Andrew Keys
Jun 6 · 11 min read

After 12 years of treading water at the intersection of finance and technology, I found myself in a classroom at Cardozo Law School in New York City on July 14, 2014. Little did I know that what I learned that day — and the people I met — would change my life.

Aaron Wright, Professor of Law and Technology of Cardozo Law, hosted the first Ethereum Meetup of New York. Less than 40 people attended. It was the first time I met Aaron, Sam Cassatt, Christian Lundkvist, Kieren James-Lubin, and Joseph Lubin.

Admittedly, my best days of Computer Science were in college, and technically, it’s been downhill since then. But having worked at a bulge bracket bank and built a medical database company, I understood enough of what was wrong with databases and payment systems to know that blockchain was something important.

I naively thought of these from micro perspectives rather than understanding the macro issues of trust and agreement. I thought blockchain could revolutionize databases, sure, but I was not aware how blockchain would fundamentally alter the way individuals transact with each other, economies, and completely rewire the global order.

I also didn’t appreciate the growing number of devices that would be coming online, how machine learning, the Internet of Things, and blockchain networks would coalesce into a gargantuan automated internet in its own right, far surpassing the visions and capacities of us mere meat sacks. There was a lot I didn’t know. But I was about to learn.

Chancellor on brink of second bailout for banks

Joe began the meetup by thanking Satoshi for her work in creating a peer-to-peer money system as the first way individuals could secure property rights without having to pay for a trusted intermediary. He then posed that Alice sending Bob value via Bitcoin was just the opening act, and that the addition of business logic to the transaction — the concept of smart contracts — would radically change our financial, social, and political operating systems.

(If X happens

then Alice sends Bob value

else no payment)

I remember thinking that this could be an upgrade to how Earth works. I started asking myself questions like: What is money? Why do we need auditors? Why do we need banks?

What are we going to do with all those skyscrapers?

One week later, the Ethereum Foundation sold ETH in exchange for $18M worth of Bitcoin.

Forming Consensus On ConsenSys 0-1

I fell down the rabbit hole straight from that first meetup. I spent weeks thinking of society through the lens of counter-parties and intermediaries. I realized just how many situations existed in which the intermediary interposes itself and seeks rent. I began thinking of the evolution of subjective institutional trust to programmable automated trust.

I religiously attended every meetup possible. Eventually, Joe — soft-spoken, stoic, and focused — explained he was starting a company named Consensus Systems. This company would build software made to fundamentally shift how humans agree (or disagree) with each other. There was no specific vertical, no concrete business plan, no go-to-market strategy. I loved the concept.

At that time, ConsenSys was situated at Brooklyn Desks in Bushwick, in a room smaller than 1000 square feet with all of the hallmarks of a startup: test GPU mining hardware (this was before the launch of Mainnet), drones, computers, and printers that didn’t work.

Joseph Lubin (Computer Science and Electrical Engineering from Princeton), Sam Cassatt (Masters in Computer Science from Johns Hopkins) and Christian Lundkvist (PhD in Algebraic Geometry from Sweden’s elite KTH Royal Institute) were the core technical team in Brooklyn, with a handful of other engineers tinkering remotely on the Ethereum testnet.

First day at 49 Bogart. No desks, no chairs, no AC.

Knowing my skillset was more in finance than computer science, I met Joe, Sam and Christian in April of 2015 and offered to volunteer without pay to create a business development and marketing strategy. No one had a title. No one had a desk. No one had a job description. Joe just wanted to find the smartest people from every field to construct the next generation of the Internet and revolutionize how society collaborates. We were a company revolving around a software protocol that hadn’t yet launched, with no developer tools, building for an ecosystem that didn’t yet exist. Wild.

Mainnet Launch 0–1

Mike Goldin setting up our miners in my <500 square foot Manhattan studio on the day Ethereum Mainnet launched… we should’ve just bought the ether on exchange due to Manhattan’s egregious $.26c kilowatt/hour

Gearing up for the launch of Mainnet in the summer of 2015 was an exciting time. People were beginning to understand how Ethereum was different from Bitcoin in that it could do so many other things rather than transact. We started seeing interesting projects pop-up everywhere. One particularly interesting project I remember was Slock.it, a smart contract based lock where ether payments would unlock the device.

0 — $1.00

I set about cold calling every Fortune 500 company and investment bank I could. I found a willing ear in a perennial innovator. On October 28th, 2015, Microsoft and ConsenSys announced a collaboration wherein a permissioned version of Ethereum would reside on Azure. In my opinion, Microsoft continues to be the blue chip vanguard in heralding blockchain technology. I guess cold calling works. :-)

Marley Gray and I huddled in a back office on 42nd St. in Manhattan, ensuring Microsoft corporate communications that this was actually a good thing. Blockchain-as-a-Service was conceived, and then explained as best as we could to the Wall Street Journal’s Paul Vigna.

That was when everything started to get crazy.

It was also the first time ether crossed $1.

Vitalik, Myself, CEO Of MSFT Satya Nadella, Co-founder of Blockchain at MSFT Yorke Rhodes
Kumavis, Dan — Metamask Co-Founders and Groovin’- Uport Co-Founder

Many thanks to Cale, Yorke, Marley, Marc and the rest of the ‘softies for putting this industry on the map and helping to usher in the next generation of the Internet.

ConsenSys Enterprise Solutions 0–1

As Ethereum began to mature, so did our strategy for service offerings. A small team of Igor Lilic, John Lilic, Mark D’Agostino, James Slazas, Kishore Atreya and myself began “ConsenSys Enterprise Solutions” to educate Fortune 500’s and governments. We literally ran around the world doing so.

Fun fact: Our first client was John Hancock.

ConsenSys’ Solutions team is now 300+ people strong and spans the globe, with clientele including Glaxo Smith Kline, JP Morgan, Microsoft, Santander, Procter & Gamble and many more.

ConsenSys Enterprises Solutions first deck cover
1st Page — Kudos to the Lilic brothers for creating

Financial Instruments 0–1

After the Microsoft launch, we needed to actually build applications. We created the first derivative instrument on blockchain, the Ethereum Total Return Swap. It demonstrated how blockchain could improve a financial transaction from AML/KYC to smart contract based oracles for price feeds, real time collateral rebalancing, real time tokenized asset gross settlement, and triple entry accounting. Kudos to James and Iggy for driving this.

Since this art of the possible, we’ve gone on to build countless applications with and for some of the largest institutional banks, insurers, and central banks.

Supply Chain 0–1

Supply chain is blockchain’s sleeping giant. Our first supply chains were built for BHP Billiton to track well samples and Philips to track vaccinations.

These learnings led us to create Viant, one of the strongest ConsenSys product offerings led by great people, Tyler Mulvihill, Kishore Atreya, Connor Keenan and my favorite Romanian, Dragos Rizescu.

De-Central Banking 0–1

One of the most fascinating aspects of working with ConsenSys has been learning about Central Banks and monetary policy. I had the privilege of explaining how blockchain tech enables real-time gross settlement of fiat currency to the central banks of Argentina, Brazil, China, Chile, Dubai, England, Hong Kong, South Africa, Singapore, the United States. We gained such a unique opportunity to learn the plumbing of legacy financial systems all over the world from the inside out.

Hong Kong Monetary Authority

Enterprise Ethereum Alliance 0–1

Pre-EEA Launch War Room at Microsoft

Helping to create the Enterprise Ethereum Alliance is one of my fondest memories. I remember learning a bit of tech history from Jeremy Millar in regards to how Java become Java 2 Enterprise Edition (J2EE), which then became the most used software language anywhere: Standardization. Engineers in Mumbai, Dubai, Paris, and San Francisco used J2EE because it had clean web APIs and database APIs. Similarly, Enterprise Ethereum needed a standards body.

EEA has now grown to over 235 members and is flourishing as the largest open-source blockchain initiative on Earth.

Token Fever 0–1

This story wouldn’t be possible without a little token fever. Supporting the creation of ConsenSys Capital composed of Token Foundry, ConsenSys Ventures, and Fund Foundry taught me the ins and outs of primary issuance of assets, cap-tables, and risk — but more so it taught me human emotion. Through these endeavors, I was able to revisit the entrepreneurial grit of seed stage companies. It reminded me of the fearless hope and ambition that propelled the earliest days of ConsenSys.

One of my proudest moments of this time was when ConsenSys announced it was NOT going to continue to #tokenizeallthethings until there was regulatory clarity and our legal team created the Brooklyn Project, to define an ontology of digital assets and educate regulators on their implications. God bless the lawyers.

Where do we go from here?

To go from 0 to 1, to conceive and then create — particularly a vision of this magnitude — that’s the miracle. But the best part about the early days of Ethereum, ConsenSys, and the decentralization revolution is precisely that they are the early days. We’re so remarkably beyond where we were then. We got from 0 to 1 and then to 2, and then the growth of the Ethereum ecosystem was exponential. Now, our little community has grown into a global force, the infrastructure for a new global economy, and there is more work than ever to be done…

Guns and Butter — The Economic Principle of Comparative Advantage

My favorite high school class was Introduction to Macroeconomics, taught by Robert Davis.

A principle I remember to this day is the notion of Comparative Advantage. Long story short: there are 2 countries (or companies) that can produce 2 goods (or services). The first country is more efficient at producing the first good, while the second country is more efficient at producing the second good. Comparative Advantage states that they should each specialize by producing the good they accel at and trade for the other good, rather than both of them producing both goods individually and not trading.

An example:

2 Countries can each produce Guns and Butter with varying efficiency of each asset.

In Option #1, Country A contributes 50 guns and Country B produces 25 guns. In Option #3, Country A contributes 100 lbs. and Country B contributes 5 lbs. of butter. Both of these options are socially inefficient as one country isn’t focusing on their comparative advantage in either case.

Option #2 is the best choice, as it maximizes production and utility for both countries. Each country produces the item in which they have a comparative advantage, allowing them to receive benefits from trade. Country A produces 100 lbs. of butter, while Country B supplies 25 guns.

This is a hypothetical situation. In a more realistic scenario, Country B will produce exclusively or primarily guns and trade them for butter from Country A in a barter system. Country A would do the exact opposite, producing butter and trading its excess supply for any guns it wanted from Country B and didn’t produce on their own.

Country A and Country B can specialize in which good has the least opportunity cost for them, thus using their resources in the most efficient manner. They can then trade with their specialized goods for other countries’ products of specialization. Utilizing a comparative advantage, both countries are better off.

Why am I talking about Guns & Butter?

Moving forward, I will be serving Digital Asset Risk Management Advisors (DARMA Capital) as Managing Partner. DARMA Capital is a CFTC registered, NFA member whose goal is to provide Quantitative Systematic Alpha Generation of Web3 Protocols. Our flagship fund is an Ether Optimized Long strategy with $100M worth of digital assets under management, created for investors that want to accumulate more ether.

Employing the economic principle of comparative advantage and synergistic nature of the the Ethereum ecosystem, DARMA and ConsenSys can work collaboratively to specialize and trade. I will personally remain on the advisory board of ConsenSys, and will continue to triage business opportunities to ConsenSys where appropriate.

DARMA Capital will use ConsenSys products like Alethio, Open Law, and Gnosis Safe to enhance alpha generation, ensure safekeeping of our assets, and improve our legal documentation and processes.

ConsenSys will use DARMA’s risk management services to optimize a portion of the ConsenSys ether treasury.

Guns and butter.

1 Last Prediction

I’ve made a few predictions about the blockchain ecosystem and its effect on the world over the years, but I’ll leave you with one last prediction:

ConsenSys has the potential to be the most important software company to society within 10 years, and Joe’s vision of radically improving how humans agree will progress Earth’s financial, social, and political operating systems. The output of these newly formed consensus systems built by ConsenSys will digitize our global economy, thaw liquidity, and usher an industrial revolution unlike anything we’ve ever seen.

Thank You

I feel like this has all been a dream.

To my colleagues, thank you all so much for everything you’ve taught me about the world and about myself. ConsenSys has been and continues to be the most interesting and rewarding endeavor I’ve ever embarked on. You are truly changing the world. Never ever ever give up.

Keep ConsenSys weird,

AK

DARMA Capital

An investment management firm exclusively focused on managing risks associated with blockchain digital assets.

Thanks to ConsenSys

Andrew Keys

Written by

Everything changes. Everything is connected. Pay Attention.

DARMA Capital

An investment management firm exclusively focused on managing risks associated with blockchain digital assets.

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