<\/p>\n
His X profile bio says \u201cYour doubt is my alpha.\u201d<\/p>\n
The motto rings true in Joel Monegro\u2019s approach to investment in the crypto industry. During Ethereum\u2019s struggles in 2018 and 2019, for example, the partner at Placeholder played the contrarian game and invested heavily in the ecosystem.\u00a0<\/p>\n
\u201cIt\u2019s hard to imagine that Ethereum would be an outcast today because now it has this sort of dominant position,\u201d he says, \u201cbut Ethereum went through a really tough time in \u201818 and \u201819.\u201d<\/p>\n
The venture capital firm \u201cdoubled down\u201d on the struggling network \u2014 and it paid off. Monegro says that some of the firm\u2019s best investments were made \u201cat the bottom in 2019.\u201d<\/p>\n
On the Lightspeed podcast (Spotify<\/a>\/Apple<\/a>), Monegro says that the FTX implosion was a similar<\/a> \u201ctime of opportunity\u201d for the venture capital firm. Having witnessed the flight of investors from Ethereum DeFi<\/a> and apps, Monegro says the firm saw a very similar pattern playing out with Solana\u2019s storyline.<\/p>\n \u201cWe got really active, following that,\u201d he says. Monegro explains that the firm had been \u201cwatching Solana<\/a> for some time\u201d but had concerns about the ill-fated exchange\u2019s involvement.<\/p>\n \u201cThe way those investments were being put together didn\u2019t sit right with us.\u201d Monegro adds, \u201cit felt like FTX<\/a> had a lot of power over the community and the ecosystem.\u201d<\/p>\n \u201cThat was a big part of the reason why we kept some distance from Solana<\/a> during that time,\u201d he says.<\/p>\n Despite the doubts, Monegro explains that the firm began researching and meeting with a number of entrepreneurs building on Solana. After the market began to \u201cunravel\u201d in 2022, Monegro says a \u201cclear market opportunity\u201d emerged.\u00a0<\/p>\n \u201cWe started slowly investing and then accelerated our pace post-FTX because in our minds, it took care of our biggest problem with the network.\u201d Monegro says the network \u201cdecentralized quite a bit\u201d following the FTX collapse, making it a much more attractive investment.<\/p>\n One of the biggest selling points that Monegro sees in Solana today is the ecosystem\u2019s \u201cstrong product sense\u201d and \u201cmaniacal focus on the end user.\u201d Whereas the Ethereum ecosystem tends to focus more on the decentralization<\/a> and counter-cultural ethos, Solana has \u201cbridged the gap\u201d between Web2 and Web3<\/a> in a way that he says is \u201cmore approachable to users.\u201d<\/p>\n Not only that, but Ethereum venture deals tend to be \u201ctwo or three times more expensive than Solana deals,\u201d Monegro says, \u201cbecause other investors aren\u2019t willing to invest as much in this ecosystem.\u201d<\/p>\n \u201cFor us,\u201d he says, \u201cthat just means more opportunity.\u201d<\/p>\n The industry has moved beyond the stage of \u201cexploration and discovery,\u201d Monegro says, during which time the focus was on \u201cinventing the infrastructure.\u201d<\/p>\n Now, the innovative activity is moving to the application of the technology \u201cand things that really hit the end user,\u201d he says.<\/p>\n \u201cEntrepreneurs who wanted to reach end consumers were bumping into the fact that the infrastructure wasn\u2019t ready,\u201d he says. \u201cIt wasn\u2019t fast enough. It wasn\u2019t cheap enough. People didn\u2019t have enough wallets. There weren\u2019t enough fiat on-ramps and so on and so forth.\u201d<\/p>\n The new generation of entrepreneurs can shift their focus to building applications without having to invest in building the infrastructure itself, Monegro says, adding \u201cthe most consumer-friendly applications are more likely to emerge on Solana than they are in Ethereum.\u201d<\/p>\n Solana has a \u201ccompetitive edge,\u201d Monegro says, in attracting the next wave of crypto users. \u201cThe wallet experience and speed and cost is going to be a huge factor.\u201d<\/p>\n Read more:<\/strong> Bringing major content creators to Drip Haus key to mass adoption strategy<\/a><\/p>\n Monegro sees early success in the growth of venture portfolio apps like Drip Haus and Tensor, he says. \u201cWe see it in how they\u2019ve been able to build really high quality products with very minimal resources<\/a>, on just their seed round. They\u2019ve been able to reach audiences and user bases that are unmatched\u201d on Ethereum, he says.<\/p>\n \u201cEthereum companies actually have to raise more money to build a similar quality experience than Solana companies,\u201d he says. \u201cOver time, company by company and cycle by cycle, those differences are going to start to show up.\u201d<\/p>\n Updated Oct. 26 at 11:37 am ET: Modified for additional context.<\/em><\/p>\n Don\u2019t miss the next big story \u2013 join our\u00a0free daily newsletter<\/a>.<\/strong><\/p>\nA clear market opportunity<\/h2>\n
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