A Brief Analysis of Multicoin Capital's Ten Investment Philosophy and Future Prospects
Original title: "10 things learned from the Multicoin Capital summit, investment methodology and future prospects"
Author: emagicTT
Compilation of the original text: Alex
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1) Be disciplined and avoid FOMO
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2) Paper priority method
The job of the investment team is not to find good investments, but to form a thesis about how the technology will advance and be implemented, and how the market will develop. Then they happen to monetize those insights through investments. The main part of their investment memo:
1. What is our thesis?
2. What assumptions did we make?
3. How is this composite?
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3) When to quit
Three reasons to sell assets from their hedge funds:
1. The thesis is proven and they achieve their expected perfect value.
2. The paper is invalid. They learn some new information and don't believe it anymore.
3. Others.
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4) Recruitment target
- Ability to formulate a thesis and reason critically about how technologies and markets will evolve. When writing your essay, you have to explain what you actually know, what you really believe, and how you formed your beliefs around them.
- Flexible enough to reconcile your beliefs about the paper with your ability to identify problems. Rather than abandoning the concept entirely, update what you have and revise the paper with new information.
- Don't change your mind just because others disagree with you, because the only way to get extraordinary returns is to be contrarian and right.
- Requires an understanding of business models for working in an open source, permissionless world. Since anyone can copy your code and have no IP, you must have a different method to capture the value. This is very different from what traditional investors can understand. It takes someone with traditional investing experience 6 months to learn and become a crypto native. It's better to find people who have the skills to be an investor, but haven't learned all these bad habits from traditional finance and can reason all this stuff from first principles from day one.
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5) Open Finance (DeFi) and Web3
Open Finance (DeFi) and Web3 are the two main themes driving Multicoin's performance.
The total value locked in open finance protocols, as well as the total transaction volume and activity in those protocols, is increasing dramatically. This is driven by the advent of liquidity financing, where these protocols can essentially buy liquidity with their tokens. It turned out to be an extremely effective bootstrap mechanism, sparking incredible growth that captured the attention of nearly everyone in the financial services industry.
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6) Bitcoin related decline
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7) Composability
According to Jesse Walden, "composability" is defined as "a platform is composable if its existing resources can be used as building blocks and programmed into higher-order applications."
People have been talking about the need to scale blockchains for some time. However, throughput alone is not enough. You have to be able to put things together and allow users to have all kinds of new social interactions on an open public permissionless system.
Composability is at the center of everything they think about now, especially how they allocate and invest. They believe that within the next 12 months, the next generation of applications will rely on a large number of composable cryptographic primitives. These apps will provide experiences that were not possible before.
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8) Solana is Crypto’s “iPhone moment”
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9) Creator Economy
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10) Metaverse
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