Christopher

The vintages raised when consensus is weakest are usually the ones that outperform, and that is how this moment reads to us. Talent is strong, capital is scarce, and while many crypto funds say deal flow has dried up, we’re seeing more of it than at any point since we started. 1kx Founding Partner @lalleclausen joined @bennypjacobs on Scenius Studio to walk through what that looks like on the ground: --> Why Web2 founders are finding product-market fit in crypto while crypto-native founders are stalling --> Where the line falls between what wins as a token network and what wins as a company --> How Cost of Trust 2.0 holds up in the current cycle

@pet3rpan_ @1kxnetwork Time flies!

Officially at @1kxnetwork for 6 years now!

Everything we back at @1kxnetwork comes down to one question: what does it cost two parties who don't fully trust each other to transact, and who keeps the margin that cost creates? In capital markets that margin runs to $17 to $24 billion a year on trade processing alone, the back-office work of matching, confirming, and reconciling trades that exists because every party keeps a separate ledger that has to be checked against everyone else's. It's the most measurable piece of the cost of trust, billed back to whoever is transacting. $32B in real-world assets now sit on public blockchains, up 5x from January 2025. BlackRock's BUIDL alone holds $2.4B; Apollo, Franklin Templeton, Goldman, BNY, and JPMorgan are all running tokenized funds or payment rails, with Kinexys processing more than $5B daily; the DTCC announced a tokenization pilot for 2026 earlier this year. The shift from crypto-native experiment to incumbent infrastructure project happened largely in the last 18 months. Tokenization is doing four things to assets in this market: letting them settle around the clock, making ownership programmable, cutting issuance and servicing costs by collapsing intermediaries, and opening access to investors who couldn't reach these assets through domestic brokers. The limits matter just as much: liquidity still depends on whether anyone wants the asset, credit risk still depends on whether the borrower pays back, and most tokenized equities today are synthetic or custodial claims rather than direct shares on a company's register. I wrote a piece walking through the six layers of the RWA stack and where value concentrates by asset class. 1kx invests in the three layers an incumbent ends up renting from someone else regardless of how much it spends internally: compliance, data, and the issuance infrastructure asset managers depend on. Four 1kx portfolio companies already serving institutions at scale: @SuperstateInc, @0xPredicate, @cryptio_co, @redstone_defi. Between them, they cover issuance, compliance, accounting, and oracles for the firms running this market. The fourth layer runs the other way. Distribution isn't a neutral rail, it's the place to own the end customer, and the edge we see there is in DeFi, the channel we think gains most from tokenization. Full piece linked in the reply. Building in this space? We want to hear from you. Disclosure: 1kx is an investor in Superstate, Predicate, Cryptio, and RedStone.

1kx Research Partner @_weidai on the $2B+ that moved into AI security M&A in 2025-26, what it priced, and where the next venture-scale category gets built. Wei covers the Cost of Trust frame, applied to the agent layer - article link in the comments.

The fact in @_weidai’s piece I’d point someone to: $2B+ has moved into AI security M&A. The highest-risk failures are at the sequence level, one layer below where that capital went. That gap is the next venture-scale category.

Cost of Trust 2.0, the full conversation. Where the frame holds in financial infrastructure. Where it gets repriced at the AI edge. Where the next category gets built. Plus, where the thesis has evolved since the 2018 paper. 1kx.capital/thesis/cost-of…

The Cost of Trust 2.0 framework, applied to a $9 trillion category. @nichanank on the rewiring of trade finance: stablecoin rails compressing correspondent banking rent (340bps on lower-value flows) and opening dollar access where banks structurally cannot reach. The seven-layer trade stack, the MLETR regulatory gating analysis, and where we are investing. 1kx.capital/thesis/the-rew…

Two years we sat on this one. The anchor isn't crypto. It's banks retreating from these corridors year after year, while the law finally catches up to digital trade documents.

Consortium chains were doomed the moment they wrote "editable" into the design.

Custody is the simplest thing a bank does. It's also the most expensive. That gap is the whole thesis.

@san_x_m @AnthropicAI Very true. Trust Disintermediating Technologies will be more and more critical going forward: 1kx.capital/thesis

This is a massive wake-up call. Imagine your startup built on Fable 5 and it just went dark overnight with zero warning. Anthropics own foreign national employees cannot even access it. This is proof that you cannot fully rely on American tech infrastructure. Countries around the world need to start building for themselves. Build sovereign. Build local. Technology is the new weapon and today just proved it.

The US government, citing national security authorities, has issued an export control directive to suspend all access to Fable 5 and Mythos 5 by any foreign national, whether inside or outside the United States, including foreign national Anthropic employees. The net effect of this order is that we must abruptly disable Fable 5 and Mythos 5 for all our customers to ensure compliance. Access to all other Claude models is not affected. We apologize for this disruption to our customers. We believe this is a misunderstanding and are working to restore access as soon as possible. Read our full statement: anthropic.com/news/fable-myt…

Very timely reminder of the Cost of Trust. If you haven't read our thesis yet, I suggest you give it a read: 1kx.capital/thesis

The useful version of an AI agent is also the risky one. It can read private context, take in outside inputs, and act. In this clip, 1kx Partner @_weidai explains why that combination makes prompt injection much more than a chatbot problem. More in Cost of Trust 2.0: 1kx.capital/thesis/cost-of…

Our last startup almost got deplatformed by an App Store reviewer on a bad day. We waited two weeks with no path to appeal. That was my cost-of-trust moment. Cost of Trust 2.0 thesis live: 1kx.capital/thesis/cost-of…

The game theory of "exploiting" the Zcash bug is much more complex. "If the Zcash bug were exploited, we would have seen a large outflow from the Orchard pool." No, it's not that simple. A sophisticated hacker would not have just withdrawn from the shielded pool and sold tokens. Why? Because once they are out of the pool, there is basically no way to launder a large sum of money. The orchard pool itself is actually the best way to launder counterfeit ZEC. The best scenario for a hacker is if (1) they remain the only party with counterfeit ZEC and (2) the Orchard pool remains in operation (not drained), so the hacker can launder the ZEC slowly (say, direct OTC within the Orchard pool over a longer period of time). Can we rule this out? Yes, this can be ruled out if we ask most ZEC holders in Orchard to withdraw (i.e. drain the pool). Another angle of attack that could have been executed which is hard to rule out: the hacker could have taken a large but ordinary-looking short position on ZEC after finding the exploit. This strategy is even plausibly deniable--you can reap rewards from knowing about the exploit early with little risk. Since there's a liquid perp market on ZEC, it's possible to "hide" a significant short position (worth millions) without moving markets significantly or leaving suspicious traces. A sophisticated hacker could have run a combination of the two strategies above.

Thank you @money2020! The last 48 hours have been a whirlwind. We caught up with our partners, made hundreds of new connections, and shared key WalletConnect Pay milestones. So much more to come.

There are two distinct quantum x crypto market opportunities. 1. Post-quantum security for digital assets. The goal here is to offer security guarantees for *existing* 2.6T of crypto assets. Yes, one cannot do this without upgrading chains. But you can try to offer as much added security as possible. 2. Quantum-native blockchain. Quantum compute is actually a value-creating technology: NISQs, even with just hundreds of noisy qubits, can be used for optimization problems, and as logical qubits emerge & gate fidelity improves, there is the possibility of quantum one-time programs & quantum cryptography. Even just a PoQW (proof of quantum work) L1 blockchain as the baseline is extremely interesting from a new "post-quantum" non-sovereign SoV asset standpoint. There have been quite a number of teams building 1 (pq security), but 2 (quantum-native chain) is quite overlooked, and where most of the value creation will happen.

April fee data from the 1kx Onchain Revenue Report (1,000+ protocols tracked). Aggregate fees are down (-11% MoM, -20% YoY) as market volatility decreased both vs. March (Iran-uncertainty calming) and vs. last year’s Trump tariff-related moves, causing DEX and MEV-related fees to drive most of the declines. It's a mixed picture on the category and protocol level, though. • DeFi/Finance -11% MoM is a mixed bag: --> Perps lost, e.g. @HyperliquidX -15%, though other markets gained, e.g. @Polymarket >3x in fees (largest gainer overall) --> Lending markets gained in fees, led by @aave (due to utilization increase - see here: x.com/KoschigRobert/…) • L1 fee dispersion is widening. @ethereum 2x, @Zcash and @trondao up, while MEV-driven builders like @titanbuilderxyz give back March’s gains. Mostly a vol-compression unwind from March’s Iran-uncertainty spike. • Middleware 7% growth driven by @chainlink and @CatFeeio • DePIN 18% Fee decline almost entirely caused by @AethirCloud • Wallet sector down 17% in fees, mainly due to interfaces like @AxiomExchange (-24%), @tradexyz (-18%). Even @phantom’s fee decline is mostly from their perps-trading interface • Consumer overall flat-ish -4%, though bifurcation in Launchpads: @fourdotmemezh, @bonkfun, @farcaster_xyz with 50-80% declines in fees vs. @Pumpfun, @BagsApp positive. @printr as a new entrant So what for 1kx: the decline in trading activity is in line with the compression in market volatility. Continuous growth in emerging DeFi categories like RWA is consistent with our Onchain Finance overweight. Prediction markets entering a fee-generating phase (Polymarket >3x) is consistent with our Frontier Applications thesis. Launchpad bifurcation tells us the consumer category is sorting itself.

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Looking forward to @CVConf_ discussing the latest on DePIN economics with @Tech_Metrics , @Powerledger_io and @onocoyRTK See you next week!