Outlier Ventures Weekly Brief Issue #2 |   View Online
State of Blockchains - Q3
Markets Turn To Professionals
The total market capitalisation of all actively traded tokens has reduced to a low of $141 billion from a high of close to $800 billion at the beginning of the year. While the pace and extent of the “dip” may have come as a surprise to many, we had anticipated a winter. The fall in token prices have also affected how startups in the space have been raising money and deploying them too. Token sale events raised a little over $1 billion this quarter, a decline of over 74% from Q1 2018.  Estimates also indicate that September saw only $150 million being raised through token sales. Would this mean the ecosystem is all set for doom and gloom? Data suggests otherwise.

Our quarterly state of blockchains deck recently explored the maturing of the ecosystem by putting venture capital in the space in the context of the changing funding landscape around token sales.

Here are some key findings.

1. VC Investments have surged from a total of $900 million in 2017 to $2.85 billion this year.
2. VCs are active across all funding stages with 119 deals disclosed this quarter, the most ever as good projects
3. The US continues to dominate investments in the industry.
Our Partners, Eden and Aron have a few thoughts on the matter

“This quarter saw significant negative sentiment around utility tokens from an investment standpoint. Many investors have grown frustrated over-regulation and exasperated over valuations of tokenized networks. This represents a new cycle back towards equity-based blockchain investments until the crypto community makes advances in validating tokens as a new asset class with viable business models. That said, projects with well designed token economies are still finding support from the community and increasingly from VCs.”
- Eden Dhaliwal, Partner and Head of Crypto-economics

“As we see the focus of early-stage investment into tokens shift away from tech-savvy retail investors toward VCs, hedge funds and ultimately larger institutional investors, we’re seeing a large growth in new businesses and services enabling the larger institutional investors to enter the space. Self-sovereignty means self-responsibility, and when your private keys are lost or stolen there is no broker to call. Institutional investors have a need to reduce that technical complexity and risk. New players solve that problem; from institutional-grade custody providers to trading platforms offered by the financial incumbents.”
- Aron Van Ammers, Founding Partner of Outlier Ventures

In other words, as the ecosystem matures, it is likely that traditional forms of capital play a key role in venture building and helping networks capture their initial userbases. The funding landscape within the blockchain community has consistently backed and helped scale companies that have found their product-market fits. As token sales decline in the count and raise, we will see more teams turning towards venture capital to launch their projects.

Read the entire State of Blockchains Report here for more on the matter.
While much of the market has been keeping its eyes peeled on the charts, the team at Outlier Ventures has been hard at work. Here are some updates from the team

1. Evaluation of Privacy-Preserving Technologies for Machine Learning
Florian Apfelbeck explored approaches for preserving privacy as applicable to machine learning in Fetch as a part of our on-going research programme with Imperial Centre for Cryptocurrency Research and Engineering. Read the post here.

2. Reading between the lines of the UK Crypto-assets task force report
Our head of legal - Jocelyn Roberts provides inputs on what the crypto-asset task force report could mean for the industry and how the regulatory landscape could evolve in the year to come. More here. 

3.Outlier Ventures and Imperial College Hackathon: Blockchain, Smart Contracts & Token Economy

ChainHack24 brought together the 50 brightest minds from Imperial College. Outlier Ventures was a sponsor for the event. Learn more about what the leading teams built from Catherine's post here. 
Blockchains are the next step after open source, as they provide open data & open execution. You don’t just see the source code with something like Bitcoin or Ethereum. With a full node you see all historical data, all pending writes, and can retrace every step of code execution.
    Email a Friend  
You can update your preferences or unsubscribe from this list
This email is intended only for the person to whom it is addressed and may contain confidential information. No one else may place any reliance upon, copy or forward all or any form of this email in any way. If any addressing or transmission error has misdirected this email, please notify us immediately by responding to us directly, and ensure that the email and any attachments are immediately and permanently deleted and is not used, disclosed, copied, printed or relied upon in any manner. In no event shall Outlier Ventures Operations Ltd or Outlier Capital LLP be liable for any direct, consequential, incidental special, punitive or other damages, whatsoever (including without limitation, damages for loss of business profits, business interruption, or loss of business information), even if Outlier Ventures Operations Ltd or Outlier Capital LLP have been advised of the possibility of such damages. Outlier Ventures Operations Ltd may monitor email traffic data and also the content of this email for the purposes of security.

Outlier Ventures Operations Ltd is registered in England and Wales, company registration number 10722638. Outlier Ventures Operations Ltd is an appointed representative of Sapia Partners LLP which is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 550103).

Crypto-currencies can be extremely volatile and subject to rapid fluctuations in price, positively or negatively. Investment in one or more crypto-currencies may not be suitable for even a relatively experienced and affluent investor. Each potential investor must make their own informed decision in connection with any such investment (after having sought independent financial advice thereon).

The content provided in this email is provided for information purposes only. It is not intended as an offer or solicitation to enter into any proposed transaction or investment.

In this email you will find links to other websites; they are for your convenience or to provide additional information, they are not an endorsement or a financial promotion. Outlier Ventures Operations Ltd Is is not responsible for the any contents, data, opinions and or reliability of the linked websites, and does not necessarily endorse views expressed on the linked website, and does not accept liability for the accuracy or completeness of any such information or opinions which can be subject to change without notice.
You can update your preferences or unsubscribe from this list

This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Outlier Ventures Operations Ltd · C/O Milsted Langdon LLP · 46-48 East Smithfield · London, Middlesex E1W1AW · United Kingdom