The Briefing Memo

April 2024 - Welcome to The Briefing Memo from the The Department of XYZ, which features our latest insights and updates. You can manage your subscription preferences at the bottom of this message.

Crypto’s Regulatory Olympics

I made it a goal last year to visit the major emerging hot spots for crypto innovation. Places that are attracting crypto builders and producing new fit-for-purpose regulatory frameworks.

What I discovered is a parallel universe from the current state of affairs in the US. The rest of the world is engaged in a competition for the prize of becoming capital to the next generation of financial services: tokenized finance operating in open and decentralized systems. With Team USA (largely) boycotting this financial olympiad, a fresh set of champions has a rare chance to emerge.

The financial services map of the future could be redrawn in a way that looks markedly different from today. The United States is likely to rejoin the race eventually, making this a time bound opportunity for new jurisdictions to establish and solidify their leadership positions before it’s too late.

I shared my thoughts in CoinDesk along with a scorecard for keeping score of the race. Let me know what you think.

Department of XYZ Portfolio News

• Harry Donnelly, Co-Founder of Opdefi is featured in a profile by Lynx Collective.

• Nikhil Raghuveera, Co-Founder of Aethos joined a podcast produced by The Defiant to discuss liquid restaking. Aethos also recently published an introduction to what they are building, a generalizable policy engine built for smart contracts.

• Robert Leshner, Founder of Superstate, lays out his vision for tokenized real world assets on a recent Bankless podcast.

Department of XYZ Team Updates

• We were featured in Velvet’s recent report, The Voice of Venture Capital and Private Markets, as an example of “new and emerging boutique VC funds that leverage specialization, focus, and small size to drive superior investment return."

• We partnered with Pantera to host some of New York City’s top early stage venture capital investors for drinks and discussion.

  

• Matt spoke about policy, legislation, and regulation at the Solana Hacker House on a panel moderated by Department of XYZ LP Advisor Andrew Chang.

  

• Matt participated in the DeFi Retreat at the Presidio in San Francisco. It was great to catch up with founders and LPs / LP Advisors.

  

What we’re reading and listening to

• 10X Capital Podcast: Episode 4 - Abe Othman of AngelList on how Solo GPs and small partnerships often outperform larger funds due to their ability to assess the credibility of early-stage deals within their specific domain of expertise.

• Politico: One Super Tuesday Winner - The cryptocurrency industry got its way on Super Tuesday. The biggest beneficiaries of spending from a well-funded network of crypto-affiliated super PACs are on track to prevail, a victory in the industry’s efforts to sway the 2024 elections to benefit digital asset firms.

• FinTech Brainfood: Brazil: The country of Fintech's Future - Simon Taylor has a characteristically excellent deep dive into Brazil as a fintech market. A snippet: “Winning at Fintech in Brazil feels like an unfair fight. The incumbents are poor, interest rates are high, and the need for something actually good is astonishing.”

• Arthur Hayes: Dust on Crust Part Deux - Ethena, a tokenized structured product sometimes described as a stablecoin, has reached more more $2 billion in size in only a few months. In this deep-dive long form piece, Arthur explains how it works and shares his view on its risks.

On the horizon

We’ll be at Consensus in Austin, TX from May 28 to 31. Please give us a holler if you are there as we’re organizing a gathering on the sidelines of the main event.