There is a new enterprise studio in the world that looks rather different from previous venture studios from a structural point of view. In contrast to the famous apparel like Atomic or Science or Exp that makes companies that sell equity to VCs who expect the value of that equity to increase, this new studio, Super Layer. Instead of selling shares to VCs, Consumer intends to spin initiatives and enable communities to engage in them by gaining tokens that may be bought, sold, or used to participate in other projects.
In the case of SuperLayer, the tokens will all be linked to a blockchain network called Rally, which SuperLayer’s creators established previously and hope to help promote by developing more exciting apps on top of it. It’s part of what early crypto supporters dubbed Web3, which they define as an internet controlled by its creators and users and coordinated with tokens. It is also a world that many venture capital firms are still wary of. However, if more businesses like SuperLayer arise, many of them founded by battle-tested entrepreneurs, they may easily miss the boat.
Kevin Chou, the founder of Super layer, sold his gaming firm, Kabam, for $800 million in 2018 and dived headfirst into the area of blockchain technology, which he believes may unleash new economic opportunities, particularly for gamers and artists. Chou cofounded the blockchain gaming business Forte before launching SuperLayer, and he is the co-founder of Rally, a platform allowing producers to develop and distribute their own digital currencies that are effectively white-labeled copies of the RLY token.
Investors such as Coinbase Ventures and Andreessen Horowitz have backed Chou along the way, and they have already seen significant gains. Those RLY tokens, which were worth five cents when all 15 billion were created, are now valued at around $.052 on Coinbase and other exchanges. Investors and team members are said to possess more than three-quarters of the supply at the moment, forcing them to keep them or risk losing money, but the plan is for the community to own 70% of the supply after it is divided over time.
If all goes according to plan, it might make many wealthy individuals even affluent, while also enriching many less fortunate token holders. Consider this: just approximately 7% of the coins are in circulation, giving the currency an estimated market capitalization of $800 million. The currencies’ completely diluted market valuation would be $7.9 billion if all 15 billion coins were distributed at today’s pricing. Chou and his team’s efforts to decentralize their social token architecture are fascinating in and of itself. Still, the true news here could be the potential and problems that a company like SuperLayer is beginning to present to venture capital companies because of its greater complexity compared to typical equity investments.
It’s one of the reasons Sequoia Capital said earlier this week that it is registering as an investment advisor. Roelof Botha, the head of Sequoia’s U.S. operations, wrote on Medium on Tuesday, being an RIA gives the company more freedom in a variety of areas, including allowing it to enhance its investments in developing asset classes like cryptocurrency. Sequoia is not necessarily reforming itself because of its rising interest in crypto ventures, according to Chou. However, he believes that if additional companies want to profit from ventures like his, they would have to follow suit.