest starting here for some video breakdowns.
Individual portfolio company data
Tokens available from a16z backed companies
Let us know what you think here!