On 21st Apr, we are so honored to invite 5 great persons from popular web 3.0 venture capital institutions on Robby, CEO of Animoca Brands ; Stella Xu, VP of Foresight Ventures ; Eloy Zhan, Investment Partner of ChainfirCapital; May Liu, Founding Partner of Spark Digital Capital ;Aria Zhang, Investment Partner of Zonff Partners. Thank you for your sharing, and here is the AMA recap.
Nancy: Welcome everyone to our latest AMA session. I’m Nancy.
We are witnessing the evolution of WEB3. It is defined by the next generation of web applications, and is flourishing in modern technologies such as Blockchain, Artificial Intelligence (AI), Internet of Things (IoT), Augmented Reality (AR) and Virtual Reality (VR). In fact, these technologies make up the core technology stack of businesses that are reimagining new ways to connect, communicate and collaborate in the digital world.
So, how to participate in the evolution of WEB3? The sharing of professional speculative institutions may inspire us, let us welcome them!
- First of all, please briefly introduce yourself and the investment institutions you represent.
Robby: Hi Everyone! I’m Robby Yung, the CEO of Animoca Brands. We’re a blockchain game developer and investor. We make direct strategic investments as well as VC investments through our fund, Animoca Ventures.
Stella Xu: Foresight Ventures backs innovative and disruptive crypto/Web3.0 projects. We believe crypto will define the next few decades of innovation. We invest early and make decisions fast, and provide wide ranging support from our ecosystem which include crypto-exchange Bitget and crypto-wallet BitKeep. The current portfolio includes Realy, Colony, Matrixport and Defina, etc.
Bitget is the world’s 6th most traded derivatives exchange, Bitget has 5000+ KOLs around the world, mainly in Japan, South Korea, Southeast Asia, Russia, Britain, Turkey, etc. The invested projects can get the priority of initial exchange offering and listing on bitget.
Eloy Zhan: Hello, this is Eloy from Chainfir Capital.
Chainfir Capital was founded in 2018, a block-chain focused venture capital institution, base in Shanghai. We mainly prioritize the investments in Defi, NFT, Gamefi and other blockchain sectors, committed to a better blockchain ecology together with more high-quality projects.
May Liu: This is May, founding partner of Spark Digital Capital. Established in 2017, Spark Digital Capital is an NY based family office with remarkable tracking record in the industry.(www.sparkdigitalcapital.com)
Spark can be considered as a strong value adder in the industry, and is one of the top 10 most active crypto investor 2021 along with Coinbase venture and Alamenda Research according to The Block.
Briefly speaking, Spark could help portfolios onboard long-term partners such as 1. Public chains 2. Exchanges and public sale platforms, 3. Marketing support ( Influencers, PR agencies), 4. Equity funding & other strategic business partners
Aria Zhang: This is Aria Zhang，Investment Partner of Zonff Partners.On board advisor of several startups focused on NFT.
Keen investment vision and precise layout in early stage web3 startups. Focuses on DeFi derivatives, Web3.0 infrastructure, Gaming, NFT and Metaverse. Used to work at Pricewaterhousecoopers, with rich experience in consulting about blockchain and expert at designing token economics.
Used to work as a financial analyst for a Fin-AI platform in securities company, with rich experience in finance, industry research and financial industry.Founded in 2016, Zonff Partners is a stage agnostic venture capital firm: investing from seed to late-stage companies. We provide capital, connections, and community, backing bold entrepreneurs to fully unleash their potential, driving global business innovation and contributing to the decentralized economy.
Zonff Partners invests in all aspects of crypto, including infrastructure, new layer 1s, Defi, NFTs, Gaming, DAOs, web 3 apps, decentralized social networks, etc. Our influence spans the entire blockchain ecosystem, including a quantitative hedge fund, a hashrate fund, and NFT Art Fund (VulcanDAO). Our portfolio includes Dehorizon, Manta Network, DoDo, Mask Network, Solcial, etc.
2. We’d like to hear your valuable views on WEB3, could you please share with us now?
Robby: Web3 represents an exciting opportunity for the world to embrace true digital ownership. Thanks to blockchain and NFT’s, gamers can now truly own their in-game items as NFT’s, and we feel that this will not only change how the world plays games, it will also onboard billions of users to blockchain through entertainment.
Stella Xu: The first generation web3 technologies were ledger-based transactions. “Commodity-type” transactions are the first use-case scenario of the web3 industry. It drives the first entrants into the space. They provide an alternative to the status quo.
In a Web3 world, information is stored in virtual digital wallets, not in data centers. Individuals use these wallets to tap into Web3 applications, which are run on blockchain technology. When a user wants to disconnect from an application, they simply log off, disconnect their wallet and take their data with them.
Eloy Zhan: Web3 is a new decentralized and distributed Internet form, and Web3 users have real ownership. The current Web 2.0, centrally controlled by large corporations, with major players capturing the largest portion of the monetary value created on the Internet. Web3 network will distribute value to developers, creators and users. As a result, these network participants can redesign new incentive mechanisms for organizations such as DAOs on the chain and create new value distribution methods.
I think there will be more and more enterprise scenarios applying Web3 technology, not just focusing on blockchains built on Web3, community-driven ecosystems, and platforms for institutional investors and individuals to participate in DeFi.
The current Web3 user experience can be complex for non-technical people. Such as setting up a wallet, purchasing bitcoin and ethereum, and connecting to some DApps are very difficult for non-technical users. Also considering the current gas fee of Ethereum, the cost is pretty high for most of the users.
My point is that how to make the user experience of Web3 more friendly will be a market opportunity.
3. What WEB3 projects have you invested in recently, and why are you optimistic about this project?
Robby: We have recently acquired two game studios in France: Eden Games and Darewise. Eden is one of the most famous racing studios, having made games like F1 Mobile Racing, Need for Speed: Porsche Unleashed, and Gear.Club. Darewise is an indie game studio formed by veterans from Ubisoft making the AAA blockchain MMO Life Beyond.
We are optimistic because we think that bringing top quality AAA talent like this into blockchain games will only be good for consumers.
May Liu: I am here sharing a few as well: recently did projects like, Stepn, Above Land, Fusionist, which would bring experienced game level design to users; Volare (https://twitter.com/financevolare?s=21), an option protocol; ICPort (https://www.icport.finance (https://www.icport.finance/)), a Web3 accelerator with automatic assessment tool; RobinFi, a game volume solution with streamer and local promoters, &etc. We are generally open for any creative mind.
Aria Zhang: Thank you for this question. So,recently, we have spent a lot of time diving deep into tech infra and breaking down sectors so we didn’t make too many investment decisions, but we are very confident in the projects we have already invested in. I will simply share with you a few web3 projects that’ve been currently disclosed.
Well, the first project I wanna talk about is Metagravity: It belongs to the Metaverse infrastructure sector. The core mission is to develop a crypto-native game engine, which is dedicated to solving the problem of limited user capacity in the meta space. Specifically, it designs to use artificial intelligence (AI) to introduce probability factors, and allocate computing power according to that probability, thereby expanding the overall user capacity. In addition, there are two developments ongoing, one, an MMO game: EDGE OF CHAOS, and a Metaverse exclusive public chain. Second project is Orbiter: It belongs to the cross-chain bridge sector and is designed as a decentralized cross-rollup bridge for transferring the ETH-native assets between L1 and Layer 2s. Currently, it mainly supports the zk-rollup protocol. Why we invested it: first, among all of the popular trends, Layer2 & Rollups represent the future of ETH and stay as most promising fields in the rest of the year; and then, compared with similar projects, the solution is more secure with high scalability, and lower cost.
Furthermore, there are also Nxgen Labs, Aboveland and other projects . Because of the time limits, I will not introduce them one by one, but I am very confident that they will become the leading projects in the social and metaverse field respectively.
4. Now that you have begun to work for the WEB3 track, does it mean that you think the current underlying architecture and technology maturity are enough to support the reform of WEB3?
Robby: I think the underlying technology is constantly evolving. The best part is that companies are innovating every day, and we see this in the chains, the toolset, and the games. That said, some ecosystems, like Ethereum and it’s layer 2 scaling solutions, have now reached a point of maturity that they are able to support major projects, for example.
Stella Xu: Web3 is all about decentralization — it aims to give users more control over their data. The tech is not mature enough to support the whole world revalotion, but is had some innovation happened in L2 and some ecosystems. However, there are still have lots of potential in infra and security, we are also looking for the future changes.
Big Tech does manage to gain a foothold in the market, Morris believes that there could still be an opportunity for the new web to achieve its decentralized dream. He said that Big Tech can be helpful for a period of time as Web3 companies get their foot in the door and their projects up and running.
May Liu: At the moment, Web 3 is a very young concept. A lot of the bits and pieces still need to be built. For example, there are not many people who know how to code. On the top of it, there is a niche carved out by each blockchain in terms of development language, further aggravating the situation.
Until more people jump on to this space, there is going to be some gap between expectations of the masses and products shipped.
Other concerns could be: scalability, Interoperability, education, regulation, & etc.
But as the space matures, you will definitely find that a lot of these services start to become mainstream.
5. With the in-depth development of WEB3, what do you think WEB3 will affect our current way of life and the production materials in the future?
Stella Xu: Sure, definitely, there are lots of changes in how to interact token to physical work. Like the success of stepn, and so on.
Hopefully, they are many AR VR projects will bring new ideas for our life.
Aria Zhang: Thanks. This is quite an interesting question. I will answer it from a more broadly and imaginatively viewpoint. Everyone knows that our earth’s resources are limited, so in the future, human beings will either go into space and explore the universe or enter a virtual world that breaks through the boundaries of time and space. The world, as we can see, has builders working in both directions. The in-depth development of Web3 will allow us to enter the virtual world more freely and immersively anytime, anywhere. And as the infrastructure of the blockchain becomes more solid, the “rules of the game” and “economic system” in the virtual world becomes more reasonable and stable, Web3 will redistribute the proportion of our time spent on business and entertainment in the virtual and real world respectively. Moreover, blockchain redefines the relationship of production with its technical advantages, so the current stage of web3 is more about value transfer economy. As the larger-scale technological revolution requires the commonality of productivity, production relations, and production materials, therefore, I think, in the future, AI+IOT+blockchain will complete the utility and distribution of the core production materials of data + computing power speeding up 1000 times, thus promoting civilization to a higher level.
6. There is news that says more and more traditional VCs are entering the WEB3 track and inevitably have an intersection with the crypto world. What’s your opinion on this?
Stellar Xu: It’s a certain trend for more traditional VC enter Web3.0, they will also bring their resources and talents. Web3 has recently been receiving more attention from investors with companies in the space reaching billion-dollar evaluations along with the want from people to have control and ownership of their personal data as well as have the ability to exchange services with no central authority.
Some of well-know traditonal VC like Sequoia, Tiger, and so on have alread enter in Web3.0, I think they might have their understanding for Web3.0. It is a great chance for them to enter a new industry, but their opinion will not affect our decision.
May Liu: The concept of Web3 has captivated investors and the tech industry for more than a year now. In some respects, Web3 is a successful re-brand of blockchain technology. Investment into web3 startups suddenly zoomed up to $23.7 billion, and celebrities have been lining up to back all things crypto. More dapps are coming out from sports, entertainment, education and many other industries. They would for sure need existing connections in each industry. Spark is actively working with ppl from tier one investment banks, upstream and downstream firms and VCs to help the portfolios.
7. We also see that WEB3 entrepreneurial projects are emerging in the market. Then how can we screen out the real high-quality projects from the numerous projects and make investment decisions?
Stellar Xu: Pay more attention on the innovations rather than FOMO, be a long term investor. I think there are still lots of innovations Web3.0, especially that how to interact with token into physical world. Like our Foresight Ventures, be a long-term investor.
Eloy Zhan: Our priorities are the founders,teams, product and market size, also the capability of innovation. An ambitious team can solve various problems through innovative means. This ability happens to be the most concerned issue for investors.
In addition, we have set up a score sheets to inspect teams, products, markets, and risks, so that we can review a project with a unified system and give the corresponding investment quota.
Different types of investors will establish corresponding investment models according to their own capabilities and constantly improve it. Pay more attention to founders and teams, and “Investing In People” is our core logic.
May Liu: Generally speaking, we look into the business position, revenue model, token structure and mechanism, product and traction, development, team, funding, go to market strategies, partnerships and legal framework. We partner with reputable VCs, exchanges, ecosystems as well as accelerators to optimize the decision making process.
For anyone who is interested in further details, I would recommend you to go talk to the ICPort team, I helped them build up the project assessment work flow along with a few friends.
Aria Zhang: Others have already shared a lot of investment frameworks and ideas for analyzing web3 projects. I will not repeat but I wanna highlight one very important thing here. One way to make decisions is to make a list of variables, and then weight the importance of each variable and finally get the total score. But later on, when every time I make a decision, I noticed that there is always a single variable outweighs the rest of them. In other words, there is one aspect of the project that is very outstanding, so is not being everything stays above average. A little trick is to let the project team summarize their core advantages in three sentences in order to impress you, and then, you, as the investment manager, come up with just three reasons for your investment memo of the project. The most catchy product is always the one that can grab user’s attention in a very short period of time.
8. What are your views and suggestions for retail investors to participate in the WEB3 project? I think this is also the most concerning issue for our community members.
Stellar Xu: Depends on many perspectives, such as team, technology, networking and so on.
The fundamental difference between the web3 organizations in this quadrant and those using a more traditional GTM model involves the key question: What is the product? Whereas web2 companies and those in the lower-left quadrant largely must start with a product that will attract customers (“come for the tools, stay for the network”), web3 companies approach go-to-market through the dual lenses of purpose and community. Generally speaking,the long-term success in web3 is clear purpose, having an engaged and high-quality community, and matching the right organizational governance to that purpose and community.
Eloy Zhan: Whether you are an institution or a retail investor, risk control and safety always need to be put in the first place. All kinds of stealing, phishing, and impermanent losses keep happening, especially in this nascent market.
For retail investors, I recommend knowing web3 from their terminal products, by using them to gain an in-depth understanding of the project, will be the best way. After a long time of understanding and recognition, it is enough to make appropriate investments within an affordable range. After all, investment is not necessary for retail investors. But still, you can earn quite a lot by hodling the tokens or receiving airdrops from projects.
Aria Zhang: In my opinion, participating in a mission-driven DAO organization that you are really interested in is the first step. Only if you are really interested, that you can grow together with the project, oversee how the project realize the vision step by step, and gradually change from an audience standpoint to a community member to contribute and participate deeply, then you can benefit from the development of the ecological network of this project, which is an opportunity for equal rights and ownership of data that is not available on web2. Indeed, there will also be many popular projects that overwhelm you. What you can do is to invest in some projects with acceptable risks, you could choose to join in one of NFT drops or the product launches or even participate in the secondary token market. Anyone who is open-minded and willing to experience new things can choose the right time to skin in the game. It will definitely come with risks, but remember to stay with your judgment, not the crowd and learn to deal with Fomo.
Nancy: Ok. It’s time to put an end to today’s AMA. I would also like to thank everyone for joining us here today and stay tuned for more exciting AMA and events to come! Good Bye!
