Eddy Deep Dive

**Eddy Lazzarin** (0:00)
As AI becomes more powerful, it becomes better able to circumvent constraints. So how do we truly constrain it? Well, cryptography. Cryptography for identity, cryptography for authentication, cryptography for money. Technology accelerates the production of mediocre things as a side effect of producing the incredible things. People are spending like 5,000 bucks a day on tokens, but only paying 200 bucks a month because the companies are raising rapid capital. Like we're in the attract phase, not the extract phase. Okay, well, what happens during the extract phase?

**Sonal Chokshi** (0:30)
Yeah, that's exactly where crypto is going to come in.

**Eddy Lazzarin** (0:32)
I think it's just a complete and over-amount.

**Sonal Chokshi** (0:33)
Stablecoins are being adopted everywhere and in all the corners of the economy. What we are talking about is crypto's first killer app.

**Eddy Lazzarin** (0:39)
They are not a full end-to-end fix of the whole chain. They're not. They solve one specific part of that chain, and they do that one little piece so fast, so cheaply, and so securely that-

**Sonal Chokshi** (1:01)
Hi, everyone, welcome to the a16z crypto show. And I am so excited today, first of all, to be back on the show after a while.
Excited to have our cohost, Robert, on. But most importantly, our special guest is Eddy Lazzarin, who I have known for a number of years, but recently he was announced as our newest GP, general partner in the crypto fund. Actually, what does it mean to be a general partner?

**Eddy Lazzarin** (1:25)
I think technically, in our case, it means having the direct ability to write checks, so to speak.

**Sonal Chokshi** (1:31)
And there's fiduciary responsibilities at that.

**Robert Hackett** (1:33)
Well, I do know one of the fun ways that the fund operates is that it's all by somebody saying, yes, there's not a veto rule where somebody says, no, we're not gonna do this. It's all somebody has conviction, then they go in.

**Eddy Lazzarin** (1:45)
That's right.

**Sonal Chokshi** (1:46)
Well, is it more precise to say it's not consensus-based also, because when you say that, it sounds like basically, you don't need like group agreement.

**Eddy Lazzarin** (1:55)
Yeah, no, our investment is what some people call a single trigger, a specific GP, a single GP can unilaterally make an investment decision.

**Sonal Chokshi** (2:04)
Can someone kill a decision? What would a non-consensus bet be in crypto today?

**Eddy Lazzarin** (2:10)
In a way, what's funny is, how do you identify what non-consensus is? If it's clear enough to be something that you can point at, then that's probably because some people have formed consensus around that, and made it visible, made it something you can interpret. So I think in retrospect, things that are non-consensus bets become evidently and observably non-consensus, but at the time, they're probably defying some kind of pattern.

**Sonal Chokshi** (2:35)
This is where Peter Thiel's famous thing came from, which Chris Dixon actually talked about a lot when he came to the A6 & Z over a decade ago.
It's basically the idea that good ideas start out looking like bad ideas, that you kind of have to find an idea that's really a good idea, but it looks like a bad idea. And that was his definition of finding non-consensus.

**Eddy Lazzarin** (2:57)
Yeah, and looking like a bad idea has many dimensions to it. One can be that it's not consensus, so that makes it look bad. Another could be that along some critical dimension of the consensus idea, it's completely at the opposite end of some specific part of it. It's more obvious in retrospect, and it's not a thing that we have a strong sense of now.
What's non-consensus in crypto? I think just because something's non-consensus doesn't mean it's good either, right? Obviously, like, there's a lot of things that are non-consensus in the sense that there is consensus that they're bad. And, you know, I hate to admit, like, some of those categories are probably on the weaker side today. It's probably pretty obvious.

**Robert Hackett** (3:37)
Well, your point is there's a McKinsey quadrant, right? You've got the bad stuff that everybody knows is bad. You've got the good stuff everybody knows is good. But you want to go for the stuff that people think is bad, but actually is very good. And that's a distinct skill to be able to figure that out.

**Sonal Chokshi** (3:52)
Is it also possible that given that we're on the cusp, we don't know, but the indicators are that clarity could pass, that the seemingly bad things can become good things? Because for the first time, we might see people that only did, quote, shit coins, meme coins, whatever they're called. I don't want to be derogatory, because there may be some community value, but they can actually evolve into something with the business model now?