Note: The original article is from the Variant Fund blog post, compiled by Mars Finance.
As soon as we got back to the office in the new year, we started talking about the projects we wanted to fund in 2024. Here are our Requirements for Startups (RFS), covering consumer payment user experience, DeFi tools, gaming, betting, and prediction markets, among others.
We're excited to see these areas evolve this year and beyond. If you're working on one of these areas, or working on other cryptocurrency ideas, please contact us.
Cryptocurrency payment infrastructure
The opportunity to leverage cryptocurrencies to improve global payments is enormous. However, using cryptocurrencies for payments and moving between cryptocurrencies and traditional payment tracks remains a challenge for users and developers. There are many opportunities in the cryptocurrency payments value chain to remove friction for developers, users, and merchants.
Institutional-grade DeFi
In the medium term, the distinction between the two will fade as cryptocurrencies and the traditional financial system converge. We still have the opportunity to build high-performance financial applications and infrastructure that take full advantage of the capabilities of cryptocurrencies and serve existing crypto users, while continuing to onboard new users, including institutional users, over time.
Consumer-centric transactions and an amazing user experience
There's a lot of design space around apps that buy and sell cryptocurrencies to create an engaging experience. Providing current and future users with more options to interact with cryptocurrencies will greatly benefit them.
—Geoff Hamilton， 投资合伙人
Information market
Blockchain makes it easier to create two types of information marketplaces: markets that access existing information and markets that create new information. The former involves pricing/elimination of information asymmetries for access to information, and for example, can be paid for proof of selective consumer behaviour or demographics. The focus of the latter is to facilitate new exchange rates by making previously unobservable information observable through a unique aggregation of existing data or mechanisms. Examples of this category may include novel risk-based pricing structures, participation in on-chain simulations, or prediction markets with real liquidity. The financialization of information has emerged in systems such as Friend.tech's keyholder room, Polymarket, and Arkham's Intel Exchange, a new way to give value to previously hard-to-discover information.
—Alana Levin, Venture Partner; Jack Gorman, Data Scientist
Product-led payment applications, especially micropayment experiments
In these applications, the use of cryptocurrency channels creates opportunities to enter new markets or expand them: a global audience that would normally be turned away by currency exchange fees, a large number of users who are less willing to pay than traditional users (but can compensate for in numbers), and so on. It may also seem as simple as reinventing a movie ticket with a cryptocurrency track under the hood.
New namespace
Subdomains are particularly underutilized. These digital resources have verifiable ownership. Publishing a subdomain by a trusted party, such as a parent institution, helps prove the legitimacy of the entity. Charities are a case in point: the Federal Trade Commission estimates that hundreds of millions of dollars are lost annually to charitable fraud. Trusted publishers grant verifiable subdomains to registered charities, creating a useful log of which organizations are truly legitimate.
—Alana Levin,投资合伙人
Privacy infrastructure
The privacy infrastructure is in its very early stages and is still under construction. The sheer scale of this category is exciting. I strongly believe that most on-chain states will be private in the long run, as this will bring advantages to market efficiency, security, and consumer preference. Solutions utilizing FHE, ZK, MPC, and TEE all have different trade-offs and are therefore suitable for different applications. The design space of the infrastructure layer is vast and the opportunities are numerous.
Uniswap V4 hook marketplace
One of the most exciting new design spaces in DeFi has apparently emerged: the Uniswap V4 hook is a plugin for designing pools with unique features and features, such as a new auction mechanism, fee design, and more. With the release of intent-based trading protocols such as UniswapX, on-chain and off-chain liquidity is becoming increasingly blurred. As a result, hooks are becoming the new frontier of DeFi mechanism design, and they are an effort to make on-chain liquidity more competitive with CEX liquidity, which DEX traders can now take advantage of.
—Derek Walkush，投资合伙人
Keep an eye on betting apps
Like Mr. Videos made by top creators like Beast have views comparable to those of NFL (National Football League) games. Virtual games and betting already exist around sporting events, but now social media and "the greatest online game" (such as creators) have players large enough to have their own betting and prediction experiences. Think of it as a sports bet on social media, transacting with cryptocurrencies.
MMORPGs in the real world
Stepn showcases the potential of crypto lifestyle games, leveraging mobile-first Web2 experiences, gamifying real-life activities such as running, and subscription-based assets. However, Stepn also has flaws – the games are mostly single-player, use complex tokenomics models, and are overly financialized. AROUND SOCIAL Xi, combined with incentives and verifiable off-chain actions, new real-world games have a lot to offer.
On-chain AI proxy market
As cryptographic AI proxies become more sophisticated, developers will design proxies that can perform specific tasks. It will be easier for a regular proxy to purchase services from other specific proxies instead of building one that must know how to do everything. The crypto-AI proxy marketplace will allow people to purchase targeted proxy services, or trade trained consumer app proxies (such as Parallel Colony NPCs, ASM brains, Frennug, etc.) on the platform or in-game.
—Mason Nystrom,投资合伙人
On-chain reputation system
While blockchains are trustless by design, it is still difficult to trust the various actors on the chain. I see a huge opportunity to build a reputation system that uses on-chain data to help us trust the contracts we interact with and the participants we engage with. Not only does the reputation system easily protect against bad actors like scammers or airdrop spoofing attackers, but it also rewards good behavior on-chain, which can be leveraged in areas such as credit-poor lending or freelance marketplaces.
—Mason Nystrom, Data Scientist