How to Overthink Cryptocurrencies

Links

• Haseeb Twitter
• Web

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Show Notes

Cobie & Ledger <> Haseeb Qureshi

UpOnlyTV Notes

Haseeb Intro

 ⁃ Managing partner at Dragonfly Capital (@dragonfly_cap)

 ⁃ Formerly a professional poker player then learned to code and became a software engineer at Airbnb before moving into crypto

 ⁃ Full time crypto in 2017 doing security research, worked at 21/Earn, a stable coin startup and then into the investment side

Poker & Crypto

 ⁃ Cobie: Why are there so many poker people in crypto? Haseeb: They’re willing to do weird things to make money, predisposition to it. It rewards being a little bit obsessive

 ⁃ Very few poker players in VC roles much more that are traders

 ⁃ Poker has also been getting worse as an economy and harder to make a living from it

Dragonfly Capital & Investing

 ⁃ Multistage firm, will invest at all stages of a project, doing both equity and token deals

 ⁃ Ledger: Is one easier than the other when it comes to making decisions? Haseeb: Equity liquidity is decided for you, the rest of the time you’re along for the ride which makes things easier

 ⁃ Long term investments in tokens and will have lockup’s 2-4 years but tend to hold beyond that even when liquid. Sometimes things run quicker than expected and it makes sense to exit but still holding most things today

 ⁃ Crypto markets aren’t efficient so even knowing marginally more than the average trader is enough to make money

 ⁃ When it comes to project performance: Winners keep winning

 ⁃ If Dragonfly buy tokens that are already live they’ll negotiate with the DAO or OTC

 ⁃ Ledger: Do you give any weighting to revenue back to token holders tokenomics? e.g. Uni vs Sushi? Haseeb: Markets are forward looking, lack of revenue to holders right now is less important than them being the market leader and future developments

Biggest Misses?

 ⁃ Uniswap. Hayden wanted Dragonfly in the round but it didn’t seem sustainable and completely missed it

 ⁃ Has seed round memos for Solana @ .04 but they didn’t act on it (~4000x) as well as for Terra

Making It & Diversification

 ⁃ Haseeb: Multicoin Capital became a titan from leading the Solana round

 ⁃ Cobie: Great example of only needing one big win to make it. People come in with too low of time horizons and have losses leverage trading trying to play catch-up.

 ⁃ It’s like making 10 high conviction thesis driven investments and watching them carefully to see if what you expected to happen, happens. Am I right, am I wrong, and why?

 ⁃ Haseeb: Diversification is powerful. If returns are power of law distributed the optimal strategy is to be maximally diversified

 ⁃ Ledger: I used to mock the idea of keeping moon bags but I’ve seen enough that’s just kept going up so much more than anticipated

 ⁃ But, you also can’t put your fate into something that continues to underperform

Multi-chain Future & L1 vs ETH vs L2

 ⁃ Line of sand is between EVM chains and non-EVM chains

 ⁃ The EVM is the lingua franca , all of the tooling has been built with one ecosystem in mind. Equivalent to JavaScript, it wasn’t the best language but it became the thing you had to write in

 ⁃ Thesis has been broadly that the L1s end up winning over L2s due to L2 constraints e.g. security model

 ⁃ L1s have more flexibility

 ⁃ Cobie: What about Bitcoin? Haseeb: Bitcoin is digital gold, it’s been around long enough and held up – so it’s strength now is in not changing. Ledger: Feel like it will underperform in emerging bull markets but hold up better in bear markets

What’s Next?

 ⁃ Synthetic assets still feel under-explored and under-appreciated

 ⁃ Grandmother is old-school and was buying gold instead of relying on the Rupee. The reason people aren’t buying other assets is due to a lack of access

 ⁃ Crypto is about global permission-less access and it’s not about being able to offer it in the US but elsewhere

 ⁃ DeFi has evolved less and not grown that much since DeFi Summer ended. There aren’t enough people that are technical enough to build it out

 ⁃ Vast majority of people in the world are living month to month and not concerned about interest rates

Final Alpha

⁃ In crypto it’s really easy to overthink things and the obvious thing is usually right

Notes by Luke

Music by GiovanniPickle