Chain Venturer: Sachi Kamiya of Polygon Ventures

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Hi folks 🙋🏻‍♂️,

Welcome to a new series where I’ll be having intriguing conversations with the most interesting crypto investors in the space.

My goal with this series is to have meaningful conversations that will push our space forward — while highlighting the work being done by capital allocators to our audience of 11,000+ builders and investors.

• The conversations will first and foremost, highlight the individual(s), not the firms that they’re working for.

• You’ll be learning about their journey into crypto, current investment theses, thoughts on topical news, and many more.

Many interview series with crypto investors air on the side of being overly bullish (or bearish) and focus on big-picture theses without digging deeper into the substances and nuances.

I aim to break that mold. This series will not be scared to ask the hard questions and challenge some beliefs held in our industry when it deserves to be challenged — all in good faith to push our space forward.

I hope that you’ll enjoy this series in the coming months. If you would like to participate in a future episode, DM me here.

-Marco

P.S. My goal with this series is to become the Nardwuar of crypto interviews.

Just In case you don’t get that reference, here’s a clip:

Sachi Kamiya, Polygon Ventures Lead

Sachi has an extremely diverse background.

Having graduated from Caltech with an Electrical Engineering degree, she started her career at Mitsubishi Japan before transitioning to more financial-centric roles. Not long after, Sachi spent her career as an Economic Analyst at the IMF and an Associate at Bank of America.

Crypto is a global asset and Sachi is a truly global person. She has lived in more than 4 countries across 4 different regions. Now, Sachi is a member of the Polygon Ventures team where she leads the $100M ecosystem fund focusing on furthering the growth of the Polygon blockchain.

Here’s my conversation with Sachi.

Quick takeaways:

• US founders need to be flexible with regard to relocating given the ongoing regulatory development. Dubai is a good option.

• Seeing much more active deal flows in Asia, from Asia-based teams, and Asia-based investors.

• Real-World Assets (RWA)s is an exciting space, but a “crypto-native” way to do KYC needs to be solved.

• Crypto is currently focusing too much on infrastructure, instead of consumer adoption.

• Tether and Binance market dominance is the biggest risk in crypto.

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What was the defining moment that made you decide to work in crypto?

Sachi met Sandeep through a mutual that was already working in crypto. At that time, Polygon was still called Matic and it wasn’t even listed on Coinbase yet.

Early conversations with Sandeep convinced her to make the jump. Sandeep described an analogy that explains the potential of crypto technology. The analogy was that Ethereum is akin to replacing the centralized institutions e.g. the Central Banks, whereas Bitcoin will become the value layer akin to digital gold.

Seeing the growth of the industry, Sachi realized the opportunities in crypto, both from a technological potential and career progression perspective. In traditional banking jobs, there are often glass ceilings associated with age no matter how hard one works.

Eventually, Sachi decided to join Polygon. At first, her role was not clearly defined, but Polygon was in the middle of revamping how it invests in projects to bootstrap its ecosystem. Sachi then came in to help construct a due diligence framework to evaluate potential investments, including creating an IC for the ecosystem fund.

How has your international background helped when looking at crypto?

Having a diverse background certainly helps.

As a truly global asset class, you’re working with people from all over the world. Naturally, you’ll need to understand how various culture operates. In terms of striking deals, this also translates into having a good understanding of various cultures’ mannerisms and styles. For example, Sachi’s background has helped her land deals in Japan-based crypto projects.

You’re a former credit trader, how did that experience affect your crypto outlook?

Simply put, Sachi was looking at the big bank bonds and figuring out what was the right yield for these bonds. That experience helped her get a really good experience in understanding how traditional finance works, which helps a lot in understanding DeFi mechanisms in crypto.

A lot of what’s being done in DeFi are just concepts taken from TradFi. However, many DeFi degens are usually not familiar with the systems, primarily on the risk management side. Pricing options, creating a proper swap market, and other financial technicalities are still being done poorly from times-to-times.

How do you see the role of Emerging Markets (EMs) in crypto?

Crypto is especially relevant for EMs where inflation is a problem such as in Venezuela or Argentina. They truly understand the value of crypto and there’s a lot more potential to catalyze mass adoption in comparison to developed markets where they can easily access the US dollars.

Which regions are you seeing the most active deal flow?

There are still a few US deals but Sachi is seeing much more Asia deals. Activities from Asia-based projects and funds have been much more prevalent recently. Part of the reason is because US funds were overinvested in the bull market so they currently don’t have dry powder to allocate. Whereas Asian investors are more opportunistic and typically don’t like to invest when valuations are high. Now that valuations are lower, they’re much more open to allocating capital.

There are also much more projects coming out of Asia as there’s less political risk.

What tactical steps can Founders do to face the current regulatory regime?

Founders should remain flexible and have to keep an open mind. Looking at the current regulatory development in the US, there’ll always be a possibility for founders (at least in the short term) that they’ll have to move.

There are a lot of countries that are starting to become more welcoming toward crypto. Dubai is a great choice with a lot of potential. In an interview with CZ, he stated that the jurisdiction certainly wants to welcome crypto businesses and entrepreneurs, while also conducting proper regulation.

What was the fundraising experience like for Polygon’s $450M raise?

An investor (redacted) was suggesting/pitching to Sandeep that he should do a raise for Polygon. One of the primary reasons was the fact that other alternative L1 competitors have just finished giant fundraising rounds.

Sandeep was not too keen to raise at the beginning because Polygon still had a lot of capital but then started to realize the value of having big-name institutional investors in your cap table for strategic purposes.

The big lesson: Once you have a commitment from investors, close it ASAP. This is especially in a space as volatile as crypto where there are real dollar values tied to the technology development cycle. When the market starts to dump, investors’ sentiment can significantly shift and it’s never guaranteed that commitment will always be honored. Timing also matters. Polygon raised funding at the right time (late 2021, early 2022).

What are Polygon Venture's current investment theses?

The fund is currently focusing on infrastructure-type projects such as staking, ZK-tech, and Real-World Assets (RWAs). Assessing the next emerging crypto trends is a bit challenging at the moment; but as the macro condition turns, the possibility of a resurgence amongst consumer-focused apps such as gaming will be much higher.

How are firms navigating RWAs compliance?

While RWA is exciting, it remains to be seen how much sacrifice will be given from the decentralization spectrum to support institutional adoption.

In TradFi, KYC is incredibly important. In crypto, there’s currently no great way to KYC people natively. Perhaps Coinbase’s Base can become an attempt to KYC individual users at the chain level.

Polygon is also working on Polygon ID, which utilizes ZK tech to proof and verify identities without necessarily revealing your full identities.

Thoughts on the Binance crackdown?

A crackdown on Binance is healthy for the crypto industry in the long term. In the past few years, Binance has been having too much power. Every project that wants to be successful must be listed on Binance. There’s a need for other exchanges to catch up in terms of market share to prevent excessive monopolies of concentration of liquidities.

Rapid Fire Questions

1. What’s a web3 game that you are most interested in right now?

   • My Pet Hooligan.

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

   • We’re focusing too much on infrastructure instead of consumer adoption.

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

   • USDT de-pegging or Binance-related regulatory action.

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

   • NFT ticketing, getting into a club using an NFT.

5. What’s one book that an aspiring investment professional should read?

   • Steve Jobs' autobiography, it’s a good template for how a founder should think, also highlights the importance of focusing on user experience.

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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.