Ep 51, An Early Technologist’s Perspective on Investing —with Joey Krug of Augur & Pantera Capital

Wyre Talks

It’s no surprise that Joey Krug is a fan of taking calculated risks. After all, he was betting on horse races (and winning) in middle school and eventually created a mechanism for making bets on the blockchain. As an early crypto developer, Joey had the opportunity to meet a lot of promising entrepreneurs. And ultimately, he put together a syndicate to invest in the projects with the most potential.

Joey is the creator of Augur, the decentralized oracle and prediction market protocol built on Ethereum, and the Co-Chief Investment Officer with Pantera Capital, an investment firm focused exclusively on ventures related to blockchain tech, digital currency, and crypto-assets. On this episode of Wyre Talks, Joey joins us to discuss the inception and early days of Augur and explain why the team chose to raise money through an ICO — the first on top of Ethereum. He describes how Augur has evolved, shifting from a reporting to a dispute-based model, disincentivizing invalid markets, and incorporating the use of DAI in V2.

Joey goes on to address how companies building on Augur are tackling US regulations and offer his take on what should and should not be regulated by the government. He also covers the advantages of using Augur overrunning a centralized operation, sharing the benefits for users in terms of limits, odds, and fees. Finally, Joey walks us through his transition to angel investing, explaining how he came to work with Pantera and how he evaluates investments with regard to team, product, and market. Listen in for Joey’s insight around the prerequisites for DeFi mass adoption and learn about the scalability projects he is excited to see the launch in the near future!
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Follow Joey on Twitter: https://twitter.com/joeykrug
Follow Augur on Twitter: https://twitter.com/AugurProject
Follow Pantera on Twitter: https://twitter.com/PanteraCapital

Today’s Topics

[0:30] Joey’s introduction to Bitcoin mining and building on Ethereum

[3:36] The inception of Augur

[4:59] Why Joey’s team pursued a crowd sale to raise money over venture capital

[6:15] How the Augur team created an incentive model around its tokens

[7:15] The profile of the average participant in the Augur ICO

[8:01] Augur’s shift from a reporting to dispute-based model and reduced dispute period

[10:23] How V2 of Augur is disincentivizing invalid markets and allowing the use of DAI

[13:23] How Joey’s day-to-day involvement in Augur has changed post-ICO

[14:56] The pros and cons of running a distributed team

[17:34] Joey’s insight on deciding what Augur should build internally vs. what external developers should build

[19:30] How companies building on Augur are tackling regulatory issues in the US

[20:56] The advantages of using Augur overrunning a centralized operation

[22:25] The benefit of Augur for users in terms of limits, odds, and fees

[23:20] Joey’s insight on political events + sports as the premier use cases for crypto prediction markets

[24:30] Joey’s thoughts around what should and should not be regulated by the government

[27:20] How the team is building compliance tools into Augur

[28:48] The tradeoffs Augur is making to maintain a sound regulatory position in the US

[30:52] How Augur’s solution to the oracle problem differs from that of UMA

[33:47] Joey’s take on the problem of parasitic use of oracles

[36:03] Joey’s transition to angel investing and how he came to work with Pantera

[40:14] The three main funds Joey works with at Pantera

[40:41] What Joey would do differently around Pantera’s digital asset and ICO funds at a time of massive flux in the crypto markets

[42:50] How Joey thinks about assets in the ERC-20 token space

[44:25] Whether governance tokens have value independent of a direct economic incentive

[45:37] How Joey evaluates investments in terms of team, product and market

[48:28] The major moat growing around Ethereum

[49:02] The Layer 1 platforms with a potential value prop for developers

[51:01] What Layer 1 platforms need to do from a go-to-market standpoint

[52:16] Why Layer 2 projects that sold equity should monetize at the UI layer rather than the protocol layer

[54:26] Why it’s advantageous to build your UI and protocol layers at the same time

[55:32] Joey’s thoughts on the existing interoperability solutions (e.g.: Cosmos and Polkadot)

[59:09] Why massive scalability and better fiat onramps are prerequisites for the mass adoption of DeFi

[1:00:51] What Layer 2 primitives Joey would like to see built in DeFi

[1:03:25] The advantages and disadvantages of building on open-source platforms

[1:04:16] Joey’s take on sharding as a scaling solution and how it might impact DeFi

[1:05:53] Joey’s crypto thesis + how he sees the misfits of other markets driving adoption

[1:08:52] The scalability projects Joey is excited to see launch in the near future and their potential to facilitate exponential growth in the space