1/ The US has lost its global lead in crypto & blockchain developers.

This is a policy disaster for the US.

Almost every other region understands the potential of these technologies and how to regulate reasonably.

We see this daily. Amazing founders are leaving the US 👇

https://twitter.com/MariaShen/status/1639327629517160448

2/ In the @ElectricCapital portfolio alone, founders of companies/protocols worth $5B+ have left the US and given up permanent residency.

@solana, @NEARFoundation, @cosmos host their developer conferences outside the US

The center of gravity of @Polygon is in Dubai and India

1/ People are surprised to learn @ElectricCapital's team is 68% software engineers and designers

Why does a VC firm need engineers?

Because Crypto will do to TradFi & venture capital firms what the Internet did to retail & media companies.

🧵👇

mirror.xyz/electriccap.et… 2/ When @pmarca wrote "Why Software is Eating the World" he noted every business must become a software business

Software companies deliver better products, have big moats, acquire customers at lower CAC, and have better margins.

To compete, every company must be software-first

1/ @ElectricCapital has raised $1 billion in new capital, our largest fundraise yet.

The web3 economy built on top of the programmable money stack will be one of the defining disruptions of the 2020s.

Where are we going to invest $1 billion?

mirror.xyz/electriccap.et…

🧵👇 2/ We believe five key trends will define the 2020s:

i) DAOs will empower global communities to allocate resources in new ways

ii) NFTs will form a new asset and infrastructure layer for Web3

iii) DeFi will democratize access to financial products

1/ Time for @ElectricCapital's Annual Developer Report:
medium.com/electric-capit…

We analyzed 150m+ repos & xM code commits to produce these 100+ charts.

This was a community effort: 150 people contributed via email and Github! Thank you everyone who helped.

Let's dig in👇 2/ Our methodology:
We focus on open source code, so we undercount total developers in web3.

We focus on unique code and do not count purely copy/paste code.

These are all imperfect measures but directionally useful to understand web3 growth. Feedback is appreciated!

1/ Loot is like @ethereum. It has ignited the imagination of a community by giving us some basic primitives.

It is clunky and limiting, but it is a working MVP.

If the community energy persists, it is a BIG breakthrough. It is the first truly community-owned gaming platform

🧵 2/ Quick @lootproject primer for those new to it.

A Loot bag is an NFT that contains text. The bag is a collection of items each with a known rarity -- think @Wizards_DnD, Magic the Gathering, or Pokemon

It is now up to the community what games to build on top of Loot items.

1/ Some friends and I are trying an experiment:

$400k for 7% on a SAFE, *before* you've picked an idea for a startup

medium.com/south-park-com…

I've done this w/ 3 founders since 2017. 100% of the companies have raised a A and they are worth ~$200M

Details on the $400k👇🧵 2/ @southpkcommons, @rsanghvi, @adityaag, @jubos, @tfmeeks22, and I are coordinating this experiment.

More important than $400k is the South Park Commons community -- 250+ founders, domain experts, authors, researchers, intentionally exploring together: southparkcommons.com/faq

1/ Q: What has 126 slides based on 89M code commits across 270k repositories?

A: The 2020 @electriccapital Crypto Developer Report!

A herculean effort by @MariaShen, data infra built by @jubos and @puntium.

The full report:
medium.com/electric-capit…

Some highlights below👇⚡️ 2/ There are 1500 new developers coming in to crypto every month!

The number of new devs is growing for the first time since 2017.

15.3k new devs through Oct 2020, compared to 12.6k in all of 2017 and 27.5k in 2018.

Dev growth follows price so perhaps we see more devs in 2021

🐂🚀
The # of people asking me for "crypto 101" reading is skyrocketing

🔎 What are the best "intro to crypto" articles for smart laypeople?

+ what is Bitcoin and the case for investing?
+ why crypto unlocks innovation (and disrupts FAANG)?
+ what is DeFi?

Kicking it off👇 2/ One of the best of all time:
"Institutional Investor's Take on Crypto Assets" medium.com/john-pfeffer/a… by @jlppfeffer

1/ Currency wars are going digital.

In this new world:
+ For the USD to remain the global settlement currency, the US govt must embrace crypto
+ For crypto to survive, the crypto community must help the US govt

@ElectricCapital article w/ LOTS of data: medium.com/@ElectricCapit… 2/ A US govt and the crypto community collaboration is not about ideology -- simply game theory and self-interest.

Why? China is swiftly embraciing digital currencies and the degree to which they can influence crypto creates a common adversary for the US govt and crypto.

1/ Today we are unveiling @ElectricCapital Fund II, a $110M crypto-focused fund!

We're fortunate to partner with world-renowned endowments and philanthropies on Fund II.

We invest $250k-$10M in tokens and companies.

Need an idea? Here are 16 we are excited about👇🏽 2/ DeFi
--
+ Decentralized Market Maker: Can we build a decentralized Jump trading?

+ DeFi Insurance: Risk mitigation is key as capital locked in DeFi grows

+ Credit Scoring: Is there a way to do unsecured lending in DeFi?

+ Robo Advisors: Wealthfront for DeFi

1/ I did an interview with @eladgil prior to COVID lockdowns with a number of crypto founders.

Elad is one of the best investors of all time (@stripe, @Square, @coinbase, & @Airbnb and more)

Full interview:

Some highlights 👇 2/ ✅ How Elad Gil makes investment decisions:

1/ People look for a new job completely backwards, e.g. "I want to be a PM at these 3 companies"

How people prioritize:
A/ Role
B/ Company
C/ Manager (sometimes)
D/ Market (almost never a consideration)

How people should prioritize:
A/ Market
B/ Manager
C/ Company
D/ Role 2/ Market -- In 1985 you should have worked in PCs, 1995 Internet, 2000 eComm, 2005 Social, 2010 Share Economy, 2020 Crypto and Remote Work

Just as in investing, the market dominates everything else.

Pick the right market and success will eventually find you.

1/ The demand shock in travel, restaurants, events, retail, etc. is already bad and likely about to get much much worse. [This is not financial advice.]

OpenTable is -36% globally already -- before mandatory quarantines kicked in. These numbers are going to get much worse soon. 2/ Food service, retail, and hospitality employs 26.5M people. That is almost 1 out of every 5 jobs!

What happens to these people when demand drops by 50% for 2 months?

Most of these employers are small businesses, likely with few cash reserves.

Sharing lessons from running a startup through 2008. Hope it's useful to founders.👇

1/ Most important: prioritize your health and family. It's clearly stressful as the world feels like it's falling apart. If you are healthy and have your loved ones, you will be fine long term. 2/ Duration -- this will last a lot longer than you expect. From peak S&P in 2008 to bottom was 500 days. We are only 20 days in to this correction.

Maybe it's different this time...more likely we have a long way to go. And it will feel a lot worse than it does right now.

1/ The biggest mistake of the Internet era was believing platforms could be value-neutral. As we learned, software without ethics will be usurped by oligarchs & tyrants

The promise of crypto-networks is to codify human freedoms in software so these freedoms cannot be co-opted👇 2/ We mistakenly thought the Internet was value-neutral. That 0 marginal cost was egalitarian. This was false.

Network effects unfurl unchecked and users cannot exit these systems. Central services are easily co-opted. The Internet converged to digital Feudalism and Oligopoly.

1/ I read the SEC's filing against @telegram. Most of the summaries I've seen miss the crux of the filing.

The filing focuses on GRAMs as a security because Telegram Inc. controls TON and fundraised for its Messenger in addition

My read of the SEC's Telegram filing (IANAL)👇 2/ The SEC is being consistent, focusing again on the Howey test:
A/ investment of $
B/ in a common enterprise
C/ with the expectation of profit
D/ based on the efforts of others

A - obviously
C - VCs want a profit

The crux of it is B/ common enterprise and D/ efforts of others

1/ A large institutional investor asked me why people will trust Bitcoin over banks.

I showed the following data: The big banks have been fined upwards of $300B in the last decade for all sorts of appalling behavior.

US-only violation tracker:
violationtracker.goodjobsfirst.org/prog.php?major…

👇 2/ Just this week, the UK fined banks $66 BILLION: "The commission paid by the bank to its staff for the sale was 87% of the premium. As the profits were so large, firms were prepared to risk a fine for mis-selling, according to the Financial Services Authority"

1/ Self-sovereign identity is not going to happen just because people want an identity. People want value and identity emerges as a side effect.

No one wants Social Security Numbers, Equifax, or FB to own identity. They want govt benefits, credit cards, and to find their friends 2/ The leading contenders to back in to identity are trading, lending, gaming, layer 2, and messengers with crypto built-in.

People want to do these things without identity. All of these get much better if there is a stable identity in the mix.

1/ One of the hardest parts about being a founder is picking yourself up after you've failed. Not just the first time you failed but after the 100th time.

Failure is the default outcome for most ideas. Thus constant failure is the environment in which entrepreneurs must survive. 2/ Most serial entrepreneurs will tell you that if you try and fail once, most people can pick themselves up.

But trying and failing for years on end will wear on even the best entrepreneurs.

If you have tried starting a company and failed even once, you know how brutal it is.

1/ I published a ZIP outlining a new approach to Zcash governance after the expiration of the Founder's Reward:
forum.zcashcommunity.com/t/dev-fund-pro…

A short summary of the proposal is below. 👇

Read the full thing for full context. 2/ Background: Cryptocurrencies are network-effect driven. Liquidity, fiat on ramps, developers, miners, users, etc. all create network effects.

The primary driver of success in a network-effect business is how quickly you grow the network effects.

1/ I've been reading all of @WarrenBuffett's letters - amazon.com/Berkshire-Hath…

Someone can/should execute Buffet's "buy and hold forever" approach to software. Patient capital + no interference for founders + a brand halo that makes borrowing/hiring/press easier + dividends 2/ There are many great SAAS and marketplace companies that make for weak IPOs, are too small to IPO, or growing slowly but could grow for decades. Even many sub-$5B software companies would do better as private companies or wholly owned subsidiaries of a patient umbrella brand