
Head of Research @Liquid_Capital_ | Deep macro tracking thesis narrative flow | Backing asymmetric early stage plays | DMs open for high signal pitches
HongKong
Joined July 2021
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Jay | LD retweeted
I’ve had a few people write to ask me to follow up on a (reply!) tweet I wrote that’s gotten a lot of retweets. I considered deleting it just to avoid the headache, but I think that would make people more paranoid. So let me share my thoughts.
Jay | LD retweeted
Abdul El-Sayed is entirely unfit to serve in the U.S. Senate, not because of his name or religion, but because of his deeply troubling, anti-American views.
I am a Democrat who very much wants our party to regain control of the House and Senate.
But embracing toxic bigots like El-Sayed, Darializa Chevalier, and Zohran Mamdani will do far more damage to our party and its electoral prospects than any political advantage we might gain from embracing them.
Political labels obscure the structural incentives driving this behavior.
Jay | LD retweeted
The Internet Needs Crypto to Survive AI: youtube.com/watch?v=TKVY4hVA…
One of the most exciting, and underrated, developments in crypto atm revolves around this @Bankless conversation with @eastdakota of @Cloudflare.
~20% of all websites are routed through Cloudflare, and in this conversation Matthew tells us that the business model of the Web is under attack. To put it simply, agentic traffic is exploding, and agents don't click on ads, but ads underpin much of the "free" stuff we get online. The infrastructure is creaking under agent load.
Matthew's assertion is that microtransactions, at a scale not previously seen, will be needed to pay for access to content, as the advertising model of the Web falls apart with agents. Crypto people have talked about microtransactions forever, but it was for people, which never worked, whereas we're now contemplating it for agents.
He says Cloudflare handles ~500M requests per second, and that 1-10% of those requests may be suitable for this microtransaction model. A blockchain environment is the only payment network that could theoretically handle this scale, and it would need to hit 5-50M TPS.
5-50M TPS in prod dwarfs anything yet attempted in crypto, and is far beyond anything TradFi can handle. There are very few blockchain environments that could conceivably provide this throughput.
Just as important as the scale, is the model and trust assumptions. While Cloudflare may roll this out as a solution for its customers first, what's implicit here is the potential for an entirely new business model for the Web.
If Cloudflare walks this path, I hope that what they build has permissionless validation, allowing for anyone to audit the network.
Cloudflare has been a torch bearer for the open Internet, and so it only follows that if they're to pioneer a new business model for the Web, that the architecture be an open network. Doing so will engender the most trust, goodwill, and adoption in the long run.
Web 3.0 is dead, long live Web 3.0.
Jay | LD retweeted
For the record, I don’t know if there are any new cryptanalytic results coming out of the major labs. If there are, I hope they’d be cautious about disclosure. I do know they have cryptanalysts. They’re not uninterested.
Tokenization adds complexity without solving the underlying redemption mechanics
My conversation w/ @rali_perduhova on ANDRA, a new ETF tokenization platform…
We discuss:
-How ANDRA works
-Why ETF issuers should pursue tokenization
-Current interest from issuers
-Why built on Canton Network
-Competition around tokenization infrastructure
-Why SEC’s innovation exemption matters
-Future of tokenization
via @CryptoPrimePod
Tranches are a liquidity trap for the last buyer.
Are tranched rounds a sign of a bubble?
“In every cycle, you get the innovators, then you get the imitators, and then you eventually get the idiots.
The innovation of the tranche financing was the notion that I can get ‘build with me’ money at a lower valuation, then use that to get money at a higher valuation.
Now everyone is doing it, and it is not tied to the quality of the company anymore. It has become another technique for people to do.” @venkyganesan
How do you feel about tranched rounds? Lessons/observations? @dafrankel @nbt @Alfred_Lin @chetanp @PhilipJohnston
Routing is not the same as settlement or finality.
The Internet Needs Crypto to Survive AI: youtube.com/watch?v=TKVY4hVA…
One of the most exciting, and underrated, developments in crypto atm revolves around this @Bankless conversation with @eastdakota of @Cloudflare.
~20% of all websites are routed through Cloudflare, and in this conversation Matthew tells us that the business model of the Web is under attack. To put it simply, agentic traffic is exploding, and agents don't click on ads, but ads underpin much of the "free" stuff we get online. The infrastructure is creaking under agent load.
Matthew's assertion is that microtransactions, at a scale not previously seen, will be needed to pay for access to content, as the advertising model of the Web falls apart with agents. Crypto people have talked about microtransactions forever, but it was for people, which never worked, whereas we're now contemplating it for agents.
He says Cloudflare handles ~500M requests per second, and that 1-10% of those requests may be suitable for this microtransaction model. A blockchain environment is the only payment network that could theoretically handle this scale, and it would need to hit 5-50M TPS.
5-50M TPS in prod dwarfs anything yet attempted in crypto, and is far beyond anything TradFi can handle. There are very few blockchain environments that could conceivably provide this throughput.
Just as important as the scale, is the model and trust assumptions. While Cloudflare may roll this out as a solution for its customers first, what's implicit here is the potential for an entirely new business model for the Web.
If Cloudflare walks this path, I hope that what they build has permissionless validation, allowing for anyone to audit the network.
Cloudflare has been a torch bearer for the open Internet, and so it only follows that if they're to pioneer a new business model for the Web, that the architecture be an open network. Doing so will engender the most trust, goodwill, and adoption in the long run.
Web 3.0 is dead, long live Web 3.0.
Jay | LD retweeted
“Sometimes people pay up to be able to win the deal.
Sometimes people pay up because they are able to see a bigger TAM than the other investor.
In those cases, you are not actually paying a higher market price. You are able to see that the opportunity is bigger.” @venkyganesan
What percent of rounds that are paid up today is due to unique insight vs fomo @m2jr @nbt @hunterwalk @plaffont
What Menlo has done over the last 24 months is exceptional.
Yes, they did Anthropic’s round at $4BN that will make them $50BN+ as a firm. NICE!
But they then took that and went f****** hard. They do Lovable, Higgsfield, Legora.
They compounded the brand win of Anthropic to cement their position from respectfully a slightly ageing firm to being a dominant venture leader at the forefront with Thrive, a16z, Benchmark etc.
It is incredible to see and I sat down with @venkyganesan to shoot the s*** on this.
1. Every Seed Investment Is an Option Bet
Seed-stage deals function as financial options to discover true outlier potential before committing major capital. VCs must construct a broad enough portfolio to secure sufficient at-bats, only sizing up their position when quantifiable, revenue-based metrics prove an outlier has emerged.
2. What Is the First Sign of the AI Wave Cracking?
Market cycles rarely collapse due to equity write-downs. They fracture when levered debt defaults occur. When market participants take on heavy leverage during an AI boom, precise timing becomes as critical as being directionally correct, making debt obligations the primary failure vector when cycles turn.
3. Why Every VC Must Now Prioritize IRR
Every startup in the current landscape writes a structural tax to the Mag 7 and hyperscalers for compute and foundation models. Because LPs can buy index exposure to those same public tech giants without fees or carry, private VCs must generate outsized IRR performance, beating public markets by at least 1,000 basis points, to justify private capital allocation.
4. Why LPs Wanting Smaller Funds and Slower Deployment Is BS
LPs cannot demand both smaller fund sizes and multi-year deployment paces in the middle of a generational platform shift. Because AI startups face immense capital requirements to scale compute, VC firms that refuse to deploy capital rapidly will watch competitors step in and capture the category winners.
5. The Theory of Reflexivity and How It's Causing Markups
Reflexivity creates self-reinforcing loops where fast revenue growth triggers rapid valuation markups, attracting elite human and financial capital that further accelerates growth. However, when copycat investors chase markups for momentum rather than underlying fundamentals, reflexive valuation bubbles inflate until market realities force an inevitable correction.
6. Sometimes You Pay Up Because You Have Unique Insight
Premium entry prices are not always the result of irrational bidding. They often stem from an investor's ability to recognize a fundamentally larger total addressable market than the consensus. When a VC possesses unique conviction around an expanding market opportunity, paying above current rates reflects calculated foresight rather than price-taking behavior.
7. There's No Limit to What a Person Can Do as Long as They Don't Care Who Gets the Credit
Personal ego remains one of the most expensive liabilities in venture capital and company building. True long-term success requires setting aside individual notoriety, focusing ruthlessly on generating LP returns, and empowering teammates and founders without worrying about who receives the public credit.
(links in comments)
Jay | LD retweeted
Another data point to keep an eye on…
Default rates climbing in riskier corners of fixed income market.
via @ReichJosie
Jay | LD retweeted
Lieb making the top 3 is the biggest surprise to me — but also, not that crazy given how many lattice model papers are chilling in this repo
If anything, the more I look at these results, the more I see TCS/analysis types of "grind it out" proofs and less of the "we found a magic spectral sequence whose functorial properties give you the answer"
Feels like a fundamental thing in nature, you very rarely get things that look aesthetically like Bott Periodicity
Instead you are grinding 528 Sobolev estimates that you chain gradually — which is why Bourgain, Tao, Lieb, Smirnov, and Sheffield make this list over, e.g., Grothendieck, IMO
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