Chain Venturer: Belinda Zhou of Sharding Capital

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Happy Weekend 🙋🏻‍♂️,

Welcome to Chain Venturer, a series of intriguing conversations with crypto investors. This week, we have Belinda Zhou of Sharding Capital.

Belinda is the Founding Partner of Sharding Capital, a thesis-driven investment firm that invests in blockchain projects from the early stages. Sharding capital has deep roots in the Middle East and has become a household name in the region.

Prior to Sharding, Belinda started her career as a trainee in the Dubai Business Associates program under the patronage of H.H. Sheikh Mohammed, ruler of Dubai. While in Dubai, Belinda started helping out with ICO projects with PR & marketing efforts which led to her full-time CMO role after her government trainee life.

If you would like to participate in a future episode, DM me here.

-Marco

In case you don’t know…

I’m an investor at Primitive Ventures. We back founders who believe that crypto represents the new socioeconomic primitive that will redefine individual sovereignty and financial paradigms.

If you’re building an interesting project → DM me here.

If your project is too early in the lifecycle, I also run a syndicate, you can check it out here.

Anyway, enjoy this week’s conversation.

lmao Ansem

Belinda Zhou of Sharding Capital

Belinda Zhou is the Founding Partner of Sharding Capital, a thesis-driven investment firm that invests in blockchain projects from the early stages. Sharding capital has deep roots in the Middle East and has become a household name in the region. She runs a web3 KOL agency Shard Labs and hosts the largest web3 demo day in the Middle East region called Shard Dubai. 

In 2016, Belinda started her career as a trainee in the Dubai Business Associates program under the patronage of H.H. Sheikh Mohammed, ruler of Dubai. While in Dubai, Belinda started helping out with ICO projects with PR & marketing efforts which led to her full-time CMO role after her government trainee life.

With a strong founder network and blessed with an understanding of the crypto market, Belinda started more angel investments and in 2021, she moved back to Dubai and founded Sharding Capital and positioned it as a go-to fund in the Middle East region. 

Here’s my conversation with Belinda Zhou. 

Quick takeaways:

• Sharding Capital is an early-stage Web3 fund, that prides itself on identifying and supporting founders from day one, focusing on three main pillars: research and investment, events, and PR. The event arm has gained notable recognition for hosting significant summits, such as the Shard Dubai Summit.

• From a policy standpoint, Dubai stands out for its progressive and welcoming approach to crypto and taxation regulation.

• There's an increasing acknowledgment of high-quality projects, not only from the traditional "crypto degen" or native funds but also from traditional finance funds eager to allocate substantial capital to the crypto sector.

• Recently, Sharding Capital's focus has shifted towards non-EVM (Ethereum Virtual Machine) languages, acknowledging that the EVM ecosystem has become saturated.

• Whether pre-launch, attracting users to farm tokens, or post-launch, encouraging them to stake or park their liquidity, the key lies in a balanced approach that leverages both technology and marketing strengths.

What was the defining moment that drew you into the world of crypto?

Belinda began her journey into the crypto world in 2017 while participating in a training program under His Highness Sheikh Mohammed, the ruler of Dubai. Her year in Dubai, filled with ICO projects, roadshows, and fundraising activities, offered her her first glimpse into the crypto sector. Utilizing her marketing background, she contributed to the PR and marketing of several projects, receiving rewards in ETH and EOS, including from EOS itself. This experience introduced her to the concept of crypto.

The defining moment: Following her training, Belinda decided to focus entirely on the crypto industry, soon taking on ICO projects and helping the projects' marketing initiatives. This confirmed her full-time commitment to crypto, a field she never left after graduating.

Belinda appreciates the crypto industry for its openness and innovation. She highlights that the sector values knowledge and skills over age or background, offering significant responsibilities to those who prove their capabilities. This aspect contrasts with traditional industries, where progression often follows a more structured, hierarchical path.

The inclusivity of the crypto world means that there's a niche for everyone, whether in development, analysis, content creation, or any other area. Opportunities abound for those willing to engage with the community and contribute their skills. Belinda's dedication to crypto was driven by her recognition of the industry's potential for growth and the freedom it offers to innovate and contribute meaningfully.

What is Sharding Capital?

In 2017 and 2018, Belinda served as the “CMO” for an ICO project, managing a broad array of responsibilities including project fundraising, KOL engagement, community management, and exchange listings, effectively overseeing the project's complete lifecycle. After her exit, she leveraged her marketing acumen, a skillset she found universally applicable across the crypto sphere, to venture into angel investing. This decision allowed her the flexibility to selectively support projects with her PR and KOL resources. Her investments in projects like NEAR, Metis, Biconomy, and Galxe yielded substantial returns, with some achieving up to 200x gains.

Recognizing the limitations of angel investing in terms of capital and influence, Belinda aspired to amplify her impact. This ambition led to the establishment of Sharding Capital two and a half years ago, positioning it as a prominent fund in the MENA region at a time when the crypto landscape there was nascent, offering a "blank canvas" of opportunity. Leveraging her connections within government and local funds, Sharding Capital has become a vital conduit for showcasing the MENA region's potential to global and regional players alike.

Sharding Capital, an early-stage Web3 fund, prides itself on identifying and supporting founders from day one, focusing on three main pillars: research and investment, events, and PR. The event arm has gained notable recognition for hosting significant summits, such as the Shard Dubai Summit, attracting key figures in the crypto industry. This platform enables founders to present their ideas to an audience comprising VCs, Tier 1 exchanges, KOLs, and angel investors.

• The PR arm functions as an independent marketing agency, significantly boosting token prices for projects with Sharding Capital collaborates.

• This success has established the firm as an "activist VC," often securing favorable valuations and terms due to its capacity to offer extensive exposure and marketing opportunities.

• Furthermore, Sharding Capital plays a crucial role in organizing KOL rounds, drawing on a network that has seen substantial benefits from previous collaborations. Sharding Capital has thus become a go-to entity for projects looking to make their mark in the MENA region or seeking to enhance their marketing in the APAC regions. 

Sharding Capital hosts the highly recognized Shard Dubai Summit on April 15th at the Museum of the Future in Dubai. This event brings together leading figures from the crypto sphere, including prominent investors who have been featured in Launchy’s Chain Venturer, such as Arthur Cheong from DeFiance and Zaheer Ebtikar from Split Capital.

What are the practical benefits, such as regulatory support and community engagement, that position Dubai as a desirable hub for cryptocurrency projects?

Belinda highlights several key factors that make Dubai an appealing hub for cryptocurrency projects. First and foremost, she notes the city's entrepreneur-friendly atmosphere, characterized by openness and collaboration. In Dubai, individuals from various backgrounds quickly feel at home, fostering a sense of community and ease of collaboration.

From a policy standpoint, Dubai stands out for its progressive and welcoming approach to regulation. The city's leadership is forward-thinking, actively supporting the growth of crypto and blockchain technology with the aim of transforming Dubai into a smart city. This approach eschews restrictions, instead facilitating innovation and growth within the sector.

Taxation—or the lack thereof—is another significant draw. The absence of income tax in Dubai is a major incentive for founders from around the world, including Japan, India, and Europe. This advantage is particularly appealing to founders who anticipate substantial gains from their projects and wish to minimize tax burdens.

The influx of crypto entrepreneurs and founders has, in turn, established Dubai as a burgeoning hub for the crypto community. Beyond the professional allure, Dubai's high quality of life plays a crucial role. Despite misconceptions of extravagance, the city offers a diverse range of living options to suit all budgets, from luxurious dining experiences to affordable meals, making it accessible to a wide demographic.

Dubai's international culture is another highlight, fostering a diverse and collaborative environment that continues to attract a global population. Efforts to enhance the city's livability extend to innovative measures like climate control and cloud seeding to moderate the summer temperatures, further emphasizing the government's commitment to improving resident and visitor experiences.

Safety is an unparalleled attribute of Dubai, with personal belongings often left unattended without risk, reflecting a level of security uncommon in many developed nations.

In summary, Belinda attributes Dubai's attractiveness to cryptocurrency projects and professionals to its supportive regulatory framework, tax benefits, vibrant community, diverse culture, high safety standards, and continuous governmental efforts to enhance the city's infrastructure and livability. These factors collectively establish Dubai as an ideal location for crypto founders and industry practitioners seeking a conducive environment for innovation and growth.

What are your thoughts on the current market situation?

Belinda's reflections on the current market situation highlight the profound seasonality of the crypto market. Belinda observes a significant shift post-ETF introduction, marking a pivotal moment in the crypto sector. This transition underscores the global liquidity factor, introducing a level of unpredictability previously unseen.

Before ETFs became involved, the market exhibited predictable cycles and liquidity patterns. However, the introduction of ETFs has altered the landscape, drawing attention from traditional finance circles and making market movements less predictable. The ease of buying and selling ETFs has facilitated broader engagement worldwide, suggesting a shift towards treating cryptocurrencies akin to commodities, particularly for major players.

For individual projects, Belinda notes, successful execution could lead to significant returns, as the market rewards value creation. There's an increasing acknowledgment of high-quality projects, not only from the traditional "crypto degen" or native funds but also from traditional finance funds eager to allocate substantial capital to the crypto sector. This broader recognition provides more fundraising avenues for quality founders and projects.

Belinda is optimistic about entering a potential supercycle in the cryptocurrency market, driven by the belief in sustained growth and consolidation at higher levels. With continued investment in the space, there's a hope that the bull market will persist at least until the middle of next year. This strategic allocation of capital reflects a bullish outlook, underpinned by confidence in the sector's future trajectory.

What kind of sectors are you excited about these days?

Sharding Capital maintains a sector-agnostic stance, with the firm's primary interest lying in the strength of the team and the compelling nature of the narrative. This diverse interest is reflected in Shard Capital's events, showcasing panels from across various verticals. 

Recently, Sharding Capital's focus has shifted towards non-EVM (Ethereum Virtual Machine) languages, acknowledging that the EVM ecosystem has become saturated. The onboarded individuals are already familiar with the system, and although new users continue to arrive, they face challenges in navigating the complex "dark forest" of EVM. This environment may captivate crypto enthusiasts but proves daunting for newcomers, who might struggle with issues like front-running or losing money on-chain.

• Sharding Capital finds non-EVM languages like MoveVM particularly intriguing for potentially fostering a more accessible blockchain ecosystem. The firm also highlights platforms like Solana and Aptos, which aim for mass adoption through an emphasis on user experience—a critical factor for broadening blockchain's appeal. 

• Sharding Capital has been bullish on Solana even during its price dips to below $10, driven by conversations with developers focused on enhancing user experiences. Similarly, the firm is optimistic about Aptos and its parallel execution model, which could significantly improve transaction efficiency for greater user adoption. These platforms' partnerships with traditional sectors, including major consumer apps, payment companies, and traditional funds, underscore their potential to bridge the gap to mainstream acceptance.

• Sharding Capital is keenly watching non-EVM projects and languages gaining traction, actively investing in promising initiatives in both private and liquid markets, signaling a strategic bet on platforms poised to enable broader blockchain adoption.

What does liquidity fragmentation across L2 solutions and Cosmos app chains mean for L2, and what would be the key marketing and PR strategy for L2 to achieve growth in this context?

Belinda asserts that evaluating a project's potential involves a dual focus: on its fundamentals and "pumpamentals" - a term that refers to the underlying or perceived value aspects of a cryptocurrency that could drive its price upward. She emphasizes that the technological infrastructure plays a crucial role in enabling liquidity aggregation. This involves scrutinizing the technical stack for its capacity to secure and optimize liquidity bridges against potential compromises.

On the "pumpamentals" front, Belinda highlights the importance of demonstrating traction and mobilizing a wide user base to consolidate liquidity. This requires a robust technological foundation, enabling the project to stand out on the product side. Equally crucial is an aggressive business development (BD) and community engagement strategy. Projects must forge as many partnerships as possible, ensuring these partners are fully integrated into their ecosystem. Furthermore, there's an imperative to incentivize user participation actively, guiding them to contribute to the project's liquidity pool.

For a project to successfully aggregate liquidity, it must not only showcase solid technical prowess but also deploy an effective go-to-market strategy complemented by a strong BD arm. This strategy should aim to secure an expansive partnership network. Marketing and community-building efforts are vital; they ensure that the project's achievements and opportunities, such as token farming or utility-based incentives like staking, are visible and attractive to the community. Whether pre-launch, attracting users to farm tokens, or post-launch, encouraging them to stake or park their liquidity, the key lies in a balanced approach that leverages both technology and marketing strengths.

Rapid Fire Questions

1. What’s one content that any aspiring investment professional should read/watch?

   • N/A.

2. What’s your biggest investment mistake?

   • FOMO.

3. What’s the most underrated use case of crypto?

   • Telegram bots. 

4. What’s your most contrarian view in crypto right now?

   • People are overestimating the power of CEX.

5. What’s the biggest risk that the crypto space is facing?

   • Hacks and exploits. 

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.