Original Title: Chain Venturer: Jacob Ko of Superscrypt

Original Author: Marco Manoppo

Translation: Qianwen, ChainCatcher

Jacob Ko is a founding member and partner of Superscrypt, an early Web3 venture capital fund established by Temasek. Superscrypt is dedicated to investing in and supporting innovative founders and projects throughout the ecosystem. According to the RootData page, the fund mainly focuses on infrastructure, identity and credentials, Web3 services, and emerging use cases, and has invested in projects such as Aptos, Safe, LI.FI, OutDID, and Kaito.

Jacob Ko's career began at the U.S. management consulting firm Kearney, where he worked as a strategic advisor, and later at Citibank from 2010 to 2013. In 2013, he joined Temasek, where he helped establish investment projects in Australia and New Zealand and was responsible for deep technology and agricultural technology investments.

In July 2022, he helped create Superscrypt. In addition to providing funding, Superscrypt also works closely with portfolio companies to provide support in strategy, product, GTM, marketing, community technology/developer relations, and recruitment.

This interview covers the following topics:

• Superscrypt believes that blockchain technology is the cornerstone of the new internet. Good infrastructure should "just work" and fade out of people's sight.
• Many people may not realize that the success of many RWA protocols is largely due to their decentralized nature, which enables these protocols to facilitate low-barrier, seamless transactions. However, for platforms dealing with RWAs, legal compliance requirements must be verified, which limits direct growth in users, value, and liquidity.
• For asset categories not tied to physical counterparts, such as short-term government bonds and private credit, RWA tokenization makes more sense.
• Web3 needs to explore the areas of identity, reputation, and credentials, which will provide users with greater control over their data.
• Most investors in cryptocurrency and venture capital do not fully understand whether a project needs a token; they are only focused on short-term price fluctuations that tokens can provide, rather than focusing on the long-term benefits of building something new.

The following is a summary of the interview:

1. What was the decisive moment that attracted Jacob to the crypto world?

Jacob only started getting involved in cryptocurrency in 2020. At that time, with the global lockdown due to the pandemic, and limited entertainment options outside of work, he decided it was time to explore and study Bitcoin and Ethereum.

Bitcoin changed his perception of currency, while Ethereum and smart contracts opened up a whole new world full of possibilities for anyone with internet access. He began actively participating in DeFi on Ethereum, Polygon, Binance Smart Chain, and Solana. On Solana, he further explored NFTs and participated in multiple community and ecosystem activities.

2. Introduce Superscrypt. What is its relationship with Temasek?

After several years of accumulation in the field, Jacob switched to full-time crypto work and helped establish Superscrypt, an early Web3 company funded by Temasek.

Superscrypt is research-oriented, focusing on investing in and supporting early Web3 builders to develop protocols, tools, and emerging applications. The team believes that deep user and community engagement is the core of success and provides practical support to the companies they invest in.

Superscrypt believes that blockchain technology is infrastructure and the cornerstone of the new internet. Blockchain can allocate ownership of almost any transaction through a distributed ledger, which is a key innovation. Like most excellent infrastructure, blockchain technology should "just work" and fade out of people's sight. Therefore, they invest in infrastructure solutions to make blockchain usage more convenient, faster, and cost-effective. At the application layer, they are always looking for high-quality product teams that can create a better life or interesting experiences for users.

They believe that a key area waiting to be explored is identity, reputation, and credentials. This underdeveloped area is a key unlocking point for web3: solutions built using blockchain technology can give users better control over their data, drive product innovation, and create a better overall user experience.

3. What areas and types of projects are Jacob or Superscrypt currently interested in?

Superscrypt invests in Web3 infrastructure that can help scale blockchain, such as Rollups, sorters, MEV, and interoperability solutions. They also strategically invest in wallets and developer tools, as they are the entry points for consumers and developers to interact with and build on blockchain technology.

As mentioned earlier, identity, reputation, and credential solutions are particularly worth paying attention to. Identity solutions can provide users with richer contextual identity based on their on-chain activities and allow users to control the data they want to share.

In terms of emerging use cases, the team chooses to invest in the emerging areas of Web3 social and real-world asset tokenization. However, these are just preliminary plans, and the team will continue to conduct comprehensive research and monitoring before investing in these areas.

Superscrypt does not invest in the gaming sector. Although the sector has broad prospects, it is not the main focus of Superscrypt, as it may not be able to select successful enterprises, and successful projects in this sector require a large amount of capital investment.

Regarding DeFi, Superscrypt tends to selectively evaluate projects with a unique innovative angle (such as cross-chain DeFi).

4. What details do people sometimes overlook when dealing with real-world assets?

Jacob observed that as institutions slowly adopt cryptocurrencies, real-world assets (RWA) are gaining renewed attention. However, he pointed out that the expected large-scale adoption of cryptocurrencies by institutions has not materialized, possibly due to market collapses. Nevertheless, people have recognized that blockchain can bring efficiency to transactions and asset management.

Accompanying emerging models is often speculation. Jacob warns that due to technological, regulatory, and practical constraints, currently only specific RWAs integrated with blockchain have practical significance. However, this also presents opportunities for assets such as short-term government bonds and private credit, which are not tied to tangible counterparts and seem more suitable for tokenization.

Many people may not realize that the success of many RWA protocols at present is largely due to their decentralized nature, which enables these protocols to facilitate low-barrier, seamless transactions. However, for platforms dealing with RWAs, legal compliance requirements must be verified, which limits direct growth in users, value, and liquidity.

He believes that RWAs should not be hyped as the latest category in the cryptocurrency field, but should be evaluated within the realm of financial technology, as this asset category has inherent limitations and different opportunities it can bring.

5. What are Jacob's views on the future of RWA KYC systems?

Jacob anticipates that the future RWA KYC systems will be highly complex. Currently, regulated RWAs seem unlikely to adopt privacy-preserving cryptographic solutions like zkID as KYC standards. The ideal scenario would be for regulatory bodies to understand and accept these technologies, believing that they can verify individual identities without disclosing too many details.

However, gaining the trust of governments in these emerging zero-knowledge proof (zk) solutions will face significant barriers, as authorities may feel that there is no need to adopt new technology if they can directly request personal information under the existing system. While many teams are researching zero-knowledge proof (ZK) solutions, they have not yet reached the level where governments consider them standard requirements.

Jacob foresees that identity solutions will continue to evolve. This scope may range from more ambiguous identity identifiers (such as attestations, profiles based on user on-chain activities) to more mathematically based solutions (such as zk technology), and to the strictest identity solutions (traditional KYC and AML processes).

Depending on the specific product, any identity solution can meet regulatory requirements, and the strictest solution can be used for securities, requiring KYC. If regulatory bodies begin to better understand technologies and solutions like zk, these technologies and solutions may be sufficient to meet regulatory requirements. However, given that these technologies are just getting started, it may take several decades to reach this point.

6. What are Jacob's thoughts on the best fund structure model for crypto assets?

Jacob shared his insights on transitioning from traditional venture capital to crypto investments, emphasizing the unique liquidity of tokens as investment tools. Compared to the 5-10 year cycle of venture capital, the token cycle is much shorter (within a year). This dynamic sometimes leads early investors to focus only on short-term results, causing price fluctuations and affecting public perception of venture capital.

The popular investment structure currently combines SAFE (Simple Agreement for Future Equity) used for initial seed rounds with token warrants. This structure aligns with Superscrypt's long-term investment approach. While the company acknowledges the early liquidity brought by token issuance, its main focus is to support teams that can create long-term value, potentially leading to trade sales or IPOs.

Regarding investment strategy, Jacob emphasized the difference between venture capital and liquidity management. The former involves long-term supporters taking risks for eventual returns, while the latter requires different skills, focusing more on entry and exit points and liquidity management. Superscrypt primarily focuses on venture capital, but Jacob believes that liquidity strategy is also worth considering, especially in bear markets, where significant price drops can create attractive valuation opportunities for top teams and tokens.

Quick Q&A

- What is a book that any aspiring investment professional should read?

Any content that can help build a solid foundation and framework (about Bitcoin and Ethereum) is worth reading.

- What was Jacob's biggest investment mistake?

It was NFT, but it also gave Jacob new insights into cryptocurrency, Web3, and digital ownership and their impact on people.

- What is the most underrated use case for cryptocurrency?

NFT: Currently not popular due to frequent speculative activities and price fluctuations. However, this technology for allocating property rights to intangible assets is a mechanism that can unleash more value creation and new business models.

- What is your critical view of cryptocurrency now?

Most investors in cryptocurrency and venture capital do not fully understand whether a project needs a token; they are only focused on short-term price fluctuations that tokens can provide, rather than focusing on the long-term benefits of building something new.

- What is the biggest risk facing the cryptocurrency field?

Lack of regulation.

Note: The above text is not a verbatim quote, it has been optimized in written form based on the conversation. In this process, some context and subtle differences may not be accurately conveyed.

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