♠️ Blockchain Capital crypto portfolio breakdown

Welcome to zero knowledge. A weekly newsletter breaking down where the top VCs are investing in web3/crypto.

Expect portfolio breakdowns (like this) every Tuesday. And other crypto topics, insights, and updates everywhere in between.

Here we go 💪

Outline

In 2013, Blockchain Capital was founded and was the first venture capital firm founded to focus exclusively on blockchain technology and the crypto ecosystem. Most crypto portfolios have a significant amount of overlap with one another. Blockchain Capital does not. Here are a few things that stick out about their portfolio:

• Heavy exposure to Bitcoin 💰- their belief in Bitcoin is clear through the number of investments in (and to improve) the ecosystem.
• All the exchanges 💱 - after all, exchanges have been the biggest winners and most profitable. Their name seems to be on every cap table.
• Energy solutions 🌳 - several bets at the intersection of carbon neutrality and blockchain.

Here's what to expect below 👇

• Recent funding news from Blockchain Capital.
• Blockchain's portfolio broken down by layer, blockchain, company type, and category.
• 🕵️‍♂️  The most interesting company in their portfolio.
• 💼 Entire Blockchain Capital portfolio (in an Airtable sheet).
• 💰 Tokens available from Blockchain portfolio companies.

Recent funding news from Blockchain Capital

1. Composable Finance Raises $32M series A round to build the final missing “LEGO” building block in the Web3 and DeFi technical stack: cross-chain composability (equity 💵)

• Composable Finance is among the first to develop a development and execution environment that aims to deploy orchestration logic that allows for ecosystem - agnostic, cross-blockchain communication in a truly decentralized fashion.  

2. Landed Raises $7M Seed Round to Solve Restaurant and Hospitality Staffing Challenges and Bring Financial Services to Blue Collar Workers (equity 💵)

• Landed provides the first end-to-end recruitment engine for the restaurant and hospitality industries. This raise (and the relevance to Blockchain Capital) will be used to roll out a new suite of products that include crypto-enabled bank accounts.

Below is a thematic view of Blockchain Capital's investments by:

1. Category (ex: infrastructure vs. finance companies)
2. Company type (ex: payments vs. NFTs and digital ownership companies)
3. Layer (ex: L1 vs. L2)
4. Blockchain (ex: Eth vs. Solana)

#1 Investments by category

#2 Investments by company type

#3 Investments by layer

#4 Investments by blockchain

Most interesting portfolio company 📈

• Elevator ⚡️: Chainflip is a decentralized protocol that supports the direct cross-chain exchange of cryptocurrencies without a trusted intermediary. Chainflip does this with no special software, no wrapped tokens, no accounts or registration, no collateral requirements, and no unnecessary complexity. It's a big deal and a solution that's urgently needed in DeFi. Here's what Lord Vitalik has this to say on the matter:

• Problem 🚩: If you've ever tried to swap tokens on a decentralized exchange, you'll immediately understand the annoyance of dealing with wrapped tokens and setting up additional wallets, among other added complexity. People have been trying to solve this problem and we've been promised a cross-chain DEX solution has been "right around the corner" since 2016. Many projects claimed to be the de facto solution, but in reality, each has fallen short. Despite the appetite for a decentralized solution, users have been forced to default to centralized exchanges that offer more liquidity, volume, and a much smoother user experience.
• Key insight 🕵️‍♂️: With Chainflip, you get the same permissionless experience as Uniswap (without the limitation of being confined to the Ethereum blockchain), the same one-step swapping experience as Coinbase (without the centralization), and all of this is done without having to add collateral or set up additional wallets (a key annoyance of using other options). You can just swap ETH directly for BTC, or XTZ for DOT. It's simple, just like it should be.
• Advantages 👍: On Uniswap, you're stuck on the Ethereum main net and confined to trading only the assets supported in that ecosystem. Additionally, you pay Eth gas fees every time you execute a trade, even when you're not trading Eth. Chainflip does a few things differently. Most notably, it maintains its own proof of stake blockchain (called the State Chain) which records all transactions, swaps, and balances. This means you don't pay Eth gas fees on every transaction, but instead, and more intuitively, you only pay transaction fees for the blockchains you interact with. For example, if you're swapping Bitcoin for Solana, you'd pay fees in Bitcoin.
• How does Chainflip actually enable cross-chain 📜: The short answer is through joint wallets that are set up on each blockchain. The protocol's validators manage the wallets and are compensated by Chainflip's native token which also exists to incentivize liquidity providers. There is more that happens behind the scene, but as a user, you'd never know it, All you do is swap one token for another (like you would on Coinbase), and it just works. And that right there folks is an amazing thing.
• Disclaimer: The big issue with Chainflip is that is hasn't taken off. It's a great idea, but they've been plagued by software bugs and an inability to grow their validator base (here is Chainflip's latest update if you're curious to follow along). Sadly, all of the above has led to less than stellar growth. Still, this is a technology that will no doubt exist, and I'm actively looking for great projects to back here so LMK if you have any suggestions. If you're curious about options that are similar and working well, I recommend checking out THORChain.

Individual portfolio company data

Tokens available from Blockchain Capital backed companies

Feedback

Let us know what you think here!