Explain Framework Ventures' investment map in detail: Investors on the edge of DeFi
Original title: "Uncovering The Framework Ventures behind the DeFi Craze: The 'Immersive' Enabler of DeFi's Great Leap Forward"
Source: Chain smell
Cryptocurrency venture capital firm NBSP; founded only in 2019; Framework Ventures (Framework) hasn't been on the market for a long time, but it's worth everyone's serious attention. In the current hot & NBSP; NBSP; NBSP; NBSP; NBSP; NBSP; DeFi Decentralized Finance (Decentralized Finance) in the wave of investment, the company assumes the name "NBSP; native venture capital & NBSP; in the Decentralized field". And the proud neo-cons may be the biggest gainers and the most important behind-the-scenes players. & have spent & have spent
If you don't believe me, here are some facts:
According to a report by Block chain media Decrypt, Framework is a platform for publishing synthetic assets & NBSP; Synthetix SNX & NBSP; the native token; The largest holder & NBSP; It could also be a decentralized prophesy machine provider; Chainlink The largest holder of a LINK of native tokens (if you don't count the Chainlink team's own holdings) -- Synthetix and NBSP;ChainLink is one of the hottest and most spectacular risers in the current DeFi boom: NBSP; NBSP; NBSP; ; The Framework has always been behind the envious DeFi project, with its recent investment in a decentralized trading platform, NBSP; Futureswap Led a decentralized lending project & NBSP; Teller And bought a decentralized lending project on the cusp. Aave The scrip.
For all of the projects in which the Framework has invested, the Framework & NBSP; Active involvement & NBSP; And to influence the direction of the projects, in particular to assist them in the design of a fascinating new model of token economy - Mining in liquidity & NBSP; Having exploded the DeFi ecosystem, that is the skill the investment house has been paying close attention to in the current DeFi boom. Framework promotes cross-chain stability currency project & NBSP; KAVA Improvement of governance and economic models; In addition, the information obtained by the chain news shows that with the assistance and guidance of the Framework, the popular loan project Aave is also redesigning the token economy model, which will be introduced into NBSP; Flow mining & NBSP; And & have spent Staking reward & have spent And so on new incentives.
The Framework's two founders repeatedly said, NBSP; Blockchain technology & NBSP; And & have spent Decentralized Network & NBSP; Represents the next major paradigm of computing technology, they saw, chain block industry and the traditional way of the Internet industry to create and capture value have a fundamentally different, encryption asset is "is different from the past, the existence of the unique for all asset types, therefore the existing assets assessment model is not suitable for encryption, and encrypted world needs & have spent new investment ideas and service framework & have spent" .
Therefore, they appear as a new leader in the blockchain venture circle. They are breaking the traditional investment service model and trying to build a new investment service framework belonging to the encryption field. Within this framework, they redefined the role of encrypted venture capital: not as a bystander, but as a cake; Builders & have spent Is the whole open blockchain network & NBSP; Immersive participant & NBSP; .
So what kind of innovation does this upstart venture capital firm bring to the encrypted world? Investment philosophy and Investment service Framework & NBSP; , what has been established so far & NBSP; Investment portfolio & NBSP; , and how to "immerse" in the service of these blockchain start-ups?
Who is the Framework: both an investment company and a development company
According to the Framework itself, this is a company founded in NBSP; July 2019 & NBSP; Open Crypto Networks, a venture capital fund with a team of technical experts, researchers and investors dedicated to investing in open Crypto Networks and helping build their products and services. The areas of greatest concern for the team include NBSP; Decentralized finance & NBSP; (DeFi), & NBSP; Web3.0 & have spent , scrip based on NBSP; Games & have spent And decentralized media.
The founders of the Framework were two: NBSP; Michael Anderson And & have spent Vance Spencer , both have rich experience in investment banking consulting, strategic management and product development.
Vance Spencer (left) and Michael Anderson (right), source: Forbes
Michael Anderson is a graduate of NBSP; Yale University & NBSP; Computer science major, who started as an investment bank analyst at Barclays Capital before working as a product manager at Two silicon Valley tech stars, Dropbox and Snapchat, has nearly five years of experience as an Internet product manager.
Vance Spencer is a graduate of THE U.S. & NBSP; industry; University of Southern California & NBSP; Economics and econometrics. Worked as a business management consultant for Monitor Deloitte for two years before heading corporate strategy for Netflix (NFLX), where he helped expand its business in Japan.
Before creating the Framework, Spencer and Anderson co-founded a company called NBSP; in 2018; Hashletes's game enterprise. The game company, which could trade NFL player CARDS based on blockchain, was backed by venture capital firm Khosla Ventures and eventually acquired by JDS Sports, a Sports company.
Of course, the founders' journey into the encrypted world has already begun. Spencer says the two have been investing in cryptography since 2013, so they have a wealth of experience and expertise in estimating, valuing and executing trades. They were involved in the Prediction machine project early on. Chainlink To raise money in token.
About a year ago Anderson and Spencer created the Framework, the initial startup fund about NBSP; $20 million & NBSP; .
The original idea, Anderson and Spencer argue, is that blockchain would be NBSP; just as the Internet democratizes content and information. Democratize values and trust & NBSP; As blockchain technology continues to mature, they believe they will see an explosion of innovative products and new business models in finance, markets, insurance, games, media and entertainment, hoping to capture investment opportunities in these areas.
Cryptography digital assets based on blockchain are unique and different from all previous capital asset classes, they argue, so traditional valuation models are not suitable for cryptography assets, and networks and companies in this emerging industry need it. New support and growth models, which is exactly what the Framework was created for and where the Framework comes in.
On the Framework's official website, the first thing you see is a striking slogan:
The global transition to decentralized technology requires a NBSP; A new framework & have spent (the Framework).
The Global Transition to Decentralized Technology Requires a New Framework.
In the early days of the Foundation, the founders of Anderson and Spencer wrote about the Framework as follows:
"The core of the Framework is a NBSP; technology company NBSP; through NBSP; establish products and services & NBSP; to support the open blockchain network. In order to achieve this goal, the Framework will combine its own investment strategy with technical experts and research teams, and gather multiple forces to jointly find, support and build the best blockchain network and companies."
This means that the Framework will be a NBSP; NBSP; NBSP; NBSP; in terms of investments and operations. The complex of investment companies and development companies & NBSP; A different existence from the existing investment and technology companies in the market.
A Preliminary Study on Investment Strategy: "Builder" rather than "Bystander"
Determined to move into encryption, Anderson and Spencer have certainly done a lot of thinking and analysis in this area. In their opinion, the blockchain industry and the Internet 1.0/2.0 industry & NBSP; While there are many similarities, there are also many fundamental differences. The two analyzed these differences in detail on the official website of The Framework, and the links and messages were arranged into the table as follows:
It is these nuances, they argue, that determine how the new industry creates value, who will capture it, and what is the best strategy for building or investing in it.
In an interview with Forbes in March, Anderson summed up what he thought was the "best investment strategy" for encryption:
The traditional & have spent Venture capitalists & NBSP; NBSP; Has been buying and holding these "encrypted" assets, NBSP; Technology companies & NBSP; Build applications or protocols on these open networks all the time, NBSP; Hedge fund & NBSP; NBSP; They've been taking these assets and trading them. In encryption, you need a combination of these three things to invest in and develop these protocols, and to really work with the core team and the ecosystem that's built around these networks.
In the process of investing in blockchain enterprises over the past year, Framework will not only buy a certain proportion of network tokens, but also participate in the initial network verification, token pledge, liquidity construction, community governance and so on of each blockchain network. Ecological construction Activities & NBSP; , and work with the community to develop relevant tools and services.
Different from the traditional investment model, The Framework integrates a variety of roles in this process. It not only buys tokens to inject capital as an investor, but also takes the lead in becoming the most active part of the blockchain network it invests in. Maintainer and user & NBSP; , immersive experience of the network's services, while helping to build eco-applications and tools as a developer.
In other words, they're actually doing more to grow the network than just capital. And this investor is deeply involved in the ecosystem & NBSP; Interactive investment service Model & NBSP; , is a unique challenge for the investment block chain industry, but also a unique opportunity.
Framework's portfolio: DeFi preferred
According to public disclosures, the Framework had invested in the system as of press time; About 10 encryption projects & NBSP; , the vast majority of which are DeFi projects, which have been gaining market heat recently.
Framework Ventures has made some investments in cryptocurrency
Analysis of Framework's current investment portfolio reveals that, unlike the traditional Internet investment model, most of the investment in these cryptographic projects is in the form of the purchase of the project's native token. Most of them are DeFi fields & NBSP; The project.
According to the two founders of the Framework, they play a role as NBSP; Chainlink Angel investors participated in its token raising in 2017, becoming one of the largest holders of LINK tokens. Later in the portfolio, Framework continued to increase DeFi new projects, and invested in the synthesis asset issuance platform & NBSP; Synthetix Tureswap, decentralized exchange Futureswap, and decentralized credit Agreement Teller and Aave, etc.
In addition, the Framework also has a small amount of cross-chain ecology layout. Two popular cross-chain projects have been dabbled in ecology, such as Cosmos ecology's cross-chain DeFi mortgage lending platform & NBSP;; Kava Commonwealth Labs team developing The Boca Ecosystem PoS blockchain project Edgeware; Also obtained the investment of the Framework.
Framework Ventures partial Investment Summary
In numerous interviews and open conversations, the founders, Anderson and Spencer, have made no secret of their admiration for DeFi's prospects. Certainty and preference.
With a study of The blockchain ecosystem, they believe Web3.0 may need it, Anderson said in an interview with The Defiant In June. 5-10 years & have spent It would take 15 years to get a decentralized Twitter or a decentralized Facebook or something like that, but NBSP; Uniswap And & have spent Compound Such projects have proven to the market that DeFi can provide value now. He sees that in the vertical space of DeFi, innovators have challenged traditional financial services based on blockchain technology.
Of course, they are well aware of the challenges and dilemmas that DeFi faces in its current evolution.
At the moment, DeFi is a slow, inefficient way of dealing with finance, Anderson said in another media interview, but over time, DeFi is considered a recipe for success. Value curve & NBSP; Move up and in some ways replace traditional financial institutions such as Banks, among them, NBSP; Borrowing & have spent Will be the core theme.
However, he stresses that building a mature DeFi industry "would require a multi-player crew, including a NBSP; an underwriters; a NBSP; a credit infrastructure; a NBSP; a lending capacity; a hedge fund; a NBSP; and that would take time to happen". So far, identity, credit scores and all the credit data needed to get a loan from a bank have not been tied to the blockchain.
But they remain adamant that the sector is "about value transfer and doing it in a decentralized network. DeFi really has a chance to be the sector where the blockchain industry is NBSP; the fastest-growing sector in 2020."
According to Anderson, the future Framework will focus on investing in derivatives and loans, as well as NBSP; Stablecoins were also a focus, as they felt the Stablecoins project was well suited to be an infrastructure for building consumer applications.
How do you interact with your projects?
Perhaps the pure investment theory is not able to intuitively grasp the new investment logic brought by the Framework to the cryptography, we might as well use the investment service case of the Framework in the past year to understand how it has "deep interaction" with the invested blockchain projects.
After analyzing a number of cases, it is concluded that in the process of supporting blockchain projects in the portfolio of The Framework, the following modules are mainly involved in or most concerned about:
Buy tokens to invest
Mainly by injecting capital into the blockchain network in this way and facilitating the distribution of this token. The Framework will not only take part in primary investments early in the project's life, before the tokens are issued, but also boldly invest in token projects after the tokens have already been traded on the secondary market -- as they did last year with NBSP; Synthetix And this year's investments in KAVA and Aave.
Assist in the construction of a token economy model
The token economy model is something the founders of Anderson and Spencer have emphasized on several occasions. They believe that the biggest weakness in the current DeFi field is that many projects lack a sound token economy model and governance model. They argue that if decentralized finance (DeFi) wants to replace centralized finance, it must build a robust economic model of tokens and a pie that can replace centralized exchanges such as BitMEX and Binance or major lending platforms. Governance model & NBSP; .
We will promote greater online liquidity
Liquidity provision is critical to many DeFi projects, especially in the early stages of development. The Framework invests in tokens (used for mortgages or loans) to help build liquidity over each DeFi protocol network.
Community proposal and Network Governance
The new blockchain network often has many deficiencies. The Framework will propose improvement Suggestions for community proposals based on the problems found. Meanwhile, as the holder of token, it will participate in network governance through pledge of token and voting.
Work with communities to build eco-products and new functions
Finally, The Framework will use its own technical strength and the community cooperation of the blockchain project to build upper applications or new products and new functions to promote the growth of ecology.
A Case study
Let's look specifically at a few investment service cases of the Framework.
Case One: Synthetix, a synthetic asset platform
Synthetix is an Ethereal-based synthetic asset issuance platform that allows anyone to join the network and provide collateral to support the issuance of synthetic assets, such as gold, bitcoin and dollars, on Ethereum.
The Framework is one of the early backers of Synthetix. On October 29, 2019, Synthetix announced on its official blog that it had purchased the cake from the Synthetix Foundation; 5 million Synth (SNX) tokens supported Synthetix's development, becoming one of the few SNX "big holders" worth $3.8 million at the then-$0.76 per-coin price. And most of these tokens are set in NBSP; Up to 24 months & NBSP; Indicates that the Framework intends to invest in Synthetix for the long term.
Synthetix emphasizes that the Framework has been contributing to the Synthetix system by increasing the supply of SNX pledges throughout the system, while NBSP; Participation in Community Governance & NBSP; Process. In addition, the Framework team helps Synthetix set the long-term vision for the project, address short-term project issues, and facilitate Synthetix's connections with influential blockchain individuals and teams.
Mr Anderson, co-founder of the Framework, says he invested in Synthetix because its "& NBSP; infinite liquidity" model offers a huge advantage over its rivals.
Anderson said, "and have spent synthetic asset & have spent (Synthetix assets) is a kind of primitive financial instruments, it can realize the inclusive and outside the traditional financial market innovation, the next station is likely to represent the DeFi. Liquidity can be regarded as agreement Web3.0 network barometer of success, and Synthetix platform model is superior to the other synthetic asset. Superior liquidity, a wide range of asset authorization and good governance will make Synthetix success".
In November 2019, the Framework official website released the investment analysis report of Synthetix. In the report, the Framework says it wants to "make Synthetix a cake; a decentralized BitMEX ; a cake; and a cake. .
The Framework argues that native investments in cryptography cannot be bystanders, and that most vc firms are governed by existing limited partnership agreements (LP), large asset management scale (AUM), and traditional NBSP; The idea of equity investment is bound by NBSP; .
However, the investment style insisted by The Framework is that it can make token or equity venture investment, with the emphasis on active participation to promote the development of block chain network. For the Synthetix project, they have made the following investment commitments:
Put money into helping to build the SNX trading pair & NBSP; Liquidity & have spent ; Active pledge SNX helps to establish a mortgage pool; Write Synthetix Improvement proposal & NBSP; (SIPS) to facilitate the resolution of problems found in the network; Build related products based on Synthetix network; Most importantly, it will help Synthetix's core team.
On July 23, Synthetix announced on its official blog that Framework Ventures, ParaFi Capital, Three Arrows, IOSG, DTC Capital, Hashed and other venture Capital or institutional partners will become Synthetix's institutional partners and liquidity providers. The institutions together are now investing in the pie, Synthetix says. More than four million dollars & NBSP; .
In addition, the Framework's share of the Synthetix network has been growing over the past few months, according to Synthetix, while the Framework helped drive the launch of Snx.Tools and helped guide other community-based initiatives such as margin trading.
Case 2: Decentralizing the lending agreement Aave
The Aave Protocol is a decentralized lending Protocol based on Ethereum. On July 15, Aave announced on its official blog that it was raising $3 million from the sale of tokens by the venture capital firm NBSP; Framework And cryptocurrency hedge funds & NBSP; Three Arrows Capital Participating, the two institutions bought $3 million worth of Aave native notes Lend at $0.10 per scrip, which is worth its current value & NBSP; at current prices. More than $9 million & NBSP; .
In addition, Aave announced that both Framework and Three Arrows plan to work directly with Aave under the agreement to direct and participate in the process of its decentralization. Stani Kulechov, founder and CEO of Aave, said the involvement of the two venture firms will help expand the institutional use of the Aave agreement.
According to the Aave team, Framework and Three Arrows will be deeply involved in the ecology of the four modules of the Aave protocol:
New Token Economics
The first is to build a new scrip economy model, and both investors have given a lot of feedback to Aave's new scrip economy model, which LEND to NBSP; AAVE After the migration, the mechanisms such as pledge of scrip, liquidity supply reward and new intelligent contract are all considered in the new scrip economic model.
Note: Aave confirmed to Chain that a new scrip Aave would be launched and replace the current issued scrip LEND through scrip exchange. The economic model designed for the new scrip Aave will contain the mechanism of liquidity reward and scrip pledge reward.
Aave protocol governance
Both institutions will be actively involved in the governance of the Aave agreement, including the submission of Aave improvement proposals around the agreement, risks and specific market policies. (AIPs, Aave Improvement Proposals) and vote.
Market Access & AMP; The Depth)
Both investment institutions plan to transform their existing OTC borrow/Lend activities to help facilitate the growth of assets on the Aave platform, while also helping to increase liquidity and market depth to facilitate access by large institutional participants.
In addition, they plan to introduce NBSP; Credit commission & NBSP; Credit Delegation's new service allows Aave depositors to entrust their lines of Credit so that users can borrow without collateral, part of an innovative DeFi component that will expand Aave's impact on traditional financial markets.
An insurance fund & NBSP; (Insurance Fund)
The two investors will also participate in the pledge of Aave's insurance fund, which is also part of the new scrip economic model and provides a backup support mechanism in the event of any problems with the Aave agreement.
Case 3: Kava cross-chain DeFi mortgage lending platform
Kava is an app based on NBSP; Cosmos Cross-chain DeFi mortgage lending platform.
On April 22 of this year, the Framework announced that it had purchased 1 to 5 percent of its native scrip into The lottery; $750,000 investment & NBSP; . In the past, the Framework has made a number of recommendations to improve Kava's monetary policy, and Framework co-founder Anderson said he plans to provide ongoing technical support to the Kava team.
On March 17, The Framework posted details of its push to improve Kava's currency policy on its official blog.
The article points out that the Framework and Kava will work together to improve Kava's NBSP; Monetary policy & NBSP; To drive user growth. To overcome initial liquidity problems with the Kava stabilization USDX, the two sides plan to initiate an incentive mechanism to create usDXes that generate more than $10 million by mortgaging assets of more than $30 million.
Specific methods include:
Modifying the CAKE of KAVA token; Inflation curve & NBSP; NBSP; To generate additional KAVA for growth incentives;
Holders of tokens in the Kava agreement will receive an incentive based on the amount and time they generate the USDX;
To avoid a big increase in initial market supply, additional KAVA generation for incentives will be locked in for 52 weeks before circulation.
According to the plan, Kava's first year with NBSP; Reward inflation of about 15%. Staking inflation stands at 4.75 per cent and will then gradually fall to 2.5 per cent and 3 per cent in the fourth year.
Then, on March 17, Framework launched a vote on the Kava monetary policy improvement proposal in the Kava community, proposing to establish an incentive mechanism through token inflation to promote the initial flow and growth of the Kava stable currency USDX in the online startup. The proposal was approved by the Kava community on April 8 with a vote weight of 48 million Kava ($25 million), and Kava officials say it will be implemented in a future upgrade.
other
In addition to Synthetix, Aave, and Kava mentioned above, the Framework is also actively involved in other portfolio projects for ecological development.
In March, The Framework moved to decentralize The futures exchange, according to The Block. Futureswap Invested $400,000 in the Boca Ecosystem Project & NBSP; Edgeware Commonwealth Labs, the team behind Edgeware, invested $500,000 and locked 20,000 ETH units in Edgeware to help facilitate network distribution.
In addition, Framework founder Anderson said they have helped build the scrip economy for Futureswap and plan to provide millions of dollars of liquidity to the Futureswap network once the project is launched.
The Commonwealth Labs team also received support for the Framework, which has been involved in running &Nbsp on the Edgeware network; The first validation nodes & NBSP; (Validator Nodes), and run for board (DAO like seat). The Framework also helped the Commonwealth Labs team make some strategic decisions, such as determining which applications to look for later. The Framework also intends to build products and new features based on the Edgeware blockchain.
summary
Blockchain technology is looking for new breakthroughs, DeFi market is looking for new growth, and crypto investors are trying to find a NBSP; NBSP; fit in this new space. Investment logic and service framework & NBSP; .
Framework, as a cutting-edge investment institution on the encryption track, has its own unique understanding of the encryption field, and brings a set of new investment service philosophy. From its investment service process in the past year, we see that it tries to pass the resources and strength of the institution & NBSP;; Helping these start-ups grow & NBSP; And try to do it in a way that is unique to the encryption domain & NBSP; Post investment service & NBSP; .
We don't know if this is the best investment strategy and service framework for cryptography, but we believe that a growing number of institutional investors who are hands-on participants in the ecological construction and community building of decentralized networks will inject new power into the cryptographic world and DeFi.
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