The two most important factors with early stage investing are TAM and Team. This is exactly why we led the Series A in EigenLayer. Occasionally, when we invest in an absolutely transformative technology (like EigenLayer and restaking) we double down and invest in enabling infrastructure. This hunt for ecosystem leverage and additional exposure to restaking, is what led us to Rio Network.
LRTs (Liquid Restaking Tokens) are the next evolution of LSTs (Liquid Staking Tokens). The premise behind both is straightforward: users want to (re)stake their assets without sacrificing liquidity and utility. This dynamic has driven massive growth in the liquid staking market with disproportionate market share (>70%) accruing to the market leader (Lido). It serves to reason that we’ll see the same dynamic emerge with restaking — and that the market leading protocol will capture a massively disproportionate share of the economic opportunity.
We believe the restaking market will be large – likely measured in 10 figures out of the gate and quickly growing to an 11 figure market. The demand for LRTs in restaking might be even greater than demand for LSTs in staking markets because users benefit not just from liquidity but also from AVS selection.
Without getting into the weeds, restakers will be faced with a “burden of choice” as to which protocols they wish to restake their capital toward. In the face of that choice, we believe the vast majority of users will prefer to engage in a coordinating protocol that will enhance their ability to navigate the restaking landscape and select appropriate baskets of AVS’ to support while preserving the liquidity and utility of their staked assets. This is the promise of Rio Network, the coordination layer for restaking, the liquid restaking network.
Given the market opportunity is known and the business model has been successfully demonstrated by Lido, we believe the winning protocol in the LRT category will be built with vigorous execution and will enable exceptional risk management capabilities. That’s why we’re backing Alan and Brandon…for the third time.
That’s right, we’re tripling down.
In 2017, we led the Seed Round and Series A for RADAR, where Alan (Chief Executive Officer) and Brandon (Chief Research Officer) built one of the very first DEXs (2017), Lightning Network applications (2018), staking infrastructure (2019), and MEV trading desks (2020). Ultimately, RADAR was acquired where Alan helped take the company public and served as CTO.
After helping take Core Scientific public, we doubled down and recruited Alan and Brandon back to BCAP to build and lead our Platform and Network Participation efforts.
One of the greatest pleasures of venture capital investing is the opportunity to observe and support relentless and insatiable founders pursuing a big opportunity. We’ve had that in spades with Alan and Brandon.
Alan is a “Founder’s Founder.” He’s built and sold three companies, hired hundreds of people, managed every department category, and led multiple organizations through ups and downs. It’s why we picked him to kickstart our Platform efforts!
Brandon is a “Crypto Expert’s Crypto Expert.” Few people in the world can match Brandon’s depth and ability to assess the nuance (and risks) of crypto networks. He’s been running crypto infrastructure since 2011 and served as an advisor to more projects than we can list. It’s why we picked him to kickstart our Network Participation efforts!
We’re thrilled to be tripling down on Alan and Brandon. They have the right mix of experience, skill, and pragmatism needed to build a dominant LRT protocol, one we believe will become indispensable network infrastructure for the next evolution of the Ethereum ecosystem and its community.
Disclosures: Blockchain Capital is an investor in several of the protocols mentioned above. The views expressed in each blog post may be the personal views of each author and do not necessarily reflect the views of Blockchain Capital and its affiliates. Neither Blockchain Capital nor the author guarantees the accuracy, adequacy or completeness of information provided in each blog post. No representation or warranty, express or implied, is made or given by or on behalf of Blockchain Capital, the author or any other person as to the accuracy and completeness or fairness of the information contained in any blog post and no responsibility or liability is accepted for any such information. Nothing contained in each blog post constitutes investment, regulatory, legal, compliance or tax or other advice nor is it to be relied on in making an investment decision. Blog posts should not be viewed as current or past recommendations or solicitations of an offer to buy or sell any securities or to adopt any investment strategy. The blog posts may contain projections or other forward-looking statements, which are based on beliefs, assumptions and expectations that may change as a result of many possible events or factors. If a change occurs, actual results may vary materially from those expressed in the forward-looking statements. All forward-looking statements speak only as of the date such statements are made, and neither Blockchain Capital nor each author assumes any duty to update such statements except as required by law. To the extent that any documents, presentations or other materials produced, published or otherwise distributed by Blockchain Capital are referenced in any blog post, such materials should be read with careful attention to any disclaimers provided therein.
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