
Bain Capital Ventures’ Kevin Zhang: The ‘Unlockable Potential’ in Lending, Investing, and Insurance
Kevin Zhang, partner at Bain Capital, assess the technological tailwinds for emerging players in lending, investing, and insurance....
Alex Sharata~quoteblock
Hacks, theft, and other illegal activity are leading to a rise in the flow of illicit funds in blockchain markets.
Security must be the next domino to fall if crypto and blockchain are to become mainstays.
The first domino was compliance, solved with KYC and AML tools like Chainalysis and TRM Labs. Now, there is a new attack seemingly every week, often caused by smart-contract vulnerability, governance manipulation, or oracle failure.
The Axie Infinity breach highlighted the fact that sidechains —networks that connect blockchains — are known security weak points. These caused $650M in losses in Ether and stablecoins. The Wormhole DeFi platform was hacked for $325M after a crucial bug fix was uploaded on GitHub, but not deployed.
The crypto toolchain for building and shipping distributed apps is fluid and ever-evolving, which adds to the urgency.
Given that crypto adoption is still in its early innings, investing in crypto security now is also a long-term bet on overall growth of the underlying market. There are over 40 million developers globally, but only a small percentage of those are crypto-focused. You have to believe that this number will continue growing rapidly in the coming years, even with the issues crypto has seen along the way.
It’s true that crypto volatility has an impact here. Whenever we enter into a “crypto winter,” crypto appetite seems to wane. Regardless of market cycles, if you believe that crypto is here to stay, then security will be an important pillar, enabling the next one to two billion users to onboard into the crypto economy.
Alex Sharata~quoteblock
Watch for momentum to build on the necessity of Web3-native tooling as other approaches fall behind. “Some market participants are likely wondering if crypto-specific security tooling is necessary,” says Sharata. “The question is whether crypto-native security tooling will have sufficient differentiation versus what already exists in the market, and whether some Web2-focused tools will be applicable over time. But, from the looks of it, the existing static- and dynamic-analysis players are largely overlooking crypto because the vast majority of threats are novel. For example, Snyk hasn’t updated their vulnerability database for Solidity’s Integrated Development Environment (IDE) in a while.”
Adjacent markets like cyber insurance could see their revenue opportunities expand. “Crypto-specific breaches can add a new pocket of TAM for the already large cybersecurity insurance market,” he says.
CertiK, Chainalysis, Chaos Labs, HackerOne, OpenZeppelin, Quantstamp, Snyk, TRM Labs
Kevin Zhang, partner at Bain Capital, assess the technological tailwinds for emerging players in lending, investing, and insurance....
Jill (Greenberg) Chase, investor at CapitalG, assesses the feasibility of several business models amid a massive wave of funding into the AI/ML space. Across different delivery modes and business models, large standalone businesses will be built on differentiation....
John Cowgill, Partner at Costanoa Ventures, points to some of the more overlooked and contrarian business models within this closely watched ecosystem. As the space matures, competition between emerging companies and quick-to-adopt incumbents will determine the winners...
Technology, innovation, and the future, as told by those building it.