Mostly the reason I have zero faith in crypto venture capitalists as an institution is that their primary value add is marketing, their due diligence

Why I Have Zero Faith in Crypto Venture Capitalists

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2021-06-13 14:00:02

Mostly the reason I have zero faith in crypto venture capitalists as an institution is that their primary value add is marketing, their due diligence is a joke, and they are functionally equivalent to the shills we all mock.

One of the very first whitepapers I ever analyzed was for the Basis protocol. This protocol was for a multi-token algorithmic stablecoin. It had problems. One was when they fundamentally misunderstood the differing role of the Federal Reserve and the US Treasury. The other was that it looked very much like a security. I pointed out both issues. The protocol nonetheless raised millions from a vast array of venture capital firms. The blatant mistakes and issues were less important than the potential returns. I still contend that the stability model would have failed as well. Which actually since someone else took the concept and decided to launch ‘Basis Cash’ we can see evidence of:

Luckily for Nader Al-Naji all of these mistakes and failure did not affect his ability to raise more money. This time he somehow raised millions for his ‘not a company’ Bitclout, a decentralized social media that seems to violate Twitter Terms of Service and uses people’s images to promote the shitshow of a project without their consent. Just a real dick move all the way through. VCs will make their money though. I’m sure he’ll have no problem raising for his next project in 3 years.