♠️ Multicoin 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 random crypto topics, insights, and updates everywhere in between.

Here we go 💪

Outline

Multicoin has the most eclectic, exploratory web3 portfolio you'll find. What sticks out immediately is how broad their investing spectrum is–it's spread across the most vibrant layer 1 ecosystems, with additional bets that are just as vibrant in the layer 2s and 3s on top of those same ecosystems. They're not afraid to invest in the edgy stuff, which has led to a number of outliers, which has led to insane returns 👇🤯. When they're not picking 1000x companies, they're focusing on the media side of their venture business and I highly recommend their writing, podcasts, and videos.

Here's what to expect below 👇

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

Recent funding news from Multicoin Capital

1. Aptos, raises $200m to start a layer 1 contender (equity 💵)

• The 1st money they raised was this $200m at a unicorn valuation 🤯
• The founders are ex-Meta employees. The original creators, researchers, designers, and builders of Diem, Facebook's payment network.
• Investors in Aptos include a16z, Tiger Global, Katie Haun, 3 Arrows Capital, FTX Ventures, and Coinbase Ventures.

2. Oxio, raises $40m, to bring tokenized telco model to US and Brazil (equity 💵)

• Oxio offers a white-label product that allows any brand to launch a mobile service and serve as a mobile operator for end-users or companies.

3. Marginfi raises $3m, to build a unifying platform for traders across the Solana ecosystem

• Marginfi is aiming to bring “institutional-grade” margin trading for institutional partners and trading firms interacting within the Solana ecosystem.
• Pantera Capital co-led the $3 million round with Multicoin; with participation from Sino Global Capital and Solana Ventures.

Below is a thematic view of Multicoin'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 ⚡️: Furucombo is a tool that lets anyone execute DeFi strategies across several protocols at the same time through a simple, drag and drop interface.
• Key insight 🕵️‍♂️: Navigating DeFi is very complex. The current experience is built for robots, not the masses. Furucombo built an easy-to-use abstraction layer that gives DeFi 'muggles' access to the same opportunities that technical traders and developers have had. Beyond making several trades across several different protocols much easier, they're introducing the masses to the power of flashloans, an incredible invention introduced by Aave and made possible through smart contracts (see 'flashloans ⚡' below).
• Key solution ✅: Furucombo visualizes complex DeFi trades into 'cubes', letting users assemble and order cubes to form their trade strategy. Furucombo then packages all the cubes into one transaction and sends it out to execute. From the user's perspective, all you have to do 1) select which trades, swaps, orders you want to execute, 2) dictate the token and amount you want to trade, and Furucombo does all the rest. It's extremely intuitive–they boil everything down to two factors: here's what you put in and here's what you'll get at the end.
• Flashloans ⚡:️ Flashloans are used to generate free money with no upfront cost. It allows users to borrow any amount without any collateral, so long as the loan is repaid in the same transaction. You can think of it as a batched transaction, that includes borrowing funds, doing something with those funds, and immediately paying back the borrowed funds. This gives anyone access to a massive amount of liquidity to use across other protocols however they want. Technically speaking, it's a self-loan that is created and paid back simultaneously (since every single blockchain interaction is executed simultaneously when the transaction is included in a block by a miner). Conceptually, it's the first time you don't need money to make more money, allowing you to become a ‘whale’ without any capital.
• Example 📜: 1) set up a cube 2) drag and drop 3) connect your wallet and click send. #1 Setting up a cube entails picking a protocol (like Uniswap), selecting tokens (e.g. swap Eth for Dai), and entering an amount. #2 Drag and drop is an easy way to visualize and order the actions that will be executed. If your trade strategy involves the use of a flashloan, you'll drag and drop to dictate what you're borrowing and then what you'll do with the borrowed funds (visual below). #3 Sets the entire combination in motion, and brings much-needed simplicity to DeFi ecosystem. Link to a 4 minute Youtube video of how it all works.

The most interesting innovation in the portfolio

Nervos is eliminating the frustration of multiple wallets, exchanges, and seed phrases with its infrastructure for developers to build universal apps.

• Elevator ⚡️: a layered blockchain network built to support the needs of a decentralized economy.
• Key Insight ️️🕵️‍♂️: To Nervos, the fundamental issues of any blockchain are a result of trying to solve everything in one layer, rather than letting each layer do what they are best at. It's particularly difficult to solve everything in one blockchain when the problems you're trying to solve are problems that are completely opposing like decentralization vs. scalability, neutral vs. compliant, privacy vs. openness, store of value vs. transaction cost, and cryptographic soundness vs. user experience.
• Key Solution ✅: The best way to construct a system is not to build an all-encompassing single layer, but rather to decouple concerns and address them at different layers. By doing this, the layer 1 blockchain can focus on being secure, neutral, decentralized, and open public infrastructure, while smaller, layer 2 networks can be specially designed to best suit the context of their usage (scalability, etc.).  
• Example 📜: In the Nervos Network, the layer 1 protocol (the Common Knowledge Base) is the value preservation layer of the entire network. It is philosophically inspired by Bitcoin and is an open, public, and proof of work-based blockchain, designed to be secure, censorship-resistant, and to serve as a decentralized custodian of value and crypto-assets. Layer 2 protocols leverage the security of the layer 1 blockchain to provide unbounded scalability and minimal transaction fees, and also allow for application-specific trade-offs in regard to trust models, privacy and finality.

Individual portfolio company data

Tokens available from Multicoin backed companies

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