TLDR:
- Crypto investors may not be aligned with the projects they invest in due to changing dynamics in venture capital.
- Tokens have transformed how venture capital works, allowing for faster returns and liquidity.
The article delves into the changing landscape of venture capital in the cryptocurrency space, highlighting the disconnect between investors and projects. The author, Azeem Khan, founder of Morph, observes that while consumer crypto projects are popular to discuss, they often lack investments. This shift in focus from consumer applications to infrastructure can be attributed to the introduction of tokens, which have altered the traditional venture capital model by providing investors with quicker returns.
The author emphasizes the impact of Ethereum in enabling the launch of consumer crypto applications and tokens. Unlike traditional venture capital investments, where returns are typically realized over long periods, token agreements allow investors to cash out within a year. This change necessitates a reevaluation of investors seeking exponential returns over a decade versus those aiming for smaller returns over a shorter period.
By rethinking venture capital and aligning incentives with the goals of project founders, the author suggests that the focus should shift towards investing in the right infrastructure and consumer applications in the crypto realm. This honest conversation about the evolving nature of venture capital may lead to more substantial investments that drive innovation and adoption in the crypto space.
