Crypto

1. 1. Scaling the blockchain

   → Some existing blockchains are struggling to rapidly process the high number of transactions caused by the influx of crypto newbies.

   → Startups are now focusing on improving scalability, whether by developing entirely new protocols (“layer 1” features) or building better platforms and networks on top of existing ones (“layer 2”).

2. 2. Infrastructure plays

   → For all its ambitions of becoming an alternative financial system in its own right, crypto remains dependent on transfers from or back into fiat currencies.

   → Startups are supplying the infrastructure to better connect crypto platforms to the traditional economy, whether by functioning as compliance service providers or payment gateways.

3. 3. DeFi vs fintech

   → Decentralised finance (DeFi) offers the possibility of creating a parallel financial system centred on peer-to-peer transactions that don’t rely on intermediaries like banks.

   → But with its success dependent on the mass adoption of underlying blockchains like Ethereum, the sector may evolve to focus on synergies rather than competition with fintech, for example by providing infrastructure like smart contracts.

4. 4. Wild west no more?

   → Once central to its appeal, the lawlessness of the crypto universe has since become its Achilles’ heel, with each hack raising more awkward questions.

   → Startups are now doubling down on custodial solutions, like developing the next generation of wallets for users to safely store their assets.

Who early stage startups are up against