Partnered With:

A&T Capital: Why did we invest in ConsenSys?

Read this article in 29 Minutes

ConsenSys was founded by Ethereum COO Joseph Lubin in 2014 and currently has an oligopoly in the mainstream developer tools space.

Original title:"A& T Family: ConsenSys -- future Web3.0 operating system"

Original author: A& T Capital

Why invest in ConsenSys

Introduction & have spent

ConsenSys has closed its latest $450 million Series D funding round, valuing the company at more than $7 billion, more than double the $200 million series C funding it raised in November 2021. In January, the number of monthly active users accessing Web3 applications through MetaMask topped 30 million, an increase of 42% in four months. More than $1 trillion was traded on the Infura Ethereum chain.

ConsenSys CEO Joe Lubin said in an interview with Decrypt that MetaMask will soon launch decentralized autonomous organizations (DAOs), and that the new DAOs will not be involved in managing MetaMask, But the DAO will fund MetaMask's update and confirm that MetaMask will not only launch the DAO but also plan to issue tokens. ConsenSys' fundraising and coin offering have generated a lot of buzz among users.

ConsenSys closed a $200 million Series C funding round at a $3.2 billion valuation in November 2021, just six months after raising $65 million from jpmorgan Chase and mastercard, valuing the company at $3.2 billion. A& T Capital participated in the round. As an investor in ConsenSys's last round, A& T would like to take this opportunity to introduce you to our rationale for investing in ConsenSys and to show you the full picture of ConsenSys products.

Why do we invest in Consensus?

Back in 2021, we thought enterprise blockchainization would become a mainstream trend:

Take IBM Blockchain and R3 Corda, the two largest alliance chain technology providers in the overseas market, for example. In the two and a half years from 2019 to now, the number of open business cases on the official website has been decreasing year by year, especially in the first half of 2021. Both companies made major layoffs in the blockchain sector earlier this year. Redeployed. With the gradual deepening of the overall environment's understanding of blockchain, alliance chain is no longer the only choice for traditional enterprises to use blockchain: With the gradual deepening of the "blockchainization" of enterprises, the process requires corresponding changes and coordination of enterprise business, and such changes are not capable of external service providers, but need the decision-making and promotion of the internal team of enterprises, thus giving rise to the demand to disintegrate the whole blockchain solution into modules and load on demand.

Defi's popularity has gradually increased, as Defi's total market capitalization has risen to nearly $20 billion, with more transactions being done on decentralized trading platforms and more wallet addresses interacting with Dapps than on centralized trading platforms.

Ethereum scheme is favored, public chain system into the corporate vision, thanks to ethereum in the public chain world absolute leading position and strong innovation, enterprise ethereum (Quorum& Besu, compared with other alliance chain solutions, has greater potential value and space and is favored by the majority of traditional enterprises.

So ethereum, the absolute leader in the public chain market, has become the core value storage layer of this value network.

In the Ethereum ecosystem, there are three main traffic portals for Ethereum: navigation websites, aggregation platforms, and wallets. Among them, navigation website has the lowest stickiness and the lowest technical threshold, aggregation platform has a short rise time, its user stickiness is relatively good, low technical threshold and high operational threshold, wallet user stickiness is the highest, technical and operational threshold is relatively higher.

The wallet field started early with a large number of players, and is now a red sea. With the innovation of technology and market requirements, there are also frequent innovations (e.g Smart contract wallet), but traffic is always a dilemma.

Returning to ConsenSys' traffic advantage, ConsenSys' MetaMask is the largest unmanaged wallet in terms of users.

For developers, considering that Ethereum has gone through a long period of time since 2014, and development tools have become more perfect and mature, the developer community has formed a set of optimal development tool use scheme.

ConsenSys has an oligopoly in the mainstream developer tools space, including Infura, Truffle, Ganache, MetaMask, and others.

ConsenSys profile & have spent

Company introduction & NBSP;

ConsenSys was founded by Ethereum COO Joseph Lubin (" Joe ") in 2014. ConsenSys is an integrated service company that focuses on ethereum development, incubation, and enterprise services.

ConsenSys offers products for three groups of customers:

1. Enterprise customers: SaaS like products (Codefi) split the previous overall regional plan into 9 modules, so that enterprise customers can buy on demand; ConsenSys will retain a certain amount of customized services as a channel to export brand value. Typical cases: Komgo, MAS clearing system;

2. Developer clients: As a "must use" development tool for Ethereum developers, Truffle will offer charging services on a free basis, while Infura will continue to charge tiered services;

3. End users: Wallet (MetaMask), as the wallet with the largest audience of Ethereum, launches new charging services on the basis of free basic functions.

ConsenSys's core direction in the future, after modularizing the overall solution, is to provide a complete set of modular products for Ethereum projects and enterprise blockchain customers, combined with their Infura, Truffle, MetaMask and other products. Customers can purchase any modules and combine them according to their own needs. (See below)

Product Introduction & NBSP;

End User oriented

MetaMask - ecological maximum flow entrance of public chain & NBSP;

ConsenSys' only product to date for end users, MetaMask is one of Ethereum's earliest wallets and the largest by far. Founded in 2015, it has long been known to the public as a web-based, free, "semi-official" wallet, belonging to the unmanaged wallet.

MetaMask is the default option for all apps in the wallet section of ethereum, and has been extended to other mainstream public chains outside of ethereum in the past year, e.g. BSC, Algorand.

With the DeFi app craze in 2020, MetaMask's user base is growing rapidly. Mobile client and transaction function (named Swap) will be added in 2020.

MetaMask Institutional edition will be launched in May 2021, enabling institutional users to integrate MetaMask with organization-level hosting, facilitating workflow management, ease of reporting, and more.

For developers

ConsenSys offers Infura and Truffle for public chain developers, which are described below:

Infura -- AWS for the Age of Blockchain;

Infura is a node outsourcing service provider of public chain (API access). It started in 2016 and operates about 10% of Ethereum nodes. These nodes are load-balanced, allowing developers to connect their products to Ethereum quickly and stably through Infura's API (see figure below) : & NBSP;

Analogy to understand

While Internet companies can easily deploy their applications on the cloud by purchasing AWS's cloud services, Infura's API makes it easy for developers to deploy their applications on blockchains like Ethereum.

Reverse understanding: Often just to get started, businesses must spend tens of thousands of dollars to set up and operate nodes that can interpret and write to the blockchain. This is not only slow and costly, but also consumes a lot of engineering resources. Worse, node architectures may not gracefully support large-scale scaling. Load balancing across servers (as is traditionally the case with Web applications) breaks down when nodes mistakenly make block numbers out of sync.

Uniswap < > Infura

· Background: As taifang's most successful app, Uniswap has been using the Infura API suite to meet its data requirements since its launch in 2018.

·挑战：Uniswap 界面允许用户轻松交易Token、增加流动性和创建流动性供给。在幕后，Uniswap 需要从以太坊区块链上的智能合约中提取一系列信息，以输入接口并填充诸如 Token 定价、用户余额和利率等数据。而 Uniswap 团队需要一个易于集成的解决方案来访问这些数据，该解决方案还可以扩展以满足不断增长的请求量。

·解决方案：在用户访问其 UIUX 时, Uniswap 使用 Infura 查询信息，并将 Infura 与 web3-react 配对，从 Uniswap 智能合约中获取 Token 交换率、 Token 余额和其他信息等数据。

Infura operations

As the most popular node outsourcing service provider for ethereum, Infura supports nearly half of all ethereum-related applications (e.g. MetaMask, Binance, Uniswap, Coinbase), and its API is currently called about 12 billion times per day.

Infura uses a SaaS - like charging model, charging for each CALL to the API, with the basic model being free.

Truffle

Truffle is an open source framework for developing smart contracts based on Ethereum's Solidity language. Known as an IDE since 2015, Truffle provides tools from development to deployment (Ganache goes with this) and is the most comprehensive contract framework in the Ethereum ecosystem.

As ethereum's most popular contract framework for professional developers, In addition to ConsenSys' Truffle team, Truffle has an active community of developers who are constantly expanding and optimizing it.

Truffle's basic tools are free, and Truffle Teams, a premium package with additional resources and services, was launched in February 2021.

For enterprise users

Customization service

Enterprise-class customized blockchain services have been the biggest differentiator for ConsenSys. ConsenSys (including before the split) has provided customized blockchain solutions to dozens of companies in the financial, real estate, supply chain, municipal and other sectors in the past.

Government Finance:

· Working with Monetary Authority of Singapor to explore a real-time full settlement system (POC, MAS open source code completed in 2018);

· Explored the central payment and settlement system with South African Reserve Bank (completed POC in 2019, using the code of MAS case);

· Participating in CBDC test projects of Reserve Bank of Australia, Bank of Thailand, Societe Generale and Hong Kong Monetary Authority;

Cross-border trade:

· Participate in cross-border trade management & AMP; Financing platform project Komgo, which was initiated by ING, BNP, Shell and other giants (MVP completed at the end of 2018, 1000+ transactions/month);

· Participated in Covantis, an agricultural trade chain platform project initiated by CoFCO, Cargill and other giants (launched in March 2020, the first case was the soybean transportation trade from Brazil to China);

Financial markets:

· Planned and developed JPM Coin (in-ecosystem payment) and Liink (cross-border payment) for JP Morgan;

· After JP Morgan sold Quorum to ConsenSys, ConsenSys integrated Besu and Quorum at the business level and also provided services externally;

ConsenSys considers customized blockchain services to be a "drudgery" with a lack of revenue stability and plans to reduce the amount of customization through modular SaaS offerings such as Codefi and Infura. Making custom services more of a window for ConsenSys to export its brand value.

Exclusive Azure & have spent Blockchain: Azure has announced that it will shut down the Azure version of its Blockchain service in September, replacing it with Quorum; ConsenSys sells Quorum based enterprise blockchain services on Azure through both custom and modular models.

Codefi - SaaS form output & NBSP;

ConsenSys started Codefi in 2019. ConsenSys has taken an entire set of enterprise-class blockchain solutions and broken them down into modular infrastructure products, eliminating the need for development teams to write repetitive code and focusing on using blockchain technology to optimize traditional business and financial applications.

Codefi consists of nine modules (see figure below) and is currently sold primarily in large single cases attached to institutions;