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Why I have zero faith in crypto venture capitalists

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Re: Why I have zero faith in crypto venture capitalists

#31

Post by 3np »

slg wrote: post #25
borrowcheckfml wrote: post #22

Earlier quoted context omitted.

I think of it like this. Various tokens give you certain types of exposures with different risk profiles. Yields are so high because of the risk. This really isn't so different from the centralized financial system where we have built complex structures (exotic derivatives, structured products, etc) to give you certain types of exposures. The difference is that DeFi is globally accessible and permissionless. Even if…

Except those "exotic derivatives, structured products, etc" do have real investments at the heart of them. What is at the heart of those "DeFi" investments? It seems to mostly be criminal and criminal-like behavior (this includes transferring money in ways the local government doesn't approve of which can admittedly be great if the local government is oppressive).

Government bonds are already on the way there. There are multiple alternatives live today for getting exposure to stocks of major companies as well as commodities.

It is a matter of regulatory clarity, and processes and infrastructure (of which some of these projects fill) until we get hard non-crypto-related security tokens etc.

Things are starting to fall in place but things have to prove themselves in the current market before

Re: Why I have zero faith in crypto venture capitalists

#32

Post by bob33212 »

borrowcheckfml wrote: post #29
slg wrote: post #25

Earlier quoted context omitted.

Except those "exotic derivatives, structured products, etc" do have real investments at the heart of them. What is at the heart of those "DeFi" investments? It seems to mostly be criminal and criminal-like behavior (this includes transferring money in ways the local government doesn't approve of which can admittedly be great if the local government is oppressive).

I think it's arguable what real investments are. How "real" is the stock price of Gamestop? Aren't most prices just driven by imaginary narratives? Investors rarely care about dividends. There are also DeFi projects that are based what you call "real investments" such as stablecoins, synthetic assets for stocks and commodities, etc. When the backing/staking mechanism for these works as intended, they are just as real…

True, a good chunk of trading and wall street in general is not doing anything real. But just like the dotcom bubble, the music stops eventually, and you don't want to be stuck holding worthless stocks or coins when that happens.

Re: Why I have zero faith in crypto venture capitalists

#33

Post by slg »

borrowcheckfml wrote: post #29
slg wrote: post #25

Earlier quoted context omitted.

Except those "exotic derivatives, structured products, etc" do have real investments at the heart of them. What is at the heart of those "DeFi" investments? It seems to mostly be criminal and criminal-like behavior (this includes transferring money in ways the local government doesn't approve of which can admittedly be great if the local government is oppressive).

I think it's arguable what real investments are. How "real" is the stock price of Gamestop? Aren't most prices just driven by imaginary narratives? Investors rarely care about dividends. There are also DeFi projects that are based what you call "real investments" such as stablecoins, synthetic assets for stocks and commodities, etc. When the backing/staking mechanism for these works as intended, they are just as real…

Let's say Gamestop is shutdown tomorrow. There is real estate, there is IP, and there are physical products that could all be sold to recoup losses. There is intrinsic value there regardless of whether the current stock price has greatly exceeded those values. The overwhelming majority of cryptocurrency investments have no intrinsic value.

Re: Why I have zero faith in crypto venture capitalists

#34

Post by oefrha »

rvz wrote: post #6

For example look at the real price history of a VC funded token called "Internet Computer" [0] by selecting "ALL" on Coinbase. Out of no where on launch, it was listed on Coinbase and Binance already with the top 10 coins of the largest market capitalisations. Only VCs and angel investors with such connections to these exchanges could have made such a listing like that possible. After that, then came the VC dump with…

To anyone familiar with these matters, is this likely going to be investigated by SEC? If this is not investment scam I don’t know what is.

Re: Why I have zero faith in crypto venture capitalists

#35

Post by zajd »

artfulhippo wrote: post #17
ralston wrote: post #14

Earlier quoted context omitted.

Was just talking with friends yesterday about this - Internet Computer getting absolutely dumped by the VCs who pumped it so hard from the beginning. Once I saw that they were headquartered in the Bay, had their entire team in the Bay, and wanted to be the “everything for everyone” computer, that was kinda my sign that this was a scam.

Internet Computer aka DFINITY is not a scam. The price action is fishy, but when you investigate the project’s vision, the technical architecture, the team behind it, and the community building on it, you’ll discover that it’s perhaps the most serious, innovative, and ambitious system out there.

lol

Re: Why I have zero faith in crypto venture capitalists

#36

Post by rvz »

pavlov wrote: post #7

Venture capitalists are in the “buy low, sell high” business. Their motivation is not “is this thing I’m buying going to be useful to someone?” (although that’s a nice side effect that gives them something to talk about at parties.) Rather it’s: “Can I offload this thing I bought with exclusive access to someone else in a reasonable time horizon?” Tokens and other crypto investments have been attractive to VCs becaus…

> Tokens and other crypto investments have been attractive to VCs because there was a steadily rising level of interest and a regular cycle of hype booms that make for great exit opportunities. (See the timing of Coinbase IPO.)

It was not really an IPO, its was actually a direct listing and it was planned when BTC price action was breaking another all time high. Upon listing day, it is the same cycle of the VCs selling at the top with the retail investors bag holding $375 - $425 which I continuously warned against buying into the hype. [0] It has never recovered over those prices and is sitting at around $225 - $228.

When everyone and their goldfishes and the media are hyping everything at the same time during the build up to an angel or VC funded project they will unload a large amount of their investment onto the retail trader at expensive prices. You lose nothing by ignoring the hype.

This is how the VCs always keep winning.

[0] https://news.ycombinator.com/item?id=26826826

Re: Why I have zero faith in crypto venture capitalists

#37

Post by vgatherps »

artfulhippo wrote: post #17
ralston wrote: post #14

Earlier quoted context omitted.

Was just talking with friends yesterday about this - Internet Computer getting absolutely dumped by the VCs who pumped it so hard from the beginning. Once I saw that they were headquartered in the Bay, had their entire team in the Bay, and wanted to be the “everything for everyone” computer, that was kinda my sign that this was a scam.

Internet Computer aka DFINITY is not a scam. The price action is fishy, but when you investigate the project’s vision, the technical architecture, the team behind it, and the community building on it, you’ll discover that it’s perhaps the most serious, innovative, and ambitious system out there.

I agree that people often use scam to mean “it’s not worth what people think it is”, “this is going to be vaporware”, “this doesn’t have much real world use”. I expect that the folks at DFINITY are actually trying to build something.

But it’s a little beside the point. I’ve seen some of how the sausage was made in creating and listing new crypto projects, and it’s pretty ugly. There’s a lot of focus on pumping, shilling each other (all while putting in a facade of independence), “tokenomics” which is 50% euphemism for Ponzi scheme. There are likely scam-like qualities to the way that this was listed, who was involved in providing early liquidity / pricing (the initial listing price/pump matters a lot in keeping the price stable above a certain value), and a suite of lesser benefits the inner crowd get.

I left before ICP so I don’t have any facts, but what I saw with projects before that make me confident the exact same thing happened.

Re: Why I have zero faith in crypto venture capitalists

#38

Post by thinkmassive »

runawaybottle wrote: post #4

Honestly, all these cryptos have to do is bake themselves into in-game currency for any video game. Fortnite crypto could be a multi billion dollar market. I would love to just buy an army in Starcraft, pillage your base and take your crypto, then sell it on Coinbase. If we are truly to live in a job-less world with basic income, I’m gonna need shit to do.

Or skip the middleman and awards BTC directly. This is what Zebedee has done with Infuse:

https://zebedee.io/infuse

They had an esports arena at the Bitcoin Conference in Miami last week. It was a lot of fun, and a successful proof of concept. I think we’ll start seeing a lot more events like this, and also see it expanded to other mainstream games in addition to CS:GO.

Re: Why I have zero faith in crypto venture capitalists

#39

Post by curation »

Crypto is the next reframing of the repo market regular cycle of failures. Virtual money is not new, it's what the eurodollar system is (US dollars outside of the US also called shadow bank system that know one knows the value of). The offer on hand will be that blockchain will help keep track of the liquidity and rehypothecation; in reality it is yet another patching of an economic system that more closely resembles feudalism than capitalism. (Perry Anderson, Jeffrey P. Snider, Yanis Varofakis).

Re: Why I have zero faith in crypto venture capitalists

#40

Post by NationalPark »

borrowcheckfml wrote: post #29
slg wrote: post #25

Earlier quoted context omitted.

Except those "exotic derivatives, structured products, etc" do have real investments at the heart of them. What is at the heart of those "DeFi" investments? It seems to mostly be criminal and criminal-like behavior (this includes transferring money in ways the local government doesn't approve of which can admittedly be great if the local government is oppressive).

I think it's arguable what real investments are. How "real" is the stock price of Gamestop? Aren't most prices just driven by imaginary narratives? Investors rarely care about dividends. There are also DeFi projects that are based what you call "real investments" such as stablecoins, synthetic assets for stocks and commodities, etc. When the backing/staking mechanism for these works as intended, they are just as real…

Companies have intrinsic value in their balance sheets and are also subject to accounting rules that give confidence (and value) to their cashflows. So, ultimately, a share in a company does map to something material that could theoretically be used for something other than speculation.
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