TON: Pantera's Largest Investment Ever | Interview With Cosmo Jiang

Summary

In this episode of the Fundamentals Podcast, Cosmo Jung, a portfolio manager at Pantera Capital, discusses Pantera's largest investment in the TON Network, originally designed by Telegram. They delve into the strategic partnership between Telegram and TON, the potential for TON to onboard the first billion users to crypto, and Pantera's role in supporting TON's growth post-investment.

Takeaways

• 😀 Cosmo Jung, a portfolio manager at Pantera Capital, discusses Pantera's largest investment into the Open Network (TON), a layer one blockchain originally designed by Telegram.
• 📈 Pantera Capital's investment approach is long-term and fundamentals-based, focusing on deal sourcing and due diligence processes to build conviction for investments.
• 🤝 The strategic partnership between Telegram and TON is a key factor for Pantera's investment, highlighting the potential for TON to onboard the first billion users to crypto through Telegram's user base.
• 🌐 TON is uniquely positioned due to its thriving user and developer ecosystem, impressive traction in gaming, and the growth of stable coins on the network.
• 🎯 Pantera's bullish case for TON is based on the potential for mass adoption and monetization, despite acknowledging risks and areas that are unanalyzable at this stage.
• 💡 Cosmo's background in traditional finance and consumer internet investing shapes his perspective on digital assets and the potential for tokens as a new form of capital formation.
• 🚀 Pantera Capital was an early investor in blockchain, launching the first-ever blockchain fund in the United States in 2013, and has since expanded its exposure across the industry.
• 🔍 The due diligence process for TON involved assessing the fundamentals, including user growth, strategic partnerships, and the potential for value creation and capture.
• 🛠️ TON's development and growth are supported by Pantera post-investment, focusing on improving developer experience and addressing key risks such as user experience and ecosystem tooling.
• 💰 The potential market opportunity for TON is significant, with a bull case valuation based on the ability to capture a portion of the economic surplus created by a growing user base and economic activity on the network.
• 🌟 Pantera Capital continues to focus on investing in the highest potential blockchain-enabled businesses and protocols, emphasizing product-market fit, growth prospects, and strong management teams.

Q & A

What is the main focus of the 'Fundamentals Podcast'?

The 'Fundamentals Podcast' focuses on demystifying crypto and helping listeners navigate the ever-evolving internet-native economy.

Who is Cosmo Jung and what is his role at Pantera Capital?

Cosmo Jung is a portfolio manager at Pantera Capital, responsible for their liquid token strategies, which include everything that's liquid or publicly traded.

What is Pantera Capital's approach to investing in the digital asset space?

Pantera Capital takes a long-term approach to fundamentals-based investing, focusing on investing in the future of the digital assets industry and riding the industry's secular tailwinds to compound capital over multi-year periods.

What was the catalyst for Pantera Capital's largest investment into the TON ecosystem?

The catalyst was the strategic partnership between Telegram and TON, along with the native in-app integration of TON features within the Telegram app, which signaled a concrete commitment to the TON ecosystem.

How does Cosmo Jung view the relationship between Telegram and TON?

Cosmo Jung sees the relationship between Telegram and TON as mutually beneficial, with Telegram needing TON for its sustainability as a private entity and TON benefiting from Telegram's massive user base for distribution.

What are some of the key factors that Pantera Capital considers when building conviction for an investment?

Key factors include strategic partnerships, the potential to onboard a large user base, the importance of a thriving user and developer ecosystem, and the traction of applications within the ecosystem.

What is the significance of the TON wallet being a tab in the Telegram app?

The TON wallet being a tab in the Telegram app signifies a seamless user experience and a strategic advantage for TON over other apps on the Telegram platform, as it is just one click away from the user.

How does Pantera Capital approach due diligence for investments in the crypto space?

Pantera Capital's due diligence process involves a deep understanding of the business model, the competitive landscape, the team's vision and execution capabilities, and the potential for the project to capture economic surplus.

What are some of the risks or 'yellow flags' Pantera Capital identified during their due diligence on TON?

Some risks include the uncertainty around the development of necessary blockchain primitives like bridges, the challenge of attracting developers to a non-EVM platform, and the execution risk of growing the TON ecosystem to hundreds of millions of users.

How does Cosmo Jung perceive the role of gaming within the TON ecosystem?

Cosmo Jung sees gaming as a significant opportunity for TON, given the success of mini-games on Telegram and the potential for these games to drive user engagement and retention within the TON ecosystem.

What is Pantera Capital's stance on the importance of stablecoins for a blockchain ecosystem?

Pantera Capital views stablecoins as crucial for a blockchain ecosystem, as they provide a foundation for economic activity and transactions, which are essential for the growth and adoption of the blockchain.

How does Cosmo Jung evaluate the potential for TON to become a leading blockchain platform?

Cosmo evaluates TON's potential by considering its user base growth, the monetization potential of its user base, the strategic alignment with Telegram, and the development of its ecosystem, including the growth of stablecoins and developer tools.

What is Pantera Capital's approach to supporting their portfolio companies post-investment?

Pantera Capital takes an active role in supporting their portfolio companies by providing feedback, acting as a sounding board for product development, and leveraging their expertise in capital markets and monetization strategies to guide the companies towards success.