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As crypto continues its wild rise, storied venture firm Sequoia is not just competing with the a16z\u2019s of the world but with a rising crop of crypto native venture funds that are seeing their assets balloon and their influence upend the traditional venture hierarchies. In a conversation on TechCrunch\u2019s new web3 podcast Chain Reaction<\/strong><\/a>, Sequoia crypto partner Shaun Maguire talked about the firm\u2019s commitment to the sector, regulatory challenges and what plenty of crypto investors still don\u2019t understand.<\/p>\n<\/p>\n 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.<\/p>\n 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 \u201care going to pull back\u201d when the market grows less frothy, but he believes that Sequoia has already committed to a lengthy relationship with the sector \u2014 \u201cwe have permanent intentions.\u201d<\/p>\n \u201cSequoia is very deliberate with everything we do and we spend huge amounts of time debating every strategy change, everything, we debate every seed investment to sometimes excruciating detail, but it helps us make really good decisions and make decisions as a team rather than as individuals,\u201d Maguire tells us. \u201cWhen we make a decision to do something, it doesn\u2019t happen unless the whole team is behind the decision. So that\u2019s what you\u2019ve seen get unleashed with crypto over the last 18 months, we went from it being some people with really, strong positive views, to the whole firm being completely behind it.\u201d<\/p>\n The crypto category has dealt with plenty of skeptics, some in the venture capital community, who believe that the sector\u2019s benefits are being oversold and that the web3 promise of decentralization is just smoke and mirrors.<\/p>\n \u201cI am an absolute crypto maxi, but I think there are a lot of things that are misunderstood by the masses today,\u201d Maguire said. \u201cDecentralization 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.\u201d<\/p>\n Maguire said that more important than decentralization for its own sake, is the ability of users to \u201cbe able to leave with their identity and data,\u201d 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\u2019t be thrown out.<\/p>\n \u201cOne of the tensions I have in my head is that 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\u2019s a lot of wisdom in there,\u201d Maguire says. \u201cIn some ways, one way to view what\u2019s happening in crypto right now is it\u2019s almost like throwing all the old rules out and starting with a blank canvas.. I think what we\u2019re seeing is a lot of the crypto community is actually coming back in 90% of the situations and realizing that, \u2018Oh, actually, the way things were done in the past was actually pretty good and got there for an optimal reason,\u2019 But 10% is like radically different and\u2026 you can kind of meaningfully improve the whole system by getting some of those things right.\u201d<\/span><\/p>\n You can listen to the entire\u00a0interview with Maguire<\/a>\u00a0on our podcast, Chain Reaction. Subscribe to Chain Reaction on\u00a0Apple<\/a>,\u00a0Spotify<\/a>\u00a0or your alternative podcast platform of choice to keep up with us every week.<\/em>\u00a0<\/span><\/p>\n<\/p><\/div>\n