Enabling the Antifragility of Finance through the Power of Blockchain

BoCG Ventures (BoCGV) is committed to blockchain-based development across all our portfolio assets. Our venture operating approach allows us to help early-stage companies with ground-up strategic development while also assisting more mature companies with follow-on product roadmaps to unleash growth opportunities. Since venturing past cryptocurrencies into blockchain technology development, we have directly witnessed the power of this revolutionary technology. Our experience in the space, linked with the research published by Statista’s Research Department, where they forecast the blockchain technology market to reach 163B by 2027, make us bullish on blockchain in general. Our team views scalable technology solutions as pivotal enabling factors for democratizing innovative businesses. We specifically view the three following blockchain-specific features as instrumental competitive advantages for early adopters.

Blockchain technology market size worldwide from 2017 to 2027(in billion U.S. dollars) — Source: Statista

1. Triple entry accounting system only available through an immutable blockchain.
2. Peer-to-Peer Trustless verification rather than antiquated financial institutions.
3. Infrastructure for unprecedented property rights and banking without prejudice.

The innovators of tomorrow understand the power of the blockchain and the team at BoCG Ventures is investing in the future of this still very dormant market segment.

Blockchain technology by itself is not antifragile. In order to withstand and grow from market shocks, the entire business model has to be fortified. Blockchain technology provides insight, auditability, and security where these features build off one another to enable democratized access. The core philosophy behind what we believe is the antifragility of finance. Single and Double Entry Accounting have limitations rooted in lack of transparency, verification, multiple booking systems alongside accountants that can be bribed or bought; examples include Enron, where the accounting firm Arthur Andersen signed off on fraudulent filings because of the sheer size of the client. The result is a great deterioration of public trust. The immutable cryptographic technology within blockchain resolves these limitations as a system that prevents manipulation, fraud, and alterations. The Triple Entry Accounting system is what leads us to a peer-to-peer (p2p) trustless verification system that remains powerfully influential. A few key benefits include enabling consistency rather than auditing, enabling self-regulation and a shared environment, unbiasedness, and an immutable history. These permissionless blockchain networks remove the biases inherent in existing financial systems and reduce the inequalities endemic in current socioeconomic systems. Immutable records that eliminate third-party professionals, improve speed of transactions, and ensure security make up the foundation of an antifragile enterprise.

Like any new technology application, we know that blockchain is not sufficient to bring about greater levels of change and new customer behaviors. Some may claim blockchain as antifragile because of the hyper-growth Bitcoin experienced between 2018–2020 where the coin hit a value of $67,000. Since then, Bitcoin value has dropped to below $30,000 making the point that inflation, higher interest rates, and gloomy market outlooks directly affect the value even of the world’s premier cryptocurrency operating on a bitcoin-enabled blockchain network. This example highlights that blockchain-based frameworks such as Crypto, NFTs, and DeFi are not sufficiently antifragile. Crypto is volatile and always will be, NFTs are going through a bubble-like, boom and bust cycle, and DeFi is inherently limited due to the pitfalls of regulation and overcollateralization. So how can we overcome these challenges and barriers to commercial scalability?

At BoCG Ventures, we design antifragile enterprises by enveloping innovative opportunities with the systems design needed to scale. A few recent use cases include:

1. Biotechnology commercialization through crypto networks to achieve real world value.
2. NFT-based smart contracts to ensure monetary and intellectual property rights for asset owners.
3. Tokenization of debt instruments to introduce new alternative lending opportunities.

The common thread amongst all three of the above opportunities is regulation. Biotechnology and healthcare is a highly regulated field and any innovation will receive the highest levels of scrutiny before receiving regulatory approval. Alternative lending is similar, in terms of regulatory scrutiny, as it touches upon people’s personal finances and security. The rise of tokenization enabled by blockchain networks has seen the emergence of NFTs as an alternative, unregulated way to raise capital, sell items and earn royalties. These instruments have flown under the radar of regulators but are likely to be classified as securities in the near future. The BoCG Ventures team believes that DeFi is a successful, emergent instrument for change albeit one that needs to withstand both regulatory and market scrutiny in order to be widely adopted.

We understand that blockchain-based, antifragile value creation is the future of enterprise. This new technology holds impressive growth opportunities to those who understand how to wield it wisely. The key to antifragility is to ground every project in data, develop strategic milestones, gain traction through operating and iterating, and embracing change as a tool for innovation. Moreover, the gloomy global economic outlook for the near future highlights the need for antifragility across all areas of enterprise. Consumer trends such as Kickstarter, Robinhood and Streitwize show us that financial antifragility is wanted. It is in the best interest of anyone seeking a better future to invest in blockchain-based technology and the companies that embrace them. Similarly, traditional finance institutions and stakeholders will need to adopt, adapt, and assimilate to the next wave of financial innovation founded on blockchain technology or run the risk of becoming obsolete.

We are committed to bridging the gap between lofty ideas and scalable antifragile investment opportunities — To educate both entrepreneurs and investors on the prowess that our Venture Operating Model uses to marry antifragile principles with systems design and bring to market innovative products and services. The Antifragility of Finance is here to stay and we’re excited to work side-by-side with the brands leading the way. Watch our teaser and follow us for more updates as we launch and scale companies that have fully embraced these paradigm shifts:

To learn more about our work, contact our team or follow us on LinkedIn, Twitter, or Medium.

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The views expressed here are those of the individual BoCG Ventures, L.L.C. (“BV”) personnel quoted and are not the views of BV or its affiliates. Certain information contained herein has been obtained from third-party sources, including from portfolio companies of funds managed by BoCG Ventures. While taken from sources believed to be reliable, BoCG Ventures has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation.

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