The Winner Takes All
We study various chains, and fund research
into ensuring our chosen chain dominates
Thesis
Monolithic Capital believes that the future will be dominated by only one main chain.
Multiple Layer 2s will exist.
There will be multiple Layer 2s and side-chain systems which will allow every project to decide on the desired properties and their security trade-offs.
They connect primarily to one chain.
By virtue of network effect, there will only be one chain worth connecting to, and this network effect builds from first-mover advantage or having better security.
Fund
Monolithic runs two funds on the thesis, with the aim of generating regular returns in addition to the potential outsized returns
Long-only
We diversify into chains which has a chance to be the dominant chain. Assets are put to use in delta-neutral ways, either in yield farms or native staking programs.
Absolute Returns
We capture market bias through various relative value and carry strategies for quarterly dividends. Upside is captured via long-term long-short strategies and identifying risk premia to earn; black swans and downside are hedged out.
Research
We fund projects that are identified to ensure the single chain dominance
Connectivity
Cryptocurrencies are uniquely vulnerable to systemic network infrastructure failure, which could be caused by either global instability or unexpected doomsday event.
Connectors
There is likely to be a universe of Layer 2 networks. We fund development of connectors of all side-chain networks to our preferred chain.
Contracts
The dominant chain is likely to have many existing smart contracts. Building on these, we will identify new smart contract projects to be funded and audited.