Draper Dragon: Bullish on Web3 projects like IoTeX and MachineFi

Kavan Canekeratne, Draper Dragon Senior Associate, whose company is significantly bullish on Web3 projects like IoTeX and its MachineFi vision, said his investment firm believes many projects have failed tokenomics and should focus on making them sustainable.

Web3 is here to stay. We've heard this phrase before, mainly when crypto advocates speak of the future of blockchain and digital assets. And there is evidence to support that it is true.

Eleven months ago, a Bitcoinist report revealed that institutional investors owned 8% of the total supply of bitcoin. Late last year, according to a Reuters report, the International Monetary Fund (IMF) conceded that "crypto assets are potentially changing the international monetary and final system in profound ways."

On 26 April this year, Bitstamp published a survey showing that 80% of institutional investors believe crypto as an asset class will surpass traditional investment tools in the next decade. The same study, covered by Euronews in an 11 May 2022 article, indicates that 88% of the 28,000 institutional investors interviewed believe crypto will go mainstream within the next decade.

Draper Dragon launched in 2006, a couple of years before the bitcoin genesis. Its founders, Larry Li, Andy Tang, Bobby Chao, and multi-billionaire Tim Draper, initially invested in traditional tech firms from Silicon Valley, Toronto, Shanghai, Hong Kong, Singapore, and Bangalore.

However, today, “we only invest in Web3 and companies that will bring the next wave of people into crypto,”said Kavan Canekeratne, Senior Draper Dragon Associate. He also said crypto projects should focus more on sustainable tokenomics. “Currently, very few products have this figured out but should focus more on this issue.”

The Draper Dragon portfolio includes "unicorns" such as Microport Medical, Coinbase, Otter, VeChcain, IoTeX, and Ledger, a crypto hardware wallet provider, which just recently closed a $100 million funding round at a $1.5 billion valuation.

Video insert: IoTeX to Enable Widespread Web3 Use:  In Conversation with Kavan Canekeratne

The next wave of people into crypto

Draper Dragon has a dedicated digital asset fund that focuses on all things web3, explained the California-based company's Senior Associate Kavan Canekeratne.

"We have four main tracks, which are infrastructure, where IoTeX and its MachineFi vision fits in, and NFTs, DeFi, and metaverse-gaming," he added." So, it's a pretty broad thesis within web3, but that's all in which we invest."

He said that on the infrastructure side," we also invested in Ledger, which is one of the best selling cryptocurrency hardware wallets."

 

"What we look for are companies that will help bring the next wave of people into the crypto economy," said Canekeratne. "And what I mean by that is that (web3) right now it's been built by developers for developers. So, how do we make it an ecosystem that's usable by everybody? And I think those will be the next great companies."

In that sense, said Canekeratne, "IoTeX fits really well into what we are looking for but also just like an actual concrete use case for web3 and crypto because data is super important. Everybody is trying to figure out more ways to collect data. And then what we can do with that data and the insights are typically very powerful."

Video insert: IoTeX Models Sustainable Demand & Tokenomics:

Problem: Very few control consumer data

"But today we're in a world where very, very few people control that data, whether it's consumer data, like our user behavior, or also for machines and how we're using them, and how they are used," the investment expert pointed out.

And this is where IoTeX's MachineFi is significantly relevant. It is about empowering users and enabling their access to the data economy. "That's only going to grow in importance in the coming years," he said.

In Canekeratne's opinion, IoTeX's MachineFi is a powerful proposition. "There is always going to be somebody looking for what you guys (IoTeX) are supplying," which is data. "And I believe that is a powerful ecosystem for users to get involved in," he said.

The Draper Dragon Senior Associate spoke of one example where users could monetize weather sensors in their spare time thanks to IoTeX's technology and its MachineFi platform.

"The weather data flow is fascinating because it is a pretty capital-intensive thing to do," he said. "Weather flow is a weather collecting sensor that could bring more users into the IoTeX ecosystem."

How does MachineFi benefit users?

MachineFi Lab is IoTeX's core developer. It has built the most cutting-edge technology to power all kinds of intelligent devices and machine networks and create the most groundbreaking web3 reward economy for the benefit of users.

As Canekeratne said, currently, only tech firms benefit and profit from the billions of smart devices and machines connected to the internet. But with MachineFi technology, that will no longer be true as it decentralizes the intelligent machine connectivity with blockchain. It gives the user back control over their devices and their data.

Today's data economy could mean up to $3,000 in extra cash each year for users, and currently, there are only about 20 billion devices connected to the internet. That value is expected to increase significantly by 2030, when IHS Markit estimates that people will have 125 billion IoT smart devices and machines.

"For any MachineFi network to exist, you need adapters to grab the data, computing resources to process that data, a trusted way to serve the data, and a machine-friendly blockchain to power assets," he said. "And, of course, decentralized identities are indispensable."

IoTeX has built the blockchain to decentralize the IoT, to democratize it so that users can profit from their data instead of the big corporations as is now the case.

"We have built a fast, extremely low-cost, secure, and scalable multichain," Guo added. "IoTeX supports IoT-friendly crypto curves, SDKs, and bridges to connect other blockchain and blockchain assets. We are also close to releasing W3bstream for data streaming, gathering, and serving." W3bstream is poised to be one of the most advanced technologies to deal with machine data, Guo added.

The conclusion in IoTeX's CEO's words

"Web3 represents a significant paradigm shift that could fundamentally change how people interact with smart devices and machines and how IoT businesses work," said Chai. "MachineFi technology decentralizes the IoT and gives people and businesses back ownership. It returns data ownership to users unlocking rewards and benefits never seen before."

Web3 comes with many challenges, and it is still at its early stages, but those who decide to get involved with it and, particularly with MachineFi, will reap the benefits it brings, Chai concluded.