Boost VC was the first institutional fund that was brave enough to deploy into crypto back in 2013, and we’re also the first crypto fund that was brave enough to expand the investment thesis to include hard-tech startups as well. Since then we’ve led investments into dozens of companies which are standing up entirely new markets from scratch — from Radiant building mobile nuclear reactors, to Gigamune developing new kinds of in-vivo cell therapies, to Starfish Space pioneering a more sustainable lifecycle for satellites. Over the last 10 years of crypto’s existence, we’ve also witnessed the emergence of a completely new pattern for human organization which has expanded the design space for new institutions which can now exist. Token incentives and shared rulesets have shown us that a large number of small participants can take on markets which are normally dominated by a small number of large participants.

We believe that right now is the time to double down on what we’re calling “Hard Crypto” — companies building cryptosystems which can power and replace the physical products, services, and utilities which we’ve come to depend on (or that we don’t yet know are possible). While this encompasses some of the activity we’ve already seen from within the DePin, DeSci, DeGEN and RWA ecosystems, we believe there is still a huge untouched surface area available for founders. We’re calling this space “Hard Crypto” to both emphasize a focus on atoms vs bits, and because we want to work with founders who are brave enough to tackle some of the hardest problems that humanity is facing today.

Why Now?

There are a number of factors which are simultaneously converging that make us think the next great generational companies will be built in the intersection of hard tech and crypto right now.

First, we see that crypto tokens have increasingly proven themselves to be useful tools for coordination, both to secure blockchains and more generalized networks as well. Whereas previously it was perfectly respectable for a web2 intellectual to tilt their noses up at crypto, there are now too many proof points live and working in the wild for “crypto is a scam” to be a defensible position anymore. Too many things are working. This is combined with an US regulatory regime which is increasingly softening to the idea that utility tokens are conceptually legitimate, and should be regulated independently of securities. The result is that the risk associated with launching a token has never been lower, and we think this is the perfect catalyst for non-crypto-native founders feeling comfortable to take the plunge on token-based business models.

The second reason we think that right now is a great time for Hard Crypto is that for the first time ever, crypto tech is finally ready for mainstream adoption. Over the last decade, the time it takes to build a crypto application has continued to drop, so much so that a modern LLM can build you a working crypto dapp in a matter of seconds. During this time, the transaction price of secure and liquid blockspace has also continued to trend towards zero, with new mechanisms like restaking adding fuel to the fire. And finally, as if that weren’t enough, recent work around wallet and account abstraction means that adding a cryptoeconomic element to your product no longer means you have to educate all of your users about crypto at all. Practically speaking this means that the total operating cost of integrating cryptosystems into your product have fallen drastically in the last several years, and show no signs of stopping as they approach zero.

Finally, and perhaps most importantly, the world is facing a giant mismatch of supply and demand in project funding. Over the last decade, we’ve seen massive new design spaces opening up in biotech (thanks to the cost of genetic sequencing dropping) and in robotics (thanks to the cost of off-the-shelf-components dropping). Unfortunately, the existing models which humanity relies on to sustain our development like grant programs and universities can no longer keep up with the pace at which we’re able to explore our scope of human possibility. This is also reflected in the later-stage venture funding markets for biotech and robotics— both categories experiencing an insufficiency of capital that’s willing to invest in the existing business models driving these research projects which are in their later stages of gestation. This contrasts the extremely busy crypto funding market, which is flush with cash waiting to invest into new tokenized business models. These investors face a fundamentally different risk profile on their investment than they would when investing into traditional startups, thanks to the predictably liquid asset they expect to eventually receive. The result is that founders of token projects have more flexibility to build massive ecosystems which require years to be properly stood up, especially compared with their non-token-founder peers. Ultimately, we believe that the next generation of organizing patterns which will drive human development forward will inevitably be built using cryptosystems.

What’s Crypto Good For, Anyway?

Stepping back, we see that there are a number of unique benefits which cryptosystems offer builders which aren’t otherwise available to them using other technologies.

Cryptosystems are unique in their ability to offer economies-of-scale benefits via the trustless coordination of a large number of participants. Tokens are useful tools for going 0-1 on a brand new idea with an interested community, by easily distributing an asset which aligns the interests of necessary parties. Tokens also make it easy for new users to bootstrap their legitimacy within a network, by having them stake tokens to prove they have skin in the game. These tokens can be slashed in the event that users act against the best interests of the protocol or act as network drainers.

Cryptosystems are also extremely useful for facilitating valuable interactions between users. At their most basic level, tokens make it easy for groups of people to pool their capital towards shared goals. They make it easy for a network at large to gather data from the edges (ie incentivizing user contributions), or to impact change in the real world (via human agents). Not only can blockchains secure valuable assets, but thanks to proof-of-stake systems they can also secure information itself. Tokens also come in handy when it comes to network rebalancing — making it easy for those with a surplus to sell to those who are deficient. They also help with risk management, where a large number of participants can agree to share the burden of an equally probable black-swan-event, vs unlucky individual(s) being forced to pay themselves. Finally, tokens make it easy for a network to capture value and to have the benefit of that be shared by all participants: by forcing users to buy and hold or burn your token, the marginal revenue of each additional user acts as buy pressure on the token in public markets which any existing holder has access to. While most of these things can be accomplished individually using existing systems (albeit with higher overhead costs), only cryptosystems can offer the ability to do all of these things at once. More importantly, there are still even more value-based uses for crypto that we haven’t even discovered yet— and cryptosystems are by far the cheapest way to experiment and try them out.

Finally, cryptosystems are useful for structuring projects which include a variety of different stakeholder groups, where each of them has their own unique optimization function and constraints. They fundamentally rely on the ability for participants to witness validate the interactions of various users on the network, and therefore bring massive benefits for cross-org collaboration. Blockchains can uniquely ensure that data is trustlessly timestamped, and offers immutable provenance records for every single interaction, out of the box. Because applications and protocols are openly composable, ecosystems can naturally form around existing projects in a way that’s driven purely by the needs of real users, without people needing to ask for anyone’s permission. Cryptosystems have also enabled new kinds of decentralized governance to flourish (like token voting or capital-pooling based schemes), which allow for important decisions to be dictated by the will of the many instead of the will of the few. As the web continues to make us more interconnected, we think that new kinds of n-sided marketplaces that solve real-world problems are coming, and will inevitably be built with cryptosystems.

Here Are Some Examples…

As a parting note, we wanted to leave you with some ideas for the kinds of hard crypto networks that we think are exciting and are inevitable. If you think you’re working on a project that belongs on this list, please reach out to us.

• TrashPickup — let people pool tokens to fund targeted trash cleanups or continuous environmental maintenance, using a decentralized protocol and AI agents to administer the cleanup + verification of work + payouts.

• ContractUs — let groups of independent contractors bid for large projects together, and bootstrap trust by staking tokens which can be slashed if work isn’t successfully completed.

• SkyFly — let people hedge weather risk via decentralized prediction markets which automatically settle using satellite data on-chain.

• EggMe— let people contribute their backyard-hatched eggs or locally-grown produce to shared networks which either sell the products or distribute them among existing users.

• ChargeMe— let people charge their electric cars at other people’s houses rather than at centrally-managed charging stations.

• SaveMe — decentralized emergency response, where network participants can alert nearby agents who can help them in high-risk or high-urgency medical situations.

• iCoral — let individual divers from the public participate in the planting and regeneration of coral reefs and other aquatic ecosystems, participating at their own risk.

What do all of these problem spaces have in common? They’re all fucking hard.

Good luck!