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Betting on Structural Winners: Why I’m Joining the CoinFund Team | by Evan Feng | Sep, 2020


“We may have all come on different ships, but we’re in the same boat now.” — Martin Luther King, Jr.

Evan Feng

Today, I’m excited to announce that I have joined the investment team at CoinFund, and am eager to contribute to the continued momentum and future success of the firm’s network lifecycle investing approach which covers liquid, venture, and cryptonative investing in the blockchain space. Blockchain continues to be a fascinating, humbling, and uniquely interesting space. But before we get to talking about the future, I thought it was an appropriate time to take a look at the recent past.

There has never been a more exciting time to be in the space, where the pace of innovation is inspiring, at times frightening, but always exciting. Even though I’ve only been immersed in the world of digital assets for a short time compared to my preceding finance career, the wholesale progress made by the sum total of people, projects, and market participants in our world is nothing short of amazing. We have seen the waning of the SAFTs and the STOs that tried to fill big shoes in a post-ICO world, the excitement over and subsequent disappointment in the first generation of Ethereum-killers as some have fallen short of their ambitions. More recently, the explosion of DeFi protocol TVL (total value locked) and the resulting hangover threatens to throw out the baby (unique use cases that have found product-market fit) with the bathwater (the many forked clones of the aforementioned baby, seeking to cash in on unaware retail investors late to the party). Despite all that excitement, we are now on the cusp of unleashing the building blocks of the next wave of technology-enabled finance in a way that is inclusive, safe, and value-additive in a universal and deeply unifying way for all of us that share the stewardship of this planet. For example: blockchain-enabled cross-border remittance capabilities are already life-changing for a migrant worker and her family back home especially in the presence of foreign currency controls, but adding a full suite of financial services on top, such as the ability to earn interest or be insured against losses fundamentally changes the game in a radically inclusive way for previously excluded people, while lowering costs for all market participants globally.

The current infrastructure stack has grown meaningfully. Source: The Block

In 2020, the opportunity set for blockchain is bigger than ever before and there has been an explosion of data, products, verticals, and product-market fit. As a result, we can now apply fundamental conviction and traditional analyses to digital assets, and we are seeing the emergence of an exciting new consensus, despite all the head-spinning volatility and continuous dichotomy of steps forward and backward. This is not the cypherpunk’s Sybil-resistant Nakamoto Consensus, but the organic, Wall Street-like term I use to characterize the iteratively improving accuracy of asset-level valuation and price discovery. For example, AT&T stock now largely trades on its forward EPS (earnings per share), associated PE (price-to-earnings) multiple, and quarterly wireless subscriber net additions, demonstrating remarkable information efficiency given the company reports hundreds of other line items and press releases each quarter.

An example of the beginnings of fundamental valuation taking off. Source: Token Terminal

Against this backdrop, I believe fundamental bottom-up and top-down investing, such as the approach taken by CoinFund across its strategies, is on the cusp of seriously hitting its stride and moving towards greater information value as well. We are now past the stage of early stage team bets or hoping for a product to eventually deliver on a whitepaper. Traction can now be measured in real time on-chain, compared to peers, and even sense-checked in a way that approximates the approaches taken in the traditional markets (for instance, we can now calculate price-to-sales multiples for the protocols that are now publicly capturing value through real usage). Simultaneously, many projects are demonstrating product-market-fit by capturing fees (lending spreads or trading fees) and others are exhibiting early stirrings of long-term thinking in governance. Naturally, as the remaining gaps in understanding between data availability and ideal investor requirements are bridged, I believe new investors will jump into the fray and contribute their thoughts and capital to the ecosystem, thereby driving the next phase of emergent digital asset ‘consensus’ valuation paradigms.

From my perspective, CoinFund is a leading firm that has demonstrated flexibility, longevity, and a multidisciplinary approach to investing rooted in deep understanding of technology and professional investing experience. Moreover, the firm is doing it for the right reasons, having demonstrated commitment in deploying capital responsibly and genuinely adding value for the founding teams and protocols. I’m thrilled at the opportunity to leverage my past experiences in both the traditional and digital asset worlds to help Jake, Alex, Seth, Oleg, Pallavi and the rest of the team in the mission to build on our past successes and bridge the firm to a brighter future as we collectively seek to realize and magnify the benefits of blockchain and other decentralization technology.



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