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Key Talks: Interview with Lex Sokolin

The transformative potential of web3 technology in reshaping the future of finance and technology.

Mark Galkevich
September 25, 2023
Key Talks
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Partner Genventure Cap, Ex. Chief Economist & CMO Consensys

What trends and developments in the Web3 ecosystem do you find most compelling, and how do you see them reshaping the future of finance and technology?

‍I have strong conviction in the financial infrastructure that has been built over the last decade in Web3, from digital value storage, to decentralized finance, to stablecoin-based payments. The work around NFTs as digital objects for commerce is also long-term correct, and we have the right abstractions. Scalability, privacy, and identity are also all on the way to being solved. That said, the main unlock will have to come from bridging the old and building the net new economic activity to leverage this infrastructure. This is the task to come.

Your expertise spans both finance and technology. How do you see the convergence of these two domains in the context of Web3, and what innovative financial products or services do you believe will emerge as a result?

‍Finance is the catalyst of real economic activity. It underwrites risks, processes payment, and allows entrepreneurs to raise capital. Technology is the current iteration of the creativity of the human spirit. The next era is economic, where Internet scale global productivity growth from artificial intelligence can combine with the financial -- centralized and decentralized -- rails built over the last decade. The issue isn't innovative financial products, but rather what kinds of things people can do once they have access to money, savings, credit, and markets.

What aspects of Web3 technology do you believe have the potential to disrupt traditional industries, and why?

‍Web3 is the network of value, rather than media. To that end, anything that touches human productivity and economy is transformed by Web3. In the early stages, that looks like fintech innovation, from money transfer, to payroll, to exchange. In the later stage, this will look like coordination, community involvement, ecosystem financial incentivization, collective ownership, and global governance. Money goes to the root of how people account for their time and efforts, and the root of power. All these are touched by Web3 technologies.

The machine economy is a term that's gaining traction. Can you provide examples of real-world applications or use cases where machines are already playing a significant role in economic activities, and how should businesses prepare for this shift?

‍The original machine economy term refers to the Internet of Things, IoT, where robots interact with other robots and require automated money transfer to perform their jobs. I think this is too narrow a term, especially since most of us are hybrid robots already given our usage of smart phones, biometric devices, and various other integrated computing that makes us all into cyborgs and centaurs. To that end, as more of our commerce and labor is done by our AI agents, these goods and services form value generation of the machine economy. I believe commerce around this will settle on the machine networks of Web3, which is the core thesis of my fund Generative Ventures.

What are the key criteria you consider when evaluating early-stage projects or startups in the machine economy, and what advice would you offer to entrepreneurs looking to attract investment in this space?

The investment thesis is the North Star of our vision, but there are many steps along the way. Companies that touch Fintech, Web3, and AI and recognize how these deeptech themes are becoming integrated are all worth the attention. We look at the usual metrics around team, product, and go to market. Particularly in the current environment, early traction is important, as well as a business model that targets economic activity over financial engineering or speculation.

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