Alok Vasudev, Standard Crypto

Blockchain value discovery

Last week SV Icons hosted Alok Vasudev, founder of Standard Crypto, top tier crypto fund, ex-Benchmark investor, and Stanford Ph.D.

Here are several takeaways from our conversation with Alok:

1)  Recognizing the Value of On-Chain and Decentralized Solutions: Many individuals acknowledge the benefits of on-chaining various aspects but struggle to grasp the significance of widespread adoption. It's important to understand that having a currency on-chain and decentralized itself holds tremendous value even without broadening the tech to real-world applications.

2)  Zigzagging Innovation and Adoption: The trajectory of innovation in the crypto space has followed a zigzag pattern toward adoption. It began with the introduction of cryptocurrency as a medium of exchange, then progressed to governance with DAOs, and, more recently, non-fungible tokens (NFTs). Each new use case overcomes certain barriers to adoption, shifting crypto from the realm of early adopters to mainstream acceptance. It is remarkable how the journey has evolved, from fully on-chain yield to off-chain solutions like T-bills while still utilizing on-chain tools.

3)  Gaming is likely the main use case that brings crypto to mass adoption. The introduction of frictionless ownership inside games using account abstraction will end up with people having wallets and assets without even thinking about them. That’s where we might see the first billion users adopting crypto.

4)  Contrasting Adoption Perspectives: There exists a stark contrast in how crypto is understood and adopted in developed versus emerging markets. Crypto has gained significant traction in markets with weaker currencies and unstable governments, as it provides a means to preserve savings in a more stable currency like USD while benefiting from yield exposure on various protocols.

5)  Considerations for Protocol Development: Those interested in building protocols may find it challenging to do so within the United States due to current regulations. As a result, moving outside the US, particularly to a city like London, which has demonstrated substantial innovation in digital assets post-Brexit, is a more favorable option.

6)  Challenges of On-Chain and Off-Chain Collaboration: Numerous attempts have been made to facilitate collaboration between on-chain and off-chain solutions, with some successful outcomes. However, merging these two worlds requires significant regulatory cooperation and additional friction for the users, which usually isn’t a great choice.