Set aside slick marketing narratives and focus on authenticity — 1confirmation’s Nick Tomaino

The venture fund founder looks for nuance instead of clear narratives

article-image

Aman Patel1/Shutterstock modified by Blockworks

share

Nick Tomaino often hears a familiar list of reasons why a given layer-one blockchain solution is technically better than another.

“A lot of that is bullshit, to be honest. For crypto to matter, it’s about products that are useful,” he says.

“So we’re only investing in products that are useful to us. And it just so happens that products that are useful to us kind of early tend to be products that are useful for the masses in the long-term.”

The 1confirmation venture fund founder talks to Blockworks on the Empire podcast (Spotify/Apple) about his company’s approach to investment in the crypto industry. 

“Most investors, especially when you have a lot of money,” Tomaino says, “you have a massive fund and you have to invest in a narrative without understanding how the thing actually works or being an actual user of the product.”

“We’re just very laser-focused on products that we understand.”

Seek nuance over clear narratives

One marketing narrative that stands out to Tomaino is the advancement of “next-gen” layer-1 blockchains. “When I hear people argue about a cheaper, faster L1 or something like that, my bullshit meter goes up quite a bit.”

More important than “vastly overrated” claims of faster block times and cheaper transactions in crypto, Tomaino says, is social innovation. 

“A new governance, a radical approach to on-chain governance or a sovereign chain approach where you’re not going to have one chain that every app settles on, but you’re gonna have a bunch of app chains that all are interconnected — those are the types of things that I think are actually underrated.”

The more interesting and truthful innovations, Tomaino says, are usually not as straightforward. “Most people don’t appreciate nuance,” he says. “If you want to just get a lot of people to believe something, you lack nuance and you state something that is far from the truth.”

“As an investor, that’s where you can actually do really well,” he says. “If you appreciate truth, you invest in these nuanced projects.”

Solana, Tomaino says as an example, has a very “clear narrative.”

“Cheaper, faster Ethereum. That makes sense to people. That excites people,” but it doesn’t matter in the long-term, he says. Tomaino suggests more nuanced narratives that most people don’t care about are better for investors, citing the example of the sovereign-chain Cosmos ecosystem.

“We’re very focused on authenticity,” Tomaino says. “My bet when I invest is that the authentic wins over time and things like marketing and [business development] don’t matter that much.”

Tomaino says the venture fund invests in “first of its kind projects that we think are meaningfully innovative from a social perspective, that are pushing the space forward.”

He admits the approach can be frustrating, at least in the short term. “You see teams that have great marketing, great [business development], really shining and thriving. And especially in a bull market, it takes a lot of juice out of these authentic projects.”

“FTX had great marketing and great [business development],” he says, “And they were really shining in the short-term.”

But we know what happened.”

A lot of people in crypto do not have a long-term perspective, he says. “It’s easy to say, ‘have a long-term perspective,’ but it’s harder to actually do.”

The best strategy in Tomaino’s experience, he says, has been to invest in products long before a clear narrative develops. “When the narrative is clear, the best investments are gone.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

Revolut said that the standalone crypto exchange is currently “invite only”

article-image

The stock price jump comes after Coinbase reported ending its seven-quarter run of net losses during the fourth quarter

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders