x50 Manifesto

x50 is a private venture capital fund investing in web3 technologies. The fund was launched in May 2018. At this time it is not possible to become a partner.

Market Situation

Stagnation continues in the market, turning smoothly into recession. After the rapid growth and information noise at the end of 2017, there was a period of correction and emotional disappointment. The fundamental reason for this was the oversupply of liquidity in the market and the lack of infrastructure for its organic use and “digestion”.

The same factors prevented a continuation of growth: the lack of a functional toolkit for working with assets, incomplete products and unprepared teams, low qualifications of early investors, errors in the tokens distribution, and many fraudsters who took advantage of the moment to raise funds.

In addition, one of the fundamental reasons for the current situation is the inability of the cryptocommunity to clearly explain the value of their developments to the real sector and ordinary users. Beyond cross-border transactions and market speculation.

We observed a similar situation in the market in 2013-14, when after a strong surge, the market went into a deep correction that lasted for two years. It took that long for the ecosystem to find and offer the market new ways to use blockchain technology.

BTC surge in value in October, 2013 and subsequent two years correction

< Nostradamus mode on >

Baba Vanga, blind Bulgarian mystic and clairvoyant

The current correction may be shorter, but more likely we expect a continuation of the trading flat with a gradual decline in the BTC price until the end of 2018-early 2019. We see the target quote at $2,800-3,000.

If you look at the historical charts and try to analyze the reasons for the strong moves preceding the highs (in 2013 and 2017), they did not occur after any particular event or limited set of reasons. The market at those moments became ready for growth. Emotionally, resource-wise, and infrastructurally.

The current market situation (spring 2018) does not hint at a quick turnaround: trading volumes are decreasing, BTC increases dominance, alternative coins show a decreasing or flat trend, and local bursts are observed only for single assets. And the leading projects are only announcing or postponing solutions to their fundamental problems.

Similar situation in October, 2017 and current correction

For the next breakthrough, the ecosystem must mature again: deliver promised innovative products to the market, prove their performance, viability and economic feasibility, bring a new theory-based groundwork for future projects, cool down emotionally from the previous rally and believe in a new innovative future again.

In addition, the community needs to clearly articulate why they are doing all this, what Web3 is and why everyone else needs it.

We expect this to start happening in the second half of 2019 at the earliest.

</ Nostradamus mode off >

Инвестиционная стратегия

Investment horizon: 36 months.
Underlying asset: ETH.
The fund does not state financial goals.
The Fund is named “Х50”.

The Fund invests in projects that, in its opinion, will form the basis of the web3 ecosystem, and without which its further development at the current stage will be extremely difficult:

• L1: ETH as basic web3 protocol;
• L2: Fungible tokens already operating protocols for accounting, trading, and asset management (including predictive and governance markets);
• L3: Non-fungible tokens with high return potential (ENS, LAND, etc.);
• Hedge investments vs. ETH: productive and decentralized L1 protocols for storing, processing and transmitting data, which are fundamentally different from ETH in terms of computer science;
• L1 private protocols based on zero knowledge proof mechanisms: snarks, starks, bulletproofs.

Projects that meet several criteria are selected for investment:

• a breakthrough or fundamental technology with a clear field of application;
• a strong team and professional community around the project;
• clear token distribution;
• small capitalization (up to $100 million); exceptions — projects that do not currently have any clear competitors in their niche;
• project prospect to increase capitalization over a 24-month horizon to $1+ billion, or x10 to the current estimate.

If the underlying asset moves up a new multiple before the end of the specified planning horizon, the closing of the current fund may occur at the related upside.

Investment Projects

We have selected two dozen projects with currently successful entry points that meet the above requirements and solve the problems facing the ecosystem. They are all diversified into different application areas: high-speed and quantum-secure registries and protocols, Internet of Things, predictive markets, virtual reality, and protocols for decentralized trading. Most of them are currently available for entry, some are awaiting crowdsale.