Vlad Martynov on Ethereum ecosystem and venture capital in crypto

Co-founder of BR Capital and blockchain entrepreneur Vlad Martynov joins us for a special episode of the crypto.news show. In part 1, Martynov discusses his role within the Ethereum ecosystem, the future of venture capital in crypto, and how the current system of tokenomics is broken. Martynov also expands upon his role within the decentralized Zuzalu “network state” community, as well as new regulatory climates from the US, Europe, Asia, and beyond. In part 2, Martynov conducts a one-on-one with Ethereum co-founder Vitalik Buterin, in a crypto.news show exclusive. Turn on, tune in, Zuzalu out!
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Dorian Batycka: Hello, hello, hello. Welcome to the Crypto.News show with myself, your host, Dorian Batycki, and my co-host, Tony Noto.
Our guest is Vlad Martinov, founder of BR Capital, blockchain entrepreneur, and OG friend of our Ethereum overlord Vitalik Buterin. Welcome.
Vlad Martynov: Yeah, thanks a lot. Hello, everybody.
Dorian: Welcome to the show. Yeah, there is a lot to talk about post-election, Ethereum, and venture capital in the crypto space. Welcome to the show. Perhaps let’s start by giving us a little bit of an introduction to yourself.
Vlad: Thank you. Well, I’m a high-tech entrepreneur. My first startup I co-founded with Dmitry and my Abutarians back in the late 90s. And it was, we were selling the Kirpi system, quite an innovative one at this time. And after we built and sold our business, and by the way, we sold it to Microsoft. We started looking for new ventures, and that was the early days of cloud technology and…
We decided to develop one of the first SaaS-based CRM membership management system solutions for non-profit organizations, which also was quite a successful project. And eventually, we became very close friends and spent a lot of time together with our families and kids when Vitalik was a young boy. And Dmitry, he was always…
A kind of technology visionary, tech visionary, and early adopter of disruptive technologies. And, you know, he had a kind of talent to identify these technologies at early stages and when just these technologies start emerging. And he was the first one who told me about Bitcoin. It was like a long time ago, I can probably…
Around 2012 or so. He introduced me to Bitcoin and explained the whole innovation behind it. Then, in 2014, he told me that Vitalik Hisan was working on a platform that would significantly expand the user cases that would be available to run in a decentralized environment, in a peer-to-peer environment.
At this point, I just realized the power of this technology, and I was truly amazed by this and started learning more and studying this field in detail. Eventually, when Vitalik launched the Ethereum network and founded the Ethereum Foundation, they decided to have a kind of advisory board inviting external experts in certain fields.
To help them scale, not the business, but the whole Ethereum movement. I raised my hand and said, can I be part of this advisory board and take care of kind of educating the public about what is behind this technology? And so I’ve been doing this for a couple of years, and also I’ve been doing not only educating the public about this, also eventually helping Ethereum Foundation to bring more developers, educate more developers about the Ethereum network and Ethereum chain. So that’s one of the reasons why we set up with his father online educational platform called BlockGeeks.
Later, I established the Ethereum Competence Center just to help developers build solutions on top of the Ethereum network. So, and then there was an ICO craze, sometimes between 2016 and 2017. I was approached by this time; people know I’m kind of associated with the Ethereum Foundation through the advisory board. And I was approached by hundreds, maybe thousands of startups offering me to become an advisor or pre-seat investor.
And actually, I picked up a few in the specific fields, which really sparked my interest and intellectual curiosity. The ones like I really want to explore deeper and see how they work in practice. For example, that was tokenization of real assets or real estate, tokenization of real estate of real assets. At this time, there are no stable coins. There was no USDT.
Volatility is a huge issue if you do some transactions, in particular some business transactions. I look at the stablecoins backed by gold and a few other projects. But most frankly speaking, most of these projects failed. Well, for a number of reasons, the technology was not ready or mature enough. It had a lot of limitations. The teams early adopters teams, were not ready and not mature.
I mean, people who were behind these projects. A lot of scammers, a lot of people who’ve been there for quick money and didn’t care much about the final product or the value. So anyway, the market was not mature and it was still early days.
Tony Noto: Vlad, would you argue now that the market is still not mature and there are still too many scammers? And as a person who’s very passionate about the use cases of cryptocurrency and blockchain, it seems like a lot of the headlines are devoted to quote-unquote shitcoins and meme coins and too many people trying to make a quick buck, as you said.
Vlad: Yeah, well. I would disagree if somebody would say the market is still not mature. The market made huge progress because, at this time,e it was wild, wild crazy wild west. So, let’s say three components of maturity. Let’s define it first. It’s a technology. Definitely, technology is much more mature. With the infrastructure technology, the transaction fees are much lower. The speed is much higher, right?
So it means there is time to build the application. This, in the early days, even if you come up with a good product idea, come up with good applications, and put on the chain in a decentralized environment, you can’t scale your business because basically the users who came to your app, think it’s too expensive to pay a certain gas fee, right? So, it was a roadblock for mass adoption of these applications. Now, it’s a different story.
Second is like, there were no stablecoins, as I mentioned. So basically, if your application or anything you create is supposed to kind of exchange values and to secure certain like, to have like situation when volatility is not an issue, then it was a problem. Right now, you can see a lot of stablecoins algorithmic and just centralized, like USDT stablecoins. You have a lot of choices.
Then, there would define the market was not developed at this time. So right now We have a lot of components. Yes, let’s talk about people. Well, they’re probably in terms of the quality of people. This market had progress but not as huge progress as technology. Let’s put it this way, but still, I see the difference not only I see the difference because there are more mature entrepreneurs who come to this business but sometimes from the web too. They came either alone or together with their investors. And in terms of, by the way, the capital is also the market is more mature because at this time was pretty much retail investors. Now we have heavy-lifting institutional capital, which came to the market, which also creates more resilience for the startups, right?
For example, when they deal with venture capital funds, even like us fund, we apply a kind of classical metrics to define if the project is good or not. So, like classic venture, a venture-like criteria, metrics to make an assessment. of course, there is a specific for Web3 projects. We also understand that, but that helps to see more quality projects on the market. So I think…
The market is much more material now than it used to be. No doubt about that.
Dorian: Can you talk a little bit about, like, the sort of ICO landscape versus DAOs and how you sort of see the future of fundraising in this, like, next cycle? Are we looking at the DAO model again? Is this ICO? Are we going to see more, like you said, institutional capital come in, and where is that sort of tension between the Web Two and Web Three versions of fundraising in this current cycle?