Why Republic Capital led Flipside Crypto’s Series A

There’s a little secret in crypto that many retail investors don’t know about and don’t consider: tokenomics and on-chain activity. To many, it sounds like a silly little word — a blend of nerd and finance that means little when ‘number just goes up’. It’s why you see meme-coins like Dogecoin and Shiba Inu express the kind of volatility that they do.

But, what is under the hood? Well, Dogecoin rewards miners with 10,000 coins every minute and Shiba Inu has a maximum supply of 1 quadrillion tokens. What if I told you that the top 5 wallet addresses for Dogecoin hold over 40% of the total supply? What happens if even 1 of those groups, exchanges, or whales decide to sell down their position? Well, maybe you’re still not convinced… So let me show you a better way.

One hot topic on the minds of crypto-natives these days (and all days) is decentralization. The promised land where tokens can survive indefinitely without a fearless leader or a powerful venture capital firm pumping the bag. True decentralization means a permissionless environment where all market entrants can participate (buy, sell) without the fear that somewhere lurking in the shadows is a market participant that can shake the foundations of the protocol. Bitcoin and Ethereum are strong bets here — they’ve been around long enough, and have fewer centralized power than anything else on the market. But from a broader lens, the technology powering these top digital assets pales in comparison to what could come next. Eth and Btc maximalists might call this a feature, others may consider it stifling innovation, but the reality is that new protocols are here already and more are shipping everyday. Layer 1’s like Avalanche, Solana, Luna, Near, Polkadot all have thriving ecosystems of hundreds (thousands?) of Layer 2 and decentralized applications building on or around them.

What then to do with all these choices? One way is to YOLO in, buying the name that sounds best on Coinbase or Kraken, and hope that Elon tweets about it. Another way is to peek under the hood, help decentralize the networks, and get paid to do it. This triple whammy is why Republic Capital led the Flipside Crypto Series A. Let’s talk about it.

Peek under the hood

Since 2017, Flipside has been developing a suite of analytics tools that enable researchers, data scientists, and programmers to peek under the hood of crypto protocols and see what’s really going on. Flipside users leverage the platform to run simple or complicated queries on blockchain ‘databases’ without having to ping the blockchain each time. I’ll save the technical language for another post, but suffice to say the data are pre-labeled and organized by Flipside’s technology, and allow for fast, free outputs.

Once a query is created and an output is generated, users can then post their findings publicly (to inform us, the consumers of this data). Thousands of dashboard have been created by users, creating transparency and accountability in the ecosystem.

Get paid to help decentralize the network

You might be wondering about who these generous people are, who go around querying a blockchain database for the benefit of all mankind. This is where Flipside Crypto gets super, super interesting. If you navigate your way to the earn section of their website, you’ll find a long list of Bounties ready for completion. Bounties are challenges, ranging from simple queries, to complex dashboards, that our heroic Flipside users can complete to earn rewards in the token in which they are working the bounty on. That last part is critical — it brings new, valuable users into the ecosystem, empowers them to learn about a protocol, and pays them to share the goods with the world. It is true crypto-native game theory, rolled up into a platform that simply works.

(A sample bounty from 4/7/2022, paying 60.63 ALGO equivalent to about $47 for completion)

Is it working? I’d say the numbers speak for themselves. Below, you’ll find the number of Bounties submitted during the corresponding month.

(Submitted Bounties — different colors denote various protocols)

So how does Flipside Crypto afford to pay all these bounties? Is it never-ending venture dollars or is it something much more clever and scalable? The solution is elegant in design and truly scalable in nature: by partnering with treasuries, foundations and protocols to fund the bounties through a series of official foundation grants and node delegations. The more a protocol votes to delegate to a Flipside Crypto node, the more tokens there are to distribute, and the more Bounties are created as a result. It creates the right incentive structure for all parties; protocols, researchers, and Flipside Crypto itself. Major node or grant partnerships include Solana, Algorand, Luna and many more.

Closing notes

Republic Capital is thrilled to be leading the Series A round for Flipside Crypto. I’ve known Dave (CEO) for a long time, and have been watching the progression of Flipside since Day 0. Over the last year or so, it’s become less fun to sit on the sidelines, and more important for our firm to share in the future potential for this company. There’s so much more coming that I could talk about here, but we’ll save that for the company to announce themselves. Flipside Crypto, welcome to the Republic Capital family!

Any opinions expressed herein are those of the author. Certain information contained in the presentation discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice.

Any opinions expressed herein are those of the authors. Certain information contained in the presentation discusses general market activity, industry or sector trends. Any opinions expressed herein are those of the authors. Certain information contained in the presentation discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. or other broad-based economic, market or political conditions and should not be construed as research or investment advice.