Our friend Ryan
came out of the woodwork with Messari
, his brand new venture. Named after the Italian merchants who invented double entry accounting (nice one Ryan!), Messari aims to become the open-source database for cryptoassets. Unlike other attempts at data aggregation in this space, this one is particularly interesting as it addresses a key flaw of the existing approaches:
“there are no incentives for projects to volunteer such info, AND it’s against the very ethos of the industry to share such information with a third party when that third-party stands to only individually profit from the data aggregation.”
We sent over a few question to Ryan and he was kind enough to grace us with thorough responses in his unmistakable style. Enjoy!
TE: It sounds like Messari could require a lot of manual data aggregation, right? How can you scale it to thousands of tokens in a cost-efficient manner?
RS: As we think about crowdsourcing data and information that would go into a sort of crypto "10-K", we wanted to start with the least controversial, most objective, generally available, and most static information possible: supply authorized and outstanding. The industry's investors, lawyers, advisory firms, and the projects themselves are excited to share this information to help inform users about their future supply schedules. It's a no-brainer to share inflation rates in one place, so people understand what type of dilution they should expect over time in a given project.
It's a basic and critical consumer protection disclosure given that inflation is the second most important driver of price (behind finger-in-the-air sentiment about "will this pump or dump?")
Supply is also relatively easy for our small team to aggregate and scrub for accuracy, and to keep properly updated -- even if there are occasional modifications to some project's supply schedules (e.g. when Ethereum switches to PoS).
But we still want the projects to be proactively "filing" information into the Messari database. And they should!
We don't own it, and we aren't trying to license it back out or silo the information. There's no token required to access the information. No bullshit. It's an open-source library that CoinDesk or Bloomberg could pull from for free.
Still, to be successful here requires us to develop some common data standards and a submission portal that will get people to buy in to this as a low-friction way to self-regulate. And busy developers need to feel urgency to contribute to this database when there is no legal need to.
So these first few months are about building an aura of inevitability around this project.
I'm planning to run Messari for the next ten years. And given the fortunate and unique positions I was in to first spearhead investments at DCG, run CoinDesk and its ~3,000 person Consensus summits, and now work as an EiR at ConsenSys, there are few - if any - people in the industry that are in a similar position to pound the table for this type of project. It's also unsexy grunt work with no compelling near-term economics, so potential "competitors" should really be collaborators.
TE: You mentioned that the “Bloomberg of crypto” will be a network, not a centralized company. We smell a Messari token around the corner, can you give us a hint about how would you expect that to work?
RS: Not yet. But I will say that I am spending a lot of time advising and watching projects with good teams that have developed data tokens or what I call "human work" tokens - staking tokens that help solve incentive problems around open-source projects.
If and when we do a token offering, it will almost certainly be a crypto-security with fundamental value (revenue share from fees the network generates), and it will be properly offered via some type of SEC filing. If you're going to be the EDGAR of crypto, you shouldn't be afraid of doing a public filing yourself.
TE: You talked a lot about treasury policies in your introductory post. What's your take on the optimal structure around managing ICO funds, in light of recent events like the Tezos mess?
No comment on specific events, but I've been pretty vocal about reining in some of the excesses in the industry. There's a lot of things I see every day that disgust me: people doing insider deals for discounts and then flipping shamelessly one month later, failing to disclose advisory conflicts, even bragging about trading on insider tips prior to exchange listings.
If you're serious about your project, you don't want a lack of clarity on your treasury policies to distract or even derail things.
But I don't know what the optimal structure should be, and it's going to be Messari's position to stay neutral and simply shed light on the objective reality.
Data > Opinions. This will probably be one of the biggest challenges for me to internalize personally, because I'm pretty outspoken about some of the projects that I think have badly misaligned incentives. I need to shut up.
If you put a gun to my head, though, I'd say it's stupid and irresponsible for these projects to hold the majority of their raises in crypto. Your project is not a fund of funds. Project backers have no residual claims on the assets your team (usually one with no fiduciary experience) are gambling with. To think that some teams will raise $20mm and run out of money if there's a 90% downdraft is maddening.
Of course, this isn't a completely fair spit take. Many teams might want to diversify their raises, but they might not be banked, or find it risky to be banked with so much regulatory uncertainty! So we need to understand treasury policy to know how and when teams intend to hedge positions, move into "stablecoins" or fiat. Treasury management is a complex subject that will take time to flesh out, and I hope by looking at the universe of best practices, Messari can help standardize that area for token project leads.
Still, whether you are taking about fiat, hedging instruments or stablecoins, the main point still stands: Sell. Your. Crypto.
You need dirty, immoral, inflationary fiat to pay for operations. If you want to hoard crypto, put your money where your mouth is, hoard your own treasury, and lengthen your vesting schedules. You should be outperforming ether, anyway, otherwise why did people support you?
The tote bag?
TE: It sounds like you'll focus initially on supply curves. What can we expect to see coming next?
RS: Not sure yet. Probably basic project info (white paper, github stats, etc.) and real-time financial statements if the tech is ready.
I am a huge fan of the Balanc3 team at ConsenSys. They are lightyears ahead of anyone else I've seen when it comes to crypto accounting solutions and transparency software, and are driving the conversation with the big accounting firms in the U.S.
They are also a perfect example of a project that an outsider might view as competitive, when in reality their quickbooks-like product could funnel basic financial information into Messari without asking for all their proprietary data as well.
TE: What timeline are you working on for a first release?
RS: Depends on how fast we hire the core team. Send me good people!
I would like to get a first release out before the end of Q1 when some of these project inflation bombs start going off - days when token projects hit their one year cliff and instantly see 5, 10, 20% of their money supply become liquid overnight.
TE: How can one lend long term support to the project?
RS: If you know a team that is working on one of the 1000 "Bloomberg of crypto" plays today, please mention Messari and tell them to reach out. 999 of those projects are not going to be competitive, but complementary.
You can also subscribe
to the mailing list where we'll share when the site goes live and how specific stakeholders can show their support. Professional investors, crypto projects, and general crypto enthusiasts are going to have different ways they can help. Hit me up on twitter, or email me. [I don't give my email out, but people who are really interested will be able to track me down or get referred in by another friend within the industry.]
And if you're a media outlet, you can call and interview me and help get out the word!