Variant Fund: Investing in the Ownership Economy

Variant Fund: Investing in the Ownership Economy

Definition: Variant Fund is a venture capital firm that invests in early-stage crypto projects. They focus on initiatives that aim to give users ownership and control within the digital economy. Think of them as investors in the infrastructure and applications that will power the future of the internet, but focused specifically on the crypto space.

Key Takeaway: Variant Fund invests in early-stage crypto projects building the "Ownership Economy," where users have a stake in the networks they use.

Mechanics: How Variant Fund Works

Variant Fund operates like a traditional venture capital firm, but with a specific focus on the crypto landscape. Here's a breakdown of their mechanics:

1. Investment Focus: Variant primarily invests in early-stage crypto projects. This means they often provide funding to projects that are still in the development or early growth phases. Their investment thesis centers around the idea of the "Ownership Economy." This means they seek out projects that give users a degree of ownership, whether through token distribution, governance rights, or other mechanisms.

2. Due Diligence: Like any VC firm, Variant conducts thorough due diligence before investing. This involves evaluating the project's team, technology, market opportunity, and potential for growth. They assess the project's whitepaper, code, and overall vision to determine its viability and long-term prospects. They also analyze the project's tokenomics, which is the economic model of the token. They want to understand the supply, distribution, and utility of the token.

3. Investment Rounds: Variant typically participates in seed or Series A funding rounds. These are early-stage funding rounds that provide capital to projects to help them build their products, grow their teams, and scale their operations. They provide capital in exchange for equity or tokens in the project.

4. Portfolio Management: Once they invest, Variant actively manages its portfolio. This includes providing guidance, mentorship, and connections to help the projects succeed. They have a team of experts with experience in various aspects of the crypto industry, including technology, finance, and marketing.

5. Exit Strategy: Variant's goal is to generate returns on its investments. Their exit strategies vary depending on the project. This could include an Initial Public Offering (IPO), an acquisition by a larger company, or simply selling their tokens on the open market after a successful launch and growth phase.

Trading Relevance

While Variant Fund itself isn't directly traded, understanding their investments can provide valuable insights for traders. Here's how:

• Early Trend Identification: By tracking Variant's investments, traders can identify emerging trends and technologies in the crypto space. Variant often invests in projects that are at the forefront of innovation, so their portfolio can serve as a leading indicator of future growth areas.

• Potential for Token Appreciation: If Variant invests in a project that goes on to be successful, the project's token price may increase significantly. Traders can potentially profit by investing in these tokens before they become widely adopted.

• Sentiment Analysis: The investments made by Variant, and other prominent VC firms, can influence market sentiment. When a well-regarded firm invests in a project, it often signals confidence in the project's potential, which can lead to increased investor interest and price appreciation.

• Understanding Market Cycles: Variant's investment decisions can also provide insights into market cycles. They may increase their investments during periods of market downturns, indicating a belief in the long-term potential of the crypto market. Or, they might shift their focus when the market's trends are changing.

Risks

Investing in projects backed by Variant Fund, or any early-stage crypto project, carries significant risks:

• High Volatility: The crypto market is highly volatile, and the prices of early-stage tokens can fluctuate dramatically. There is a high risk of losing your entire investment.

• Project Failure: Many early-stage crypto projects fail. This can be due to a variety of factors, including technological challenges, lack of adoption, regulatory hurdles, or competition.

• Illiquidity: Early-stage tokens are often illiquid, meaning it can be difficult to buy or sell them quickly at a desired price. This can make it challenging to exit your investment if the market turns against you.

• Regulatory Uncertainty: The regulatory landscape for crypto is constantly evolving, and there is a risk that projects could be subject to new regulations that could negatively impact their viability.

• Security Risks: Crypto projects are vulnerable to hacks, scams, and exploits. Investing in a project that is not well-secured could lead to the loss of your funds.

History/Examples

Variant Fund was founded in 2020. Since then, they have invested in a number of notable crypto projects. They focus on the "Ownership Economy," which means they look for projects that give users a stake in the network. Some of their notable investments include:

• Uniswap: A decentralized exchange that allows users to swap tokens without intermediaries.

• Phantom: A popular wallet for the Solana blockchain.

• Worldcoin: An identity protocol that uses biometric data to verify human users.

• Morpho: A lending protocol built on Ethereum.

• Flashbots: A research and development organization focused on MEV (Miner Extractable Value) in the Ethereum ecosystem.

• Farcaster: A decentralized social network.

• Blackbird: A platform to help merchants build their own loyalty programs onchain.

Their investment portfolio reflects their vision of a future where users have more control and ownership within the digital economy. These examples showcase the types of projects Variant Fund typically invests in, which are often at the cutting edge of blockchain technology and decentralized applications.

Variant also published a series on "The 7 Powers in Crypto," adapting Hamilton Helmer's framework to the crypto landscape. This demonstrates their commitment to analyzing and understanding the forces that drive success in the crypto industry.