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Sequoi’s Shaun Maguire on decentralization and crypto venture conviction

TechCrunch | Lucas Matney | May 1, 2022

Shaun Macquire - Sequoi's Shaun Maguire on decentralization and crypto venture convictionIn a conversation on TechCrunch’s new web3 podcast Chain Reaction, Sequoia crypto partner Shaun Maguire talked about the firm’s commitment to the sector, regulatory challenges and what plenty of crypto investors still don’t understand.

Earlier this year, Sequoia announced a $500 to $600 million sub-fund dedicated exclusively to buying up cryptocurrencies. The firm has made a number of equity investments in crypto startups over the years including Fireblocks and FTX, but while Andreessen Horowitz was early to commit to a dedicated crypto fund in 2018, Sequoia has continued made its equity investments through its general funds.

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While the crypto industry continues to mint new unicorn startups, the rapid cooling of public market tech stocks has threatened to stall growth in the emerging category, which has still proven awfully susceptible to macro conditions. In our conversation, Maguire emphasized his belief that plenty of other funds dipping their toes into crypto “are going to pull back” when the market grows less frothy, but he believes that Sequoia has already committed to a lengthy relationship with the sector — “we have permanent intentions.”

The crypto category has dealt with plenty of skeptics, some in the venture capital community, who believe that the sector’s benefits are being oversold and that the web3 promise of decentralization is just smoke and mirrors.

Maguire says:

Decentralization is not a silver bullet that just solves all problems and is better for everything. You know for the vast majority of compute, you want it to be centralized. For a lot of decision making, centralization can be better for certain types of decisions.  More important than decentralization for its own sake, is the ability of users to 'be able to leave with their identity and data'

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...an effort which should protect consumers from platform overreach. While decentralization allows for a certain type of consumer protections, Maguire still contends that the rulebook of traditional investor protections shouldn’t be thrown out.

I think people sometimes forget that a lot of the consumer protections put in place by US law were won out of hard-fought lessons over like a century. And there’s a lot of wisdom in there.

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