Chain Venturer: Patrick Soh of Coinseeker

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Happy Weekend 🙋🏻‍♂️,

Welcome to Chain Venturer, a series of intriguing conversations with crypto investors. This week, we have Patrick Soh from Coinseeker.

Patrick is the Co-Founder of Coinseeker, a crypto deal intelligence platform akin to the Crunchbase of web3. It helps investors identify and catalogue startups in the crypto space before they hit the market. Coinseeker also has a venture arm, investing directly in the startups it identified through its database.

Prior to Coinseeker, Patrick was a management consultant at a big 3 firm before joining Bybit to help with growth strategy.

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Patrick Soh of Coinseeker

Patrick Soh is the Co-Founder of Coinseeker.co, a leading source of intelligence on emerging blockchain startups, boasting a comprehensive database of over 12,000 startups in the blockchain sector. It serves as a vital resource for more than 100 venture capital firms and enterprises, who rely on its extensive data and insights for investment decisions and strategic planning.

 Patrick kicked off his consulting experience with Boston Consulting Group (BCG) in 2020, and in the following year, he made a full pivot into the crypto world, joining Bybit to be part of the initial growth of BitDAO (now merged with Mantle Network). In his own time, Patrick also lent his talents to Atlas Finance, wearing hats as both the Head of Business Development and Strategic Advisor, before his spent 2.5 years as Head of DeFi for one of the Solana’s leading DeFi protocol, Francium, bringing their TVL to US$400M+ at peak. 

Today, he has come together with Jon Ren to co-found the industry’s deal intelligence platform - Coinseeker.co. Beyond this, Patrick is a Limited Partner at the Blockchain Founders Fund, and he also runs the corporate venture fund of Coinseeker.co. In his free time, he contributes as a lecturer for DeFi and Token Economics at Singapore Management University (SMU), and also volunteers as Start-up Mentor for both Harvard Blockchain Club and Stanford AI & Web3 Research Lab.

Here’s my conversation with Patrick Soh. 

Quick takeaways:

• Finding data on startups that have not yet launched their tokens or are operating under the radar remains a formidable challenge. On-chain analytics are becoming increasingly common, the real value often lies in off-chain data.

• Restaking and GameFi are two sectors that have seen a significant uptick in funding trends.

• There’s an ongoing liquidity war between the numerous blockchain layers — how this will be resolved remains to be seen.

• Restaking enables developers to focus on innovation rather than the resource-consuming infrastructure, underscoring restaking's contribution to the efficiency and sustainability of protocol development.

• For crypto founders, structuring the right cap table is more critical than one might initially think, as it will tie a lot to ecosystem support.

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

Patrick's journey into the crypto world began with a foundation in management consultancy at BCG and PwC. During this period, his interest in cryptocurrency grew as he kept up with news about mainstream crypto assets like Ethereum, Bitcoin, and newcomers like Solana. He explored the crypto scene through initial coin offerings (ICOs) on platforms like PolkaStarter and even participated in pre-sales organized by local community groups in Singapore, navigating the somewhat murky waters of early crypto investments.

While still engaged in his consulting role, Patrick sought to deepen his involvement in the crypto space. He joined Bybit to contribute to their growth strategies, managing campaigns like their annual trading competition and playing a crucial role in the launch of BitDAO, which has since evolved into the expansive ecosystem behind Bybit known as Mantle.

His venture into angel investing, particularly in Solana projects, marked a significant step in his crypto journey. This interest led him to pro bono consulting for Francium Protocol, eventually taking on the role of Head of DeFi for two and a half years.

The defining moment: The defining moment for Patrick came from recognizing how his consulting skills could be impactful in the burgeoning crypto industry. He was drawn to the industry's openness to talent regardless of age, valuing contributions based on merit rather than adhering to traditional societal norms. This aspect resonated deeply with him, as it aligned with his values of inclusivity and meritocracy.

At Coinseeker and beyond, Patrick is committed to fostering an environment that supports equality and provides opportunities for the next generation of talent. He focuses on mentoring eager learners, from graduates to undergraduates, helping to cultivate a new wave of professionals in the crypto space. This dedication to nurturing talent and creating a more inclusive industry was the defining moment that solidified his path in the world of cryptocurrency.

What inspired you to switch from a prestigious consulting job to the crypto industry? Was it the growing crypto scene in Singapore that influenced your decision?

Patrick's decision to transition from his consulting role to the crypto industry was driven by several factors beyond the burgeoning crypto scene in Singapore. While the consulting field offered prestige and challenging work, it often meant long hours contributing to a large corporation where he felt like just another cog in the machine. In contrast, the crypto industry presented an environment where his contributions had a direct impact on the startups and projects he worked with. Patrick found that in the crypto space, an individual's effort could significantly influence a project's success or failure. This immediacy of impact and the entrepreneurial spirit of the industry appealed to him, offering a more dynamic and engaging work experience.

The shift from a corporate to a more entrepreneurial setting was not just a career change for Patrick; it was a move towards a work environment that energized him, making him look forward to each day with enthusiasm. This transition aligned with his desire for a role where he could visibly see the fruits of his labour and participate in shaping the future of an exciting and evolving industry.

What is Coinseeker?

Coinseeker positions itself as a leading deal intelligence platform, trusted by investors worldwide, akin to the Crunchbase of the Web3 space. At its core, Coinseeker aims to identify and catalogue startups in the blockchain and crypto space before they hit the market or go live. With around 12,000 startups already featured in its database, Coinseeker's advanced algorithm plays a pivotal role in creating the most comprehensive primary market database available.

This endeavour is critical because, while information on established crypto companies is readily accessible through platforms like CoinMarketCap or CoinGecko, finding data on startups that have not yet launched their tokens or are operating under the radar is a formidable challenge. Coinseeker bridges this gap, offering immense value not just to investors in search of undiscovered gems, but also to service providers looking to nurture early relationships with these emerging companies.

For instance, market makers and legal firms benefit significantly from early engagement with startups, establishing long-term partnerships and client relationships from the outset. Beyond serving investors, Coinseeker has evolved to support a broad spectrum of users, including service providers who rely on the platform to identify potential business opportunities with startups at various stages of their development.

Recently, Coinseeker launched its corporate venture capital arm, actively investing in the promising startups identified through its database. This move underscores Coinseeker's commitment to the ecosystem, demonstrating a belief in the potential of these projects by investing in a diverse range of sectors, from DeFi to GameFi. In just the past two months since its inception, Coinseeker's venture arm has invested in over 10 projects ranging from Liquid Restaking Protocols (KelpDAO) to DN404 (Asterix Labs), showcasing a tangible commitment to nurturing growth within the diverse ecosystem. 

Moreover, Coinseeker enhances the value it provides to portfolio companies through a range of services, from marketing and operations support to fundraising assistance. A notable offering is the use of Coinseeker's prospecting engines, enabling portfolio companies to leverage the database for sales and prospecting efforts, thereby facilitating lead qualification and networking opportunities across the industry. This comprehensive support mechanism exemplifies Coinseeker's dedication to advancing the Web3 ecosystem and the broader crypto industry.

How does Coinseeker stand out from similar services, and what is its pricing model?

Coinseeker sets itself apart from competitors, some of whom utilize NFTs for access like an investment DAO, offering a unique approach through a more traditional SaaS, or platform-as-a-service model.

Subscribers gain access to Coinseeker's comprehensive deal flow and become part of a vibrant community, tailored to serve a wide range of users. Whether it's utilizing the CRM for business development workflows, or researchers tapping into the database for insights to inform their reports, Coinseeker caters to diverse needs.

The platform's competitive edge lies in its versatile data inputs. Unlike solely focusing on social platforms like Twitter, Coinseeker employs a sophisticated social listening algorithm that operates continuously to ensure the relevance and comprehensiveness of its data. This approach extends beyond conventional social media monitoring, incorporating data from platforms like GitHub, where many of the top developers contribute their work. This multifaceted strategy is part of Coinseeker's "secret sauce," allowing it to stand out in the market.

However, with the vast amount of data captured, the challenge of filtering out noise becomes critical. Coinseeker prioritizes data cleaning and assurance to eliminate false positives and negatives, ensuring the highest quality data reaches its users. This meticulous attention to data integrity is bolstered by a focus on off-chain data sources, acknowledging that while on-chain analytics are becoming increasingly common, the real value often lies in off-chain data.

Patrick emphasizes the importance of building strong relationships with VCs, accelerators, and ecosystems. These partnerships are crucial for Coinseeker, providing a stream of valuable data and ensuring a mutually beneficial collaboration. This strategic approach to data gathering and relationship building underlines Coinseeker's dedication to delivering quality service and distinguishing itself in the competitive landscape of crypto intelligence platforms.

What are the top two sectors that have been most active in raising money or launching projects in the past three months, especially since entering a bull market?

Patrick notes, emphasizing that this isn't financial advice, that Coinseeker has observed significant activity in two main sectors recently: DeFi and GameFi.

The interest in DeFi, according to Patrick, aligns with the macroeconomic environment. This sector responds keenly to global financial policies, as its users are typically seeking to maximize their returns. The dynamics of DeFi are closely linked to the broader financial landscape, making its prospects highly dependent on the state of global finance.

GameFi, on the other hand, is gaining traction due to the enthusiasm of key opinion leaders who view it as the next major wave in the crypto space. Patrick points out the presence of strong backers and potential catalysts that could drive the sector forward. The excitement around GameFi is partly driven by the industry's stakeholders, suggesting a robust push towards its development.

Furthermore, Patrick touches on the "liquidity war" among different blockchain layers, highlighting the significant flows into layer two solutions like Optimism and Arbitrum. However, he cautions that liquidity in these areas is not necessarily stable, with narratives constantly evolving. Following liquidity flows and investor focus can provide insights into sector trends, but Patrick suggests a cautious approach due to the fluid nature of these investments.

Can you explain how Coinseeker assists with fundraising or syndicates for projects or individuals? Additionally, are there any new fundraising methods that have emerged in the last 3-6 months?

There has been a notable resurgence in ICO platforms, diversifying with mechanisms like Liquidity Bootstrapping Pools (LBP) and IDO platforms, although IEOs have seen a decline due to regulatory constraints. These platforms, particularly IDOs, are vital for a token's launch, serving as a launchpad and providing a crucial marketing boost before market entry. This strategy mirrors traditional capital market practices, akin to pre-IPO roadshows conducted by investment banks.

Coinseeker's role in this landscape is to facilitate the early stages of fundraising and syndication for projects and individuals, emphasizing thorough due diligence. While new platforms like Moby enter the market without the burden of historical performance, they face the challenge of establishing credibility. Conversely, existing IDO platforms, having operated through bear markets, may have impacted their credibility due to less favourable market conditions during token launches.

Liquidity Bootstrapping Pools, popularized again by entities like Fjord Foundry, offer a permissionless approach that distinguishes them from more traditional, commission-based platforms like Coinlist. Coinseeker values the added layer of diligence that comes with permission-based launches, ensuring that its subscribers are offered only the most viable projects. This commitment to quality and risk management is fundamental to Coinseeker's approach, offering a blend of traditional diligence with the innovative dynamics of the crypto fundraising landscape.

Could you share one or two investment theses you're excited about?

Restaking, known for its innovative approach to give Ethereum additional yield factors, addresses several technical challenges, particularly in the context of crypto economic security and DeFi. Patrick acknowledges the unique solutions that EigenLayer is bringing to the table, especially in terms of enhancing yield in this environment of falling transaction costs. This approach, he believes, could play a crucial role in revitalizing the DeFi sector, where current yields often fall short of attracting liquidity providers. With the risk-free rate hovering around 5%, DeFi money market protocols need to offer more competitive yields to entice investors. Patrick notes a growing interest in restaking protocols, which are increasingly seen as viable opportunities for liquidity providers seeking enhanced returns, though he also emphasizes the risks associated with AVS failure and the cascading repercussions it can bring to Ethereum as a whole. 

Beyond restaking, Patrick is equally enthusiastic about the prospects of GameFi. Despite the sector's rapid ascent and subsequent saturation in 2022, he views GameFi as a promising area for investment, particularly because of its potential to engage retail consumers directly. Drawing from his own gaming experiences, Patrick understands the power of gaming to foster brand loyalty and create engaging content that not only captivates users but also encourages financial investment in the gaming ecosystem. He highlights the significant network effects that can be achieved through successful GameFi projects, with substantial backing from industry investors who possess the resources to integrate various elements of the ecosystem. This holistic support, ranging from intellectual property activation to partnerships with publishers, positions GameFi for substantial growth in the upcoming quarters.

Given the trend of outsourcing security to solutions like EigenLayer and utilizing services like Conduit and Celestia for different aspects of running a blockchain network, how do you think these developments might impact the value or role of the underlying tokens of these networks?

Exploring the interplay between EigenLayer, underlying blockchain networks like Ethereum, and the broader implications of restaking, Patrick delves into the nuanced layers of impact that such technologies introduce. He acknowledges that while restaking inherently carries certain risks, these often cascade down to the underlying assets, suggesting potential repercussions for them. Nonetheless, Patrick views restaking protocols as pivotal to enhancing the liquidity and security of the Layer 1 and Layer 2 (L1/L2) ecosystems.

“Restaking is crucial today because as more institutional players view Ethereum as a yield-bearing asset, we are seeing more players going for the (shrinking) pie. While it’s novel to “rent” crypto economic security, we must also pay attention to the development of risk management within this sector,” commented Patrick. 

Historically, services like Lido and Ether.Fi has ushered in a new era of liquidity through staking solutions. Restaking builds upon this foundation, adding another layer of liquidity and, notably, bolstering the ecosystem's overall security. This dual benefit of increased liquidity and enhanced security positions restaking as a fundamentally positive development for the blockchain space, despite its pioneering status and the complexities involved.

Patrick highlights three key advantages of restaking: enhanced rewards, which allow Ethereum holders to earn more while contributing to protocol security; boosted security, with restaked assets reinforcing the security of the protocols they support; and improved developer efficiency.

From a builder's perspective, restaking offers a significant advantage by obviating the need to establish new security measures within protocols, a factor particularly beneficial for builders who are open to the idea of inheriting the security nature of the underlying blockchain. Leveraging solutions like EigenLayer allows developers to focus on innovation rather than the resource-consuming infrastructure, underscoring restaking's contribution to the efficiency and sustainability of protocol development.

What tips do you have for founders and investors to find and connect with each other?

Navigating the challenge of connecting founders with investors efficiently, Patrick highlights the inherent inefficiencies of traditional networking and the critical importance of speed in securing deals. He observes that as market sentiment improves and competition among investors intensifies, the ability to quickly identify and act on opportunities becomes increasingly vital.

• For investors, Patrick suggests that while being proactive and engaged in networking events is traditional, relying on digital platforms can significantly streamline the discovery of promising projects. This approach is particularly relevant in a market where investors are more inclined to take earlier bets and where there's more capital vying for the same deals.

• For founders seeking the right investors, understanding the industry and connecting with knowledgeable advisors can make a significant difference. Patrick emphasizes the value of having advisors who can guide founders in building a strategic cap table, pointing out potential investors with a track record in specific sectors like GameFi. This strategy ensures that startups are not just raising capital but are doing so with partners who can provide substantial ecosystem support.

Coinseeker aims to bridge these gaps by offering digital solutions that facilitate these connections. Through its platform, Coinseeker provides portfolio analyses, helping projects to identify investors with specific interests and strengths, such as a focus on DeFi or game-centric protocols.

This tailored approach enables founders to assemble a cap table that not only supports initial fundraising efforts but also contributes to the project's long-term success in the market. Patrick underscores the platform's commitment to leveraging data-driven insights to optimize matchmaking between startups and investors, reflecting on Coinseeker's role in enhancing the fundraising landscape for the digital asset ecosystem.

Rapid Fire Questions

1. What's one piece of content every aspiring investment professional should read/watch?

   • The Lean Startup by Eric Ries.

2. What’s your biggest investment mistake?

   • Chasing narratives. Worst investments are made when you don't make your judgement, you just follow on because of certain narratives or certain social influences.

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

   • EdTech sector or where blockchain's potential for fostering credibility and transparency remains largely untapped due to the lack of financial incentives for backers.

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

   • Blue chips that we see today might not exist in the next decade.

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

   • Financial risk, but Patrick notes that beyond financial risk, the personal safety concerns, including receiving death threats, represent a significant but often overlooked risk for those publicly involved in DeFi projects.

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