Investment Thesis

The internet as it exists today is broken. But this wasn’t always the case.

When the internet was formed in the 1970s, users communicated in a peer-to-peer fashion without relying on a third party intermediary. The internet was initially built as a truly decentralized network.

As the world wide web formed and matured, large corporations entered the picture. They brought a more feature-rich environment, where social media and applications could flourish and bring billions of people together.

But there was one problem… a BIG problem. This architecture, which still exists today, is rife with data breaches, privacy concerns and hacks. Users are not in control of their data or the way in which it is monetized.

Herein lies the opportunity.

Starting with a 2008 white paper titled ‘Bitcoin a peer-to-peer electronic cash system’, a movement began to reshape the architecture of online communication. Bitcoin allowed users to exchange value with anyone, anywhere in the world without the need for a trusted intermediary like a bank. This alone was a huge leap forward.

But what’s really exciting (and is the reason we’re here today) stems from a 2014 white paper by Vitalik Buterin: “Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform.” We’ll skip the technical explanation and dive into why everyone is so excited about this next-generation technology.

Ethereum is a world computer that can fundamentally bring decentralization back to the internet. This is what’s referred to as Web 3, where users own their data, privacy is maintained, rent-seeking middlemen have less power and money is internet-native.

Ethereum has established itself as the premiere Web 3 platform. It has the longest operating record, the biggest community of developers (estimated at over 250,000) and the largest number of decentralized applications (over 1,000). It has a clear roadmap for protocol improvements over the next few years that will improve the security and scalability of the platform while retaining its promise of decentralization.

Ether Capital was formed in early 2018 to give public market investors access to this emerging asset class. Our first investment saw us acquire just over 45,000 Ether (“ETH”), the native protocol token to the Ethereum blockchain. Since then, we have been diligent in our approach in identifying investment opportunities we believe will give our shareholders exposure to the Ethereum and Web 3 ecosystem.

Ether Capital is pursuing a long term business model built on three pillars:

  • Asset management through our holdings of Ether and tokens or equity of other projects,
  • Technology development aimed at decentralized application adoption,
  • Ancillary blockchain services that generate income from passive assets.

Key areas of focus that we believe will capture value as Web 3 matures over the next few years are:

  • A decentralized stable unit-of-account,
  • Efficient fiat-to-crypto onramps and
  • Improvements in blockchain scaling.

Our investment and technology development efforts will focus on projects that address these important challenges.

Our team is comprised of crypto-natives, leading venture capitalists and capital market experts, which uniquely positions us to identify and capitalize on opportunities in the space.

We are passionate.

We are dedicated.

We are working to make Web 3 a reality.

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