Unlocking Institutional Confidence: Product-Market Fit and Regulatory Clarity in Crypto

I've been in the crypto space for quite some time now. My tech journey started in 2010 with a company I co-founded called Pogoseat. It’s an app that lets you upgrade your seats in real-time at sporting events. If you’re in the nosebleeds at a game, you can hop on Pogoseat and upgrade anytime for a discounted price. The company is still going today, 15 years later.

Pogoseat had nothing to do with crypto, however, my technical co-founder was mining Bitcoin in our office in Venice Beach in 2013. I remember laughing because I’d ask him “hey, how’s the app update coming for the Warriors game tonight” and he’d say “hold tight, I’m mining some Bitcoin.”

I finally asked him to explain Bitcoin to me, which he did on a long drive to Palm Springs for a company offsite. Bitcoin was around $13 at the time. If only we had invested our seed round into Bitcoin!

The ICO Boom and Bust: Lessons Learned

After my time at Pogoseat, I attended the first Ethereal conference in Brooklyn and promptly passed on investing in Ethereum at $7 because my buddy told me I already missed the 10x. So naturally, I decided to start a crypto fund.

A few friends and I founded Aenigma Capital during the ICO boom. It was a multi-strategy fund and I worked in the VC unit, meeting with founders, reading white papers, and investing in pre-launch projects. It was a wild ride–we made some money and lost some money. But the experience taught me something critical: most of the ICO companies were not building products that anyone actually used (if they built a product at all).

They were missing one of the most important things – product market fit.

That’s where the industry is different now. Projects that are surviving and thriving today are the ones that have real utility, real users, and real demand.

Product Market Fit is Everything

If you look at where we are today in the crypto industry, certain projects have clearly achieved product market fit.

Take Bitcoin, for example. It has been well-established globally as a store of value. That’s product-market fit. Then you look at stablecoins. In the second quarter of this year, stablecoins had ~2x the transaction volume of Visa (A16Z Crypto). That's product-market fit. There is product-market fit in prediction markets like Polymarket. It's arguably the most accurate predictor of elections. People put their money where their mouth is. There was ~$3.6B in bets on the recent US election, right? That's real volume.

Wall Street is Finally Taking Notice

One of the most exciting things I’ve seen recently is TradFi getting involved in crypto. Companies like Fidelity, Blackrock, and Lazard are now competing to provide services in the crypto space and launch tokenized funds.

A lot of credit goes to Coinbase, which helped legitimize the industry. They’ve become an amazing public company with a market cap north of $50B at the time of this writing. They've been a beacon of hope in the industry and just yesterday they announced a ground-breaking partnership with Visa.

Why I Joined Kadena: Building Real-World Solutions

Although my career in crypto started on the investing side, my recent move to Kadena as Vice President of Business Development was motivated by a desire to get back to my builder roots and get closer to the technology itself. Kadena’s focus is on building blockchain solutions that solve real-world problems – essential if we want to achieve widespread adoption.

We launched mainnet almost five years ago and our blockchain has been battle-tested in the real world. I’m excited to be part of a team that’s building products that solve problems and that people want to use. There’s lots of competition in the L1 space and my grandpa always said “it’s uphill all the way” but I believe we have all the ingredients for success.

The Future: Regulatory Clarity and Continued Innovation

Regulatory clarity will be a massive win for the industry. You have a lack of regulation in the US government that still hasn’t defined what a security is.

Recently, I was talking about betting on the US election on Polymarket with a friend who works at Goldman. He told me one of the reasons the bigger players haven’t stepped in yet, in regards to Polymarket, is because they’re still wondering if the platform is legal and if they win their bet, how will they get paid? What are the tax implications?

All of these things and many more need to be flushed out. We want a pro-crypto Congress to write some common-sense laws. We don't want to be the Wild West because that attracts charlatans and scammers. Meanwhile, mom-and-pops lose their shirts.

Where Do We Go From Here?

There’s no doubt in my mind that crypto has crossed the Rubicon and is here to stay, but it’s still up to us to build products that people want to use - products that are better than what’s available today. We’ve come a long way from the speculative ICO days, but there’s still a lot of work to do to make crypto a part of everyday life.

At Kadena, we’re focused on building that future. We work with partners across different sectors to create solutions that will drive adoption to make blockchain useful for more than just the early adopters. It’s time to build!