Matt Slater's Personal Website

25 Predictions for 2025

Mon, 06 Jan 2025 07:44:31 -0800

Inspired by Fred Wilson who has been blogging since the dawn of the internet, here are my predictions (loosely held) for 2025.

CRYPTO, MACRO AND MARKETS:

S&P stock market reaches new ATHs and touches 7000.
Bitcoin reaches new ATH > $145,000 in 2025. Fails to make a new high again for this cycle.
ETH reaches high of 5k
Solana reaches ATH 500.
Bitcoin strategic reserve does not get approved. But US Government stops selling silk road coins and calls that the SBR.
Interest rates stay mostly flat. Unless there is a black swan or major recession catalyst causing Fed to react.
Real estate continues to slump in covid beneficiary states like Florida, Texas sunbelt. Intellectual capital hubs like SF and NYC see the highest rent and residential real estate appreciation as workers flock to new AI and AI related jobs in tech and tech servicing.

AI & TECHNOLOGY

OpenAI does not reach AGI but does reach a model that resembles super intelligence. AKA a hyper generalist model that when interacting with it feels like it can do anything.
First AI Agents enter the workforce
AI Agents reach parity with a human internet user. By combining 3 technologies: Jailbroken LLM (zerebro/Truth Terminal etc), Opitcal Character Recognition (AI agent controlling a full computer), and a TEE (Trusted Execution Environment) giving the AI custody of funds and autonomy.
5b AI Agents get created and are considered “active Agentic internet users.” Total internet users doubles in 2025 from 5b to 10b.
AI Bubble peaks on expectations of AGI...Read More

Request for Startups: 10 Ideas I'd like to Fund

Sun, 10 May 2020 22:30:44 -0700

Here are 10 ideas that I'd like to fund that could be billion dollar businesses.

1) Social Commerce App. TaoBao has seen massive growth in China opening up a new sector of e-commerce and a new business model for the web. Sellers or influencers can stream live product explanations and viewers can buy the product in real time. It's both entertainment and live shopping. (think a more woke QVC infomercial that anybody can host).

2) AI Powered Title Insurance - Title insurance is a $25 billion dollar a year business dominated by 3 companies. Payouts are 5% of claims compared to car insurance which is around 65%.

3) Search for Shopify Stores. There should be a way to search across all shopify listings. Similar to eBay but for Shopify stores.

4) Non fungible tokens for all digital content. Imagine a way to hash photos, videos, blog posts, digital art, memes so that we could trace the content creator to its original source and pay royalties in real time.

The problem is that anybody can change one pixel or shave off 1 second on an mp3 file and the hash will change, allowing anybody to copy and publish without attribution.

I'm not sure this is ever solvable but it would unlock many new types of web business models and opportunities.

5) Website logins without username and passwords. The internet just knows who you are. Like when you walk into a store you pick what you want and check out.

Crypto addresses seem like an obvious first attempt. We can already "login" to any web3 based dApp with our metamask browser using only our ether address. Now imagine our ether address contained a username (ens domain) and any profile info we wanted to share with the website. We could actually walk around the internet without having to login again to every new website.

Customer acquisition strategies...Read More

COVID19 KNOCK ON EFFECTS

Sun, 15 Mar 2020 14:16:40 -0700

“This is not a financial crisis” — President Donald Trump

There is no systemic risk” — Goldman Sachs

"This is not a financial crisis"

The Corona Virus has taken global economies by surprise. While it started out as a health crisis, it has taken out the tide on the financial markets, revealing just how much risky and levered financial practices have been going on.

Everybody seemed to be drinking from the same cool aid over the past decade. Corporates have been spending all their free cash flow on stock buy backs.

Hedge funds and market making funds have taken on more leverage to squeeze out profit on small moves only to get blown out when COVID19 hit.

Rates will go negative this cycle to stimulate growth.

ORDER OF EVENTS THAT HAVE UNFOLDED

For the past decade, volatility has been at all time lows with the vix not breaking the 30 mark.

Then COVID19 hits sending volatility to an all time high.
Banks and Funds are forced to reduce the value at risk since their investment models are based on market volatility. Heard recently that a bank trader had his book reduced from 200m to 15m.
As a result, forced liquidations occur causing markets to move drastically lower
In a liquidity crisis, everyone looks for a flight to safety. IE. the US Dollar.
USD rips against all FX currencies because of US reserve currency status and significant foreign debt liabilities are denominated in USD (think oil and commodities).
Almost everything sells off initially including Gold and BTC.
Fed is forced to bail out Airlines, hedge funds and corporates that gorged on stock buybacks.
The only way to save the economy is to print money, have the FED buy assets and bring rates to 0.
Eventually this calms markets at a new low...Read More

Crypto Asset “Market caps” — The Magnification Effect

Sat, 30 Jun 2018 14:45:41 -0700

Crypto assets (Bitcoin, Ethereum etc.) have appreciated in value faster than almost any other asset in the history of financial markets.

However, there’s one major difference. From what I’ve seen, it’s a phenomenon that is unique to crypto assets. I call it the magnification effect.

Here’s an example. Let’s say Ether (ETH) is trading at $500 (to make numbers easy). And 0x Project (ZRX) is trading at .001 Ether or .50 USD. Many of these smaller market cap coins trade on substantially smaller volume compared to the top coins such as Bitcoin and Ethereum. ZRX does not have a ZRX/USD trading pair on any exchange. ZRX trades on a ZRX/BTC or ZRX/ETH trading pair.

Now let’s say the price of ETH doubles to $1000 but the ZRX price in ether remains the same at .001 ETH (assume no trading volume to illustrate the example). The USD market cap of Ether will have doubled from ~$50B to ~$100B and interestingly, the ZRX market cap will double as well. ZRX at a price of .001 ETH has increased from .50 USD to $1.00 USD and from ~$250M in market cap to ~$500M. With no trading volume, the market cap of ZRX has doubled in USD terms. This is an interesting phenomenon because the USD value of the ZRX token has increased without any trading volume on the ZRX order books. The ZRX price appreciation come solely from the underlying trading pair ETH.

A similar effect happens in the equity markets but we don’t take notice or feel it. For example, if the dollar (USD) rises in value against the euro (EUR), all US companies are now worth more in terms of Euros even though their USD market caps remain constant.

This effect is exacerbated in the crypto markets because of the nature of crypto to crypto exchanges. For context, this would be like buying Snapchat stock with Apple stock on the ticker SNAP/APPL. There are no cross-trading pairs in the equity markets — all public stocks in the US trade against the dollar. If you own Apple stock and you want to buy...Read More

The Birth of A New Asset Class: Blockchain Tokens & The Decentralized Web

Sun, 02 Jul 2017 14:23:43 -0700

“You can’t connect the dots looking forward; you can only connect them looking backwards.” — Steve Jobs

The rise of ethereum and broader blockchain ecosystem share many attributes with the early days of the internet.

In 1995, the World Wide Web was a vast, bare and open platform. It was weird, of little utility and used for illicit things. In fact, very smart people were very convinced it would fail.

Fast forward twenty years, it has fundamentally changed our lives in unimaginable ways. The same pattern is unfolding with blockchain assets and the decentralized web with one major difference.

HTTP, SMTP, TCP/IP, SSL, MySQL

You should see the above URL in your browser. HTTP & SSL are used here to access medium.com

Most people can’t tell you what these acronyms stand for nor what they are used for. Yet, all of us use them every day, multiple times a day. We rely on them to keep our bank info private and work remotely. They allow us to facetime our loved ones, get us home when we’re lost and read this post on our phones. These open source internet protocols are critical pieces of our internet lives and yet we don’t evenrealize they exist. Why? Because we don’t need to understand them, in order to use them.

The internet we know and love today — Facebook, Gmail, WhatsApp, online banking, Airbnb and Uber are built on top of these protocols. The modern web is made up of a stack of technologies that work together to support the applications we use every day. We call this the modern web stack. It looks like this:

As consumers we only interact with the top layer. Yet, we use the...Read More

Decoding the DNA of Derivatives

Wed, 11 Nov 2015 17:07:13 -0800

Our startup journey didn’t begin in our parent’s garage, a college dorm room, or a dirty apartment.

We started building Hedgy in the spring of 2014 at a bitcoin hackathon — hosted in the bowels of the historic Benjamin Franklin Hotel building — a block away from Napster’s old headquarters in Downtown San Mateo.

We started by solving a pain.

At that time, the exchange value of bitcoin had dropped 50% from it’s all-time high of over $1,100 roughly six months prior. Anyone that had bought into the hype on the way up, were now experiencing regret on the way down, as the price would painfully plunge by another 50% over the next six months.

In the world of fiat currencies, a volatility event like this doesn’t happen often. Stable assets such as the U.S. Dollar (USD) are backed by the federal government. Thus, artificial safe guards are put in place to keep the market from dropping too much, too soon. However, digital commodities such as bitcoin are not backed by any central government, meaning those synthetic safety nets don’t exist. Instead, they are underpinned by the laws of math and enforced by the rules of code. Together, these digital properties combine to form a protocol suite — much like the internet — upon which tools can be built to protect market participants from unsuspecting volatility events.

In traditional finance, one such tool exists called a forward contract.

A forward contract is a type of over-the-counter derivative instrument that acts as a bilateral agreement between two counterparties, to buy or sell an asset or commodity for a fixed price at a specified date in the future.

When a forward contract is used to protect against downside price risk, it is known as a hedge. Businesses have been using forward contracts for hundreds of years to protect their unique commercial interests from all types of...Read More

Why We Founded Hedgy

Tue, 21 Apr 2015 22:20:45 -0700

A paradigm shift is happening right now. A vibrant community of intrinsically motivated engineers and designers are re-building the financial world on top of a mountain of cryptographic research that dates back to World War II.

The tipping point of crypto finance will be another black swan event.

But the aftermath will yield a more open, accountable and distributed financial world that runs on distributed public ledgers, called block chains.

This tack in trajectory is already being compared to the rise of the internet. Therefore it’s not unreasonable to believe its effect will have similar results.

Still, somehow after twenty years, the internet has left many industries relatively untouched — the financial sector being one of the last remaining unchanged. Just as the internet disrupted media, information and communication — block chains are disrupting finance, contracts, data storage, law and even creating new unexplored markets.

However, the promise and hype of block chains (Bitcoin in particular) has long overshot the current development cycle. Bitcoin hasn’t even hit version 1.0 and the media is already hailing 2.0 as the next big thing. It’s important to remember the foundation for block chains is still being built and we are excited and inspired to be a part of it.

Today, we’re proud to share our mission, show our vision and explain why we founded Hedgy.

Our mission is to create a more open, accountable and distributed financial world.

By leveraging the block chain technology underlying bitcoin, we are redesigning critical pieces of global markets and reducing the need for trust in financial contracts. We believe that when building something truly innovative it’s important to start with first principles. That’s why we traced back the roots of...Read More

The Trillion Dollar Vending MachineHow Bitcoin is slowly making a dent in the universe

Tue, 31 Mar 2015 19:46:03 -0700

Ridicule and skepticism! That’s what greeted the Internet in 1995.

Fast forward 20 years and the only people being ridiculed are the extinct companies that refused to embrace it.

Bitcoin and the Block Chain are the Internet of 20 years ago. We are just beginning to unlock the potential of this powerful new technology.

As we scratch beneath the surface of the Bitcoin protocol, the application that we at HEDGY are most excited about is the “Smart Contract”.Imagine entering into a contract with a guarantee that both sides would perform as outlined. Imagine getting paid to rent out your internet connection like a WiFi Airbnb. Imagine an artificially intelligent bank that can issue loans on its own and shut down your car if you fail to make a lease payment.

Package Delivery Drone

Google’s Self Driving Car

Imagine a self-driving car that can park, charge up, drive for uber and pay for repairs all on its own.

Imagine replacing escrow agents with programmable arbitration robots.

Imagine a network of courier drones that you can bid on in real time to make last mile deliveries.

With block chain and smart contract technology, you could run Swaziland’s entire stock market on smart phones and a network of Amazon Web Servers with minimal overhead costs.

Smart contracts have the ability to drastically reduce the size and costs of the...Read More

Bitcoin: The Tip of a New Financial Iceberg

Sat, 25 Jan 2014 14:01:10 -0800

Imagine a world where 2.5 billion people don’t have bank accounts, credit card fraud amounts to $190 billion per year, and global remittance services take $50 billion in fees. Sadly, this world is not fictional. This is the current state of the global financial system.

Enter Bitcoin.

“The most important invention in the history of the world since the Internet.” — Roger Ver, Bitcoin Angel Investor

While the media loves to poke fun, Bitcoin is bringing an entirely new frontier to the global financial industry. Just like the web democratized communication and information, bitcoin will democratize the financial industry. Bitcoin is a

HUGE HUGE HUGE DEAL

Credit card payments, money remittance and online purchases are stuck in the 90's compared to mobile phones and the internet.

Add paragraph text here.

Bitcoin will do to money what the internet did to information.

Let’s think back to what life was like pre-internet.

COMMUNICATION

Before there was email, cell phones and texting, communication was a drag. Calling family on the other side of the country, have fun paying $3 per minute. Need a contract sent from New York to London, try fedex. Need to get a hold of your doctor who’s on vacation, try her pager.

INFORMATION

It’s hard to imagine life without google, wikipedia or facebook. Doing research for a class paper, grab an encylopedia (if you can find one). Making dinner plans for saturday night, pick up a 2lb phone book and call a restaurant. (Seriously, this was reality)

The...Read More