Episode Notes

In this episode, Laide chats with Maria Shen, partner at Electric Capital - an early stage venture firm focused on cryptocurrencies, blockchain, and the Web3 ecosystem. Maria sheds some light on how Venture Capitalists (VCs) add value to the web3 ecosystem even though some may see their participation as antithetical to the ethos of web3. We chat about which blockchain applications and opportunities she's most excited about. Maria also shares more about Electric capital - what's next for them, typical check sizes, and their current hiring needs.

Topics & Timeline

  • 1:35 - Maria's background & interest in Web3/Blockchain
  • 3:57 - Why the remittance use case of the blockchain hasn't taken off as expected
  • 5:44 - Electric Capital & how they differ from traditional VC firms
  • 7:44 - How Venture Capitalists (VCs) fit into the Web3 ecosystem
  • 11:10 - On whether VCs own web3
  • 12:43 - Why Web3 founders seek funding from VCs
  • 14:09 - How Maria & Electric Capital evaluate investment opportunities
  • 16:10 - Electric Capital's time horizon for returns on investment
  • 17:10 - On NFTs
  • 21:11 - Exciting opportunities in Web3
  • 27:30 - On the Metaverse
  • 31:32 - Other areas of interest for Maria & Electric Capital
  • 33:10 - Whether there'll eventually be consolidation of the various chains
  • 38:10 - Typical check size of Electric Capital's investments
  • 40:40 - What's next for Electric Capital

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Episode Transcript

disclaimer: may contain unintentionally confusing, inaccurate, comical transcription errors amongst others)

Maria Shen: We're really living in a world where people spend more than half of their waking hours in a digital space, but the way that we still value things is still through, through the physical world. Like we value gold as an example, which I think in a while, it will not make sense anymore.

Laide: That was Maria Shen. Maria is a partner at Electric Capital, an early stage venture firm focused on cryptocurrencies, blockchain, and the Web3 ecosystem. In this episode, Maria shares her insights on why remittance, which was initially touted as a hero use case of the blockchain hasn't been fully realized.

How VCs add value to the web three ecosystem, even though some may see their participation as theoretical to the ethos of Web3 also discusses which blockchain applications and opportunities she's most excited about. She also provides more information about electric capital what's next for them.

Typical check sizes, and the current hiring needs. Maria is deeply knowledgeable in this. I found this entire conversation quite insightful, and I'm sure you will too, without further ado. Here's Maria I'm Maria. Thank you for joining the Onchain Medley podcast today. How are you doing? I

Maria Shen: I’m doing great.Thank you so much for having me.

Laide: Of course. Excited to talk to you. Uh, yeah, let's just get started. I'd love to learn more about your background and what sparked your interest in blockchain. Web three. I kind of use those interchangeably, but you might beg to differ. So feel free to also shed a light on that as well, but I'd love to start with your background first.

Maria Shen: Sure. So I'll just go chronologically. I was, uh, I was born in China, grew up mostly in the United States, studied computer science and government at Harvard. And then afterwards, uh, went to Microsoft and worked on search tech there as a PM, wanted to start my own company. Didn't know what I wanted to do.

And so I went to get my master's in computer science to kind of solve for Thai. But while I was doing that did ended up starting my own company in the supply chain space. Which is, which is how I ended up getting into crypto. So, you know, a lot of my customers had to deal with cross-border payments, um, and crossword business payments specifically where we're especially painful and not well supported.

And so this was, you know, in 2016, I started looking at crypto as a solution for. CrossCore a bit business payments and smart contracts, specifically as a way to perhaps do escrow or do rules on top of those transactions. Didn't take me very long to figure out that this was not ready for mainstream adoption, but, you know, it's just like, I I'm sure as you know, like Fiat on-ramps and off-ramps, especially in 2016, very, very unsophisticated, very difficult to use.

Uh, crypto custody is very difficult for people. KYC and AML to even start using these exchanges, even if you wanted to was, was very difficult and, uh, and you know, with kind of zero regulatory guidance as well. And so all of that meant that this, this kind of dream of using crypto for, for lightweight escrow, for business logic on top of cross border payments.

You know, was, was obviously not going to happen, but I think the core idea that you can write rules on top of money is really powerful. Like once you get over the hump, Bitcoin and Ethereum, and some of these cryptocurrencies can be considered money. Of course. And you get over that hump and then you believe that, you know, because all of this is programmable that you can write rules on top of it.

That seems very, very useful to me. Um, and so in 2018, decided to get into crypto

Laide: full-time. Gotcha. Thank you for sharing. So going back to your background about gun and supply chain. And wanting to use it for cross border transactions and it hasn't taken shape yet. Do you just have any insights into why that is?

Cause that's why I got excited about it, but I'm just wondering if we'll ever get to that sort of reality. What do you think about that?

Maria Shen: Yeah, I mean, I think it is happening, but at a very small scale, I think most of it is happening at an individual scale. So, you know, for example, someone trying to get.

Money to friends and family outside of the country. It could use Bitcoin and Ethereum, especially Bitcoin, I think is used a lot for this because Bitcoin at this point is available in almost every single country. So it is widely, widely, usable, and widely accepted. There are still, there's still difficulties, but at least, you know, And in most countries you can, if you have Bitcoin, you can find a counterparty to, to change that into local Fiat.

And so that's been very useful on an individual scale for getting both, getting money out and getting money in. But you know, on a business scale that has been happening a little bit. Um, some of the teams that I talked to who are working on remittances crypto rails for remittances have talked about how businesses, um, in Nigeria, for example, a lot of them do business with manufacturers in Asia or suppliers in Asia.

And a lot of these suppliers will take that coin. And so that, that does happen for the business case. But, you know, I think that the difficulty is that it takes a lot of sophistication for people to be able to custody and handle Bitcoin custody is still really hard. Like, you know, For small numbers, it's fine.

But if you're handling like most of your company's funds in crypto, then, you know, are you going to keep it on USB stick? Like how do you keep it safe? How do you get multiple signers on it in, you know, at least in the United States. Now there are these third-party providers for custody now, like Anchorage, like Coinbase, that that helps with a lot of that, but that's not widely available.

And so it makes that very difficult. I think for people to use.

Laide: So now you're a partner at electric capital. Can you just say more about what electric capital is? Uh, what interested you in working there and, uh, what you focus is at, at the firm? Yeah.

Maria Shen: Electric capital is an early stage VC firm. That's only focused on crypto and web three.

We're based in San Francisco. One of the ways that we're quite different from most other VC firms is that. Uh, all the partners are technical. Um, everyone codes, we have a large engineering team. And so if you look at our team makeup, we honestly look more like a startup. That'd be C firm. And that comes from this belief early on.

When we first got started. Uh, crypto native VC firms going to look very different. It's not about writing checks. It's not about kind of hanging out at networking events. It's really about inspecting what's happening on chain, looking at open source code, and then also being able to build products and build tools for the ecosystem at large, to help them and, and, you know, from an investing perspective, the help and the support that you provide means that you're going to be a more valuable investor.

Hopefully, that means that more founders are willing to work with you as well. So, as an example of something that we've built is infrastructure to crawl almost the entirety of get hub, to understand the number of developers working in Bitcoin and working in Ethereum and working in Solana and near and so on and so forth.

And, uh, and you know, that that's only possible because so much of crypto is open source. And so from that, we're able to. Publish a report every year that tells the industry like, Hey, here's how many new developers joined in 2021? We had over 30,000 new developers touch open source crypto code base for the first time.

You know, here's how many monthly active developers we have. We publish a lot of data around that for the crypto

Laide: ecosystem at large. Yeah. So that report is very, very detailed and, uh, pretty good. So thank you for putting that out there, sitting on the VC side a little bit about one of the things I I've heard when you think about VCs involvement in web three, there a lot of people who think it's sort of antithetical to the ethos of web three, And I'm curious how you, what you think about that because you guys are purely a web through crypto sort of firm, but how do you see VCs playing a part in that?

And how does that sort of differ

Maria Shen: from like what to, yeah, yeah. Yeah. It's a great question. Well, I think one kind of like, uh, the, the, the simplest. Most surface level question, um, which actually is quite counterintuitive to most people, is that as a web three native VC, you actually don't want a lot of ownership in the things that you invested.

And that's like that kind of flies against the traditional venture model where you're trying to take 15, 20% of equity and, you know, and that's how you get your returns. But in crypto, I mean, as you correctly pointed out, if someone owns 20% of the net. You know, if one entity owns 20% of the network, that's a huge red flag.

You know, that's not something that you want to see. And so, you know, as a result, there's more collaboration in the space as well, because you want to participate, but you also want to bring in other people, you know, everyone is kind of incentivized to not actually. Be the limiting factor or be the central point of failure in a network.

So that's certainly one way that, you know, on a, that even just looking at ownership percentages that VCs, you know, crypto focused VCs are looking at, like that is very different. And then the support is also very different. The way that we support founders. You know, a lot of early defy protocols will need liquidity.

And so being able to do that, being able to, uh, run nodes and validators, being able to, uh, to talk about like best security practices, a lot of, you know, I think a lot of these things are just not very unique to crypto itself. And then I think in addition to that, the, the structure. Crypto focused VC firms have to be very different from traditional VC firms as well, because you're often holding, not only equity, but you're also holding tokens.

And in addition to that, there's a lot of things that you can do with the tokens. That's also a value add for the founders themselves. So you, you know, in the, in the case of providing liquidity for at least HD five protocols, You may want to take those tokens and then put them into a pool for detox protocols that you support or founders that, that you're like helping communities, that you're helping to be able to bootstrap that ecosystem and get it off the

Laide: ground.

Gotcha. You mentioned it's more like a collaborative partnership and you know, you're not sort of like a shark in the sense that what the VCs are. You can say, I'm just curious, then what's the catch, right? What does that mean for your returns and for your limited.

Maria Shen: Yeah. Yeah. Yeah. I mean, it's not, it's not a hundred percent hunky-dory right.

Like obviously there is competition, but it is very, you know, again, I think most web three VCs have this understanding that like, you can try to take as much ownership as possible, but that actually is to the detriment of the project. So, you know, as a result, I think. It really is more anchored around the return profile of crypto.

It's just, it's moving much, much faster and is eating a much, much bigger market than people have traditionally seen. And so the multiples in this market are, are, are bigger. And so you are able to take a smaller percentage, but because of the growth multiples that we're seeing, where, um, you know, defy was started around like.

20 19 20, 20. And now all of a sudden has like $210 billion locked up in it. Like it's just that kind of growth, multiple that, um, makes it possible to take a smaller ownership, but still be able to, um, deliver results to LPs.

Laide: Yeah, that makes sense. So then what do you say to people who just say like VCs own web three?

I think, you know, Jack Dorsey had that tweet that blew up that was. The road in web three, don't pull yourself kind of thing. Like any thoughts around

Maria Shen: that? Yeah, I think, I mean, I believe in efficient markets and I think there's a, you know, I, I do think there's definitely credence to what he's saying and that there's this narrative that crypto is, is democratizing finance, but there is still a lot of VC participation, but I think, you know, you really want to have like VC participation or way that's helpful.

And. I think in web three, you see a lot more competition for VCs than in other industries. Like specifically, like a lot of dads are participating as well. Right? So I think, you know, if crypto does end up being dominated by VCs, then it just doesn't get off the ground. It doesn't grow. And it doesn't kind of live up to its promise.

So I think the market is efficient in that way. And that if, if indeed it is true that this entire thing just, you know, works to the benefit of enriched. Very few people that it, it never lives up to this new financial system that a lot of us believe that we're building. And I think the thing just dies on the

Laide: bus, the markets will, they always figure it out.

So sure. It will happen in this case. Yeah. So w what kind of founders actually require VC funding? Because there's this perception that as a founder of a, of a web three company, you can issue tokens to use that as fundraising efforts, as a way to sort of foster the ecosystem in your own way. So what kind of founder is actually.

Rely on VC funding. I mean, I'm sure it makes them grow faster, but just curious how you think. Token distribution to the public versus raising funding from VCs versus maybe a hybrid

Maria Shen: of both models. A lot of, I mean, a lot of founders don't, there are certainly things that are, um, just launched oftentime anonymously.

So like urine is a good example where, you know, Andre just kind of launched it, didn't take any VC money. Um, and this certainly happened. So I don't think every single founder needs it, but for founders that do it's, it's generally for the. The reasons that you would think so, you know, VCs can provide capital while founders are in an exploratory period where they're still trying to figure it out.

VCs can be helpful or funding rather. It doesn't need to come from VCs, but funding can be helpful if you have. Again, if you're early stage, this happens a lot. Like you're actually not sure sometimes if, if this is an equity business or a token business and, and you know, teams pivot, right. And they kind of need runway to be able to figure that out.

And if it is an equity business, then you do need, you know, funding in that really traditional. And I think for support in terms of connecting you to other people in the crypto space or connecting you to people that may be helpful to the business support in terms of thinking through product development and thinking through engineering best practices, um, thinking through hiring a lot of these things are a lot of the traditions.

Value adds that, um, that funding provides just on top of the money as well. How do you

Laide: evaluate, uh, in your firm, how do you evaluate opportunities for investments? Is it similar to the traditional model or is it quite different?

Maria Shen: It's uh, it's, it's both. I think there are a lot of things that are still very similar because we're early stage where often we're first check-in for the team.

And so, you know, A lot of that at the early, early stages. It's I think it's almost impossible for whatever someone's. Pitching and a deck or, you know, whatever's written down at that stage to be perfectly executed because it's a lot of it is based on assumptions. It hasn't been tried out yet. And so you, you, you know, you, you want to make sure that those assumptions are reasonable.

You want to make sure that the team team is. Thoughtful and has the flexibility and capacity to, to pivot quickly. If it turns out that they're not right about something, but has the tenacity to keep building and you want to see that they're working in a market that is going to be really big. You want to see that they have the technical capabilities of actually being able to execute and then, you know, for, for crypto.

For token network specifically, you want to make sure that the, the token network design is very thoughtful, that there is an appropriate amount. They're thinking about making, you know, if again, if it is truly something community oriented that they're thinking about how to bring this to the community, how to progressively decentralized.

That there's nothing on the, you know, no red flags in the sense that Hey, one person owns a bunch of stuff. Yeah. So I, I think, you know, at the very early stages, you're, you're really just looking for signals that this candy, something that is very promising and that the founders have the flexibility and the ability to adapt.

If it turns out that some core assumptions were incorrect, or if the market ends up shifting in a way that they were not excited.

Laide: So then when you think about, you know, the horizon for getting liquidity or the exit strategy, just given that everything so new, how are you thinking about that when you think about when you expect to get the returns on your investment or distribute back to your shareholders and healthy?

Maria Shen: Yeah. Well, that's the nice thing I think about being like structured, like a venture firm is that the time horizon is very long. And so our LPs are. You know, their capital is locked up for 10 years. So our time horizon is 10 years. Some funds are. Like that, right. Some funds have LPs. I can pull out every month.

Um, in which case it just incentive wise. Like it just changes the way that you approach certain things. And so for us, we have the patients and we have ability to be able to support people for a very long time. Okay.

Laide: So when you zoom out and you look at the web three ecosystem as a whole, um, I know that there is like, is your defied.

Other crypto stuff happening. What are your thoughts on just NFTs in general? I think right now they are sort of seen as just a way to express digital artwork and some people also see it as just G bag. What are your thoughts in general? On, on that?

Maria Shen: I think at its core and NFTs are really a way to express.

Ownership. And so NFTs are, you know, just like assets that you can own in real life. That can be your house and your car. That can be your phone. That can be your headphones. That can be like a sticker that you put on your laptop, right? Like items big and small, valuable, and not valuable or things that you can own in the physical world.

And I've teased our way that you can own. Things assets in the digital world and what that confers is the ability, you know, so right now, if you buy a skin and a video game, you're, you're really kind of doing that in the walled gardens of the video game itself. There are some kind of frowned upon secondary markets where you can sell things, but on the whole, like, it is not expected that you can take this item out of the game, sell it wherever you want to be able to transfer it to whomever you want, or to be able to like.

Act upon it, the way that you do act upon your physical assets. So like if you had your phone, you can, can leave it somewhere. You can give it to someone, you can sell it on any marketplace that you want. You can destroy it. That is what it means in the physical world to own something. But those qualities are often not able to be expressed in the digital world.

And after these allow you to, to express ownership. And that's really valuable because I think because ownership. Digital. It actually means that you can do a bunch of stuff that you weren't able to do in the physical world. So let's say that in the physical world, you created a piece, a pair of sneakers or something, and you sold it to someone and this, this pair of sneakers then got resold again in the physical world.

Like you really can't capture any of that secondary sales, but you can, if the item is digital and you can program it, right. So. And kind of the digital world for NFTE specifically, one of the key things that people have figured out that's important is that you can program in. Um, part of the royalties for secondary sales, which means that in perpetuity, the artist would be able to receive part of the sales or in perpetuity.

A lot of people can also program in non-profit organizations, right? So let's say that you sell something that in perpetuity, a nonprofit organization can receive 5% or 10% of all secondary sales. And that happens, you know, that. Yeah, literally happens forever and, and is not able to be changed. So that's a really powerful aspect, as well as the ability to, you know, you can split revenue, any number of ways.

Um, you can split revenue infinitely, and a lot of creators have also played around with this concept where they'll take an NFT bill. But then for all of their early supporters or people in their community, they'll say like, you know what, I'm going to create infinite splits of this. And if you support me, then you can receive a secondary, you know, a piece of any kind of secondary sales on this item as well.

So in that way, it makes the, it makes the digital asset extremely flexible in a way that we really just cannot do this in the. Physical space. And then the additional thing on top of that is really the ability to plug into defy and to financialize this asset in different ways. So, you know, let's say that you've financial, the top 40 songs, or you you've created NFTs of those songs.

You can take those songs and you can put in a pool and now, you know, and then you can fractionalize that for now, all of a sudden you can like sell individual tokens that represent an index of, of, of the royalties that are going to the top 40 songs at a certain point in time. So these are all really like, you know, kind of thing.

In the physical world would take a lot of effort to do, but in the digital world, you can just program, uh, write programs to do this.

Laide: So when you think about the other sort of aspects of it, like defy, is there any sort of application, I guess if the block. Uh, that you find the most interesting or you think has more potential.

Yeah. One

Maria Shen: thing I find really interesting is I think we're going through this, this huge behavior shift right now and it's happening maybe so gradually that people aren't realizing it, but you know, this is kind of the first time where anyone under the. Twenty-five has never experienced life without the internet.

So we have whole generations of people who are now growing up in a world where the internet feels completely natural to them as looking at some data recently where worldwide, the average for the number of number of hours spent online is seven hours, which is the world. Like that's the average, you know?

And then. You know, countries like South Africa or the Philippines or Brazil that are spending like 10 plus hours online, again, that's the national average. And then if you split it by age, then again, worldwide, like the youngest generation, anyone under 25, they're spending like more than eight hours online.

So we're, we're really living in a world where people spend more than half of their waking hours. In a digital space, but the way that we still value things is still through, through the physical world. Like we value gold as an example, which I think in a while, it will not make sense anymore. Like it kind of makes sense that digital things will be.

Just just the same way that we buy physical only items. And we don't think about why doesn't this exist in the digital space. We're going to end up buying more and more digital, only items and not have to think about like, does this give me anything in the physical space because we are going to be living our lives digitally.

So I think that's a huge, huge shift. And like NRTs as digital assets is just one kind of the tip of the iceberg, but what I'm really excited about. When you think about, you know, most of us living our lives now online, it's really going to be what we do online that really matters and defines who we are.

And this already happens in the crypto space. It doesn't matter where you went to school, it doesn't matter like where you went to college. Doesn't matter where you worked before. If you have a wallet that has done a bunch of impressive things and defy that has been participating early, that has been active in governance, then that wallet speaks for itself.

And so the things that you do on channel. Like those, those transactions, those items are essentially becoming digital lines on a resume. And I think that in itself is something I'm really excited about. So there are a lot of teams that are building credential systems. So rabbit hole is an example where now they walk you through things that you can do.

And then, uh, give you proof of that, right? Give you credentialing for that. There are protocols, um, like nukes that we just invested in that is creating, creating a protocol for people to. Badges, um, that people can claim retroactively. So let's say you're, you're someone who minted a crypto punk. Originally.

Now you can claim this as a badge and, you know, again, this kind of becomes a line on a resume. And I think what's really interesting here is if you do collect enough badges, you have enough reputation to show for it. Then you start building like all of that reputation. Really what it builds towards is identity.

And this is identity. That's not. Driven, you know, it's not the government handed you a piece of, uh, you know, uh, like a driver's license or a passport. This is identity that is purely digital that you have built based on your actions. That doesn't end. It doesn't matter what gender you are. It doesn't matter what race you are.

It doesn't matter where you live. It's purely based on the actions that you've performed. And I think that kind of digital identity system is going to be really interesting moving.

Laide: That's that's something interesting. I talked to, I think three bucks labs and he was talking about, you know, how identity could potentially just be like this hero use case and unlock a bunch of innovations too much.

Some of the things you mentioned. So I'm, I'm curious to see it take shape. Um, I'm sure it's all still pretty new and nascent. Interesting to see how that would play

Maria Shen: out. Yeah. I think it's already taking shape. Like you have people who are completely anonymous that are represented by half that they own, and that person has a reputation, right?

Like, so, you know, punk 6, 5, 2 9 is punk six, five to nine. And like that, that entity, you know, doesn't have to prove who they are to anyone. All they need to do is connect their wallet, show that they own this punk. And then. That that is all they need. Like that is their, that's their digital

Laide: ID. Yeah.

There's a privacy aspect, which is great. But then when you think about security, for example, like the KYC aspects of it, do you think that'll go away or do you think the regulations will have to sort of adapt to the sort of new form form of anonymous identity? I just wonder how the government. Take all this and make changes, do it.

I think

Maria Shen: it depends. It's probably going to be used case by use case. If you have an anonymous identity online, like, I don't necessarily think the government is going to try to make you KYC. Right. And in some cases that could be one person that could be a group of people like you can imagine DAO is controlling.

Yeah, DAO's themselves will be like a, an identity and entity that's online and that's gotta be a big group of people. But I think regulation, you know, that's, that is inevitable. Like that is something that's going to come. And I think it'll be really nice when it does honestly, to get some clarity around it, because right now founders don't have a lot of clarity around.

How they should be building things to how the, should we be structuring things so that they're compliant. And that leads to a lot of nervousness and nervousness leads to a lot of moving outside the United States to build stuff. Um, and so, you know, I think like the U S is potentially facing this issue where innovation is.

Leaving its borders. Not because things are getting regulated, but because they aren't like, because there's no clear regulations. And so I think regulators are educating themselves very quickly on crypto. And so it's, it is inevitable that it's going to come. And then I think when there is clarity, it will actually

Laide: help the space.

Makes sense. Thank you. So when you were talking a lot about how it was going, a lot of our time online, my mind kept going to the metaverse. Uh, what do you think any thoughts in the metaverse do you think it's going to be this place? That, so it was a 3d model of sort of our physical world, and really just helps with that mental model.

Getting that digital physical hybrid going, or how do you see the metaverse take shape here? Yeah.

Maria Shen: I first got into NFTs because of the metaverse I, you know, huge fan of Saifai and so not a versus a pretty course I find concept. And so of course, When I heard about crypto bottles, I was like, oh man, now we really have a metaverse like, let me go, let me go in, like, what is this going to be like?

And I go in it's 2018 and like, there's, there's, you know, there's some interesting buildings. And then, uh, and then after a while they created this ability for you to hang your FTR on the walls. And so it became almost a world where there's art galleries and museums that it's not the metaverse. Think about right where like, uh, like people are living out their, you know, their deepest fantasies because they can't do things in the physical world.

And that's just not, that is at least today. Not, not how these men versus look, we probably like are, I think this tech in order for us to. Take pic, like the way that a better versus express today is literally like, let's take our physical world, but make it digital, right? Like to your point, like, oh, it's a 3d world.

Let me walk around in it. I think our tech is just not good enough for us. For this to be believable. It's certainly interesting, but I, but I think that's a very narrow definition of a metaverse. I, you know, it's just like, when you think about the transition of when we first had the internet, right. And then people were like, oh man, the New York times is going to, oh, the internet, like, we're going to put, we're going to put a newspaper, but the newspaper is going to be online.

Like, that's kind of what I think of when we, when we talk about the modeling out a 3d metaverse, but in your browser or like in your VR headset, is that. It takes a concept we're familiar with and it just translates it over. But often when there's new technology, that's not what ends up happening, right?

Like I think no one would have predicted in the early days of the internet, that Twitter would be a huge source of information that there would be tech talk, that there would be UGC content that the biggest, the biggest like information. Is not necessarily like newspapers. In fact, a lot of them died because of the internet, you know, and it's not the, the encyclopedia Britannica that has all the information it's like Wikipedia and it's, it's just information and formats we didn't expect.

And I think similarly, I would argue that we already know. You know, do live in a metaverse where, when we talk to people on discord, when we talk to you on Twitter, it's a giant MMO. Like we're, we're like, we're essentially, we can be anyone right. Interacting with anyone else, but it doesn't look exactly like the way that things look in the physical.

Laide: Gotcha. So then you're saying the metaverse is not going to be the 3d version that I think I've sort of seen described is going to perhaps be more seamless in a way that you don't even know you're in the metaverse it's just sort of a part of your day to day existence.

Maria Shen: Um, yeah, I mean, I think my proposal is that we actually kind of already do live in a metaverse if you interact with people online that are outside of your normal physical social circle.

Um, so like a lot of gamers, you know, are on discord talking to people. They wouldn't otherwise talk to. A lot of people are, are on Reddit, interacting with people that they don't know could, this person could be based anywhere. And a lot of people are like debating with each other on Twitter or fighting with each other on Twitter.

Like, I think that actually is, that's like metaverse 0.1, like version 0.1. And I think it'll just kind of progress from there. That's a good way to

Laide: think about it. I've never really seen it. I didn't realize I was already living in the metaverse. I thought I would eventually have to live there. I see that we're getting there, but not, it's not, it's not as scary as I thought it would be.

So that that's comforting. Um, yeah. All right then. So since you know, you've been working in this space for a while now and you, or your company, are you from you see a bunch of portfolio companies? Are there any projects or spaces you're more excited about? I know you talked about identity initially, but is there anything else, any companies you want to talk about that you think are doing some interesting work?

Maria Shen: Yeah, I mean, there, there are definitely a ton, I think. You know right now and F marketplaces are super interesting. It's almost like the first consumer facing application that has really worked in crypto. And it's brought in a lot of people who otherwise wouldn't have interacted with crypto, but like NFTs are, and like owning something I think is a concept that just is a little bit more intuitive to people that.

Take this token and put it in a pool in our life, 200 APY, then take that LP token, put another full and like do it. Like, I think that's like a little bit more humbler did, but people understand ownership and understand R and like understand membership. So I do think, you know, um, after marketplaces are super interesting, we're investors in one called magic.

Um, and they're the biggest enough to marketplace on Solana. The team there is, is first of all. Fantastic. But, um, they've also kind of really thought about things and you know, what three native play there's, um, there they've created a DAO to community to like include their community. They're there, they have, you know, a lot of ways they're thinking about gaming assets and like how that's differently supported on a marketplace, you know?

So that's something certainly I think that is, um, That is, that is working and bringing people into, into crypto. Gotcha.

Laide: That makes sense. So switching now to the development report, thanks again for putting that out. That was a great source of information. And you mentioned Solana, and there's a theory, there's so many different chains.

Uh, do you just have a sense based on what you're seeing now of which one will win, do you think you'll all continue to coexist or will there be one eventuall winner? How do you see those different chains playing out?

Maria Shen: Yeah, that's such a good question. I don't know. I mean, I think that's the real answer is that it's too early to tell right now it's undeniable that Ethereum has most of the Mindshare and most of the network effects.

Um, But there are also usability issues with Ethereum. Um, gas fees can be very high when there's high demand. And so, you know, paying $200 sometimes for a transaction or paying like $50 or even $20 for trends. And it feels awful, right? Like no one wants to do that. Um, and you know, confirmation times are long and I think a lot of these issues will go away with time.

The question is kind of like in the meantime, are there other chains that can, you know, have lower transaction fees? A lot of these trains like near and Solana can, can have fewer than a set in terms of like a fraction of a cent transaction fees and so, and can be very fast. And so it can, some of this chain takes can some of these chains take, share away from a theory, um, or, you know, in a, it doesn't even need to be competitive, right?

Like in some of these chains, Uh, gateway that a lot of people who haven't interacted with crypto before come into the space, I think it's a, you know, it's a, it's a question of what kind of future will we live in and will it be a future where there's one chain. Or, or, you know, maybe there's like five big chains, main chains, and everyone kind of lives in their own chain country.

Like you're like in a theory of citizen or like you're at your nearest citizen, there's a lot of citizen. And like, everything you do is on that chain or, you know, is it kind of like, uh, people are just going to do whatever they want to do and their wallets going to interact with different chains depending on what is the best chain to do something.

And they won't even know if it's. Avalanche or on flow or on a theory. Um, and it'll, it'll really just be, you know, kind of like the way that we interact with the internet today. We don't really know what infrastructure it's running on the backend. We just know we just want to get something done and it's working.

So I, you know, I think it's probably too early to tell what kind of. What kind of future we might live in, or, you know, there also could be a future where there's just hundreds of different chains and different application types of applications live on each chain. I tend to think that there's going to be consolidation.

And so I, you know, I'm more of a believer at this point in time of a world where, you know, perhaps there's like five big chains. So that's, that's where I am today. But, uh, Yeah,

Laide: I know. I see that too. I think when, when you have that report, I sent it out to some friends who are devs, who wanted to sort of explore web three development.

And I think everyone was like, well, let's see what the winner, and who's going to stick with this area. And there was that perception that Solano was owned by VCs. And they were like, oh, I don't know if I can do that. So I don't know if you're hearing anything like that or seen anything like that, but it just feels like people are just going to keep going because he just like, everyone's already on it.

There's already a lot of codes. I don't know if you

Maria Shen: sent in that. Yeah. There's crazy network. I mean, you know, it's also like if most of the users are there, then more, or the developers are there for the developers are there, the developer tooling is better. They're like there's real network effects that are hard to break.

And yeah, I think the question is like, because of some of these usability challenges, uh, I think a lot of developers are exploring other channels. A lot of, a lot of brands or a lot of, um, apps that want to deliver something kind of usable to a main, to someone who hasn't interacted with crypto before that has never worked with metal basket before they want some sort of experience where you don't need to know how to use meta mask or like you don't need to pay.

At minimum, maybe $20 to do a transaction. And so for a lot of these, these cases, um, and also for, you know, games and things like that, where there could be like hundreds of thousands of transactions because. Like each transaction is an action that someone happened that someone does on a game and it doesn't make sense to do that on Ethereum.

A lot of those things I see being built outside of Ethereum. And it's interesting too. I think a lot of these layer ones again, because they don't have the same constraints might end up building applications that work and look different. So for example, You if transactions are faster than you don't need to be as over collateralized for lending, you can actually have a little bit more efficiency in the lending market.

And so, because you can, you can liquidate people faster in the case where prices are, are falling and they're starting to get under collateralized. And so, you know, then like lending protocols with different infrastructure are starting to be built on other chains. Um, so I think some of those differences may just amplify over time as well.

Laide: Gotcha. That makes sense. Thanks for sharing. So that's electric capital. Now I'd be remiss if I didn't ask you, uh, you said you're an early stage fund. Uh, are there particular companies or areas you want to see right now from founders and then what's the typical check size you write to these companies?

Maria Shen: Yeah, so, I mean, I'm personally super excited about things happening in the NFTE space and things happening in the DAO space. Um, so, you know, Uh, identity as something I think, uh, you know, it's very clear to me that in three years, a lot of creators are going to be leveraging enough to use as additional revenue sources and as ways to engage with their community a lot more closely.

I think in the meantime, there's a lot of negative perception around. You know, and FTS as being money grabs. And so I think there's, you know, in my head it's like, okay, well, this is the thing that's going to exist in the meantime, it's very challenging for this thing to exist. So I think the, um, you know, I'm really curious about teams that are building ways to go to market, to serve as creators and, and help them use NFTs.

But in a way that's very, uh, very reasonable and like, Uh, understands that the reality is that a lot of craters don't don't want to engage with LGS. So that's something I'm pretty curious about. And, uh, you know, in the DAO space, we're probably just a little too early there, cause I think dolls are still getting formed.

It's still, it's still a question of like what they need and you know, what are best practices. Um, but I think in the DAO space, it's also very. It's it's very clear that this is, to me, just like the concept of a company had to be invented like that wasn't something that existed before and, and then it, it did, and it created a lot of efficiencies where people could have limited liability when.

You didn't need to go to the king to apply for a charter to do something and you can kind of raise money, um, and take outside investment. Like that actually led to a lot of innovation and just, you know, just, just being able to do those things. And similarly with the DAO, all of a sudden you can have. Um, the equivalent of the bank account in a few minutes, you can have people from all over the world, contributing funds, something like constitution DAO, right.

Can raise millions of dollars over a weekend to do something like super crazy, like by the constitution. Like I, this is like a. This is like a new way that organizations can function and allocate capital. And so that's definitely a space I'm very interested in as well. Yeah. And then what's the

Laide: check size.

Oh, range. The range of it. Yeah.

Maria Shen: Um, usually like anywhere from like maybe three to 5 million, but we're very flexible. We can, um, we can go lower than that. Um, and then our biggest check size is probably a 20 to $25 million check. It's next to electric capital. Um, well, we're hiring, so that's actually one thing that's super top of mind.

So I would say if you are technical, especially if you are a woman, please get in touch with us. We're hiring, um, across the board, we're hiring backend and you know, there's front end engineers, data scientists, data engineers, and. Yeah, come build with us where we're building a lot of open source things, um, and, and public goods that can be used by the crypto ecosystem at large.

So if you just like building and if you want to build stuff in the crypto world and want to get paid for it, then, um, come talk to me. I can, I can answer questions even if you're not sure. Awesome.

Laide: While you heard her people reach out, uh, and definitely apply if you're interested. Yeah. Maria, thank you so much.

Is there anything else you want to share? Any resources for anybody who's looking to get into this space? Obviously I'm a big fan of getting more women and people of color into this space, but it doesn't seem like we're getting enough traction there. So just any resources. I just say,

Maria Shen: like

Laide: I said, it's an every episode, but it's like, everyone's like, yeah.

Crypto is going to like, make the world a better place and it create equity. I was like, ah, it's the same. So what's the point. Right. And so I'm a little bit jaded in that sense. So if you've got any words for people like me and others, I'd love to hear it. Yeah.

Maria Shen: Well, I will make one plug for, Komrebi, which is a DAO that invests in.

Women and non-binary gender like, uh, founders and in a world rifed with problems. And I would argue like crypto is, is, is even more rife with problems and like the typical tech industry. Uh, what I do find really interesting is like, there are, you know, the ability for people to get together aggregate capital quickly, and then allocate that capital.

Means that some of these quote unquote niche, uh, initiatives or, or things where, you know, maybe not a critical mass of people care about it, but enough people care about it. It's it actually is. You, you are actually able to get capital and. Momentum around that. Thanks to first of all, information, thanks to the internet, but then money and financial infrastructure things to crypto.

And so dad was like, Homer, Ravi are great for anyone. Who's founding a company. Who's a female founder who wants to get some funding. And then, you know, also. Always feel free to reach out to me. You can DM me at Maria HSA and on Twitter. Um, my DMS are open if you ever want to chat about anything.

Laide: Yeah. And that's true.

That's how I got her on the show. I DM’d her and she responded. So thank you, Maria. I appreciate it. Yeah, this is great. Uh, thank you so much for your time. And I guess Twitter is the best way for people to reach out to you and keep in touch with you, right. Awesome. Thank you very much, Maria. This is great.

Maria Shen: It was, it was lovely chatting. Thanks for all the great questions.

Laide: Thank you so much for listening. If you enjoyed this episode, please subscribe wherever you listen to podcast. I'm your host Laide a until next time.