Dear Friends and Family,

“Protocols”.

That is the answer to the question, "What has been a fundamental driver of technological progress over the past fifty years?"

Every protocol serves a specific function.

TCP/IP has enabled the linking up of computers in a network, HTTP allowed the creation of the internet, SSL/TLS made it secure for payment systems, Blockchains enabled the first cryptocurrency, Bitcoin, and Smart Contracts birthed the development of a shared ledger like Ethereum which will drive efficiency gains, new products and services.

Each protocol has created trillions in value, moved us forward, and allowed collaboration on an unprecedented scale.

And yet, it still feels like we are just getting started.

Token2049 in Singapore

In September, the Token2049 conference drew a crowd of ten thousand attendees to Singapore, and Sagar and I were among them.

We had a packed week of meetings with founders in real life, comparing notes with venture capital colleagues, and feeling the current energy level in the Web3 space at numerous events.

Preceding the conference, we participated in the ETH Singapore Hackathon, with many side events and opportunities to meet industry movers and shakers like Vitalik Buterin, the famous brain behind Ethereum.

We learned that Japan is determined to become a trailblazer in the Web3 industry and is putting regulations and incentives in place to lure founders and capital to the country. There is a strong believe that the country has missed the internet and wants to avoid making the same mistake twice.

Singapore, of course, is also a hub that is trying to attract Web3 businesses that require a stable regulatory framework, something that the US is unable to provide at this point.

Asia has indeed a chance to become a strong region in everything crypto/Web3 as they are very open to new ideas and technologies and tend to implement fast with few barriers to change.

It has never been wise to underestimate the US. Still, it is likely that it will take until after the presidential elections in 2024 to define a crypto regulatory framework like Europe now has with MiCa.

For us, it was a great outcome to establish a network with Asian venture capital colleagues to share deal flow and thoughts about the industry.

Crypto Asset Conference 2023 - The October Edition

Last week, it was “homecoming weekend” at the Frankfurt School Crypto Asset Conference.

Although there may not have been major new announcements, progress comes in small steps.

For me, one of the most impressive projects was Volker Braunberger's report on how his company, Funds on Chain and Frankfurt-based Cashlink, conducted the first transfer of crypto funds units with Metzler Asset Management in accordance with the German Capital Investment Code (KAGB), the Electronic Securities Act (eWpG) and the Regulation on Crypto Fund Units (KryptoFAV).

Yes, it takes a lot to be compliant in the crypto world!

This paves the way for the future of the fund industry and is a key milestone in no small way.

It came after more than three years of developing a solution with an expert group composed of the who-is-who of the international fund industry.

In the end, crypto is a set of protocols that create a way to exchange value, like the Internet created a way to exchange information.

The still surprisingly manual and often paper (and fax!)-based investment fund industry is an ideal use case of blockchain technology.

Unsurprisingly, Funds on Chain made it on the FinTech Germany Award 2023 shortlist, recognizing the best FinTech startups in Germany.

Fingers crossed, Volker, you are unquestionably a founder driven by a strong sense of mission!

Recommended

As I couldn't decide which one to pick, I am giving you not one but three recommendations.

As the daylight savings changeover approaches this weekend, you might find yourself with more opportunities to read and watch anyway.

I have always been a big fan of Michael Lewis, author of Liar's Poker and Moneyball. His most recent book "Going Infinite" on Sam Bankman-Fried might not answer the question whether he is guilty or not, but it is a most entertaining story about his character and the mess he got himself into with FTX.

Then there’s Marc Andreessen, the man who gave us the first web browser and who recently penned his Techno-Optimist Manifesto. While you may not agree with everything he writes, it provides plenty of food for thought and makes for great conversation topics.

And while Artificial Intelligence may not be an easy space to make direct investments in, it will fundamentally leverage developers, a scarce resource.

In fact, after watching the “1000x Developer” video, one could argue that all it takes in a startup is one experienced developer and a suite of software AI tools like Replit or GitHub Copilot to code in seconds, which previously took weeks.

The consequence of these tools is that a startup can be even more capital-efficient and swift than ever before.

As cloud computing removes the need to own hardware, AI software tools reduce the need for large developer teams.

We anticipate that the repercussions of AI-assisted coding will be nothing short of profound.

Isn’t it ironic how our initial reflex was that AI would primarily take over blue-collar jobs, but now it's coming after the well-paid jobs of creators and coders?

We’re investing

There is a considerable gap between what is possible with technology and what is being done today.

And that is why, even amid geopolitical instability and financial market uncertainties, we wake up each morning filled with great optimism about the potential for technology to leave a positive and enduring legacy.

We're always looking for founders leveraging Web3 tech to solve problems 10x better, faster, or cheaper. If you should come across a great team in this space, we would love to hear about them.

As always, if you have any comments or questions, please contact us.

Thanks for reading!

Wolfgang, Ben and Sagar