Open Finance First, Open Data Second

My partner Nick put together a deck outlining USV’s approach to crypto investing earlier this year and we have been using it with founders and investors since then.

One slide I particularly like from that deck is this one which describes how we think the crypto market will develop over time.

We have already seen an explosion of assets issued on blockchains and a number of very large and profitable custody/brokerage/exchange businesses built. We expect we will see continued innovation in the open finance (finance 2.0) sector in the next few years while the open data (web 3.0) sector will take longer to develop.

We also think that open finance will inevitably lead to open data as users (both consumers and businesses) will start to understand and appreciate the benefits of increased user control, lower transaction (and other) costs, and other benefits of decentralization.


Comments (Archived):

  1. William Mougayar

    There is another emerging big use case that’s getting more real gradually: using blockchains as a backbone to “governance”. I’m not sure where to place it on your chart, maybe related to the “Truth” segment, maybe on its own.

  2. M. Banerjee Palmer

    Is the full deck available anywhere? Took a quick look at Nick’s Twitter and couldn’t see it in recent tweets.

  3. Pointsandfigures

    Remains to be seen but there are certainly huge advantages to central counterparty clearing and centralized marketplaces. The cost/benefit of the decentralized marketplace and decentralized clearing/settlement/compliance/arbitration is going to have to be far greater than people think for players to leave the established marketplaces. I see them as aggregators since they have capital and regulatory/lobbying power. I am bullish crypto but when I serve on panels with the Fanboys I find them unrealistic about where they should be innovating and what the real potential is.

    1. William Mougayar

      Uniswap just passed 1M ETH in transactions. Not too bad. No human or database intermediaries. The smart contract is the intermediary.

  4. JamesHRH

    Mid August comment doldrums.Or?

  5. jason wright

    “Truth”.I’m looking forward to that post.

    1. Lasse Clausen

      Consensus about truth enabled by blockchains.

  6. awaldstein

    Useful.I don’t know where to categorize this, but I am deeply drawn to the new value chain that is building up with the possibilities of NFTs.While a niche, powerful.No one, including CK, really has their head around it.Most are trying to inject economics as the key of blockchain gaming, and they are wrong,Many are forgetting in the collectibles space that value is not determined by scarcity, though scarcity is an underpinning of value.Yet–the idea that we can program in behaviors in a smart contract into a unique object and let it loose on the blockchain is truly formative as a change agent.Just like me to focus on the most atomic element of behavior in a technology and obsess on it.

  7. Russell

    If electric scooters is the revolution that happened while we waited for self-driving cars, is Fed Now and improved digital fiat payments the revolution that happens while we wait for Crypto?

    1. jason wright

      Don’t feed the monster. It will eat you.

    2. Michael Elling

      E-scooters. You mean the ones without a business model? Good luck there.

  8. Chris McCoy

    Two cents”Web3″ will look like the public internet today except that the data of apps (some consumer), devices, and more will be unbundled, tokenized, open, tradable, and programmable.*Data will be the computing platform.*There will be dApps (data light) & tokenized apps (data rich).First, p2p payments. Next, tokenized and open data as the computing platform.At least this is what we’re building at Storecoin

  9. Abhi Dobhal

    So investors should have a longer investment time horizon for domains that are on the right of the spectrum? For those building services in each one of these domains, the biggest challenge is going to be timing. Ideally, as a group we need to be working simultaneously on each of these “components” that enables the ones on the right. Especially, if you need a feedback loop going right to left to improve services and understand finer needs. However, if you are dependent completely on “customers” from the right it might be a while before you can start growing revenues.