Blockchain Startups Wanted
By: Nick Plante
Tags: Investing, Venture Capital, Innovation, Startup, Blockchain

A couple weeks ago we announced dLab/emurgo, a new blockchain and distributed ledger technology (DLT) accelerator program operated by SOSV (“the Accelerator VC”) and our partners at EMURGO. The new program is designed to bring the resources of both organizations together under one roof with a mission to invest in, support, and scale early-stage startups who are tackling truly important problems in this space; startups who have ambitions to create society-scale outcomes. We’re looking to fund five of these for our first cohort in February.

What follows is a list together of some of the topics we’re interested in exploring with dLab. We expect this to evolve over time, and it’s in no way meant to be comprehensive. In fact, it’s usually the case that the best applicants to SOSV’s programs are working on ideas that we haven’t even yet considered.

However, solutions that address these particular topics are sorely needed, and our hope is to find some of you out there who are already tackling them. If you are, give us a shout. We’d love to talk to you (and if you’ve already applied, thank you — we’ll be in touch soon!)

Blockchain for the Masses

DLT faces many challenges. Lots has been written about Ethereum’s scaling challenges, for example. But the largest obstacle to widespread adoption isn’t transactional throughput but usability: we need more easy-to-use solutions that make tokens and associated services accessible to the next ten million users. This could take many forms, but integrated mobile and web multi-protocol wallets, user-friendly portfolio management, token custody services, and practical payments and point of sale solutions are some obvious areas where attention to user friendliness could be the defining characteristic. And it’s worth considering that the biggest opportunity, of course, isn’t in the first world, but in the developing world.

Developer Tools + Data Oracles

The other side to making decentralization technology more usable is making it more accessible to new developer talent. We need more high-level frameworks, libraries, tools, services, and educational resources in order to 100x the number of competent developers in the space. How do we incentivize entrepreneurs and developers to focus their efforts on ecosystem development? More creative alternatives to bounty systems are one avenue. And for dApps to bridge the divide and become more useful we’ll need to work with more external data sources, via new types of oracles where incentives are thoughtfully designed to guarantee accuracy and ongoing verification.

Governance + Self-Sovereign Identity

Many have written about the promise of blockchain for achieving a more open and transparent democratic process, for both organization management and government-level uses… as well as meta-level on-chain governance. Do we believe in a world where voting for change is transparent, immutable and audit-able? Of course. But there’s a lot of work to do before we get there. Rather than representative token ownership (where quantity of tokens is considered), many such applications require the notion of a singular verifiable digital identity, which means bridging online and offline identities in a reliable way. How is such individuality proven? Verified? What does it mean to stake your own reputation on verifying a peer? For those of us already in the first world, self-sovereign identities hold the additional promise of giving us more control over our data (medical history, social media, etc), removing power from companies who store and monetize it in proprietary databases. And for the billions of people who are unbanked in the developing world, a digital identity is the first step to gain access to financial services and to participate in the global economy.

Logistics + Supply Chain

There’s a lot going on here already. But there’s a lot to be done. Solutions that can prove origin, custody, and integrity of food and medicine are a good start. There is a startling lack of transparency as a product — whether it’s food, medicine or anything else — changes hands several times from its origin to its ultimate destination. Problems that occur, which may result in theft or spoilage or a reduction of effectiveness, are not obvious, or products arriving at the destination may be counterfeit. Paperwork, cost, and complex compliance are issues that can be addressed by using shared digital ledgers. Given SOSV’s involvement in disruptive food (FOOD-X; also based in New York) this is a particularly interesting cross-disciplinary area for us.

Decentralized Finance

It’s no surprise that the first major use case for immutable digital ledgers has been financial transactions. But ten years later, we’re still at the earliest stages of this transformation. What happens if anyone can build new types of financial products on top of open protocols like Ethereum (and whatever follows it)? And what if anyone can access those products, regardless of their jurisdiction or economic standing? The Decentralized Finance (DeFi) movement promises a remarkably open, transparent, and borderless financial infrastructure via stablecoins, crypto-collateralized lending, derivatives, issuance platforms (security tokens), insurance products, and other new instruments: all driven by smart contracts and tokenized assets. The market for these instruments, compared to the legacy financial system, is admittedly tiny, but it’s growing at Internet speed. To innovate in this realm used to be the exclusive domain of banks and other financial institutions; but now any inspired developer can test new ideas out on a live network. Proof of Stake blockchains also present new opportunities for validators, staking-as-a-service providers, and others who are exploring the evolving nature of custody.

Open Marketplaces + Data Driven Optimization

Any digital marketplace that exists today is built on top of a database owned by a corporation. In many cases, that makes perfect sense. In other cases, those systems could be far more fair, open, and efficient if they were decentralized and effectively ownerless. Decentralized energy markets are one particularly good example of this, especially when net metering is considered (and particularly so as battery storage costs drop). Does ride sharing need to be decentralized? Maybe. AirBnb? (c’mon you can be more creative than that) If all our sharing economy data ends up in blockchain-like ledgers, there’ll be plenty of opportunity to deploy machine learning techniques to analyze and optimize future exchanges. What can we learn from shared energy utilization data, for example? How could we use that information to optimize the ways that buildings collect and store (and share) energy? What about optimizing the way that taxis move about the city? Can a private data silo be better at that than independently incentivized developers operating off of an open data set?

Hardware, Intelligent Agents, and the Internet of Things

What does the wallet of the future look like? It’s probably not much like the hard wallets we’re seeing today, though they’re certainly a stepping stone. Do we expect a secure subsystem to exist in every phone in the future? If not, what else? What types of protocols are needed for efficient machine-to-machine communication and message relaying? What types of hardware will natively interact with these protocols? We’d love to see some applicants with hardware concepts as well, given our relationship with our hardware-focused sister program, HAX, in Shenzhen.

What are you working on?

Give us a shout. We’re currently accepting applications for the first dLab/emurgo program, to start in February in New York City. Applications close November 30th.