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Doubling Down on Next Generation Blockchains in a Post-FTX Bear Market

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Summary

Frictionless Capital reaffirms its belief in next generation blockchains and argues that these chains have the potential to onboard billions of users with features such as scalability, abundant blockspace, local fee markets, and preservation of composability. The FTX implosion has caused a lot of losses and has caused investors to be more cautious. Despite this, Frictionless Capital still believes that next generation blockchains have the ability to create applications with a potentially global reach and impact. They also advocate for a research driven approach to investing in order to make apples-to-apples comparisons on chain features.

Q&As

What competitive advantage does Frictionless Capital have in the technology space?
Frictionless Capital has a research-driven thesis which allows them to cut through the noise and analyze tech from first principles.

What features and properties of next generation blockchains uniquely enable mass adoption?
Next generation blockchains have scalability, abundant blockspace, local fee markets, and preservation of composability which enable mass adoption.

How does the FTX implosion affect Frictionless Capital?
Frictionless Capital did not incur any losses during the FTX implosion as they did not custody any assets on FTX, nor did they have any exposure to FTT.

What are the design choices and optimizations that enable a new paradigm of performance and user experience?
Next generation blockchains are built from the ground up with different design choices and optimizations that enable higher throughput, low gas fees, and better user experience.

Why is it important to possess in-depth knowledge of the technical nuances of blockchain to avoid misallocating investments?
It is important to possess in-depth knowledge of the technical nuances of blockchain to avoid misallocating investments because early or second iterations of tech are not always the long-term winners and sweeping narratives and disinformation about emergent technologies can create a generational investment opportunity.

AI Comments

👍 Great article that provides a comprehensive overview of the Frictionless Capital thesis on next generation blockchains. The article is well-researched and provides a detailed breakdown of the features and properties that enable mass adoption and product/application innovation.

👎 The article fails to provide any concrete examples of how the Frictionless Capital thesis has been implemented in past projects and how it can be applied in the future. It also fails to address the potential risks of investing in next generation blockchains.

AI Discussion

Me: It's about Frictionless Capital's bet on next-generation blockchains in a post-FTX bear market. They talk about the features and properties of next generation chains that can uniquely enable mass adoption and a new paradigm of product/application innovation.

Friend: That's interesting. What implications does the article have?

Me: The article highlights the importance of investing on the right chains to ensure maximum growth and adoption of products and applications. It also emphasizes the need for investors to be knowledgeable in the technical nuances of blockchain to avoid misallocating resources. Additionally, the article suggests that it is not enough to just be early in the space, but also to be right about the tech.

Action items

Follow Frictionless Capital on Twitter (@_Frictionless_) to stay up to date on their research and insights.
Subscribe to Frictionless Capital's newsletter to receive new posts and support their work.
Conduct your own research and analysis on next generation blockchains to gain a better understanding of their features and properties.

Technical terms

Frictionless Capital: A venture capital firm that specializes in investing in blockchain technology.
FTX: A cryptocurrency exchange platform.
UST: A stablecoin issued by the US Treasury.
Opsec: Operational security.
Next Generation Blockchains: Blockchains that are designed to be more efficient and scalable than legacy blockchains.
TPS: Transactions per second.
L1: The base layer of a blockchain.
L2: A layer built on top of the base layer of a blockchain.
NFT: Non-fungible token.
DeFi: Decentralized finance.
Web2: The current internet, as opposed to Web3, which is the decentralized internet.