Taipei Blockchain Week (TBW) kicked off today (12th), with the theme speech on the first day.
Global and Asian Market Overview: Insights from Leading VCs on the State of Web3) invited Animoca Ventures' venture capital and portfolio strategy director.
Nenter Chow, IVC partner Akio Tanaka, DraperDragon managing partner Richard Wang, and TRIVE Digital partner Daryl Lim discussed together.
How VCs view the current cryptocurrency environment.
At the beginning, the host Nenter Chow mentioned that the market has been particularly active recently due to Trump's election and asked other speakers what topics excite them the most right now.
Current developments and changes in the cryptocurrency field.
The development of cryptocurrency in Japan.
IVC partner Akio Tanaka first mentioned that, unlike Western countries, large Japanese companies are very active in the cryptocurrency field. For instance, SONY previously had a very close relationship with the public chain Astar, and Astar's CEO Sota Watanabe has established a Layer 2 protocol called Soneium for Sony on Ethereum.
So in reality, large companies in Japan are accelerating their capabilities in Web3 and cryptocurrencies, including stablecoins. We are closely monitoring these impacts because I believe this could become more globalized, for example, if you look at some acquisition cases.
In addition, Akio Tanaka stated that IVC is currently focusing on stablecoin payments and the entertainment sector.
The hotspots for cryptocurrency investment are shifting rapidly.
Richard Wang, managing partner of DraperDragon, mentioned that the current investment hotspots are shifting very quickly. DraperDragon's investment strategy is also adjusting at any time. As for the latest few projects, their operational time cycle is usually seven years, so they may not explode in this bull market. Wang humorously said he hopes the projects they invest in can survive until the next bull market.
We hope to survive in this cycle until the next one comes. I am not sure if the current market can sustain. But maybe it will only last until this year, right? Therefore, we must ensure that projects can survive in the next two to three years.
Fair Launch is gradually becoming mainstream.
Daryl Lim, partner at TRIVE Digital, mentioned that from a VC perspective, the 'fairer issuance' of tokens is becoming mainstream. Currently, many projects are adopting a more equitable market strategy, shifting towards a more transparent token distribution environment rather than the opaque 100% circulation model.
For example, the circulation on the first day may reach 60%, and by the third month, it may reach 80%. This is the trend we have observed, and this approach works well.
Moreover, many venture capital funds are more supportive of this strategy because it can save a lot of costs, such as reducing fees or support costs for certain companies.
The success factors of the project team.
On the other hand, Daryl Lim also mentioned that the 'attractiveness' of community user retention has become one of the important factors beyond the 'product' for project teams.
Regarding this topic, Nenter Chow believes that the 'team' behind the product is very important because the token generation event (TGE) is not the endpoint, but the starting point for sustained efforts on the product.
I believe that clearly, the team behind the product is also very important. Whether these teams are truly capable of solving problems or whether the product has long-term sustainable development potential is crucial. Because I believe there are many creative projects in the market now, but in the end, only a new logo remains.
Many people tend to focus on achieving the token generation event (TGE) as if that is the endpoint, but in reality, it is not; it is just a starting point, and you really must focus on pushing the project forward.
Is this cycle a 'super bull market'?
Then, the host Nenter Chow asked the speakers when the market will peak and if this cycle is a 'super bull market' given the inflow of institutional funds into the cryptocurrency space.
Richard Wang stated that DraperDragon still focuses on 'return on investment (ROI)' as the primary concern, with 'exit strategy and returns' being key points.
Nenter Chow then stated that this cycle is different from previous years; not all tokens are rising simultaneously. However, Chow remains curious about which areas institutional funds will flow into.
In this regard, Daryl Lim stated that he believes the exact situation of institutional fund inflows is more complex than it appears on the surface; however, they have already seen a significant influx of funds into the market, clearly flowing into specific areas.
The cryptocurrency environment from the VC perspective.
Next, the host Nenter Chow asked from the perspective of funds and partners, how is the current funding environment for crypto VCs different from the past?
Akio Tanaka stated that if we look at the past three years, the scale of cryptocurrency as an investment category has actually shrunk compared to other fields because the growth rate in other areas is faster.
Akio Tanaka continued to point out that the rise of AI in recent years has siphoned off a lot of VC investment funds, such as in gaming and financial lending, especially in the UK. The rapid development of AI has also led many projects, even crypto VCs, to shift their focus to AI.
On the other hand, Richard Wang used observations from China and Hong Kong as examples, believing that there are many investment opportunities in the domestic market, especially with limited partners (LPs).
Wang further stated that from the LP perspective, there were many quality funds in the last cycle, but the results were not ideal due to the very poor distribution growth rate (DPI).
No one can exit. Recently, many LPs are very concerned about long lock-up periods and unclear exit plans.
Wang stated that this has also led many funds to start shifting towards more liquid investments. For this, VCs either set a shorter fund cycle or create a more structured plan to achieve exits.
The old methods from the last cycle no longer work.
Key recommendations from the speakers.
At the end of the speech, the host Nenter Chow asked the speakers to share their 'key recommendations' on the current investment environment:
Akio Tanaka mentioned that internet-based currencies are being realized, and these internet-based currency protocols, especially stablecoins, will unlock vast emerging economies, and the involvement of AI may strengthen the financial narrative of stablecoins.
Richard Wang stated that quantum computing is being applied to solve various problems in different fields, which will also affect many areas such as AI and biotechnology. Additionally, Wang emphasized that 'entrepreneurial spirit' is very important.
Daryl Lim is promoting corporate investment projects and believes that the core force in the crypto world is 'culture,' and it is also the power of culture that allows the crypto industry to thrive.