The Taipei Blockchain Week (TBW) kicked off today (12th), and in the first day's keynote speech 《Global and Asian Market Overview: Insights from Leading VCs on the State of Web3》, Nenter Chow, Head of Investment Strategy at Animoca Ventures, Akio Tanaka, Partner at Infinity Ventures Crypto (IVC), Richard Wang, Managing Partner at DraperDragon, and Daryl Lim, Partner at TRIVE Digital, were invited to discuss how VCs view the current crypto environment.
At the beginning, the moderator Nenter Chow mentioned that the recent market has been particularly active due to the impact of Trump's election, and asked the other speakers what are the most exciting topics for them currently.
Changes in the Current Crypto Landscape
Crypto Development in Japan
IVC partner Akio Tanaka first mentioned that unlike Western countries, large Japanese companies are very active in the cryptocurrency field. For example, SONY has had a very close relationship with the public chain Astar, and Astar CEO Sota Watanabe has also built a Layer2 protocol called Soneium on Ethereum for Sony:
So in reality, large Japanese companies are accelerating their capabilities in Web3, cryptocurrencies, and stablecoins, and we are closely monitoring these impacts, because I think it may become more globalized, for example if you look at some acquisition cases.
In addition, Tanaka said that IVC is currently focusing on stablecoin payments and the entertainment sector.
Rapid Shift of Crypto Investment Hotspots
DraperDragon Managing Partner Richard Wang then mentioned that the investment hotspots are shifting very quickly, and DraperDragon's investment strategy is also constantly adjusting. As for the latest invested projects, the operating cycle is usually seven years, so they may not explode in this bull market. Wang also joked that he hopes the projects invested by DraperDragon can survive until the next bull market:
We hope we can survive through this cycle until the next one comes. I'm not sure if the current market can last. But maybe just until this year, right? So we have to make sure the projects can survive for the next two to three years.
Fair Launch Gradually Becoming Mainstream
TRIVE Digital partner Daryl Lim mentioned that from the VC's perspective, the "fairer launch" token issuance method is becoming mainstream. Currently, many projects are using more fair market strategies, shifting towards a more transparent token distribution environment, rather than an opaque 100% circulating model:
For example, the initial circulating supply may reach 60%, and by the third month it may reach 80%. This is the trend we have observed, and this approach has been very effective.
In addition, many venture capital funds are more supportive of this strategy, as it can save a lot of costs, such as reducing fees or support costs for some companies.
Key Factors for Project Team's Success
On the other hand, Daryl Lim also mentioned that the "appeal" of the project team to retain community users has become one of the important factors besides the "product".
On this issue, Nenter Chow believes that the "team" of the product is very important, because the token generation event (TGE) is not the end, but the starting point for the product's continuous efforts:
I think the team behind the product is obviously very important, whether these teams really have the ability to solve problems, or whether the product has long-term sustainable development potential? Because I think there are a lot of creative projects in the market, but in the end, it's just a new logo left.
Many people tend to focus on achieving the token generation event (TGE), as if that's the end, but it's actually not, that's just the starting point, you really have to focus on driving the project forward.
Is This Cycle a 'Super Bull Market'?
Next, the moderator Nenter Chow asked the speakers when the market will reach its peak, and whether this cycle is a "super bull market" given the influx of institutional funds into the crypto space.
Richard Wang said that DraperDragon still focuses on "return on investment (ROI)" as the primary factor, and "exit strategy and returns" are the key points.
Nenter Chow then stated that this cycle is different from previous cycles, and not all tokens are rising in sync, but Chow is still curious about where institutional funds will flow.
In this regard, Daryl Lim stated that he believes the actual inflow of institutional funds is more complex than it appears on the surface, but they have already seen a large influx of funds in the market, and it is clearly flowing into specific areas.
VC Perspective on the Crypto Environment
Next, host Nenter Chow asked, From the perspective of funds and partners, how is the current cycle's crypto VC financing environment different from the past?
Astar stated that if you look at the past three years, the scale of cryptocurrencies as an asset class has actually shrunk compared to other areas, because the growth rate of other areas has been faster.
Astar continued that the rise of AI in recent years has drawn away a lot of VC investment funds, such as in gaming and financial services, especially in the UK. The rapid development of AI has also caused many projects, including crypto VCs, to focus their attention on AI.
On the other hand, Richard Wang used examples from the Chinese and Hong Kong markets, and he believes there are many investment opportunities in the domestic market, especially in the limited partner (LP) side.
Wang then stated that from the LP's perspective, there were many high-quality funds in the previous cycle, but the results were not ideal, because the distribution growth rate (DPI) was very poor:
No one could exit. Many LPs are very concerned about the long lock-up period and the uncertain exit plan.
Wang said this has also caused a lot of capital to shift towards more liquid investments, and for VCs, they either need to set a shorter fund cycle or create a more structured plan to achieve exits:
The old methods of the previous cycle no longer work.
Key Recommendations from the Speakers
At the end of the presentation, host Nenter Chow asked the speakers to share their "key recommendations" on the current investment environment:
Astar mentioned that internet-based currencies are being realized, and these internet-based currency protocols, especially stablecoins, will unlock a huge emerging economy, and the intervention of AI may strengthen the financial narrative of stablecoins.
Richard Wang stated that quantum computing is being applied and solving different problems in various fields, which will also impact areas such as AI and biotechnology. Wang also emphasized the importance of "entrepreneurial spirit".
Daryl Lim promoted the company's investment projects and believes that the core power of the crypto world is "culture", and it is the power of culture that has allowed the crypto industry to thrive.
