TL;DR: In this blog, we talk with Sentinel Global Associate, Josh Shaked, about how he learned how to question everything through math, his rabbit hole dives into DeFi and the open web, his current research areas in cryptography, and how he is toughening himself up in NYC.
“Luck is what happens when preparation meets opportunity.” -- Seneca
As someone who graduated from college just three years ago, how did you become a VC? Usually it takes people much longer to find themselves in venture capital.
Growing up near New York City, where many of my friends' parents worked on Wall Street, finance always seemed close. So during my freshman year of college, I enrolled in a few economics courses. After taking some courses, I realized, "this is not for me!" Economics relies on too many assumptions about the rationality of individuals, markets, and businesses. Through experience, I’ve learned that the world is unpredictable, irrational, and non-linear. In line with these beliefs, I decided to study Applied Math, a subject I enjoy because it's challenging and rewarding.
I always joke that being good at math doesn’t mean you’re good with numbers. To me, math is more about how proficient you are at constructing arguments and rigorous proofs than your ability to multiply large numbers in your head. Math taught me to question everything, practice second-order thinking, and craft convincing arguments – skills I use everyday as an investor.
So how did that jump from applied math to investing actually happen?
I worked at Genesis Trading, a multi-billion dollar digital asset financial services firm and subsidiary of DCG, after graduation. My work at Genesis focused on getting the firm operational on decentralized finance (“DeFi”) applications – the innovative frontier of programmable financial applications built on blockchains.
As a research analyst, I assessed the trust and safety of blockchain-based systems and helped bridge the firm’s educational and operational capabilities to understand and solve the unique legal, operational, and counterparty risks of transacting onchain. Through these experiences, I learned first-hand the obstacles of onboarding traditional financial institutions onchain, which ultimately informed and shaped my perspective on what new infrastructure, tools, and applications need to be built to accelerate the institutional adoption of blockchains.
Recognizing my passion for DeFi, the Genesis leadership invited me to help with the firm’s principal investing activities. In that role, my duties involved typical VC work such as meeting founders, conducting due diligence, and exploring opportunities for strategic collaboration. After a while, it seemed like a natural extension for me to go work in VC full-time.
So - as you say you’ve learned to question everything - what is one technology right now that you’re most excited about, given what you’ve learned in your research and through experience?
One protocol I’m particularly excited about is the AT Protocol, or "atproto," designed for building social applications. The largest app on atproto right now is Bluesky, a Twitter-like platform with over 14 million users. Although atproto is marketed for social apps, theoretically, it could support any internet application, as the internet itself is inherently social.
One of atproto's key features that I'm most excited about is its ability to separate user identity and data from application presentation. Unlike platforms like Facebook, which tightly link user data and identity to a single application, atproto allows users to carry their identity and data across various applications. This breaks away from traditional client-server models and enables a more open and flexible web.
I believe open protocols like atproto can dismantle the walled gardens of current web monopolies, inspire a new wave of innovation, and foster business models that align openness and interoperability with profitability.
I think many are very supportive of that vision, but there are real challenges to repurposing the web. What is one of the biggest ones in your opinion?
When you're doing anything with money or assets that are rooted in jurisdictional oversight, things are going to move slowly. Changing how people view money and its supporting infrastructure and technology is a decades-long journey. So the first challenge, but also opportunity, is to create new internet-native assets rather than tokenize existing ones.
A missing component to unlock the creation of more internet-native assets is cryptography. Blockchains are really good at reasoning about and verifying things that live within their own execution environment. However, blockchain consensus engines don’t know to reason about things that live outside of their execution environment, whether it's a Zoom call, my Twitter posts, or anything else that lives in the Web 2.0 world.
So cryptography is what bridges the gap between Web 2.0 and 3.0?
Cryptography is the connective tissue that connects blockchains to the offchain world and, as a result, increases the surface area of blockchain applications. Given that the most valuable internet-native assets reside in Web 2.0 applications, it’s important for blockchains to be able to understand Web 2.0 applications and verify actions taken within them.
I’m very focused on applications that leverage next-generation cryptography such as zero knowledge proofs (a cryptographic primitive that allows one party to prove something to another party without revealing anything other than the fact that that something is true) to make the web a safer, more interoperable, and verifiable place.
Aside from changing the web as we know it — which is no minor feat – what is a goal you have outside of work?
I would like to pick up another language. Right now, I’m 50% competent in Hebrew and Spanish. My goal would be to become fluent in one of those two, and go live in a place for six months to a year where I can absorb the language, hear it on the news, and speak to people on the street.
I also recently took a Krav Maga class for self-defense, which was super fun. I was decent at it. As you know, New York City is a tough place to live, so you have to be able to fend for yourself.
If you would like to learn more about Josh’s experience in DeFi, add to his views on cryptography and internet native assets, or challenge him in a Krav Maga match to see if he really is that good, reach out at hello@sentinelglobal.xyz
Opinions expressed are solely that of Josh Shaked and do not represent the views of Sentinel Global nor should they be construed as investment advice.
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