Raising $1 billion, these 5 major investment directions of encrypted venture capital Electric Capital are worthy of attention

On March 1, the encryption venture capital firm Electric Capital raised a total of US$1 billion for two new encryption funds: a US$400 million fund invested in equity and tokens; a US$600 million fund invested only in tokens and stablecoins.

Electric Capital declined to name the new fund's backers, noting that it is almost exclusively university endowments, large nonprofits and foundations. Electric Capital co-founder Avichal Garg said this group of investors was critical to the way Electric Capital wanted to invest, and needed to set up the two large funds with investors willing to buy into the 10-year lock-up period.

It is reported that the single investment scale of the new fund is between 1 million and 10 million US dollars, and the investment targets include DAO, NFT, DeFi, infrastructure, and tools to allow more people to access Web3.

DAO

For DAO, Electric Capital mainly focuses on the following:

Performance-Based Recruitment System- The DAO will become a talent-attracting organization, comparable to the best companies. Many people join the DAO by purchasing tokens, but this does not ensure that the most talented or prolific contributors join. Electric Capital hopes to fund the research and development of relevant mechanisms to allow more people to join the DAO.

Governance Aggregator- It is difficult for people to track and prioritize new proposals, especially across multiple DAOs. Electric Capital hopes to support an aggregation platform for governance proposals, making it easier for members to participate in governance.

Mechanisms for Improving Distributed Decision Making- Many decisions are currently made by those with the most tokens. Electric Capital needs a mechanism that not only increases the number and participation of participants, but also allows the right people to participate more.

Compensation and Reward Mechanism——DAO contributors need a fair and transparent compensation and reward mechanism. An effective way to compensate contributors for their work today is through bounties on platforms like Layer3 through DAOs. Contributions to the DAO can be on-chain, off-chain, one-time or recurring. These contribution types will grow and evolve as the complexity of the DAO increases. Electric Capital wants to fund projects that allow DAOs to distribute compensation fairly and openly to all types of contributors.

DAO Discovery Platform- The rate at which DAOs are created increases exponentially. The largest DAOs control coffers worth billions of dollars, issue grants and employ large teams. In contrast, the smallest DAO could be a group pooling resources to purchase NFTs. Electric Capital needs a DAO discovery platform to help more users discover and explore DAOs that match their needs and interests.

Recruitment platform- DAOs need to be able to leverage talent networks and expertise. Electric Capital is willing to invest in various projects throughout the recruitment pipeline, which can help DAOs identify and recruit the best talent.

treasury management— Today, DAOs can have complex treasuries that include different types of tokens and stablecoins. DAOs face the challenge of efficiently managing their treasury through distributed decision-making. Organizations like LlamaDAO are experts at creating proposals and helping DAOs make financial decisions. Electric Capital hopes to fund additional economic instruments that will allow DAOs to grow and utilize their treasury efficiently.

In this vertical, Electric Capital hopes to support the following projects:

DAO creation platforms like Syndicate, talent portals like Rabbithole, DAO-centric bounty systems like Layer3, platforms where DAOs can do engineering work like Gitcoin, and DAO financial tools like LlamaDAO.

NFT

Pricing mechanism of NFT——Pricing NFTs accurately is a challenge. The lack of pricing creates two problems: (1) most NFTs are illiquid; (2) financial derivatives cannot be formed on top of NFTs. Projects that allow us to accurately price NFTs will unlock new use cases and greater adoption.

Infrastructure to support NFTs as productive assets——There are currently two mechanisms for generating capital through NFT: (1) generating income through leasing, lending, etc.; (2) sharing income through royalties and sharing. Both mechanisms are in their infancy. As this space matures, we expect to see music NFTs that share royalties with fans, revenue sharing to Hollywood movies based on NFT characters, and lending and leasing cash flow through these NFTs. Electric Capital firmly believes that infrastructure supporting productive NFTs will become an important platform in Web3.

discovery platform- It is now difficult for us to quickly discover NFTs or learn about new minting information. An effective discovery platform will increase NFT adoption and allow more people to find their niche.

NFT financial derivatives——Like assets in the real world, NFTs will have futures markets, hedging options, insurance, and other types of financial derivatives. Financial products built on top of NFT will make NFT more useful.

Creators Guild- Creators will monetize NFTs and use them to mobilize their fans. Today, however, creators lack best practices and infrastructure for using NFTs. Electric Capital believes that creator guilds may allow creators to share resources, such as community managers, scripts and fan groups.

Vertical secondary market——When NFT can represent various things such as music, virtual world land, vouchers, etc., new markets will emerge to support the specific needs of each type of NFT.

Physical to Digital Bridge- NFT can be a digital representation of the physical world. We will see more general mechanisms to obtain physical assets by destroying digital assets, using NFTs to design event ticketing systems, NFTs as storage for medical records, class attendance, identification, etc.

In this vertical, Electric Capital hopes to support the following projects:

Curation platforms like JPG, social platforms like Hyype and Myty, and lending and trading marketplaces like Taker Protocol and 4k.

DeFi

Developing DeFi on non-Ethereum chains——For the next wave of users entering DeFi, non-Ethereum chains may be a more affordable entry. Electric Capital sees a significant opportunity to build DeFi services for these new users.

Cross-chain revenue opportunities——As more users join the ecology on one chain, they will hope to obtain potential revenue opportunities on other chains.

Provides a simple entry point for complex policies- Platforms like Ribbon simplify complex options strategies. Electric Capital hopes to invest in platforms that allow users to easily understand strategies such as delta neutral returns, leveraged market making, and downside protection lending.

New Liquidity Guidance Mechanism- As more protocols are launched and developed, the need for bootstrapping mechanisms will increase. As new protocols roll out, new and innovative bootstrapping mechanisms will emerge.

Payment flow and vesting- Standardization of encrypted payment flows will unlock many use cases: employment contracts, vesting contracts, DAO-to-DAO contracts, and even unsecured loans.

In this vertical, Electric Capital hopes to support the following projects:

• Accessible DeFi solutions like Kresko

• Algorithmic stablecoins such as Frax

• Crypto-native exchanges such as DerivaDEX, dYdX, Hashflow, Saddle, and Slingshot

• DeFi credential systems like ARCx

• Lending platforms like Sublime and Swivel

• Liquidity aggregators such as Tokemak

• Liquidity management systems such as Gamma

• Option protocols such as Primitive and Zeta

• Privacy solutions like Anoma

• Decentralized infrastructure

Decentralized infrastructure

Proven Frontend Hostingdecentralized computing

decentralized computing——AWS, Azure, etc. have brought about centralization issues and require a decentralized computing infrastructure.

Zero Knowledge Development Tools- Zero-knowledge technology is useful not only for private payments and rollup validity proofs, but also for interesting new use cases like gaming. For example, many games need to hide some game state: playing cards, inventory in MMORPGs, fog of war, etc.

Security review of every code commit——Nearly $200 billion in assets are locked in DeFi chain protocols. Due to the immutability and trustlessness of the blockchain, the security of assets on the chain will become more important. Electric Capital wants to fund tools that can review security during development.

In this vertical, Electric Capital hopes to support the following projects:

Authenticated submission systems like Radicle, bug bounty systems like Immunefi, identity and user data solutions like Spruce, decentralized computing solutions like Internet Computer, and formal verification solutions like Certora.

Expand the access path of Web3

Crypto games with interoperable backends- Encrypted games have the potential to create a user experience superior to traditional digital games. With a fully interoperable backend, anyone can easily build plugins or mods into the game, or be able to fork the game in a trustless manner, enabling rapid evolution of gaming experiences. Electric Capital hopes to invest in related game companies that can use cryptocurrencies to create interesting experiences that are impossible in traditional games.

DeFi Experience on Mobile——Most DeFi applications are optimized for the desktop experience, ignoring the user base operating on mobile devices. As complex DeFi strategies become easier, and wallet connection security and verification processes get better, Electric Capital wants to invest in companies that can improve the mobile DeFi experience.

Multi-chain wallet for verifying contracts- As cryptocurrencies develop, new challenges arise. For example, the rise of multiple types of Layer 1 brings new usability challenges, such as difficulty moving assets between chains or using a unified wallet to access multiple chains. Electric Capital wants to fund the wallet infrastructure to provide a smooth user experience.

earn cryptocurrency- Fiat onramps have two key issues that exclude a significant user base from cryptocurrencies: (1) many people do not have the money to invest in cryptocurrencies; (2) centralized exchanges will not support fiat currencies from every country. Electric Capital wants to fund bounty protocols, task platforms, P2E models, and performance-based deposit mechanisms.

In this vertical, Electric Capital hopes to support the following projects:

Low-fee, high-throughput platforms like Aurora and solutions for accessing cryptocurrencies through traditional financial channels like Bitwise, Bitnomial, and Kraken.