YouSaid · the spoken record

Alok Vasudev

lines on the record: 80
first: 2022-07-26
most recent: 2022-07-26
sittings or episodes: 1
sources: podcast

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“There's a class of uses that's previously been hard for computers to natively access. The basics of crypto, money and finance. Fact that I can hold this object that ultimately lives on a computer for me to hold an object that lives on a computer as a form of money with all the properties of durability, longevity. These things are just fundamental attributes of money. If you can't make really strong guarantees about the resilience of this computer, how on earth can you have a monetary asset rooted in one of these things that people can actually form a basis of belief in? So that's one really like down the middle example related, right? You can kind of grow from there to think about now like uses of that monetary asset. You can have financial rails that you can count on, even stable coins. If people didn't deeply believe in the resilience of the Ethereum blockchain, then I think that would undermine belief in holding stablecoins and using them, using them to pay people, using them as assets that you really place.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Seen before. I think other things you get are you get the dynamism of open source, the dynamism of communities forming and innovating and able to kind of express views and innovate in weird emergent ways that's harder to get when you have systems that are more closed off. All the beauty that you get in the open source software world as applied in a much more full stack way.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“This fuzzy way by the people that own and operate it. Hopefully that kind of elaborates a bit on what I meant by it. What does a community computer get you as a desirable property? It gets you unbelievable resilience. Bitcoin as a computer has been up since 2009. I can't think of another computing service that's even had that longevity before. So it's remarkable to me that we have a program, we have a computer that's been just running up for that long. It's kind of staggering when you think about it in that way. Ethereum similarly a computer that's been running for years. I think that's one property that's really unique about these things when we think about building these protocols, these immutable building blocks that we expect to live on for a really long time. The fact that you actually have a computer that can live forever, which means you can write programs that will run forever. That's something that's mind-blowing that we've never.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right one that if you kind of believe that these are a fabric that you can do much more with, you can think about so what is like community operated computer mean? You start by your own computer on your desk or at your laptop. It's a computer owned and operated by you. You decide what software you install on it. You decide when it's on, you decide when it's off. And then you think about a cloud computer like Amazon Web Services and it's controlled by owned and operated by a company. They choose what software it runs. They choose who can access it. They choose when it's on, when it's off, etc. And then a blockchain computer is the same thing, but it's owned and operated by users. The Bitcoin computer, those policies, what does the software do, what do upgrades look like? Is it on or off? All of that is set by a combination of social and economic incentives.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Computers, we have computers that are general purpose, like a server within AWS or your PC. And we have computers that are domain specific or application specific, like your calculator or your Fitbit. I think about Bitcoin, it's a domain specific computer. It's a blockchain computer that really has one job. And its job is to keep track of Bitcoin balances and make sure that you can send them around and that there's integrity in all the procedures involved. And then you have something like Ethereum that's more general purpose in nature. It's so operated on the same fabric by the same principles. There's ultimately this decentralized consensus that needs to form on whether the computer is operating properly. But what you can do with it is you can do anything you want with it. You can write applications that do arbitrary things. That's been my frame for some time. To me, it's”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“For the dollar just to spread. We have anecdotal evidence that this is actually the most successful form of a dollar to many people all over the world.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't know if kind of building it all the way up from scratch. I don't know if there's a consensus is even possible within the government to implement something like that. There's also some evidence that the government views stablecoins as is, as positive and as a vector for dollarization around the world, which obviously has positive implications from a foreign policy and geopolitical standpoint for us. It was a tiny article, didn't get much play, but there was a South American government in exile that I think we were supporters of. And at some point, they needed an aid payment. And it was actually implemented in stablecoins. And for me, it was like, huh, this is the first time that we've actually seen our government using stable coins to accomplish something. And so to me, that was like, I think there may be some voices in policy rooms that kind of agree that, hey, this is a really powerful way.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Funny, it's even hard to walk too far down that hypothetical just because it feels so implausible. This point, there is a clear vector for the government to enforce policy and constraints around stablecoins. We've already seen whitelists, blacklists, things like that for the at scale stablecoins that reflect things like OFAC compliance and reflect the will of the government.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“There's certainly an agility and pace of innovation angle to it. I think that we've seen that the private sector can do that pretty well. There's a lot they could do with it just because they have the ability to make it so and kind of enforce it.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so it relates to the amount and what it is specifically. When you have no collateral or less collateral, then you're borrowing against. That's unsound. And the other one that it's especially important in some of these crypto designs is this idea of exogenous collateral versus endogenous collateral. Exogenous meaning this asset is really independent of the core stablecoin mechanism. So for example, if you are MakerDAO, and you have ETH as your collateral, ETH is not wound up within maker's mechanism directly. And so it's exogenous. Whereas if maker DAO had NKR as collateral, if its own governance token was a form of collateral, that would be endogenous. If that collateral went bad, there's kind of the systemic spiral that would take the whole thing down together. When you have exogenous collateral that's kind of appropriately in a”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Whereas I think you can have algorithmic monetary policy on top of a more structurally sound collateral base and it works fine. There's one that we work with called Reflexor, and their coin is called Rai. And it's exactly that. It's algorithmic monetary policy, but with a base of structurally sound collateral, so far that's operated as intended. So if I'm just building out kind of a two by two matrix here of good collateral, bad collateral, algorithmic governance, algorithmic monetary policy, and monetary policy set by humans, you can think about MakerDAO as an example of its sound collateral, but humans actually do the governance because it's the collective of the maker token holders that can vote to actually establish rates within the system. And then you have all of these senior and shares models of which UST was a flavor of that live in this algorithmic monetary policy with unsound collateral. And then things like reflex.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“People often throw, I think right now algorithmic stablecoins, that concept is floated as being fundamentally insound. That's the wrong lens. I think if you discard all algorithmic stablecoins, you really are throwing the baby out with the bathwater to some degree. I think it's this combination of algorithmic monetary policy with Unsound or insufficient collateral where things go bad.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Right now, there's this idea that if you want to find a good startup idea, just look at Vitalix blog, just build something that he wrote about. And that's a pretty good startup idea. My favorite kind of OG version of that is, so if all great-up startup ideas are in Vitalix blog, the actual upstream of that is the Bitcoin talk forums from like 2010 through 2013, because pretty much every idea in crypto first existed on the Bitcoin talk forums way back in the day, including stablecoins. The first time I encountered a design for a stablecoin was Robert Sams came up with the senior shares model for a stablecoin, and he was a Bitcoiner, and it was out of that kind of Bitcoin community where it came from, we've since seen flavors of that design over and over again. And every single time it's had the same unsoundness.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“About their stablecoin having one particular property in that particular property is it not having this singular risk of the company that issues the coin getting shut down.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Dye's a stable coin. And so I think stable coins are one thing we can point to as one of the really one of the strongest forms of product market fit that we've had within crypto, especially over the past couple years. It's about demand for this form of a dollar that lives natively on a blockchain, that you can send 24 hours a day. Most of the stablecoin market right now are centralized stablecoins, like USDC and USDT. I'm sure your audience knows this as well at this point, but you have a dollar deposited in the bank account. And for every dollar deposit in the bank account, a company can issue one token that's backed one-to-one by that dollar. And we call those centralized stablecoins. And those are the lions share of stablecoin demand. And so decentralized stablecoins are basically a subset of the broader stablecoin market for users who care deeply.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“They repay their loan, there's a fee that they pay, and that fee is revenue to the protocol. And the protocol actually can take that revenue. And it's called a buy and burn. So it goes and buys back its own tokens, the MKR token, which is kind of the unit of ownership for this protocol. It goes back and buys them on the market and it burns them. It destroys them. You can kind of think of it like a share buyback where it's a form of directly converting an income stream into value to holders of that asset, of the MKR token. In that case, it's really simple to think about modeling out future cash flows and thinking about those to inform how you'd value the MKR token.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“For some, absolutely. I think a lot of the DeFi protocols that can be a really appropriate way to think about them. Maker DAO is an example. I'm going to gloss over some of the nuance with it, but ultimately MakerDAO is, it's a stable coin issuer. It issues DAI, a decentralized stablecoin. And there's a set of smart contracts that live on Ethereum that basically determine that issuance of DAI. You can post collateral into the maker smart contract and then you can borrow this stablecoin against it subject to some collateralization ratio and maker the protocol generates income. There's a fee charge to people that borrow die.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“From the outside, view the space. And I think there are a couple traps that people fall into. Like, for example, people think cryptocurrency is this catch-all. And they think that somehow these are all currencies competing with one another. And you look at coin market cap on the top 25 and these things might as well be the euro and the US dollar and the pound and all these things. And that's just the wrong mental model for it. That are mental model is you look at it like the S&P 500 and you say that each of these things is actually unique. It has unique fundamentals. It has its own unique addressable market. There's obviously competition. There's obviously overlap. But if you don't think about these things as individual entities that actually have their own first principles with which you should understand them, then you're missing basically the first step for understanding this stuff.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“General population. And there are moments where that just can't happen. Satoshi had a great line in one of the old Bitcoin forums where someone was arguing about some merit of Bitcoin and he says, if you don't believe me or don't get it, I don't have time to convince you. Sorry. I feel like to some degree that's an approach that many within crypto have taken because it's like, I don't know if we're going to be able to ultimately address every form of this. We're just going to keep doing our thing. And over time, you can keep moving your goalposts back to the point where it's absurd or you can just die on the hill. I mean, that was a rant about skeptics in general. We've done so much in the space and it started, the core idea for a blockchain is it is a community operated computer. And I think a big problem that we faced, it was one of the best and worst things that happened is that we really had this currency overtone that I think really created a lot of the path dependence for how people”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“We get people that use the same crappy arguments for years and years and years. I also think there's a tendency to move the goalposts back when it comes to this like, oh, crypto hasn't done anything. What are the use cases? And then somehow anything that we say is not legitimate enough and that keeps being pushed back. But when you zoom out and you think about from 2012 to where we are now, we've dramatically expanded the capabilities. We've dramatically expanded what we're able to do with it. At one point, it was these tokens don't do anything. It's like, well, now we have token operated protocols that generate hundreds of millions in cash flow with 90% plus FCF margin. That use case is not legitimate enough for it to be valid in the eyes of some. So I think that's why there's this base level frustration. I also think there were these moment in time things where there are moments when the Overton window, so to speak, spans and new ideas can be introduced into the job.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's tough because the skepticism has taken on so many different shapes and forms over the years and to some degree I think a lot of us within crypto have a sense of frustration with the skeptic one because I don't think we have the quality of skeptics that we deserve.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Was an awful employee bad at taking orders bad at following instructions i find that also i tend to gravitate towards things that give me energy things that actually say shape my own personal curiosities my big learning over my career is basically just find ways to do more of the things that naturally excite you and give you energy for example when you're thinking about bitcoin and crypto all day there are a number of other companies that you look over and you're like that's black and white compared to this full vibrant color over here then all you want to do is spend more time there it was just like making sure that situations where it doesn't feel like work and the more of that that you make your work the better off you are”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Always had curiosity to me, and I think that that led me to crypto. I think that I was pretty early Bitcoin crypto evangelist there. I would say that kind of intelligence curiosity, being able to follow it, I can program a little bit too. I tried some things using that to source deals that we hadn't done before.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it's about curiosity, it's about putting yourself in places where you're the only VC. That's a huge one. The number of VCs that I see go to networking events where there are 30 other junior VCs there. Again, almost by definition, a bunch of other VCs are hanging around the same scene, then it's probably not weird enough or new enough. And so I always prided myself when I go to a meetup or go to an event and there was not another VC in site because it meant that I was actually doing something to have the chance to actually be original.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Am I going to find a better open source company than Peter? Maybe, but it's not going to be structural. Better consumer company than that, et cetera. It's almost like, well, what else can I do other than try to find weird stuff that may have a chance to work? It also helped that I came from a background in science and physics. I did my PhD at Stanford in E and I worked on applied physics research. And so I was curious about things that happened to actually work out synthetic biology.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Great question Almost definitionally, it needs to be weird or non-consensus because that's your only chance. For me, it was I looked around my partnership room. I show up. I'm a 28-year-old who's never done venture before and I look around my first partner meeting and Bill Gurley, Matt Kohler, Mitch Lasky, Peter Fenton were the four GPs at the time. These guys are at the top of their games. How am I going to bring something to the table?”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Go through your own moments where you question your beliefs, you question what's going on, and crypto cyclicality certainly does that to an extreme degree. But once you go through one or two or three or four of those, you realize that these things just start to rhyme. They're a part of what happens. They're unavoidable. But you also find they're necessary to some degree. And now here we are. We're in another version of the same thing where I think a lot of the same factors are at play. Different reasons, different names, different specifics, but the broad structure, I think, holds today as it did in 2018 and 15 and 12.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“Was monetary disruption, it was a technology breakthrough, it was a values disruption in terms of how we actually build organizations and the idea that decentralization could actually work in this configuration, whereas like every other pressure in the world that you had was pushing towards centralization. And also there was a roadmap for how blockchains and the tech that underpinned it could become this fabric that you could do so much more on top of if you understood what was happening, understood where it could be upgraded or changed or improved, you could see compute being built on these blockchains. You could see all sorts of mind-bending stuff built with it. Part of it was write time, right place. I think part of it was also having a text and upbringing where I think you have default skepticism towards institutions. I think you get in a place like Texas that you wouldn't get in other places. It fit me like glove and I never really looked back. I think that over time you always”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“At the time, this was SAS was already big in early stage venture consumer internet was raging, marketplace was raging. Part of it was hunting for what's new, what's on the horizon, where can I plant a flag and build the type of reputation that can set me up to compete at the highest level. Open source was an interest of mine. Consumer was a big interest of mine because we did a lot of great work there at the firm. And Bitcoin, when I first encountered it, was this hybrid of the two. In some sense, it's a community, it's a consumer facing product, it's money that you can hold and use, but it's built on an open source network. It's an open source protocol. I think those are probably the two veins that at least made me consider it as something I should decide to spend more time on or not in a click. It was one of these things where you saw it, you understood it, and you realized that it was a disruption on so many dimensions, right?”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source
“I've been in venture for just about 10 years now. I started as a generalist venture guy. I was a benchmark is where I started my investing career. Like any young person in venture, your job is to find white space.”
2022-07-26 · Invest Like the Best · Alok Vasudev - Searching for White Space - [Invest Like the Best, EP.287] · IDENTIFIED FROM THE TRANSCRIPT · source