Fractionalization

Fractionalization is crypto’s killer use-case.

Imagine what increased fractionalization could do for startup investing.

  • VCs (1-10 wires) → Angels (10-100 checks) → Crowdfunding (100-1K+ credit cards) → Crypto (1K-1M+ wallets).
    • Legal innovations like SAFEs started this trend.
    • Crypto’s fractionalization and smart contracts will add 1000x more access to startup investing.

What other industries need fractionalization?

  • Look for businesses with high transaction sizes to get disrupted by crypto first.
    • This NFT boom is growing the market for fractionalized art.
      • Crypto could take Masterworks to the next level.

Fractionalization is a solution to the Social Token Paradox:

  • There is a risk that social tokens lose value as their communities grow.
    • This is especially true if a community mints new tokens for new members.

Scarcity and fractionalization solve these problems:

  • Example: Right now you need a whole Ape to be in the BAYC.
    • In a few years you might only need a fraction of an Ape to join.
      • There will be levels to this club, so Whole Apes are in a different group than Satoshi Apes.
        • It’s like Bitcoin.
          • Everyone with a Satoshi is in the BTC club, but whole Bitcoiners are at a different level.

Another good place to look for winning crypto use-cases are markets with high costs per transaction.

  • Example: Industries with a lot of legal friction.
    • Crypto will need to solve its transaction cost issues before going mainstream here.

I would personally love to help spark the fractionalization of startup studios.

I’m working on something new:

  • Utopic is my new personal label and parent company for my startups.
    • Utopic Studio is my atelier where I develop my own startups.
    • Utopic Ventures will be my fund to invest in other founders’ studios.

I want to develop and grow my own studio before funding and advising other founder studios.

  • I’ll be sharing my Utopic stories and process on Twitter, so follow along @NeilThanedar.

Published by Neil Thanedar

Neil Thanedar is a scientist, entrepreneur, philanthropist, and activist. He is the founder & CEO of Air to All, a nonprofit medical device startup designing low-cost respirators and ventilators for COVID-19 and beyond. He is also the co-founder and CEO of Labdoor, a consumer watchdog that independently tests and ranks supplements and other health products for its 20M+ users. He was previously co-founder and President of Avomeen Analytical Services, a product development and testing lab acquired for $30M+ in 2016. He has also served as Executive Director of The Detroit Partnership and Senior Advisor to his father Shri Thanedar in his campaigns for Governor and State Representative in Michigan. He received his BBA (Entrepreneurship) and BS (Cellular & Molecular Biology) from the University of Michigan in 2010. Neil lives in Michigan with his wife Shoua, sons Kai (3) and Ajay (1), and dogs Zeus (12) and Pluto (11). He is also a (very) amateur hockey player and drummer.