Living and Investing Across the Pacific w/ Will Patterson (Varys Capital)

Transcript

[Music] thank you welcome back to the strangewater podcast I'm your host Rex also known as Haim Solomon or Salomon crypto thank you for joining me for our third episode today's conversation is with Will Patterson the head of venture for varus Capital I met will earlier this year during a round of fundraising for a now shelved company that particular Venture ended before it left the dock but just like all Ventures through strange water there was an incredible amount for me to learn from the experience

in fact every time I swim in strange water I find myself learning the same lesson when you find someone who not only makes you rethink how this all works what makes you excited about changing the world you found the right person will is one of these people every time we speak I walk away with a burning itch to change the world this episode's conversation covers a lot of ground Will's personal story living investing and thinking internationally and a special focused conversation on the Avalanche blockchain again when I speak to will my mind opens and I hope yours does too

one final note please don't take any Financial advice from this or any podcast ethereum and blockchain Technology will change the world but you can easily lose all your money on the journey there with that thank you so much for joining us and let's get started today we have will Patterson who runs Vera's capital and uh will and I met a couple weeks ago or maybe a couple months ago now and um every single time I talk to him you know my perspective change and like the way I understand the world and crypto changes so I'm super excited to have him here super excited for you guys to be able to meet him and um will thank you

so much no this is awesome thanks for having me no of course uh do you want to just give yours give the audience a brief um background on who you are and what you do yeah happy too so uh recently joined varus Capital Ferris Capital has been around for a few years I joined at the top of this year they just launched their first dedicated Venture fund so I have a background in finance I started out in a very traditional M A investment banking for a few years and then transition to full time within crypto I worked at the business development team of Ava labs and uh recently came back I guess to the buy side side and it's been a very fun journey I mean I personally know like a lot um or more about your background and

like there's specific things that I want to talk about but before we get there can you like kind of give us a the five minutes on how you found crypto and and why when you looked at the space you didn't um you know run I guess I first knew about crypto because um in high school or like late Middle School I think I had a wired subscription so when I was younger like one of the things that my I have two older siblings one of the things my brother gave me was magazine subscriptions one was Nintendo power and I think I also like got into wired I actually have a stack of Nintendo Power around the corners for like The Vibes um if you don't know what that is I'm sorry so yeah um wired had run a piece on the uh

um Silk Road guy like busting the Silk Road guy and so like I was like aware of like crypto and um I was also in like a couple like athletic clubs um and one of the guys there I think he I mean this he had to be like 13 right he's like yeah I've got a hard drive full of Bitcoin somewhere and that he'd already lost his hard drive in 2013 and um I just I I remember distinctly like one afternoon uh we were both just like yeah like seems cool but we're like 14 so we're not gonna try and figure it out and um circling back to 2020 when now I have a job and like I have money to spend um or invest that's when I came back to crypto and I had some other friends were getting really into it it was December

2020 one of my friends called me and he was like yo bitcoin's pumping I think it's like 20 000. he's like buying in I was like okay let me like let me think about this again like it's been a while since I really thought about Bitcoin um but what got me over the edge was Nano which used to be called right blocks or Ray blocks I think there's a big exchange hack in Italy or something like a lot of the Nano Supply was like totally lost um in one form or another from like this hack um and it was down like you know well over 99 percent but what I loved about Nano is that you can move value around for free now now I know more about like why blockchains

have peas and gas Etc but so I like Nano it's like this gag blockchain with no fees and I understood that because again I had one of my older siblings was living abroad at the time cost me forty dollars for whatever to send him money well now I can buy Nano send him Nano and he can sell it on the other side and maybe it costs a dollar maybe it costs a few dollars Max right um so that's what got me over the edge was like okay there's a use case for this and so that's why I ended up like making like my first like big Investments I guess in Bitcoin yeah man that's awesome and I think what's like particularly cool about your journey in is that like you found crypto back when you're 14 but you re-entered it it because you're excited about an

actual use case um which I think is like pretty rare um just given like the state of the technology and like most people enter it um because like they you know have like some sort of like Financial background or they they are looking for upside or um even like their computer science nerds and like understand why distributed computing is cool but like it's super super rare where someone just like has a real world need and finds crypto to solve that and I think like God I hope that you are like the template for the next you know billion or four billion people that come on chain but um it was incredible and maybe it's just more rare in the US because like it's I don't know typically

like we're not being like cut off access to our money or like our money isn't like Super Hyper inflating um so yeah I mean like but it was a real world use case as opposed to like other ways of onboarding people gaming nft is like totally like real business applications of blockchains uh but that was for me that was what got it I was thinking I had to like the main thing that I thought about um and I'll pause on like the Nano store worry but like I was like okay if the coffee shop downstairs is paying Amex four percent why would they not want to have like some like middle layer where they're instantly transacting and like Nano and then back USD and saving on

fees so I was like there's clearly like a world where this creates value for people at like a mass level and so that's why I like Nano a lot bitcoin's like yo like as you know the the fees are too expensive or it's too slow like the finality is too slow um so that's like what really got me over and I started shielding people on that use case specifically as like a way to onboard them yeah no you're totally totally right and that um like Americans experience crypto in a different way than at least most of the world like maybe maybe the other European you know G7 economies are in the same boat as us but you know for us it it's you're totally right that um

that for most people like crypto is interesting specifically because of like the real world use case and like sometimes it's about sending money and sometimes it's just about like having access to to an asset that isn't um like political um and so I think um I do think there's something that like separates people let's say Americans that work in this space by like have you been International pilled or not and um it sounds like the way you tell your story that like a huge part of um that for you is your brother was studying abroad and you know you've been doing things and you realize there's a better solution but I have to just like directly ask and get into it like on top of your brother studying abroad like you

lived abroad and you experience like what life is like outside of our economies and so I would love to like hear just like whatever um you have to say about like the time you spent um I'll let you give the country but um I'd love to hear just like what your first initial impressions are and like specifically like what does crypto mean in those kinds of societies versus like where we are today in America yeah yeah for sure for sure so like my background I was like it's like kind of important context I have two older siblings they're eight and ten years older so they're like kind of older um and one of them my brother was like very into foreign languages and like that like rubbed off of me like very

hard because when I was four to like eight we would have like a Japanese exchange student staying with us or like a German exchange student saying but that's kind of like an alternating years and so when I'm like four and five I was playing shogi I was like doing like you know a little Japanese cutesy stuff so my Japanese pronunciation is still great I don't know any Japanese anymore um but like and then the German as well so like you know get the high school and stuff I studied German and Spanish like a good American boy um but I was very interested in like studying abroad and like just because uh one of the other things I realized along the way is like I need more like data points to figure out what I want to do and so I saw languages as like this very

clear path to getting more data points just in life other like World Views that can then influence or like inform my decisions about like career Etc um and so that led to German first and there's a story I can tell about this like my first trip abroad was in 2015 summer I went to Germany and like a very small very small town um but what you're alluding to is in 2017 2018 2017 for the first time I moved to China for the first time and lived in Beijing um and so I was like studying abroad at one of the top universities there and um like yeah so I was in China for for three months there and then I moved back for a

full year during senior year I was directly enrolled in classes in China I had a Chinese roommate from like the middle of nowhere um I did a four-year intensive language program studying Chinese seven days a week with a tutor and in classes um and um so I can take that any which number of ways but obviously like China was huge for crypto adoption uh I guess like kind of still is my understanding today is that you know and I've even invested in a team with it with Chinese developers they just can't Market it domestically there are a couple of like nfts marketplaces that have sprung up but it's all sort of like closed permission blockchains right like these Enterprise chains um like these closed

off ecosystems so I think like China is China's very interesting case and it can take this any which way that you want to discuss but it went from like our path to 100K BTC to then like closing off super hard they still have to try exchanges and now you have like some domestic nft marketplaces um My Hope Is that it's a matter of time before they kind of reopen and become much more crypto friendly again what is particularly poignant like in our industry and and more broadly like in our society and in our economy is that it it seems like when things are going well like our system just works better

than like let's say the Chinese system or any other system but when things go wrong like we get so locked up in arguing with each other that like we're not really able to do anything whether that's like handle a pandemic or like fix like the streets in the most expensive city in the country right and I think a lot of um I I think it's like really easy for people who stand on one side of the Pacific or the other to just like either say they're doing it better or um they're doing it worse and then it gets like really political really quick but for someone who is like not only experience both but like has like worked on building a career in both like what what do you think are like the real

differences and the real things that like Chinese do well and the real things that like we really do well that the Chinese could work on um what's your takeaway oh that that was very well said um so I think one of the uh I like to draw parallels and analogies and like how I think about many things um this reminds me of and I'm definitely an answer question like give you some trying examples but I took one class right it was on like the ethics of like International politics or something and um we had one like two and a half hour section and it was about where do you draw the line on treating someone the way you'd like to be treated um and it gets I mean it very quickly

goes like this classic debate of like you're in the hospital you can easily save this kid but the parents don't want you to kind of thing um and what do you do as a doctor so I had that experience that was the first time in a classroom setting I think after I'd already lived in China for the first time where I realized like some things uh people just have personal preferences and it doesn't matter if you think something's right or wrong like at a certain level you have to let someone else make that decision for themselves and so fast forward to you know maybe it's a Thursday or Friday morning 3 A.M getting street food with some Chinese University students and they're like we love you know like you know our country's leaders

like you know 10 000 years of prosperity let's let's freaking go um and then the back of my mind I'm like wait a minute the trade-offs that you're paying for like this are exorbitant to say yeah or vast um said another way uh from in the environmental perspective um also any number of other issues uh on the other side of the country um or throughout the country um and I realized through many conversations and and keep in mind some of these people don't they almost none of them have perfect information like they have very limited access to um certain

massacres or parts of wars or like you know certain data from Wars um so these people are operating on like somewhat limited information which should be taken to effect but even with information that they don't know about like the environment right if you if you were to make an argument with let's say Chinese college students I studied abroad two of the best universities in China um and you're like well do you mind like the short-term sort of drawbacks of having such a centralized or authoritarian like government and most of them are going to say or most to all of them are going to say like this is like if we had to choose one or the other like we definitely choose this way

um now part of that is because it's the only way they know part of that is because they don't have perfect information but part of that is also cultural and that's the part where I want to dial into where it's like um people are allowed to have preferences and we are allowed to not have like the final say on like this is the most morally correct or like this is the most efficient you know way of doing something and then I'll say one more thing um which to your other point which is like the drawbacks and like how I've used this to sort of inform my the way of My Life um I think like when I when I personally think about politics like I TR I remove almost all emotion I mean like I will try and make like an Ethics call try and

make like a practical call um I I like to mix both whereas um I think in China they don't need to do that you know to them it's just like we have a centralized actor who's going to make the best decision for us um and so there's definitely like a middle ground of like just leaving it up to the forces that be as well as like having your own voice um but I think key for me personally is is just like not becoming too attached to like one thing or the other just because of like how other people seem to feel about it um so trying to make it like more efficient like slightly less emotional I really think that there is if not like broken about the way Americans see their

place in the world there's something like super just like introspective and and self focused and that like we have trouble like understanding the way that other people do stuff because like our assumption is the way we do things is like morally correct and I think that um like there there's a group of Americans that like for one reason or another like have been kind of shattered out of like the American you know conversation or milieu or whatever and I think um you know like you just described in like the six different ways that you were pulled out of that um like for me it's like pretty clean it's I started dating this girl who like is Russian um I was born there and like her family

still lives there and then like not only does that just give me like my International flavor but like the last year has just like giving me a lesson in the real way the world works and so like when I'm sitting here listening to you talk about like these like really just like nuanced difficult conversations with Chinese students I can't help but think about um I just listened to a podcast with a Chinese expert came on and basically described like what was going on in China and what was going on in the U.S as mirror images of each other exact mirror images and like the the image that's being mirrored is like both societies are dealing with just like the uncontrolled Rampage of capitalism because like capitalism is a

good like that is how we develop that's how technology comes up like that's how we distribute technology it's like it is a good thing but like by its very nature it like creates massive inequality it like exploits like the most vulnerable like it does some like pretty awful stuff and it like tears apart societies and so when within that frame if you look at what's going on you can see like okay like the American character is about like freedom and like standing up for yourself and like fighting for the sake of fighting and just like like I you know it's like very European and like the biggest sword and with the strongest hand wins and and

like China it's they're dealing with the same problems but it's like much less about like might is right and much more about like the system needs to survive and like I you know they where does morality fit into that I don't know yeah I don't know if it fits in or to what extent it fits in in the air in the near term at all um but yeah I mean if there's one thing that is constant it is an iron grip on the ccp's uh you know like control over the country that is the one constant um and I think uh most largely the Chinese people are like totally down for that and um what I was trying to like my takeaway what I was trying to you know

uh summarize was like that doesn't have to be like a right or wrong thing now there are things that are objectively wrong that happen in China um but when it comes to like exactly exactly now we're not not here to like debate which is worse uh which which country has like worse things happen inside of it um but there are two systems and if almost all the people agree like this is the system we want yes they don't have perfect information but like it's uh it's tough to argue with that if like they don't want to change right uh so how do you see like crypto interacting like but with with China specifically with the US specifically

and then like as these two Powers become like more aggressive and more hostile to each other like do you see crypto playing like a big role in that or do you see um this just kind of being like a different part of the story of humanity yes um you remind me of a conference I went to a while back there's a student-led conference at Duke and UNC every year called the China Leadership Summit I went three times and one time I can't remember his name off top of my head so I'm a bad student now but uh he like created neoliberalism he also like did a lot of research on like this one principle that I forget the name of but effectively says like as a superpower Rises like are they death bound to go to war with the other superpower

um and it's like I think the one year conference was kind of like about like is that going to happen with the US like in like a military way or like can we avoid that this time around with uh globalization neoliberalism however you think about that um because the opportunity the opportunity costs are like the um uh you know like the sacrifices like from like an economic perspective you'd have to make to like attack another country today is higher than it has ever been um and so with that in mind um like so that is one of the things that I think about just terms of like framing competition I think of it more at like an economic level than a

military level because I think like the cost to you know really like go head-to-head with another country just extremely high I don't know if it's I don't even know if it's possible at this point for the US to ever go to war with China I mean knock on wood right uh because we're so intertwined these days so how does crypto like play a role in that um this opens up like years of like questions um one of the things I thought was super interesting um some I think some block Works guy sorry I don't remember your name but I read an email and it was the first time it's a couple weeks ago I was like wait a minute the usdc or like stable coins are amazing for the US dollar like um very rarely like I'll read an article

I'm like wait a minute I didn't even think of that this was one of those moments where like um there's also like that great I think Arthur Hayes recently where like this guy thought through like 10 steps ahead for us like those are the articles that are like yeah the cherry blossom one I'm like so amazing work so good um so every once in a while like there is something that comes up and I'm like I didn't even think about that so when I read this blockworks guy I think it's block works and he was like look if the usdc usdt are like the more widely that is used like that is great for the value of the US dollar now again like the US you know like as the currency goes up it makes exports more

expensive for other countries right there's like but on the whole like great for the US dollar and I love this little newsletter because it also gave like the downsides to that um but I think crypto you know I think the first country to realize that crypto can be used in positive ways to unlock value for businesses like the thing that doesn't I mean it doesn't drive me crazy yet because I am an optimist and I do think the free market and like private interest will eventually make its way through Congress and they will see that crypto unlocks value for businesses um and we can talk about ways that that that's possible I mean the AmEx thing right this and it's got not great for

AMEX unless Amex creates the platform that crypto goes through right so like there are like these really interesting lines of thought where the you know crypto unlocks value by making the market more efficient for consumers for retail businesses and the first country that starts seeing things like that that's not like the end-all be all of crypto but the first one that sort of uh uh is either more friendly to or quote unquote just gets it right um I think not only one is it going to be great for uh for uh you know unlocking value in the economy in like a high level way um but also I like the idea of like stable coins and like just making you

know proliferating like these like countries currencies like throughout like global trade or online trade now it remains to be seen though like how in this in my mind like when I think about crypto at like a very macro level and like how does crypto work in the world long term I try not to think like too too far ahead and in some like cases like will we get rid of I'll give you one example like does crypto get rid of governments no yeah um so like you have to so but does crypto get rid of like visa and MasterCard if you if you just if you put a pin in that and you think about like the possibilities like well how do we get

there how do we not get there those are the kind of like scenarios that it like I'll Think through in my head um and like where along the way are there businesses that like I can find and invest in that like lead to certain parts of that and like what which of those businesses like have the greatest Tecmo where they create the most value um those are like some of like the analogies and things that I think through going back to original question like um it remains to be seen but I think a lot of it is going to have to do with some level of like official stance um in terms of like how do we use crypto most beneficially to like forward our financial services sector which is the US's Crown Jewel of the attack and entertainment but also like Financial

Services we have a huge Monopoly over um out of New York City um so yeah like which country is going to like Let It flourish in in those ways you're saying like a couple super interesting things but like for me the most interesting thing is that like the second you start talking about any of this stuff in terms of like geopolitics you've like a little bit lost the plot and like we're we're just so primed to like talk about this technology like what's important here is like monetary Theory and um like all these like super esoteric Arcane things that like literally only exists because the federal government created them and so by saying like we're

coming for them it's like super a problem but what we're actually really building here is technology and like technology is like agnostic and it just provides like capabilities and features and like that can I mean the the most like schizophrenic thing that this industry does is complain about a cbdc because like can you imagine anything more bullish for like using this technology to actually like run business than a real government putting their real currency in the to the technology like whether or not it's on a permission chain or whatever right like that that's good and and somehow like

the only way that we're able to process this kind of like potential future is like oh if the cbdc comes like ethereum is dead and um yeah I mean I think maybe the answer to this like question about like China and ethereum and the United States is like I don't know policies makers are going to policy make but like the reality is is this is gonna enable like better businesses and like if we know nothing about the world we do know that like competition is what rules everything yep yeah unlike the cbdc note like I on the one hand I think like why people gag at the thought of it and like depending on which side of bed I wake up I will be in or out of like this pocket

um I think it comes down to like who has the information of like who owns what cbdc um like right now people are fine that like your wallet address says that you have this much usdc as soon as you change that usdc to like you know the US dollar Like official US Government dollar coin um how much of that actually changes um I think like At first thought like oh now they know who I am now they don't know who I am um I think it just I think it obviously it all goes back to implementation like um and like if you're getting changed back from McDonald's and it's in like the official US dollar token I don't know if that means that you know maybe

it does mean they know exactly like who you are and how much money you have that to me is like not ideal but if there is like an official US Government token and they don't need to know like who has how much at any given time um I don't know if like that's bad at all but it's totally a matter of implementation versus like a knee-jerk reaction of like should this exist or not no well I think you just said it best ever which is like you really need to think about what the difference between a cbdc in the future is versus like literally usdc which we have today and like maybe the difference isn't quite as big as like Twitter thinks it is um yep it totally depends totally depends on how they want to do it two

issues it Etc I mean what if you have what if circle now issues the official US dollar token of the government you know or or Banks do I mean there's too many unknowns for me to like get emotional about it that that's another like macro how does will how does will Patterson act on a daily basis if there are too many unknowns I'm not going to get emotional about it like because I don't know and I like could not be paid to me oh maybe I could be paid I cannot be bothered to like care enough about something if I am not an expert or like have all the have all the parameters filled you know to make a decision man well that uh you're a better adult than I am so that is something that only only on a good day yeah

cool Matt well I want to talk to you about China forever but like let's move this conversation along um one of the things I really wanted to talk to you about in this hour is like Avalanche um specifically like Avalanche and that's because like your background and like you um for those of you that were paying attention earlier like will actually worked at avalabs and since then like you're still investing in a lot of like Avalanche adjacent projects correct me if I'm wrong um some of them yeah yeah and so my from where I sit like I would never like proactively describe myself as an ethereum maxi but I think that that's like probably Fair um and so when I look at Avalanche like

what I see is um like it is the same like kind of narrative that we all understood for during the last bowl cycle right which is we see ethereum we see that it works we see that it's cool we see that it's super super slow so let's build a faster one um I would love will for you to tell me like what am what do I not understand about Avalanche like what am I wrong about and like why do you still like get excited every day about like what's going on over in that ecosystem thank you for this platform to describe Avalanche um because and I say that not because like I partially because like it's all related I invest I've invested in a

couple of um projects that are integrated with Avalanche like multi-changes Avalanche or Avalanche native um the reason like Avalanche um which is not commonly understood by VCS or generally the market is that um there is like pure blockchain distributed Systems Innovation happening natively on Avalanche um one of the things I mean I'll I'll be frankly I got very lucky in that I got this job at Ava Labs um I interviewed like one other sort of ecosystem fund and um knowing what I know now about like how blockchains work um how does transaction contention work how do consensus models work um not all blockchains are created equal

and I have these recurring conversations with Founders or with investors or like job candidates about like uh which chains are you active on what do you understand about consensus models like how do you you know uh in they'll speak often in terms of user experience instead of like the underlying technology so I used Solano a lot when I first started using crypto because to me I understood user experience to equal blockchain Tech I would submit a transaction at the time it felt instant I've used Salon a few weeks ago and I actually could tell now knowing what I know now like there's like 30 to 50 second like true finality um and at the time you know if a transaction failed every once in a while or like half the time when um grape or

radium it was like exploding with like nft Bots I totally discounted that was totally fine because I'm paying a 10 000 of a cent for a transaction and knowing what I know now they're like core um not you know in you know all the power to Solana you know assuming they'll like fix a lot of these like fee Market issues ETC um but I would rather work on a chain you know when I know now that as none of these issues like if the bar is already set with like a chain that like like has solved for very fast finality zero chain reorgs no transaction contention um that's what I'm interested in I'm less focused on gas fees for the sake of

gas fees so taking a half step back again back to one of your points I like Avalanche because they invented something totally new I think for the original white paper is from 2018 or 2019. um what it is effectively is it's just a new way to finalize transactions at its core Avalanche is it's a consensus layer now they have a public EDM um I feel like those of us that are in the know throw around this word like finalizing transactions like people should know what it means and just in case like real quick um like what finalization means for a blockchain is like you cannot undo a finalized block without like massive massive economic damage and then that economic damage is depending on you know

how proof of stake is set up like how the actual system is but what will is talking about here is like blockchain is so cool because like you know you can do a financial transaction and no one can like mess with that or undo it or whatever um Solana the what like kind of the trade-off they made is like we're okay with sometimes like not really having finality because we just think that what people care about is like speed and cost and what will is saying is like if all you care about is speeding cost like you probably don't necessarily care about blockchain blockchain technology and you might just like be more interested in

doing Financial transactions on something like AWS is that fair uh yeah that's pretty fair yep okay cool all right so sorry I didn't mean to cut you off but for sure no thank you thank you so Avalanche invented and there there was a there's a white paper that came out these are new mathematical proofs that say we have a new way of finalizing transactions in a faster way than tendermint you know and one of the Avalanche co-founders like co-created tendermen I mean like his Twitter username is tender manante so tendermint I know is used across Cosmos and some other chains that I couldn't even name off top of my head um that fastest Peak Peak Performance again relatively centralized there's a

hard cap on network participants from a validator block producer perspective Avalanche consensus or you know snowman plus plus you know whatever's in avalanche white paper solved for we can finalize transactions even faster so there's a subnet you can go to like Ava scan to third party um you know indexing website some of these Avalanche change these subnets they're finalizing transactions and roughly a third one third of a second and the number of network participants also scales you know as high as you would ever need it to go um so what that means in Practical terms is when you said it extremely well what is what makes

blockchain interesting is censorship resistance that's like the only reason this is interesting this technology created a censorship resistant decentralized Ledger and that's I mean you might have to like sit down like drink some tea and think about that but that's like the core of what blockchain is um that's why it's interesting so what Avalanche did was they said all right we could increase vastly the number of people maintaining that Network or securing that Network for the first time since Bitcoin and proof of work like ethereum but it's still kind of a theory today but uh at the trade-off finality um so they took Nakamoto consensus like the property of like you know near infinite Network participants but they

took the best part of like tender mint improved it even in terms of how they finalize transactions and you can talk about that um but that solves for like a better user experience at the end of the day um and so they released now I'll take a breath in just a second Rex but um so the Avalanche ebm chain that people know as like the just like other evm chain that is a public evm network but Avalanche at its core is a faster way to finalize transactions and launch new chains on top of that so it's really just like a consensus layer and they have tooling that they released early last year for creating your own new networks so what I think we're going to

see is like the narrative and the power behind the cosmos brand I think will come to Avalanche once there are a few proof of Concepts where people are launching like these open networks within Avalanche zones or subnets if you call it a Zone I think it becomes more sexy somehow but within like these Avalanche subnets you can launch multiple chains which cannot be done anywhere else as far as I'm aware same validator set multiple chains custom gas rules you can use the same gas token if you want custom VMS and recently what they announced The Interchange communication standard so there's a lot of native Innovation happening behind distributed systems and I know the people that work there these are like very professional people which does mean something by the way and so I

don't mind being a couple steps ahead as long as I'm not like 30 steps ahead of the market I don't mind being a couple steps ahead so that's why I really like spending time here so I again uh just for the sake of conversation I'll just say ethereum Maxi right and like what when I think of Cosmos today what I think of is like take all of like the energy and the excitement about innovation of ethereum and like give it a space to like grow and breathe away from like the like the pristine like it cannot break blockchain um and then you know like out of the out of the cosmos worlds like we've seen some like super interesting stuff like actually genuinely interesting we've

seen some like super horrible stuff like um Tara and you know like everything in between right and so like that's just how I've like understood Cosmos it's like basically like the the skunk works for blockchain um and so I think what you're telling me is that like if that's how I think of Cosmos what I should think of um Avalanche is like the exact same space but like with like true Innovation and like things happening actually at the consensus layer as opposed to tenderment which is about like kind of ossifying a consensus engine and then like building at the application layer

is that fair that is that's pretty fair that's pretty fair yeah yeah and again like come on tender mid is not trying to like ossify and like Avalanche obviously cares about building applications on top of the um the blockchain but um yes yeah okay that's that's super cool and so can you talk to me a little bit about like um I guess they're called zones now I always knew them as subnets but like how does that they are something that work I was just yeah for sake of conversation like if it's sexy or call it a Zone but it's called a subnet and yeah I'll go into that yeah yeah so but okay so how does this work like I know a huge part of it from before this conversation is about like the shared validator set but that you can have your own token

um and I remember the first time I learned about this was that crab game uh so can you just like for those of us outside of the Avalanche World um and in like kind of the ethereum frame like can you describe like what is a subnet and how does that work and how does it interact with like the main Avalanche it stands for sub Network invalidators which is like about as good of the name as like you can get because unlike a Zone which is just like a chain right a subnet could be multiple chains I mean each chain could have its own virtual machine each chain you know could have custom like you know maybe it's totally permissionless maybe it's permission there's one team I'm working with on something around this and you can also secure so you secure

all these chains with one validator set today like the crebata subnet the dfk chain um and there's like a couple other like play to earned games we've launched their own subnet there's a couple more coming trapnel is one that's like totally public there are institutional D5 chains coming that are permissioned kyc chain kyc. at the chain level which is another conversation like why Avalanche for Enterprise is what Enterprises think about crypto or you know financial institutions think about crypto um in avalanche all validators have to stake avax now within subnets like on the one hand that does create some level of upfront costs for people that want to launch

their own chain um you know on the other hand it's a huge feature and the reason I say that is with Avalanche warp messaging which is their interchange communication standard the way it works is because everyone lives on like the one validator chain as well they can effectively check you know does this wallet have assets somewhere else and like communicate that properly like should we allow their assets on this other chain to communicate with this other chain all within the Avalanche ecosystem um so it's a feature not a bug first of all that you have to stick avax uh on top of what is optional which is also staking the native subnet token

um so on day one you have access to a world of validators there's something like 1200 validators in the bull market I think it's closer to 1600 in any case that's a very large number for people that are actually like helping create blocks um and in theory like people are going to be building subnet validator marketplaces and so like if you wanted to launch your own chain on day one you can access decentralization in theory right in theory there will be a market for people who want to have these new native subnet talk or subnet tokens like emitting just by validating those networks so you can access decentralization on day one you're also solving the cold start problem of access

to users and liquidity on other chains um and so there's a lot of security benefits that you get by having all validators on one chain as well as you know whenever they want to validate subnets as well what are the types of like applications and use cases that you think are like the perfect fit for whether it's like straight up Avalanche C chain or if it's like a subnet or or whatever just what what are the types of things that are best for the Avalanche ecosystem and what are the types of things that you think like you know what like that actually just belongs on like ethereum or some sort of like chain that makes different types of trade-offs that's a that's a good question and I think like in the near term near to midterm shall we say um and I'll call Avalanche C chain being the Avalanche

public evm chain for those who the C chain it's kind of a confusing name but the contract in a smart contract chain the evm chain all the same thing all the same thing um I think in like a run rate sort of scenario um if the evm is popular forever um which is something that I sometimes think about um it'll be very popular for the foreseeable future for sure so like in the current run rate crypto uh you know hypothesis the C chain could become just like a D5 Hub um the current life cycle of like dapps on avalanches and crebata is like the main case that like saw this happen because we're very

early in like the need for app chains because crypto side note crypto's still a small industry and still quite small so krabana what happened was they had huge adoption you know maybe tens of thousands of daily active players and the Sea chain gas fees get more expensive it's like a you know one of the ways I describe it's a defense mechanism of the chain and um some people hated it you know obviously it's making their transactions more expensive um in a weird you know uh how do you call like mental gymnastics way it also gives like a certain level of value to like the crebata token because you're like spending more money like create it um but they offloaded everything to their own chain to lower gas fees

um and there were there are issues with like Plato and tokenomics that have kind of like sent it and do a little bit of a downward spiral um but this is a case where an app had a bunch of users they wanted to improve the user experience by lowering gas fees and they can do that if they want to launch a permission chain right if you want to have like a limited number of validators and if certain things are permission then you can almost I mean you can set custom gaskets if you want um so over time you're going to see apps that the same case with it parallel to ethereum mainnet gets expensive how do you make that less expensive you need to batch transactions well how do you batch transactions um so it's the same idea in this case of solving for gas fees which is fine I

mean because economics are very important so that's like totally fine the reason like Avalanche is because subnets are decentralized or can be decentralized um whereas today sequencers Roll-Ups they live correct me if I'm wrong right because they live on one computer right like they live on a sequencer and so that's why in the medium to long term I love the vision of more networks of more chains until someone can convince me that sequencers and Roll-Ups do solve for this not sit they won't exist in a run right scenario but I think more people will be comfortable with the like security assumptions of subnets overalls over time

currently that's my belief yeah no I mean I think I do think that that's correct and um I can't remember if I had this in my pitch when I first met you but um like one of the things I like love to say is that like cryptography right was like invented in World War II to like in World War one and World War II to like encrypt messages so that the enemy couldn't read like what was your battle plans were right and then for 70 80 years like we made encryption better and better and better and like that's what cryptography was and then in 2008 Satoshi came along and like showed us that like here is an application for cryptography that is like totally unrelated to like

encryption privacy like any of that stuff this is like totally new and it uses the same science and um like again that was part of my pitch because like what I would say is like just you think there's only two like uses for cryptography like of course there's like infinite and it's our job to like figure out what those other use cases are but like the reason I bring this up is because like until you're like deep deep into blockchain and into crypto like it's hard to understand what the what we're doing and what the point of any of this is and like put it very simple if you like right ethereum Bitcoin is the first and all it is is this like shared computer that um can like send and

receive coins right and ethereum after that is this shared computer that can do um arbitrarily large amount of things right like we it's called Turing complete that's not important the point is it's like a general purpose computer but the cool thing is it's shared yes and then so like now we're building all these things and um like everyone enters the crypto conversation at the layer above that the application layer whether they're talking about like D5 or nfts or like the thing that goes on top of the shared computer but I think will what you're saying about like the potential of avalanche is that someone needs to stick take a step back and say like there has to be different

and possibly better ways to build shared computers and like yes today the only application is the evm or this like shared State machine or like whatever crypto is today but just like cryptography is not just for this one thing like it's up to us to figure out and like enact what all the use cases are like distributed computing is not just for defy or for sending tokens or like whatever whatever we're doing right now and so yep um it sounds like what the thesis of avalanche is is like consensus which is like the process which makes shared Computing possible like we don't believe that it's done yet

and like we can make it better and whether that's making evm better great but like there's so much more out there than that exactly so I think even self-proclaimed the the company Ava labs they want to help create the internet of blockchains that's their thing maybe that's a cosmos I don't know who said it first but I know that they've said it um because uh it is you know like they have the proof of concept they have the EV the C chain um but what's coming we may not even know I'll give you one brief example it's a company various Capital invested in uh one of my first Investments here if not the first this year in a company called blocks tell

um it's yeah I won't tell you everything that they do because they have a website they have a public white paper now as of a few weeks ago but it was an Enterprise use case I could have never thought of because these are people that came natively from the Telecommunications industry these are guys who have been you know they have 19 plus 20 plus years of work experience in Telecom either as a chip designer as a software as a software engineer as a product manager as a network engineer at you know these uh the chip manufacturers the large telecom companies and they said wait a minute blockchain can actually be used to solve some of the like scaling latency security issues with Telecom networks that I had to understand over the course of your children's process

but effectively moving away from the current system that says all right ATT said that my SIM card is good to go I can access internet now and how much of that can we put in a public key on a chain and then encrypt just within the device so that now I don't have to go directly through a centralized entity that says all right this person can roam across these networks wherever you are and so they're creating well the it's it's kind of a two-part solution one is decentralizing the Sim so putting a public key on a chain putting the rest of your private subscriber information on a chip in your phone or on you know encrypted software within your phone and then the second is the blockchain enabled you know layer that allows people to seamlessly roam

between the att's the Verizon's as well as I'm going to call them the helium 2.0 because I don't think it's gonna be healing 1.0 so they're creating the layer that allows iot devices it can be a phone it can be a it can be a Tesla to seamlessly roam across all types of networks as well as the Sim that makes that work so the Sim as well as the system that communicates with that Sim um and um that I would have never thought of I just simply am not capable of coming up with that so we're gonna see more of those again could go all day on Avalanche as well but um let's let's pivot as we've discussed kind of offline like I really

don't want to do a boring just like who are you what do you do tell me about varus but um that being said like what what are the most important things to know about Vera is like what do you think is like special about what you're doing yeah in no specific word I guess like headquartered in Thailand by the way it's like we have a pretty diverse range of backgrounds like we are founded by an american guy a New York guy with a background in law real estate private Equity I have a background in finance I hired a guy under me oh I know from Finance um but we're also like a very international team like we have like Thai natives we have you know people from all over Europe on like the Quant side as well as like on like our back end like Dev side um in like middle

office um we just hired like a Quant researcher out of Australia um so we have a great mix of personalities perspectives which going back I forget if I harp on this or not but like when I think about out how I operate as will Patterson more data is helpful for me to like make my life decisions so like if you're 16 and you're thinking about applying to colleges like tour as many as possible get more data points right and then when it comes to making investment decisions or like anything along those lines more perspectives are helpful so I'd say various Capital we're Global in nature we have people you know a handful of different countries and we're headquartered in Southeast Asia huge for

crypto adoption of course we have a Quant desk which I kind of alluded to um people would I mean just like All-Star backgrounds in like tradify hedge fund trading um Quant development Quant trading so we can Market make for our projects um we also um I mean like myself I worked in L1 right so one of the things I like to tell people is like you know I worked there I have great things to say about them but I can also help you think about all the chains the people there the culture there General chain deployment strategy which infrastructure pieces do you need you know to like launch your project there how to think about um uh every step of that process the

level of support you can get from different chains and then the person right under me is kind of a Rex he's like an super eat native guy the Milady pfp type type beat um you know so like we have a great mix not you but like uh Bijan under me so like we have a great mix of like perspectives that we bring to the table every time um and I will you know we always will put the founders interests first um that's another thing like reputation is everything Adventure it's a relationships business um you know in a world where like the money is commoditized like it's relationship you know and like perspective based um and so like I will always try and be as objective as possible when working with with Founders so I think all that combined makes us like pretty

differentiated yeah yeah awesome and I um I don't think like it's really good use of anyone's time to like go through the like what makes you special and What Makes You Different and So like um I will do that on your behalf just briefly I think that like oh sure well like you said it actually perfectly which is like we live in an era where like money is commoditized and like if you have a good idea like you will get money for it um and like especially like as a Founder if you set up all the pieces that need to be set up like I don't really care what people are talking about how the industry is and all the money's gone or whatever like that the money is commoditized like it's there for the people like who need to

get it like the only question becomes is like what I guess like especially with the bigger firms you can say like what services do they have and like can they like give you developers or all this kind of stuff or whatever but like really really what it comes down to is like this is an industry of like Hustlers and like people that like need that so badly want to help you succeed because they know that if they help you you will help them like down the road and like what what I'm looking for in a VC like when when I'm in that stage of my career is like I want like somebody who like knows who I need to talk to and like more than

that like knows how to like get on their calendar and like make that person excited about talking to me and so like what I will say about like various but like I don't you know specifically about will is like will is that guy who like somehow knows every single person and somehow when will sets up a meeting like that person has already decided that they want in and so you know like that that is what I think like you're good at and like I'm really happy that you took that to like various and like a real firm that um like where you can put that into action but um anyway for all those wondering at home if they should give will a call for their idea yes well with that um I won't take up any more of your time I really appreciate just um just everything man

like that your personal story The insights about like China um or like I learned about Avalanche and just um man every time I talk to you I get smarter so thank you so much I really appreciate the time the the High Praise man I don't know if it's warranted but I appreciate your time too man all right thank you so much have a good one