Investment Themes

Innovative Exposure: deploying capital into decentralised networks.

ID Theory believes that the majority of the value created will accrue to the following themes of cryptoassets. This value capture is not mutually exclusive to any of these categories and we allocate accordingly.

Cryptocurrencies

The first and largest use case for blockchain is the ability to securely transact value digitally without reliance on any centralised institution or government. With increasing political distrust, irresponsible monetary policies from central banks and a digital generation reaching peak earning capacity, the demand drivers for adoption are as strong as ever. Cryptocurrencies are designed specifically to work as a medium of exchange or a store of value.

There are many core attributes required to tackle this niche; immutability, censorship resistance, security, scarcity, self-sovereignty and privacy. As yet, no one coin is optimised for all core attributes and as such we are building a diversified portfolio across a small range of assets that are best in class for any particular attribute. We support the prevailing theory that stores of values rather than mediums of exchange are strong contenders to capture value long term due to their low velocity.

Cryptocommodities

It is becoming increasingly evident that we do not own or control our digital existences. With this realisation comes a demand for new ways to interact with service providers and manage our data. ID Theory are investing in assets that power a new and user-orientated decentralised web stack.

These are essentially “network access tokens”; the digital equivalent of commodities in the physical world. To operate within a network a participant require CPU cycles for computation, storage space to hold data and “gas” to prosecute smart contracts.  These protocols will become foundational to the way in which we transact in the future; as such the demand for these digitally native commodities will rise significantly.

Enabling Infrastructure

Although comparably nascent, blockchain projects themselves require new enabling infrastructure to optimise, and scale. Despite all the hype, the reality is that true user adoption is effectively non-existent, demonstrating the challenges of bridging the old world to meet with the new. Blockchain protocols needs to scale and interoperate to deliver the functionality users expect with new technologies.

This theme focussed on protocols that enable real world adoption. In essence, ID Theory are investing in the solutions to the problems unique to decentralised networks. They offer benefits and flexibilities that will enable divergent business models and novels types of enterprise. With well calibrated incentive design, these projects will accrue great value when the next wave of adoption occurs.