KR1 November Update 🐻

Apologies for the delayed November update! We just completed a 785,000 GBP fundraise for KR1 and wanted to include it in this blog. For that to happen, of course, it had to be properly closed and announced via the public exchange first. Find our detailed announcement here.

November and early December were full of busy investor meetings, talking to current and prospective investors and explaining our view of the current crypto markets and what’s coming next for KR1. We’re very excited for 2019 and are especially looking forward to long-awaited projects finally launching!

Survive and Thrive

Many of the lessons of the successes and failures of the last ten years of the ‘Web 2.0' phase are about to come home to roost in cryptoland. After the Dotcom Crash of 2001 this cut off all the venture capital flow and a whole new lean startup culture was born led by a California professor, who became a hero to the movement called ‘Web 2.0'. But many many Web 2.0 projects failed because of bad design creating bottlenecks and bailouts, lack of customers or cost of acquiring new customers, too much investor money raised/ not enough investor money, not enough sustainable revenue or just a black swan event like a lawsuit or catastrophic technology failure. The new Web 3.0 decentralised movement is about to learn those lessons.

“Every startup is in a race against time. It has to find product-market fit before running out of cash.” Steve Blank

With the ICO craze of 2017 suddenly capital was abundant for these new crypto startups. Markets buy a story and vision of the latest technology and this leads to speculative investors piling in, now with Tokens or Coins there was capital everywhere — maybe even the Lean Startup was dead? But the good times didn’t last as people quickly sobered up in 2018 after scamming, crazy valuations and ICO flipping falling flat meant investors losing money and bailing out.

Cash is starting to run low on some crypto projects and many of these Web 2.0 lessons when cash was tight will apply to Blockchain companies as they look to find a way through the big bear of 2018 and 2019, which has eroded companies asset reserves. Given the fact that most are public projects with depressed prices, they will find it hard to re-raise, they can’t easily do another round of finance like a private company. But interestingly what we have learned in crypto from the 2014/15 ‘Alt-pocalypse’ is that with a few dedicated community members spinning nodes and keeping the system alive and healthy — they can make it through and survive, some projects even thrive! Ethereum initially came out of the bear market of 2014/15 and started trading in Summer 2015 at just above the initial token sale price, somewhere above 0.20–0.30 USD/ETH. Over the years it has gathered the largest interest, community and developer ecosystem around the technology and is one of the most powerful currently live and existing platforms of this new Web3.0 movement. What is going to be next? Our bets are especially on blockchain interoperability with Cosmos and Polkadot. This is the beauty of decentralisation — lower costs, wider incentivised members in the network, more security. Our current Internet is broken, even the inventor of the World Wide Web agrees, and decentralisation offers a new candle on the dark, but not just ‘Money 2.0’ in the form of Bitcoin but with smart contract platforms, it offers new trustless business models we haven’t ever been able to build before. There are so many potential applications, even for non-financial blockchains of the future, that it’s hard to imagine all the verticals that will be disrupted. Don’t forget that many of these projects are building the roads and rails to allow these new services to exist.

In Web 2.0 times those infrastructure protocols were already twenty years old such as “Hyper Text Transfer Protocol” that allows you to view the web and Simple Mail Transfer Protocol that powers email. At KR1, we invest in these new infrastructure platforms and projects that we believe will survive and thrive by learning the lessons of the Web 2.0 movement and the crypto economic community incentive model of tokenisation.

We love projects that use best practice in the new crypto models to encourage adoption and support their crypto networks — especially teams that have learned Lean, Agile, Guerilla Web 2.0 methods to show capital efficiency and intelligence in problem-solving like hiring.

There has never been a better time to get involved in the Web 3.0 decentralisation movement even though it is bleeding badly for the moment.

“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.” Warren Buffet

Market prices are down more than fundamentals in Bitcoin and Ethereum and experienced investors have not changed their thesis.

There are many hopes and expectations in crypto and we at KR1 are excited to support these new projects.

Out and about

KR1 AGM

We held our third AGM at our Isle of Man office. It was a long session with all directors present discussing minutes and future opportunities.

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KR1 AGM and strategy meeting with Keld, Rachel, George and Stephen in the Isle of Man

Cambridge University Blockchain

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The Cambridge University Blockchain group, Justin from the Ethereum Foundation and George

George spoke at the Judge Business School at the Cambridge University Blockchain event on November 14th. He was joined by Justin Drake, who is leading the Ethereum 2.0 sharding research.

George described the journey of starting the first publicly listed digital asset investment company in the world and also touched on the company’s strategy and future outlook of KR1 as it navigates the highs and lows of crypto.

Justin gave an expert overview of the VDF research, which lies at the very core of the vision for Ethereum 2.0. An incredibly technical and complex topic at the forefront of computer science was made understandable to all. A great skill!

They then both took questions ranging from the value of tokens and investment strategy through to the journey of going from Cambridge to Ethereum and the future plans of Ethereum.

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George and Justin in conversation and the best crypto cake we’ve seen!

Zug Crypto Valley Summit

Keld was invited to join the “Venture Capital in a Decentralized World” panel at the Crypto Valley Blockchain Summit in Zug, Switzerland with Cedric from Dfinity. At the summit hundreds of Swiss finance people in suits still want to know all about blockchain despite the market — maybe they follow Warren Buffet?

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Keld onstage in Zug (left), ‘Bitcoin is the revolution!’ conference rally at the CV Summit (right)

KR1 sponsors Grincon0

We were very excited to sponsor the first Mimblewimble magic Grincon0 at the c-base Raumstation in Berlin on a cold Friday evening. Amazing insights on what the team is up to and how the launch will look like.

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Daniel from Grin on the left and a packed Grincon session about the Proof of Work mechanism on the right

Blockchain Venture Summit London

George was on a Crypto and Hedge Fund panel alongside Adam Grimsley from Prime Factor and Shivani Dasani, who expertly took the panel. The focus was on the intentions of the established financial institutions as they begin to launch crypto offerings to their clients.

We’ve seen for some time ‘chess moves’ being made in the background by some of the largest financial institutions in the world. A heady mix of trading desks, custody solutions, derivatives and contracts for difference, with many more to appear. It is certainly invigorating to see, in the early days some would never have imagined some of the names currently beginning to get behind the tech, but with hindsight, it’s fairly predictable. There’s a desire to take part from large sections of these company’s clientele. There’s money to be made facilitating the clamour that will no doubt return soon.

For us, the true excitement stems from the traction we’re seeing from ‘crypto native’ decentralised financial instruments that serve to disintermediate the incumbent gatekeepers of the financial industry. Take Maker’s Dai stable coin and credit system — yes, still at $1 — and with 1.5 million Ether in collateral smart contracts. This is even despite an unprecedented downturn in Ether’s price ever since DAI launched a year ago.

It’s early days still for the crypto financial industry but there are shining lights out there to watch such as the offerings of Compound Finance, Uniswap, Augur and soon, Vega. The rails and pipes are being laid down on both sides of the divide. The race is on.

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Coming up in 2019

M-1 Event in Zug, Switzerland

M-1 will be a super interesting event for the Melon project! Melonport will unveil the governance council and gather everyone involved and building with the Melon protocol in Zug in early February. Keld will be featured with Will from Passport Capital and Russel from GABI.

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Follow us on Twitter for more updates.

🎄 We hope you survive Christmas and the holiday season and thrive in 2019 with the big bounce! 🎅

Written by

KR1 plc is Europe's leading publicly listed investment company focused on blockchain and decentralised technologies (KR1:AQSE). KR1 was founded in March 2016.

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