A&T Capital: Why did we invest in ConsenSys?
Original source:A&T Capital
first level title
foreword
1. Why invest in ConsenSys
secondary title
foreword
ConsenSys has recently completed a $450 million Series D round of financing. After the latest round of financing, ConsenSys is valued at more than $7 billion, more than double the valuation when it completed its $200 million Series C round of financing in November 2021. In January of this year, the number of monthly active users accessing Web3 applications through MetaMask exceeded 30 million, an increase of 42% within 4 months. Infura’s Ethereum on-chain transactions exceeded $1 trillion.
ConsenSys CEO Joe Lubin said in an interview with Decrypt that MetaMask will soon launch a decentralized autonomous organization (DAO). The new DAO will not participate in the management of MetaMask, but the DAO will provide funds for MetaMask updates, and confirmed MetaMask will not only launch DAO, but also plans to issue Token. The two news of ConsenSys financing and currency issuance have aroused the enthusiasm of users.
In November 2021, ConsenSys completed a $200 million Series C round at a $3.2 billion valuation, just six months after ConsenSys raised $65 million from JPMorgan Chase and MasterCard, valuing the company at $3.2 billion. A&T Capital participated in the round. As an investor in the last round of ConsenSys, A&T would like to take this opportunity to introduce to you the logic of our investment in ConsenSys, and to show you the overall picture of ConsenSys products.
Why did we invest in ConsenSys?
Going back to 2021, we believe that enterprise blockchain will become a mainstream development trend:
Take IBM Blockchain and R3 Corda, the two largest alliance chain technology service providers in overseas markets, as examples. In the two and a half years since 2019, the number of business cases published on the official website has been decreasing year by year, especially in the first half of 2021. At the beginning of the year, the two companies carried out large-scale layoffs and transfers to the blockchain part. With the gradual deepening of the understanding of the blockchain in the general environment, the alliance chain is no longer the only choice for traditional enterprises to use the blockchain: with the gradual deepening of the "blockchainization" of enterprises, this process requires corresponding knowledge of the enterprise business. Change cooperation, and such a change is not capable of external service providers, it requires the decision-making and promotion of the internal team of the enterprise, thus giving rise to the demand for dismantling the overall blockchain solution into modules and loading them on demand.
The popularity of Defi is gradually rising. As the total market value of Defi rises to nearly 20 billion US dollars, compared with centralized exchanges, the trading volume of decentralized exchanges is increasing, and the wallet addresses interacting with Dapp are also increasing. many.
The Ethereum solution is favored, and the public chain system has entered the vision of enterprises. Thanks to Ethereum's absolute leading position in the public chain world and its strong innovation, enterprise-level Ethereum (Quorum&Besu) has more advantages than other alliance chain solutions. The large potential value and space have been favored by the majority of traditional enterprises.
Then, Ethereum, which is the absolute leader in the public chain market, has become the core value storage layer of this value network.
In the Ethereum ecosystem, there are currently three main types of mainstream traffic portals in Ethereum: navigation websites, aggregation platforms, and wallets. Among them, the navigation website has the lowest stickiness and the lowest technical threshold. The aggregation platform has a relatively short rise time, and its user stickiness is relatively good, with low technical threshold and high operation threshold.
Back to ConsenSys’ traffic advantage, Metamask under Consensys is the non-custodial wallet with the largest number of users.
Consensys is in an oligopoly position in the field of mainstream developer tools, with Infura, Truffle, Ganache, Metamask, etc. under its umbrella.
first level title
2. Overview of ConsenSys
secondary title
Company Profile
Consensys was established by Ethereum COO Joseph Lubin ("Joe" for short) in 2014. It is a comprehensive service company with Ethereum as its core, including development, incubation, and enterprise services.
Consensys provides corresponding products for three types of customer groups:
Developer customers: As a "must-use" development tool for Ethereum developers, the contract development framework (Truffle) will launch fee-based services on a free basis, and the API service provider (Infura) will continue to charge in different levels;
After Consensys completes the modularization of the overall solution, combined with its Infura, Truffle, Metamask and other products, the core direction of Consensys in the future is to provide a complete modular product library for Ethereum project parties and enterprise-level blockchain customers , customers can purchase any of the modules separately and combine them according to their own needs. (see picture below)
first level title
3. Product introduction
secondary title
Metamask—the largest flow entrance of the public chain ecology
Metamask is the default option for all applications on Ethereum in the wallet section, and it has expanded to other mainstream public chains outside of Ethereum in the past year, eg BSC, Algorand.
With the upsurge of DeFi applications in 2020, the number of MetaMask users has grown rapidly. In 2020, a new mobile client and transaction function (named Swap) will be added.
In May 2021, the institutional version of Metamask will be launched, allowing institutional users to combine Metamask with institutional-level hosting, facilitating workflow management, and easy reporting.
secondary title
For Developer Users: Infura Truffle
Consensys mainly provides two types of products, Infura and Truffle, for developers and users of the public chain, which will be elaborated below:
Infura—AWS in the Blockchain Era
Infura is a node outsourcing service provider of the public chain (access in the form of API). It started in 2016 and operates about 10% of the nodes in Ethereum. Fast and stable access to Ethereum (see the figure below for details):
Uniswap < > Infura：
Analogy understanding:
Internet companies can easily deploy their applications on the cloud by purchasing AWS cloud services, and through Infura's API, developers can easily deploy applications on blockchains such as Ethereum;
Reverse understanding: Usually just to get started, enterprises must spend tens of thousands of dollars to set up and operate nodes that can interpret and write to the blockchain. Not only is this slow and expensive, but it also consumes a lot of engineering resources. Worse, the node architecture may not gracefully support massive scaling. Load balancing across servers (as is traditionally the case for web applications) breaks down when nodes mistakenly get block numbers out of sync.
Background: As the most successful application on Ethereum, Uniswap has been using the Infura API suite to meet its data requirements since its launch in 2018.
Challenge: The Uniswap interface allows users to easily trade tokens, add liquidity, and create liquidity feeds. Behind the scenes, Uniswap needs to extract a series of information from smart contracts on the Ethereum blockchain to enter the interface and populate data such as token pricing, user balances and interest rates. The Uniswap team needed an easy-to-integrate solution to access this data that could also scale to meet growing request volumes.
Solution: When a user accesses its UIUX, Uniswap uses Infura to query information, and pairs Infura with web3-react to obtain data such as token exchange rate, token balance and other information from Uniswap smart contracts.
Truffle
operation status:
As the most popular node outsourcing service provider in Ethereum, Infura supports nearly half of Ethereum-related applications (eg Metamask, Binance, Uniswap, Coinbase), and its API is currently called about 12 billion times a day on average.
Truffle is an open source smart contract development framework based on Ethereum's Solidity language. It started in 2015 and is known as an IDE. It provides tools from development to deployment (Ganache belongs to this). The most comprehensive contract framework.
As the most popular contract framework for professional developers on Ethereum, in addition to the Truffle team of Consensys, Truffle also has a large number of active community developers, who are constantly expanding and optimizing Truffle.
The basic tools of Truffle are free, and Truffle Teams, a paid package with more resources and services, will be launched in February 2021.
secondary title
Products for enterprise users
Customized service
Enterprise-level customized blockchain services have always been the biggest feature that distinguishes Consensys from other blockchain technology companies. Consensys (including before the split) used to provide services for dozens of companies in finance, real estate, supply chain, municipal and other fields Provide customized blockchain solution services, typical cases are as follows:
Government Finance:
Cooperate with the Monetary Authority of Singapore to explore the real-time gross settlement system (PoC completed in 2018, MAS open source code);
Explore the central payment and settlement system with South African Reserve Bank (complete the POC in 2019, using the code of the MAS case);
Participating in the CBDC test projects of Reserve Bank of Australia, Bank of Thailand, Societe Generale, Hong Kong Monetary Authority;
Cross-border trade:
Participate in Komgo, a cross-border trade management & financing platform project initiated by ING, BNP, Shell and other giants (MVP completed at the end of 2018, 1000+ transactions/month);
Participate in the agricultural trade chain platform project Covantis, initiated by giants such as COFCO and Cargill (launched in March 2020, the first case is the soybean transportation trade from Brazil to China)
Financial market:
After JP Morgan sold Quorum to Consensys, Consensys integrated Besu and Quorum at the business level and also provided external services;
Consensys believes that customized blockchain services are "hard work" and the income stability is not enough. In the future, it plans to use modular SaaS products like Codefi and Infura to play value, reduce the amount of customized services, and make customized services more More as a window for Consensys to export its brand value to the outside world.
Exclusive Azure Blockchain: Azure has announced that it will shut down the Azure version of the blockchain service in September this year and replace it with Quorum; Consensys sells Quorum-based enterprise-level blockchain services on the Azure platform through two modes of customization and modularization .
secondary title
