Jun 28, 2022
Shaun Maguire and Michelle Bailhe, partners at Sequoia, discuss their long term view and thesis about crypto, what do they look for to invest in a crypto project, the takeaways from the blowup of Terra, the insolvency of crypto companies, and much more. Show highlights:
- what is Sequoia’s long term view and thesis about the crypto industry
- how different our lives will look in 20 years from now due to blockchain technology
- how Sequoia had to adapt to invest in this new asset class and what are the similarities and differences with investing in traditional startups
- when a product or service on the internet should be offered in a decentralized or centralized way
- how Sequoia decides whether to invest in the entity behind a project or in the tokens
- whether having venture capitalists involved at all goes against the ethos of decentralization
- why Shaun believes that Ethereum proved that decentralization can be achieved even when you start being centralized
- whether people underestimate the value that VCs can add to a project
- why Shaun believes that Solana is moving towards decentralization
- Sequoia’s thesis about privacy in crypto and the potential of zero-knowledge proofs
- how Michelle sees the macroeconomic environment impacting crypto and whether this cycle is different from the previous ones
- the importance of product market fit in crypto projects
- what crypto projects should be focusing on and the business model they should be pursuing
- the main takeaways of the Terra collapse and how it was a major setback for algo stablecoins
- how crypto founders should always do the right thing even though there is no clear regulation
- whether SBF is the Berkshire Hathaway of crypto today
- the lessons to be learned from the potential insolvency of some crypto lenders and investment firms
- how demand for blockspace will keep increasing and whether a single blockchain could supply all that space
- the future of the metaverse and how it can be defined
- Michelle’s mental model for crypto and the phases for achieving worldwide adoption
Thank you to our sponsors!
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Beefy Finance: https://beefy.finance/
Ava Labs: https://www.avax.network/
EPISODE LINKS
Shaun Maguire:
- Twitter: https://www.twitter.com/shaunmmaguire
- Sequoia Profile: https://www.sequoiacap.com/people/shaun-maguire/
Michelle:
- Twitter: https://twitter.com/michellebailhe
- Sequoia Profile: https://www.sequoiacap.com/people/michelle-bailhe/
- Michelle’s investment thesis: https://www.sequoiacap.com/article/ask-not-wen-moon-ask-why-moon/
Bear Market:
- Michelle’s Twitter thread: https://twitter.com/michellebailhe/status/1526373378516365312?s=20&t=c7vdmdg2mnQ34rsAGIm0lg
- Insolvency of crypto lenders:
-
- Voyager: https://www.coindesk.com/business/2022/06/22/voyager-digital-requests-loan-repayment-from-3ac-considers-issuing-default-notice/
- BlockFi: https://decrypt.co/103422/blockfi-secures-250-million-line-of-credit-from-ftx
- Celsius: https://www.theblock.co/linked/151522/crypto-lending-firm-celsius-pauses-withdrawals-and-transfers-citing-market-conditions
- Celsius possible bankruptcy: https://www.theblock.co/linked/154100/crypto-lender-celsius-hires-more-advisors-ahead-of-possible-bankruptcy-wsj
- Previous Unchained Coverage:
-
- Why Possible Insolvencies by Celsius and 3AC Could Spell Disaster for Crypto: https://unchainedpodcast.com/why-possible-insolvencies-by-celsius-and-3ac-could-spell-disaster-for-crypto/
- Cobie and Chris Burniske on How to Navigate a Crypto Bear Market: https://unchainedpodcast.com/cobie-and-chris-burniske-on-how-to-navigate-a-crypto-bear-market-ep-354/
Terra
- Shaun’s take on stablecoins:
https://twitter.com/shaunmmaguire/status/1524420727968976898?s=20&t=26DylQ2_YbW36Y4ZMwxVFw
- Previous Unchained Coverage:
-
- Kevin Zhou on the risk of UST’s death spiral: https://unchainedpodcast.com/heres-why-usdn-de-pegged-from-the-dollar-and-why-ust-might-too/
- The Legal and Regulatory Fallout From Terra’s Collapse: Who Will Pay?: https://unchainedpodcast.com/the-legal-and-regulatory-fallout-from-terras-collapse-who-will-pay-ep-363/
- The Chopping Block: Does the New Terra Have Any Chance?: https://unchainedpodcast.com/the-chopping-block-does-the-new-terra-have-any-chance/
- Why Terra Collapsed and Whether an Algo Stablecoin Can Ever Succeed: https://unchainedpodcast.com/why-terra-collapsed-and-whether-an-algo-stablecoin-can-ever-succeed/
- The 5 Biggest Lessons From Terra/Luna’s Collapse, According to Tascha Che: https://unchainedpodcast.com/the-5-biggest-lessons-from-terra-lunas-collapse-according-to-tascha-che/