It's My Content And I Need It NOW
And a couple other theses
For those unfamiliar, Compound is a research-focused and thesis-driven fund investing in frontier tech across crypto, AI/ML, robotics and bio.
We keep an open theses database of specific areas within these verticals we think are interesting. We’re frequently adding to it so if you’re building in or around any of these areas we’d love to speak with you.
There’s a handful of new crypto-specific theses that I wanted to share quick TLDR’s on here but check out the database for more detail on each of them (and others).
Decentralized Content Delivery Networks
Concept
Content Delivery Networks (CDNs) help deliver digital content to end-users; by leveraging a cryptoeconomic model, a distributed network can outcompete existing providers with far more localized nodes and higher-performance.
Longer Description
CDN’s are critical components of our modern internet infrastructure and are responsible for efficiently delivering digital content to users around the world. They work by strategically placing servers in various locations around the globe, allowing them to store cached versions of web content closer to end-users. Closer proximity means reduced latency and improved load times, which enhances user experience.
Other Thoughts
Content providers (i.e. Disney, ESPN, Peacock, etc) are seeing more users move from broadcast television to streaming — as a result content delivery costs are exploding. 4k/UHD experiences will only continue, leading to more aggressive data consumption growth.
At the same time, TV viewership is falling & broadcasters are struggling — TV broadcasts can serve a near-infinite number of viewers with a single flat-rated channel, but traditional CDN costs increase linearly based on the number of viewers.
Using a DePIN model you can solve the expensive last-mile infrastructure deployment problem, and incentivize participation.
Comparable Companies
AWS
Cloudflare
Fastly
Akamai
Blockcast
Saturn (Filecoin)
CDN77
Leveraged Prediction Markets
Concept
Product-focused prediction markets designed to provide leveraged return outcomes, ease-of-use and social engagement.
Longer Description
Prediction markets are mostly well-understood to be platforms where participants can buy/sell shares tied to the probability of some specific future event. The idea being these markets leverage the collective wisdom of participants willing to risk capital tied to their views of various outcomes. Presumably putting your money where your mouth is. Participants can trade shares based on their conviction (or where they think risk/return is worth it) and as new information comes available, market prices change & reflect the prevailing aggregate consensus. Thus far these have most commonly cropped up around election results, geopolitical events & pop culture.
Development over the last decade:
Early Platform Period (2010-2015) – early versions of betting on political election events or economic indicator results (Intrade forced to shut down because of regulatory issues/challenges)
Intro of Crypto-based Prediction Markets (2015-2018) – Augur was built on Ethereum during this period and allowed users to vote on almost any type of event they wanted; very clunky back then, v2 had a few different options (binary, up to 8 choice outcomes, scalar, i.e. 0-100) but was difficult to use (one of a few reasons it failed)
Better UX But Still Niche (2018-today) – PredictIt became popular for US political events, operating within some regulatory constraints, Polymarket launched and gained traction as a decentralized version of these; there are a handful of others (Manifold, Kalshi, etc)
Nobody has quite won this market but it’s been interesting for a lot of reasons – gambling becoming more socially acceptable, breadth & depth of data available has exploded, 24/7 markets, alternative financial systems and faster settlement rails.
Comparable Companies
Polymarket
PredictIt
Kalshi
Smarkets
Hedgehog
Manifold
Metaculus
AIOmen
Related Reading
Just-In-Time Liquidity
Concept
An aggregated platform service or layer that acts as a JIT intent-based limit order-book such that users are able to provide liquidity without locking capital.
Longer Description
Just-In-Time liquidity is the concept of providing liquidity for a transaction only at the point in which that liquidity is actually needed. A core issue within crypto broadly is the inefficiency of capital. This exists across several vectors, but one place it manifests is that capital is often idle or underutilized. JIT liquidity leverages the unique order execution mechanisms of blockchains to programmatically eliminate that issue.
Today, in order to transact on an exchange you must have the requisite capital associated with the trade you want to place. For example, if I want to swap 3500 USDT for 1 ETH, I need to have 3500 USDT on whatever dApp I’m using. I place a limit order and wait. While my limit order remains open, I can’t do anything with this 3500 USDT — in reality I should be able to take it and deploy it wherever I think is best. If my limit order never materializes, that’s ok because my capital isn’t simply sitting idle, it’s earning yield elsewhere.
Rather than relying exclusively on existing liquidity pools or order books, a JIT liquidity platform would use an intent-based order-book system. What this means in practice is that market makers (and retail users) are able to place bids/quotes on multiple different markets while maintaining the ability to use that capital elsewhere (i.e. on other DeFi applications for example) in the meantime. This opens the door for capital to be used productively while still potentially providing 4 major benefits:
Simultaneously providing order-books with deep liquidity
Drastically reducing slippage costs for MM’s and retail users
Eliminating the CEX-DEX arbitrage over time — this is a more sustainable mechanism than the temporary solutions provided by the hedge fund-like projects launched recently
Bringing long-tail assets deeper liquidity
Feel free to reach out if you’re building in any adjacent spaces as well, or if you just want to jam on these or related topics.
My dm’s are always open @0xsmac