ConsenSys co-founder joins DARMA crypto fund, goes long on Ethereum

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Andrew Keys, the co-founder of ConsenSys, recently joined DARMA capital, a crypto-focused investments fund, as the newest managing partner. Keys strongly believes in Ethereum and is one of the main figures in DARMA’s decision to position their high-net-worth accredited investors for a decade long Ethereum bull run. 

Yesterday, Andrew Keys announced that he is moving from ConsenSys to DARMA capital as the newest managing partner. He joins James Slazas, the former head of capital markets at ConsenSys. At the same time, he stays at ConsenSys at the advisory board.

DARMA (Digital Asset Risk Management Advisors) capital is a CFTC-regulated firm with approximately $100 million in assets under their management. These are the funds of the high-net-worth accredited investors which are meant for the Ethereum “Optimized Long fund”. However, this Ethereum long position doesn’t stop at just being a long-term investment. The main idea for this Ether long-run is to accumulate more Ethereum. Andrew Keys revealed that his goal is to accumulate 1 percent of the total funds per month.

“So if you gave me 100 ether, my goal would be to produce 1 ether a month,” Keys says.

He explains that this is no “hodling”. Ultimately, their plan is to spot the market “highs” and “lows” in order to accumulate more digital assets.

Moreover, Keys has long been rooting for Ethereum. In 2018 he did an interview at the Economic Forum at Davos where he said:

“We will have a decentralized World Wide Web, and it will impact every aspect of our humanity. I’m going to be able to have peer-to-peer transactions with counter-parties without a bank, or a Facebook, or an Uber, an Amazon, an eBay in the middle.”

DARMA Optimized Long-ETH Fund

Or in short – DOL-ETH, is a program which automatically manages investor digital asset portfolios. It is designed to identify the market cycles and not only hold the assets as such. Their main point is to “create alpha”. Alpha is often referred to as an investment strategy, which ultimately means to “beat the market” or spot the edge. It refers to the idea that markets are efficient, and so there is no way to systematically earn returns that exceed the broad market as a whole.

Moreover, the company already has plans for the upcoming future, as they won’t stop at an individual Ethereum Long fund. They are in the works to providing a bitcoin long fund as well in the upcoming months. However, an interesting decision is to offer a similar long fund on Filecoin. Andrew Keys explained that investors can expect this sometime next year.

“We believe [those tokens] will be the components of the next-generation internet and essentially there is a new asset class in what I would call crypto commodities. So we’re not interested at the application layer, we’re interested in the protocols that many different applications will use,” clarified Keys.

ConsenSys and DARMA will Work Together

As already mentioned, Keys transitioned from ConsenSys to working full time at DARMA, however, he will stay as an advisor at ConsenSys. ConsenSys is a blockchain software company. Since Joseph Lubin, the co-founder of Ethereum, founded the company, their main field of operations is developing decentralized software services and applications that operate on the Ethereum Blockchain. ConsenSys has invested in DARMA in the past, and it will stay as an investor now.

Additionally, this perfectly aligns with what Andrew Keys has done in the past. He revealed that this shift matches his personal interests. 

“My core competency has been in finance and my secondary competency has been in technology,” he said.

Why DOL-ETH is better than other funds?

Keys explains that there’s a void in the market. He also believes that this Ether long fund is a simple solution and a necessary missing piece of the market.

“I think the investment stage, if you look at the PwC blockchain hedge fund report, over 70 percent of them have less than $10 million assets under management, half of them don’t use a custodian and it’s very immature. We have $100 [million] AUM, we have one of the best custodians in Opus, we have KPMG as an auditor,” explains Keys.

However, at the moment, only accredited investors, family offices and institutions can participate in this fund. 

Source:

https://www.ccn.com/crypto-hedge-fund-long-term-ethereum
https://www.coindesk.com/consensys-capital-co-founder-departs-to-bring-wall-street-money-to-ethereum

Photo by rawpixel.com from Pexels

ConsenSys Seeks for $200 Million From Outside Investors

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Recently reported by The Information, a Brooklyn-based blockchain company ConsenSys is seeking for additional $200 million from outside investors. It was founded by Joseph Lubin, the co-founder of Ethereum. 

ConsenSys Grew too Quickly

During the bull market of 2017, ConsenSys reached near 1,200 employees. However, at the end of 2018, they came to a decision to lay off 13% of their staff, because of the long-lasting bear market. Now they have approximately 900 employees. Judging by recent reports, ConsenSys revenue last year was around $20 million. That could be the main reason why they are seeking an additional investment. When comparing to other large blockchain companies ConsenSys seems to be using a different business model. For example, Ryan Selkis, the founder of Messari, tweeted a data slide from the annual DCG summit showing off the company’s numbers:

When comparing to yearly revenue reports on DCG (Digital Coin Group) we see that they managed to do over $100 million in revenue in 2018 with only 8 employees in the parent company and less than 100 total employees. Anthony Pompliano says that Coinbase is rumored to have done over $1 billion in 2018 revenue. However, Binance showed $78 million in revenue in only the first quarter of 2019. Binance has approximately 500 employees across the world.

While many say that these are not comparable companies, we can compare different business approaches.

ConsenSys Revenue Mostly is Coming from its Enterprise Consulting Business.

The Information had gathered fundraising documents from ConsenSys. These documents revealed that most of the 2018 revenue comes from their consulting services. This year, they plan their revenue to be around $50 million with $40 million coming from their enterprise consulting business. Moreover, these documents reveal that ConsenSys has a substantial share in blockchain companies.

While their primary business revolves around building blockchain infrastructure, it might seem that they are not using it efficiently. Anthony Pompliano says in his daily newsletter:

“ConsenSys has focused on less infrastructure though and more on the applications, along with driving majority of their revenue through consulting with governments and large enterprises. It remains to be seen if the strategy will pay off in the long run, but the pressures of a deep bear market expose the difficulties with this model.”

However, he wouldn’t want to count ConsenSys out. While up to this date ConsenSys might have lived with one man funding the company – Joseph Lubin, this is just the effect of the ever-lasting bear market. Pompliano believes that when the bull market will return – ConsenSys wide range of crypto assets will explode, thus driving more revenue.

Should be able to raise the money

Many believe that ConsenSys should be able to raise the capital they need. The company is led by some of the smartest people in blockchain industry. Additionally, the large basket of crypto assets that they have acquired during the company’s existence should be enough of a reason for a potential investor. Wayne Vaughan tweeted a prediction that Microsoft will invest in or acquire ConsenSys in 2019.

Source:

https://www.theinformation.com/articles/consensys-seeks-200-million-from-investors-after-bumpy-year?
https://cointelegraph.com/news/report-blockchain-startup-consensys-seeks-200-million-from-outside-investors
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