Christian St. Louis of Ethereal Ventures on Building Through Crypto’s Quietest Cycle

Speaker A: If we're talking about the unicorns of the future, I would say to focus more on like, really hard problems in difficult markets and really like, think about and model out like, the secondary and tertiary outcomes that you see playing out in the future and stick to your guns on those things, no matter like, what comes out with Claude next week. Um, you know, and that can be harder for a venture firm to underwrite and it can create a lot more work. But if you get it right, I think you can do very, very well.

Speaker B: Hey, everyone. Welcome to the SM Economy podcast where we ask your favorite builders the questions you wish you could ask them yourselves. This is a production of NeonWToday.com and I'm your host, Dylan Grabowski. In this episode, we're joined by Christian St. Louis, a partner at Ethereal Ventures, a VC firm that spun out of consensus in 2021. In this conversation we discuss Ethereal Ventures, focus on blockchain founders and being a founder first block oriented firm, how to stay sharp as a VC in 2026, the adoption of blockchain and crypto, and what it looks like today, the pros and the cons of widespread AI, uh, usage, VC deal count being at a five year low, and so much more. Just a reminder, nothing said on this podcast is a solicitation to buy or sell any tokens and and that the guest or host might hold tokens discussed in any given episode. You can check out a Full disclaimer@www.neonewstoday.com. if you enjoyed this episode, please consider rating and reviewing it on your favorite podcasting platform and sharing with your friends and family. Every rate, review, like and comment helps us reach more people and bring you more fascinating guests. With all that said, I really enjoyed this conversation with Christian and I hope you enjoy it too. What's up, everybody? Welcome to the Smart Economy Podcast. Today we're joined by Christian St. Louis, a partner at Ethereal uh Ventures, which invests globally scaling companies from inception to growth and beyond. Christian, how are you today?

Speaker A: I'm doing very well, thanks. Thank you so much for having me.

Speaker B: I'm, um, really excited. We're also going to have a fun conversation. It's a Friday morning, Friday afternoon conversation. Hopefully that light heartedness flows in. Um, but before we dive into anything, we were briefly touching on kind of like the OG nature that Canada as a country has for just like the birth of blockchain and crypto. So before we talk about anything else, I just kind of want to hear your Genesis story. What was the first time you Came across Bitcoin or Ethereum. And did it click right away or did you have to have an aha moment a few years later?

Speaker A: Yeah, it's a very good question. Thank you. I actually haven't gotten a question like that in a really long time. I guess when you're on the fun side, you're the one who's like asking that more. So. Um, but yeah, the first time I came across Ethereum, um, that was the first thing I came across. I wasn't as, as OG as Bitcoin, um, but was through my brother actually. So I have a twin brother, uh, named Charles, who is actually head of DeFi at the Ethereum foundation right now. And um, he introduced me back in university to Ethereum via uh, one of his summer jobs. So this was 2016 ish. Where uh, and as a part of that summer job he got involved and then he basically brought some people to our campus in our fourth year to teach us about solidity, um, and about just developing um, blockchains and how Ethereum works. And uh, a lot of it went over my head for sure, but it was, I was definitely intriguing. Um, and yeah, that, that was really the first touch point was actually just more on the tech side.

Speaker B: Yeah. So a, uh, lot of times when we're chatting with folks, you know, they kind of like came into crypto because of moneyness or whatever kind of like political ideology led you down that path. And I always kind of find it interesting that we don't have more origin stories like yours that were very tech oriented and kind of like developer first. So when you're first learning how to grok solidity, when you're first learning about like what a uh, programmable smart contract platform can offer. What were your initial thoughts? Like there wasn't DeFi in 2026. We, we barely even had NFTs. So what were you thinking when you first started programming with Solidity and kind of wrapping your head around this? Where did you think this technology had hope and opportunity for the future ten years ago?

Speaker A: Well, yeah, ten years ago. Um, yeah, that's crazy. Uh, you know what, I'll be, I'll be 100% honest with you. I didn't think that much of it at the time. I, I, you know, when you're at university you're still just kind of, at least I was going through the motions and, and learning about things, finding it really interesting. And I found like the cryptography aspect very cool. The way that it was described. Um, the fact that it was, you know, this consensus Machine, um, that was, you know, had coordination and coordination happening all over the world. I thought that part was really cool. But at the time, you know, there's were teaching us how to write really simple smart contracts. And, you know, you get all these cool ideas initially of what a smart contract can do and, like, what that can replace in the real world. Um, but at that time, it just, like, it didn't seem like any of it was practical. Um, but it was really fun to mess around with. And it was fun theoretically and conceptually, but, yeah, very little of it was. You couldn't really run with any of it, I guess. So it beyond, like that educational, theoretical aspect, um, I didn't take it too seriously, to be honest. Um, and then I guess the 2017 ICO stuff happened, which was basically exactly that. It was like, oh, my God, look at this technology. Look at smart contracts. Look at blockchain. Apply it to everything. Um, and then very little of that panned out. Right. But then I feel like now we're getting to a point where those ideas are starting to come back. Um, because it's just more practical now. I just. These things just take time.

Speaker B: Yeah. I really can't wait to dig into the. The landscape that you see from the VC perspective. Um, but I remember, and I've been actually thinking about this this week because. And it's. It's mid-2026 when we're recording this. We're currently in a bear cycle. Um, sentiment on CT is awful, but at the same time, you're just seeing massive adoption from, like, tradfi entities and from banks. And so 2017 was this magical era where you would just download tons and tons of white papers and read into them and get really excited about decentralizing Airbnb. Um, but there was like a magic that was there back then because we didn't quite know how this technology or asset class could be used. And there was just so much, you know, what ifs? And it was magical. But like you mentioned, I think something like 98% or 99% of every project from the ICO era has collapsed or just isn't functioning anymore. So do we still have that magic today? Like, is there something there? Because when I'm doing my daily streams, when I'm creating my content, it's a really boring story to tell. It's not sexy, it's not cypherpunk. And 10 years ago, when I was first learning about crypto and blockchain and Bitcoin and Ethereum, I did not think I would be Championing JP Morgan, integrating like a ZK enabled blockchain into their tech stack. So is there still a little bit of magic here today or are we just at a circumstance of growing up and having to shave our mohawks and put on a business suit?

Speaker A: Yeah, I mean, I think a lot of that is true. Um, I mean, if you look at the ef, I think they're going in the opposite direction. Like they're trying to be, get back to their roots, be a little bit more cypherpunk. At least Vitalik is trying to, to say that publicly. And you know, I hear that from my brother as well. Um, because the, like the tradfi, Rails, um, and the more practical applications of blockchain will just be done regardless of what the EF does. Right. Um, if institutions think blockchain makes their moat bigger or their products better, then they'll do it as regulation falls into place, which is what's happening right now. Um, so these more OG institutions I guess can say, great, you guys will take care of that adoption. We can focus on the cypherpunky stuff. So I think there's actually like a divergence right now of those two things. Um, we'll see how it plays out. But I, uh, think both will just have their own lanes now.

Speaker B: Mhm. When the crops mandate came out and EF was doubling down on the censorship resistance, making sure that there's an L1 that can continue to be permissionless and accessible to all globally, there was a lot of backlash because I think folks were happy when Tomash came in to the EF last year, started applying very DAPP and business centric ideology to onboarding users and new dapps as well into the Ethereum ecosystem. And a lot of people on crypto Twitter were very happy with this. The price of Ethereum was also going up because we were at the tail end of the 2025 bull market. And then we see this, we see Tomash leave this month or this year in February and then kind of like the crops come out. So do you think that there's, there needs to be a mandate from a permissionless L1 like Ethereum to go out there and say like, no, we need to stick to our cypherpunk roots. Like, was this the right time to do that or should they still have kind of been focusing on like appeasing the token holders, onboarding new users and dapps and really just kind of like pushing that narrative from the Ethereum Foundation's perspective?

Speaker A: Yeah, it's a really good question. And honestly, I'm probably not the best person to answer it just because I'm not as uh, close to the Ethereum foundation and like, I don't really know truly what they're, what they're trying to get aligned on internally outside of what's been pushed out publicly. But I think the point stands that it's okay for them to focus on the more crops cipher punky type direction, um, because there are other really interested parties with a lot of capital that are pushing in the other direction, um, in terms of institutional adoption. Like I don't think they need necessarily need people internally evangelizing that anymore because Ethereum has gotten to a point where it's such a mature substrate and like it's done everything it said it was going to, that anyone can just build on it and anyone with capital can throw capital at it. So um, I think it's a fair approach.

Speaker B: Cool. Um, I think what's really interesting about your background is you kind of came up from like the data side and managing and just kind of getting your hands dirty engineering data. And so before we delve into your role at ev, um, I don't know if you guys call it ev.

Speaker A: Yeah. Evil. Yeah.

Speaker B: Awesome. Um, let's just do a quick little uh, like professional journey that you've had. You, you started with Ipolitics and then you went to Stack Adept and then you co founded component. And something that's really interesting is there's this sort of quant like data analysis that's been a part of each of the steps. But as you've moved into your professional journey it also seems like you've gotten higher and higher and farther away from that. So what do you think? Um, why did you get interested in the sort of like data side of these entities that you were working with and why have you kind of abstracted away from that and gone higher level as you've progressed through your professional journey?

Speaker A: Yeah. Great question. Thank you. Time, um, to do some self reflection I guess. But.

Speaker B: So, uh, are you on a Friday afternoon?

Speaker A: No. All good. No, it's a great question and frankly like a lot of the early days of transitioning from learning, learning and, and into your professional career. I feel like a lot of that for me, some of it was intentional for sure, but part of it was also going with the flow a little bit, um, in the sense that I remember in, in back in the university days, like I was deciding what I wanted to major in, um, and ended up doing math and statistics and then doing another degree like a master's degree in that later and I had just watched goodwill hunting and I was like, whoa, you know, math is pretty sick. And so that, that had a big influence on it for sure. But then I actually ended up getting very interested in statistics and like the application of statistics which naturally leads to data science, data engineering, um, and, but a lot of it was just kind of by accident to be honest. Uh, my brother and I studied the same thing um, at the same university. M. And, and uh, yeah, ended up getting lucky I would say because uh, like I said, he went more the crypto route, um, right away. But for me I didn't get into crypto full time until end of 2020. Um, and so initially it was more data science focused machine learning kind of AI before it was um, called that, when it was more called machine learning and data science.

Speaker B: Right.

Speaker A: Um, and I just found it, I found it very interesting like the potential of that technology, specifically neural networks, um, but never would have imagined it making the jump that it did to like LLMs, generative AI, et cetera. Um, but yeah, I was just fascinated with the underlying tech. And then that took me to the, to stackadapt, um, as like in a data role. Um, and then things just kind of kept bundling from there and yeah, not all of it was intentional I would say.

Speaker B: I really appreciate. So we've been recording for 15 minutes and you've brought up your days in college twice already. And yeah, I actually really appreciate that a lot because I was an urban planner before I got into the crypto space. I came into crypto full time in 2018 and part of why I got really geeked and excited on crypto was these sort of like economic reasons. You know, a, uh, large portion of the world was unbanked and then with a cell phone and access to the Internet you could get an ethereum or a bitcoin wallet and participate in a global market. And when I was studying urban planning in school, economics was just a small part, but it was a super fascinating part of the studies that we were doing and then finally come full circle eight years after I graduate from grad school. Um, it's an economic kind of pull that brought me into the blockchain and crypto space. And I've also been trying to um, not combat but, but understand the role of where blockchain and crypto fits into the curriculum of uh, of higher education. Because a lot of people who are building, building products, they don't necessarily need to go to school. You don't need to go to school to be A founder. So how do you kind of, how do you see it, uh, this balance of teaching students about building about blockchain networks, but also this being such a easy field to build a new product and go out and fundraise and start your own company without even a college degree. What role does college still have today in an industry where you don't necessarily have to have a piece of paper to make it far?

Speaker A: Yeah, that's a, that's an excellent point. And I don't, not a lot of people talk about that. I don't think I, um, would say, at least back in my day there was definitely very little to nothing in higher education on blockchain. Um, but it's just because it was so early, I guess. And I don't, I can't 100%. I haven't, you know, done the due diligence on this. But I would probably guess that there's still very little in the way of, you know, a course on blockchain and most major universities and colleges in North America, Europe, Asia and beyond. Uh, and it's very much on the person to go find it and get interested in it on their own. Which is cool because that kind of brings very mission driven, like ah, aligned people to the space. And I think it's still like that. Whereas AI is the opposite. Like every university and college is, is teaching about AI and is there is morphing their um, you know, the curriculums around it which will just bring the masses to AI versus very mission driven, like select people who want to get into the industry for a reason. So I think it's kind of a good thing, but it also means things move a little slower as well.

Speaker B: Yeah. Something that I found interesting, um, Eat Denver was here in February. There was also a side event, ETH Boulder. And a lot of students from UC Boulder just happened to go to ETH Boulder and I had lunch with one of the students and um, you know, AI is just becoming all encompassing. You know, my dad, my mom are using it, they're retired. And it's just becoming a part of everybody's day to day life. But the students were saying that, you see, Boulder particularly is going out of its way not to offer AI courses because they want to train their students to classically think and to be able to classically write uh, research papers and things of this nature. So I wonder if it's kind of a folly that we're pushing students away from AI or maybe our education system still needs to be a light in a way and reinforce that we teach ourselves to think and then we can think through problems without just going to an LLM and, or Claude or Grok and just asking for them to think for us. Um, I don't know if like you're seeing that yourself.

Speaker A: Uh, I mean, I didn't know about that, but that's, I think that's a great stance because like, I mean if you think about any getting good at anything, whether it's intellectual or whether it's a martial art, whether it's a sport, like if you speak to any master in, in, in their discipline, it's always the fundamentals. Like you have to learn the fundamentals, you have to practice them. So why would, you know, why would education and, and learning to problem solve and write be any different? I think you should learn the fundamentals before, uh, skipping straight to copying LLM output. So I, I, I agree with that approach.

Speaker B: Yeah. So let's zoom in a little bit then to, to ev. So can you, I guess let's just first take a step back. Um, the, the kind of like intro pitch that I gave was quite broad. Um, so what, what specifically is EV and what do you guys focus on in particular?

Speaker A: Yeah, so I mean our focus at EV is still squarely in crypto and blockchain. Um, you know, we certainly keep tabs on other themes like AI robotics, space, SpaceX today, um, biotech. Right. But we're all always still trying to find a common link or thread that, that leads back to blockchain or stablecoins, because that is still our main mandate. And like we're, we're here for the long term for that. Um, and you know, the vision for, for Ethereum and for, for crypto and blockchain I think has been the same for a really long time. It's just taken a lot longer than we imagined. Um, for, you know, the, the fact that blockchain's inherent properties just make a lot of things genuinely better. Uh, and I think that we're getting to an inflection point and you know, we're trying to invest in companies that are a part of that inflection point, uh, broadly across any category, any vertical, as long as there's an element of, of blockchain, um, or you know, stablecoin or Decentralization. And um, yeah, I think we've, we've been through a few cycles now, right, that were dominated by these infrastructure narratives, um, a lot of them vaporware, um, and speculative tokens that unfortunately majority of them have, have gone down. Um, but I think we actually are Getting to a point where those kind of catalysts that were the 2017 ICOs we were talking about are starting to converge. Um, you know, I'm sure we'll talk about it more, but there's a lot happening and there's a lot of quiet product market fit that has been established. And um, yeah, those are the types of things that we like to invest in at Ethereal. And we try to at least be very thesis driven and idea forward. Uh, we try and think deeply and debate on different categories and topics internally and then go out and find those things in the world, you know, founders that share those views or like building in similar adjacent directions. Um, so we try to be very purposeful and in our outreach and who we work with and who we fund.

Speaker B: How, how big is the EV team? Because this sounds fascinating to me. Like that just sounds like a graduate school class to me where you're just in a class and you're just debating the pros and the cons. Steel manning an argument. Steel manning a topic. So how large is your team and what's the process like for uh, these internal debates and keeping them healthy and also keeping yourself sharp and keeping the eye on the ball?

Speaker A: Yeah, I mean that's the most important thing is staying sharp. And the only way you can do that is if everyone internally has an opinion and is willing to express that opinion and isn't afraid of that opinion being wrong or um, you know, completely against what the other person is saying. And it's pretty easy for us because it's a pretty, you know, flat organization. Uh, and there's only five of us, um, that are doing investing and so that it's a really good. Because you know, there's, there's five people that know each other really well that have differing opinions and like are willing to speak up on any, on any topic and also to refute any point that you make in a respectful way. So it just, it's just a great place for, for continuing to like sharpen your thoughts and have someone think on the other side and give you pushback. Right. It just makes us all better and kind of smarter, uh, moving forward.

Speaker B: One of the things that I think is the gift and the curse of blockchain is that this is the first technology in history where there's been an economic layer built into the tech stack. And this is the pro and the con. When somebody buys into your ecosystem, they're literally buying into it. They're buying the token. And so when things are going good, you're, they're A genius. And when things are going bad, it's everybody else's fault because there is this emotional element that's tied to having an investment in the ecosystem. Do you find that when you're having these kind of higher level debates that there's this emotional attachment to some of your team's arguments? Has there ever been times where it got heated and you had to take a step back and maybe reconvene another day?

Speaker A: Oh, yeah, for sure. I mean that I'm a pretty even keeled, um, relaxed person. So not really with me, but definitely like if there's. Because, yeah, there's a lot of, there's a lot of sometimes emotion, thought and time spent on, on specific ideas. And if you know someone um, comes up with a really good point on the other side and it kind of, you realize it pokes a big hole in your thinking. You know, at first it can be like, oh, that sucks. But I think it's better longer term. Right. And definitely like there's times when you get bummed out if your idea is proven to not be as good as you thought, but ultimately you're better off for it. And the fund definitely is better off for it as well.

Speaker B: Um, I want to zoom in a little bit on this. Focus on being a founder first VC firm. For there's a lot of, if you go on crypto Twitter, you can find a lot of people saying a lot of bad things about VCs. And there's merits for everything. There's, there's pros and cons to everything. There's. There's whole truths and half truths. But I think being a founder, verse. VC founder first VC firm really from the outside looking in and, and I would love for you to tell me where I'm right and wrong and expand upon this is, this is um, a venture capital entity that is investing into, into the founder of a product and is really saying, we believe in your vision and we're going to be in your corner. What does, what does that actually look like? What does providing that support look like? Where can getting in bed with the wrong VC go wrong if they're not a founder first oriented firm?

Speaker A: Yeah, really good question. And the, the person who could really answer this perfectly would be one of our, one of our partners, uh, Greg Rocco. Uh, he's, he's our operating partner and he is the most involved in terms of like day in, day out of working with our founders. He um, was also a founder himself. Um, founder at Spruce ID and funded uh, by Ethereal. Um, and I was also a founder that was funded by Ethereal, um, um, so I think that in and of itself is an interesting anecdotal piece that, you know, out of all the funds that we both worked with, we decided that we wanted to work with Ethereal um, for a reason. Right. And, and it mainly was the founder first approach. And it's just little things in the beginning and we try and kind of compound those things and, and see kind of what is most helpful to the founders that we work with and then offer that to everyone. And I think there's a few things that are, that enable us to do that. One, several of us were founders, so I think we try and come from a place of empathy rather than just sympathy. Um, having been through a lot of the ups and downs of running a business and taking venture capital. Um, we've all dealt with crazy scenarios, um, like with other firms before. And um, you just don't want to be those people, right? Like, you want to be, you want to be the ones that, where if, if a founder asks about our fund, like, they're like, we've, we have nothing, nothing but good things to say whether we work with them or not. Right? So like, for example, even if we do due diligence on any company and we take up a lot of the founder's time, if we're, you know, if we're, if we have to, you know, we decide not to invest, we make sure to walk through like all of our thinking, like a dump of all our information to be like, this is why we totally might be wrong, but this is just our reasoning so that they can take that, you know, to the next fund and um, maybe shape up their narrative or ignore it, you know, do whatever they want with it. Right. Um, but in terms of working with the founders day to day, um, we don't. We try and invest, um. I know a lot of people probably say this, but we try and invest in quality over quantity. So like, we're actually not doing that many investments per year, which is good because we're a small team and we only have so much in, in terms of resources that we can properly allocate to the people that we fund. And so that helps us because, um, you know, it enables us to spend more time with our founders and even like co build alongside them, um, and, and help from anywhere from, from hiring to like dealing with a conflict with a co founder or you know, an employee. Um, really anything that, that the founder needs, like we try and be helpful with. And then of course, like our the, the kind of historical connection that we have with, um, so Ethereal initially spun out of consensus in 2021, um, and is now completely independent to raise independent capital over the last five years. But, um, those kind of connections from, like, the early consensus days and, you know, Joe Lubin being, uh, the chairman of the fund, um, we find that, that. And like, we're, you know, we're, we're happy to talk about this because we find that that opens a lot of doors. Like, there's a lot of people, um, in our networks and that we're, you know, have worked with over the years that are still just like a phone call away. And that's kind of the nice thing about the blockchain and crypto world still being relatively small, is that you can put your founders in touch with a lot of people that actually might be additive to their business. So, yeah, hopefully that's. That's a clear depiction.

Speaker B: Yeah, you actually brought up. I wanted to just mention Joe. I mean, it's hard when you go to the website and Joe Lubin's like the first person on the team that you see, so there's just this kind of weight that's associated with it. And you mentioned the pros that, you know, there's a lot of conversations that are just a phone call away. A lot of people. What might be one of the cons of having kind of like a, a rock star of the early Ethereum days on the board, on the team? Um, I, I don't want to put any words in your mouth. I have some ideas for what, what a con might be, but, like, what are, what are some ways where you feel like that might be. I don't want to say a disadvantage, but maybe you get a conversation started off on the wrong foot or something like that.

Speaker A: Yeah, that's, That's a good point of view. I, I don't think I've ever had that happen where it was brought up in a negative way. Um, but, you know, I've only been at Ethereal for about two and a half years now. Um, so, you know, maybe it happened before that. I guess the only thing I can think of off the top of my head would be, you know, maybe there's a connotation with Ethereum and, um, you know, not. They might not think that we invest in other blockchains or other categories. Which, which is not true.

Speaker B: Right.

Speaker A: You know, we've made investments across several ecosystems. Um, so that would probably be the only thing I can think of, but I haven't experienced it. Personally, so, yeah.

Speaker B: So you've been with EV for two and a half years. EV was founded in 2021, so this is probably like the second full cycle that the firm has gone through. From your perspective. I mean, if you started two years ago, that was two and a half years ago. That's the end of the kind of meme coin craze, um, kind of Solana craze as well. Um, what has just been your experience, like, kind of going through for someone who's been in crypto as long as you and I have, uh, the lamest bull market that we've had. Um, what was your experience like, meeting with teams? What was the type of infrastructure or products of folks that were trying to coordinate and collaborate with you guys? And how has that kind of carried through? Um, basically through 2026, which has been a bear market, more or less.

Speaker A: Yeah, there's been a lot of. I think the volume has increased significantly. Right.

Speaker B: Um, in terms of deal flow.

Speaker A: Yeah, in terms of deal flow, in terms of copycats, uh, and just ideas that are being thrown out there. And I think there's a pretty obvious reason for that. It's that we all have access to Claude and chatgpt now. Um, and that's fine. Right? That's good. Hopefully more good ideas will come because of it. And people who, who are never willing to like, pursue a business or, you know, pursue an idea now they have like, someone to talk to about it, um, which is great. Right. Um, but at the same time it, it increases volume, um, because everyone who prompts chatgpt a few times, like, might think that they have a brilliant idea. I've done it many times. Right. Like, um, and I'm not, I'm not throwing shade at anyone, but the LLM just genuinely is trained to gaslight you into thinking that you're Elon Musk. Right. Like, it's just, like, it's just the way it is. It's how it gets rewarded. So naturally on our end, we're trying to build out these automated systems on the funding side to filter through that noise and get to the more real conversations. But in terms of the types of projects, I guess. Is that the question, the types of projects that we've seen over the last couple years. Yeah, I mean, a lot of it has increased in terms of volume and then a lot of it has increased in terms of being AI. Right. Despite us being like a more blockchain focused fund. Um, I think I had a, ah, I had a stat on this. We put out a report, um, A few weeks ago on like some of the, our state of the market, I guess. And just to give you a snapshot, like for Q1, our deal flow, we saw 32% of what we saw was AI. Um, so, you know, obviously that's the mind share. Still a good amount of DEFI at about 20% and then around 10% and under. We saw payments, prediction markets and stablecoins. Um, so a lot of the, a lot of similar things and they're competing on founder quality and distribution. Like, those are kind of like the two key points that have become way more important than they were a few years ago in crypto and beyond.

Speaker B: So two and a half years ago, um, like, let's just assume you started January 1, 2024. Like, that was when virtuals was really kind of having its moment in the sun and we were having these AI tokens that were just kind of booming going Q4, 2023, Q1, 2024. And that was kind of like the first time we saw this convergence of AI and blockchain and people getting really hyped and whether there was vaporware there or not. Um, I'm not here to pick winners or losers, but how has this kind of AI narrative, um, risen and fallen during your two and a half years at ev?

Speaker A: Yeah, really, I remember Virtuals. We, we looked at it in 2024 and I spoke to the team, um, and thought it was interesting, but, um, and man, it blew up, right? It, it, it, it did very well. And um, but a lot of it was probably narrative. Right? Um, I think they're building really cool stuff and a lot of it will be very useful. But I think, you know, not specifically to virtuals, but just more broadly in terms of AI on chain or AI and crypto, like, a lot of it is still very speculative, very narrative driven. Um, that doesn't mean that there's not a lot of potential. It's just that, you know, if you look at for example, all of like the X4.2 or MPP, you know, any of these new standards that have to do with micropayments and giving agents access to financial infrastructure, like, not a lot of that's being used yet.

Speaker B: Right?

Speaker A: Um, it's still super early innings. And either all of these predictions are incredibly wrong or we're just going to see like a massive explosion soon. Because, like, if you look at, you know, anyone who has a prediction on like agentic finance or agentic commerce over the next five years, it's like there's, it's going to be a $30 trillion market or, you know, it's these massive numbers from everyone. But like, the reality of that is it's. I mean, I can't give you a number, but it's tiny. So something crazy has to happen in the next few years. Um, and so I think it's still all very speculative and um, like narrative driven, but some of it will be really real and will do incredibly well. It's a question of will it be, you know, a smaller startup or it will be like these bigger incumbents that are building things like Tempo, you know, Circle and Ark, um, like who, who, you know, coinbase, um, like who will own kind of that core infrastructure and like, will value actually accrue to that infrastructure? We'll see. But I think, I think the, in the beginning it was kind of just GPT wrappers on chain, um, you know, buying and selling tokens. And then there was the whole idea of like, oh, actual autonomous agents on chain. But how autonomous actually were they tough to set? Um, so it was a lot of fun and like speculative narratives. And I, I think we're slowly like getting to a point where things are going to get really real in terms of like volume and, and use case for, for AI and crypto.

Speaker B: But we're not there yet because x402 has what, like this year, like, I want to say like $10 million in transactions have been done on it. It's, it's really. And, and still there's, with, if you look at like EIP804, there's I think 425,000 agents registered, uh, through that, um, protocol itself. And so where this is also. I didn't think I would be tying AI's growth into stablecoins growth, but you brought up a really good point where we're being told there's going to be this massive activity, $30 trillion in the coming years. And here we are, uh, June, halfway through the year, AI agents kind of really started hitting mainstream, I would argue in November of last year, um, when we started getting inklings of OpenClaw. And then February, obviously, like was the top for OpenClaw kind of Internet attention. But at the same time the other kind of killer use case that's emerging for blockchain and crypto is stablecoins. And you even have the US Secretary of Treasury saying that by 2030 the stablecoin market cap isn't going to be 2 trillion, which he originally thought, but 3 trillion. And so we've been hearing this narrative coming from treasury since Q4 of 2025 but stablecoin market cap hasn't really grown beyond 300 billion all year. It's just been kind of hovering. So to this point that you're bringing up, there's this future that's coming. Uh, but like why haven't we been seeing this kind of like linear growth before the exponential boom? What's happening in 2026 where we have banks adopting stablecoins, we have Visa and MasterCard making agentic payment solutions, we have uh, X402, uh, being given to Linux foundation and all these entities that are building for it. What? Maybe I'm naive but like I would have thought after six months of seeing all of this investment and all of these big names coming into both AI and stablecoins, we would have seen a little bit more growth than we have. And it's, it's felt stagnant all year. Um, is this just the quiet before the storm?

Speaker A: I mean, I think so. I think it's inevitable. Like uh, if you just, if you look at, at uh, at what LLMs are, have done for just day to day, especially knowledge workers and you know you just think second and third order effects. Like it has to be inevitable that there is an. The Internet becomes a very agentic place. It just, it just makes so much sense. Like almost all of our conversations nowadays are someone's clawed output and then you know, another person's clot output and, and it's like, it's kind of an aw and then there's a human in the middle. And like I feel like there needs to be a next step towards something where it's like let's just make this whole thing agentic and you know, like patch the, you know, get rid of the middle part here. And I think a lot of that is going to be applied to the Internet and to a lot of the work that we do and our work will just change a little bit. Um, and we'll be more human hopefully and more focused on things that AI is not really good at. Um, and so I think we're still in that part of like figuring that out. I mean frankly there's just like a lot of, if you look how long it's taken for stablecoins to become useful, um, from like when they were the idea first spawned. Right. It's taken a long time and like this, this, this agentic stuff is like you said, it's really pop, you know, started to narratively pop off in the last couple of years and become useful with stuff like Openclaw, especially like these more autonomous agents that are running 24 7. Um, which is just like a cron job plus an LLM. Um, Right. But it's like incredibly useful. Um, or theoretically useful at least, and cost heavy. But, um, you figure that, like, we're just still in that phase of getting things figured out and making, like, the economics make sense. And once that happens, there, there has to be, I think logically there just has to be an explosion of it unless something crazy happens. Um, so I still think, yeah, we're in that, like, we're in that bottom before, you know, before the hockey stick happens. Um, I, uh, wish I could tell you when, but, you know, we'll. We'll see.

Speaker B: You'd have to spin up your own firm if you knew that.

Speaker A: Yeah.

Speaker B: Um, I want to just, ah, talk about just VC in general for a few moments. Um, and we kind of alluded to this earlier, uh, particularly in my earlier years on crypto Twitter, just, everybody hated VCs, largely because of this, this ideology that the VCs would get early access to tokens and then they would just dump on market participants. So why do some VC companies get a bad rap? And what do you think are the best practices to kind of be a really value additive firm to the, the teams that you invest in and partner with?

Speaker A: Yeah, it's a good question. And I, I think this is just defined by the people who run the firms. Right. Like it, uh, as long as you stick to what you say you're going to do, you stick to your mandate, you're always honest and have integrity, and you treat every founder that you deal with, whether you, you give them money or you reject them, you know, as long as you treat them with respect and give them like, the time that they're due, given the time that they're putting in, then you won't have these problems. Right. Um, so I just, I think it just comes down to whatever industry you're in. If you're a VC in any category, it just comes down to, like, humans respecting humans and treating each other well. Right. And being upfront about everything. So as long as you do that, I think you're, you're totally fine. And no one's gonna, you know, no one will have anything bad to say about you if you don't do, if you don't do anything bad. Right.

Speaker B: Yeah.

Speaker A: So I think it's, it's not, that's not, I don't know why that's a bigger problem in crypto, but maybe it's just that, um, certain parts of crypto the, the you know, get rich quick mentality of years past attracted the wrong people. But those people are probably gone now. Right. Like they're definitely an AI and then they'll be in robotics soon. So you know, I think that that's just certain people get attracted to the potential of quick money and Tokens had the possibility of quick money. Like it turned the venture capital game, which has always been a 10 year game at least um, into you know, potentially three years with the TGE and like a 24 month vest. Right. But those days are kind of behind us to a certain extent. And so I think um, you know, I think the crypto VC market is just has, it's more Darwinian now. Um, and a lot of the funds, you know, from the early days will, will have moved on to other pastures where they think they can make uh, a quicker buck. But the people who stay and who invest in non consensus ideas will eventually hopefully be, be rewarded. Right. Like I think more broadly like the, the thesis there, and this is something that I was reading the other day, which is just that the majority of capital always has and will flow downhill. Um, you know like where you have a clear TAM and like the next several rounds of fundraising for example for, for a company you're looking at are already planned out. 90% of those venture dollars will go there. Um, specifically now that's AI and the majority m of the LP dollars will go to like the biggest firms that, that are focusing on that because it's not risky. It's like it's consensus is growing, capital is concentrating, um, which is good for them and it's like it's narratively lower risk. But that means that eventually like that will, those prices of those things will inflate, they'll become more expensive. Um, and so if you stick to your guns and like say you know, you're sticking to crypto and you're sticking to blockchain, um, you know, that will hopefully you know, open up outsized return opportunities for people that operate like outside that consensus in, in areas that you're an expert in and that like you've been working in for a long time. And so I think that goes for like good venture capitalists and like the founders that they're backing and we try to have that, that philosophy.

Speaker B: What do you think in 2026 is um, a contrarian kind of investment thesis. Um, in blockchain and crypto one could argue that it's kind of like invest into stablecoin infra, invest into AI infra and that you'll definitely have a role here in five years in this space. But blockchain is more than that. It's defi. There's identity solutions. There's just the benefits that distributed infrastructure can offer that a lot of other entities might not have invested in. So, you know, maybe a few years ago we would have been talking about a lot of defi projects. Um, I would have loved to have been talking about a lot more identity solutions over the years. Maybe that's contrarian today, but what do you think from your seat and looking at the market? Uh, is kind of like a contrarian crypto, blockchain type of company that interests you or perks your ears.

Speaker A: Yeah, I mean, I just. It's good to see creativity, right? Like you see like, like we were talking about earlier, you see so much about stablecoins, you see so much about, um, RWAs prediction markets, um, you know, agentic commerce and crypto that overlap and there will surely be some massive winners there. And, and you should rightfully bet on, on companies in those verticals if you believe their TAM is big and growing and they have a chance at, at carving out a slice of it. But I think one thing that I would like to see more of is just, yeah, general creativity. Like, what can you do with blockchain tech with, with the things that we just talked about, like those categories that everyone agrees on. What can you build on top of that that is creative and additive to some group of people somewhere in the world that creates a good business? You know, and those are really rare to see. Um, especially with, um, you know, with like the LLMs that are like, spitting out the same ideas. Right. Um, is like that true kind of creative edge and like, passion for something? Um, and those are the types of companies and in founders that like, we love to invest in. Right? And I think, like, the founder has become more important than ever. Um, and. But it's still the same. I think it's still like a lot of the same ideas from back in the day. But, like, there's nothing better than when a founder, you know, pitches an idea and you're like, wow, that is creative. And I didn't think of that before. Um, you know that even though we have our own ideas in our head, it's great to see stuff like that that happens. And I, um, think that a lot of that is being opened up, especially like, with the fact that we finally have gotten to the place that, where you can use an app and not know that like, crypto is in the back end, right? Like, that's taken a really long time to happen. I know we've talked about it for years, like account abstraction and all of these things, but we're truly at that place now. Like, we're. For example, like, you could be using a fintech in, in latam and do most of your banking on it and like, not know that on the back end it's stable, it's stable coins or, you know, there's a, there's a defi vault and that's where you're getting like your, your apy. That's better than a Treasury, Um, which is pretty cool. Um, so some of it, like, but maybe sounds a little boring, but, um, like, pretty cool, right? That that's actually happening now?

Speaker B: Yeah, I mean the, the adoption and use cases are the least sexy things that are happening right now, but that's what, what we see day in and day out. If, like you go to Cointelegraph or CoinDesk or the Block, these are the types of articles that are coming out. Um, I just, I don't know the right way to phrase this. Can, when you have a founder come in for, for a pitch, can you just sense that they're, uh, an AI slop founder? Do you guys get tricked? Is it hard to, to kind of like siphon through, you know, the folks who used AI to build their business 90% of the time or for 90% of. Of of their pitch? Like, what are the tricks that you guys are deploying internally so that you can kind of sift out the people who are just LLM generating a business idea? You know, make me rich, make me $5 million in a year, four hours of work a week, one shot. It. Are you able to kind of like sense the difference between the people who really like, thought through every single step? Um, or does it. Is it difficult to get that sense until you're in that meeting room and talking to them face to face?

Speaker A: Yeah, I mean, if they're just, you know, if, if you're just copy pasting like the response from the LLM, um, into your, you know, your, your diligence responses or, or what have you, then it's pretty obvious. Um, um, you don't necessarily dock marks for that, so to speak, because everyone's doing it and it's efficient and you're saving time as long as you just genuinely know what you're talking about and you care about it deeply. Um, then if, if LLMs make you faster and more efficient, great. Like, I'm, I'm, I'm fine by That I, I use it every day. Right. Like, to prepare for this, for this chat with you. Like I, I used LLMs. Right, of course. But, um, if you, the key is you have to be able to back it up. Like on a call with maybe your, your, your history with like, do you have a chip on your shoulder? Do you really care about what you're doing? Are you going to build it for 10 years? Or will the next idea that you conjure up with Claude, will that, you know, take all of your attention? So, like, these are just things that we take, we have to take a lot more seriously now is like, we spend a lot of time now doing like multiple references, like on the business side, but also just like on the individual founders speaking to people that have known them for years and verifying like, you know, who they are as a person and like, what, what, what they care about and what motivates them. Like, the psychology of the founder, I think is really important now because, you know, it would be so easy to just get whiplash from like all the amazing ideas that come across your desk, especially if you're a really smart person. Like, there's a lot, there's a lot of tempting things to try and go build, and now you can actually prototype them and, and, and, and at least build a first version of them. Um, so like, staying focused on something long term is like, easier said than done, right?

Speaker B: Yeah, I mean, that's the. Like, a lot of, uh, respectable individuals I follow on crypto Twitter say that they've never been busier in their lives since integrating AI into their workflows. And that was supposed to be the opposite of what happened. When we integrate AI, it's supposed to give us our time back, but it also gives the individual an infinite amount of time to explore billions of other ideas, which is a really interesting con, uh, to, to like being a potential founder and having to like, remind yourself to, to focus in one lane.

Speaker A: Um, yeah, and, and on that point and on the thing that you asked earlier was like, as a founder, you can definitely go build a vertical AI service business that generates good cash flow. And like, that is very tempting and totally fair. Right? Like, let's say you want to go build private equity firm that buys a company and you know, uses agents to, you know, you identify the company and then you, you improve margins. Like, that's totally fair. Like, that could be a good business. Or, you know, you could build in healthcare or travel or whatever and just implement AI, smooth things out, create better margins and create a really good business. Like that is a totally fair thing to do and a lot of people are investing in those companies. But I just think that if we're talking about the unicorns of the future, I would say to focus more on like really hard problems in difficult markets and really like think about and model out like the secondary and tertiary outcomes that you see playing out in the future and stick to your guns on those things no matter like what comes out with Claude next week. Um, you know, and that can be harder for a venture firm to underwrite and it can create a lot more work. But if you get it right, I think you can do very, very well. Um, and then outside of that, like, which is what I already said on, on the founder side of things is it's probably harder. Being a founder today is probably harder than it ever has been because of all of the things we discussed. Um, if you just had a good idea and like a few solid engineers, that was a, that was a decent moat. Right? But now you need like relentless distribution and that ability to be resilient when a lab is like releasing a new feature every couple of weeks that might overtake your business or um, some part of what you're building. And that's not for everyone. Right. It's, it's actually I think become harder to be a founder, but easier to be like to churn out ideas.

Speaker B: M. This actually leads me to an interesting topic that I wanted to bring up. Um, we're at five year lows in terms of deal, uh, count with vc. Um, funding totals have remained somewhat relevant or the same. Uh, but that's because you get a one off like ah, Kalshi getting a $1 billion raise. And so um, there's kind of a double edged sword with that. While we're at the lowest in five years with VC capital flowing into entities and into companies at the same time, that also means that the pond is smaller and that there's less big fish as well. So while we're seeing lower VC deal counts in the past five years, is there also an opportunity that that gives to the founder where they might not necessarily have so much competition?

Speaker A: Yeah, certainly, that could certainly be the case. Um, and this goes back to the concept that we were discussing earlier and that like why has funding gone down? Because people are moving to the consensus trade and the consensus idea, which isn't wrong. Um, there's, like I said, there's certainly money to be made there on the founder side and on the fund side. But I think the great thing about it is the people who Stick around the capital that stays, you know, with its core mandate and the founders that stay in, um, you know, in that smaller pond will be, will work together much better because they'll, they'll both be hopefully driven and motivated by the same things and will be more likely to be in it for the long run. If you're, if you're building, you know, in a, in a not so sexy or trendy area, it's just more likely that I think you'll probably stick to what you're building. Um, um, like, you know, if, if you're building like random PFP collections in 2021, like, I doubt you're still in crypto. Right. Like it's.

Speaker B: Right.

Speaker A: So cool.

Speaker B: Um, this is kind of a philosophical question that I don't know if there's a, an exact answer for this, but I'm super interested to hear from your perspective. When we're looking at where the future of the industry is, where the puck is going and how to skate there, people might look to VC firms and so when you're doing your job, are you predicting the future of crypto and what will be built, or are you manufacturing it?

Speaker A: It's a bit of both. Uh, it depends on the fund and it depends on like the philosophy of the fund. A lot of, a lot of funds are, you know, sit back and react to the ideas that come to them and then choose with conviction with the things that you agree with. Um, and I think every fund employs that to a certain extent. But then there are funds that like, come up with their own ideas, have their own, like I, you know, like we said before, have their own internal debates and try and come up with a picture of the future, um, ideas for the future and those secondary effects, those tertiary effects, and then go and find, you know, founders and companies that are, that are with, you know, doing those things. And we try and do that for sure. So to a certain extent you are manufacturing the ideas at least, but we're not executing on them. Right. Like that's the hard part. It's really easy to come up with ideas. Um, you know, maybe, maybe the harder part is trying to think about like the, the second order effects of those ideas and like where value will accrue in that future. But like the hardest part by far is like the execution piece of that. So, um, I wouldn't go as far as saying we're manufacturing that future because it's the founders that are doing all the hard work. Right. Um, but yeah, to a certain extent, I suppose it's a Mix of both.

Speaker B: Awesome. Um, kind of zooming out, wrapping up the final, uh, question I want to touch on. The final piece I want to touch on is. And again, um, I have to excuse our audience. I'm American. Sometimes I think too much about America. Uh, right now we have the Clarity act going through Congress. It may or may not pass. How does, um, a country like the US With a, uh, potential law like Clarity, how does that throw a wrench into the future that you and the rest of EV look at? Because whether Clarity act passes or doesn't kind of paints a very different picture for the next three to five years. Until the next time we have another opportunity for a market structure bill in the US to pass. What are the two different worlds you're preparing for? Whether Clarity passes or doesn't pass?

Speaker A: Yeah, good question. I mean, and this is, this is, uh, I'll caveat this by saying I'm definitely not a lawyer or a regulatory expert by any means, but try and read as much as possible on these things and be informed at least. But I mean, if it doesn't pass, like, it's just more of what we're used to, right? Like operating in a, in a gray zone, not, um, being too sure about what's what, what's right and what's wrong. Um, and trying to build with that uncertainty in mind, which can kill a startup, right, can kill a company. Um, you have to be so careful if you want to play by, like, the, by the rules, because there are no rules. Um, but there are suggestions. Um, so it would just be more of that, unfortunately, at least in the U.S. maybe there'll be more progress in other jurisdictions and, you know, companies can flock there. But I think it's pretty clear that the mandate of, of at least the current government is they want that innovation to happen in the U.S. and they want the U.S. economy to, like, benefit from that, which I think makes sense regardless of what your political ideologies are. So hopefully it does pass, or some version of it does pass. And, like, there is progress there, because with clear rules, people can just make more sane decisions. Um, more capital can, can come in. Right. Um, I know, you know, that's a very common thing that everyone says, but it's, it's, it's really true. It's. I'd say if Clarity does pass, it removes an excuse that a lot of people have, but it doesn't necessarily create, um, demand out of thin air, because let's say it does. Let's say it does pass. Um, and, you know, these Rules and policies actually are implemented in a few years because it'll take time to, after it passes for these things to actually be implemented, um, then things need to be built, um, but hopefully people will be building those things, you know, as that time passes. And then once everything is built, infrastructure wise, rules wise, then the, you know, this new capital, for example, can flow into the system. So it'll still take a lot of time, but, um, you know, I think, I think it's very, like, I'm very hopeful that it does, that it does pass, um, and that it enables kind of like the institutions and people who have always said it's not regulated as the main excuse to say, you know, it'll be a removal of that friction. Um, so that's what we hope for.

Speaker B: Awesome. The last question I want to ask you is just kind of a personal question for me because I've been, I. We've been in the space for a long time. Being in crypto for five plus years, it can be draining. It can feel like 15 plus years. It can be very easy to become cynical. So after being here for 10 years now, at least, studying, being aware of crypto and blockchain, what, what excites you today? Why are you still here? Why are you still part of the few that are still fighting for the future of blockchain and crypto? What's like the thing that drives you every day for the future of this asset class, this industry, this technology?

Speaker A: Yeah, I mean, I asked myself that many days, you know, and I think most people do. And a lot of people haven't been able to come up with a good answer for that. And therefore they have left to things that do get them exciting. And there's no shame in that. Right. Like, if you get more excited about a new thing, like, go chase it. There's nothing that like is tethering you to crypto and blockchain. But, uh, the reason I stay is, I think the same fundamental ideas that got us all excited 10 years ago, like, are becoming possible now. Right. And like, we're seeing implementations of these things. I, um, was more, I'd say I was more, um, I was less optimistic five years ago than I am today because maybe like, prices were higher five years ago and like, more fun casino stuff was happening. Um, which can be entertaining, but in terms of like, the actual making strides in like, on the tech side and in the adoption side, like, we're way further ahead than we were back then, despite, you know, maybe prices being lower and being in a bear market and A lot, a lot of bad things happened over that period, but that kind of thinned the herd. And um, and it, it makes me more optimistic, I would say, in the day to day. Like, there's new news that comes out every week now that is like genuinely interesting news that you would have killed to hear about five years ago in terms of like some form of adoption or, you know, something new that, that is being built that you wouldn't have thought of. Um, so I think it's a better time than ever to be in crypto. Right. Like it's, you know, when is it. When is the best time to, especially if you're, if you're buying and holding longer term. Like, when is the best time to be investing in and building in these things? Like everyone always says, right. You want to build in a bear market. Well, the reason for that is it's probably cheaper to build at that time. You know, there's less pressure and less eyes on you and there's much more potential for growth. Um, so, you know, it's. You don't want to be buying at the top and selling at the bottom. Right. So, um, yeah, I'm honestly more optimistic than I've ever been when it comes to crypto and blockchain.

Speaker B: I agree. I would actually reframe that and say you don't want to start building at the top, you want to start building at the bottom.

Speaker A: Exactly. Yeah. Totally, totally agree. And from a VC perspective, it's not buying at the top for sure.

Speaker B: Awesome. Um, well, Christian, if anybody listened to this today, who do you want to communicate with? Who do you want to chat with and what's the best way they can reach out to you?

Speaker A: Yeah, I mean, if you have an idea and, or if you just want to bounce, um, you know, have a conversation and have a debate on any of the things we've talked about or, um, any of the ideas we have, which you can find if you go to, uh, our substack. Um, we finally, a few months ago started writing kind of more public thoughts on subs on, uh, our ethereal venture substack. We have a couple articles out, but one of them specifically talks about all of the ideas that we've been discussing. Um, but you know, there's about 20 ideas on there that we hope will happen in the next five years. And so if you're a founder or an investor or whatever, you're just interested in those topics, like you can DM us on, um, on X or Twitter, you can DM us on, on, on, on substack or if you find us on LinkedIn, you can shoot me a message. Like we, we respond to every single message. Um, because like, there's a lot of alpha in those messages. Right? Um, but yeah, go, go have go give those a read. And if you think they're really good or really bad, either way, like, we want to know why and like, you know, get smarter from having a conversation.

Speaker B: Awesome. Well, thank you so much for your time, Christian. This was a really fun conversation. Um, and thanks for answering some of my, uh, open questions about VCs and the role of VCs and, um, just the nature of where we are today. It was a fantastic chat.

Speaker A: No, thank you so much. Like, you asked some really, really great questions that you, that I have not been asked before. So I very much appreciated that and appreciate the conversation.

Speaker B: Awesome. Um, well, looking forward to chatting with you again in the future.

Speaker A: Likewise.

Speaker B: Cheers. Thank you so much for tuning in to the Smart Economy Podcast. To stay in the loop with all of our insights and guests, head over to www.smarteconomypodcast.com. don't forget to subscribe. Subscribe to our YouTube channel for all of our video content. If you enjoyed today's discussion, please consider showing your support by liking, commenting and reviewing the episode on your favorite podcasting platform. Your feedback helps us reach more listeners and bring even better content your way. We'd also love to hear from you, so please drop a comment on Spotify or YouTube to share what you liked us talking about or who you'd like to hear from next. And if you or someone you know would make for a great guest, please don't hesitate to reach out. We're always on the hunt for fresh voices and new perspectives. And for our Neo token holders out there, please consider voting for Neones today as your Council representative. We've proudly been serving the Neo ecosystem since 2017 and will continue to do so by putting portions of our Council rewards directly back into ecosystem and growth initiatives. Once again, thank you so much for tuning in to the Smart Economy podcast and we look forward to catching you next time.