Subzero has pivoted to a decentralized venture capital (DVC) model and it’s important to clarify how we expect it to work both as a DVC organization and a cryptocurrency protocol, the benefits of decentralization in this capacity and the advantages for both holders and new projects looking to work with us.
Let’s break it down, starting with the industry as a whole…
What can crypto offer to the traditional venture capital model?
The traditional VC industry is an extremely inefficient system, shrouded in mystery and secrecy. Venture capital companies spend significant amounts of time raising and deploying capital provided by ultra-high net worth individuals and entities. The result is, only private groups of “accredited” or ”sophisticated” investors, get access to the proprietary deal flow.
Some of the most successful companies like Facebook, Twitter, Airbnb, Amazon, and others followed the traditional venture capital path and have made their early investors extremely wealthy. The average person could not join this exclusive club in financing world-changing companies, until recently.
With the rise of Decentralized Venture Capital (DVC), a blockchain-based venture capital method, the traditional limitations and barriers have been shattered. There is a compelling case for DVC as it breaks down these barriers to entry and provides unparalleled transparency. Thanks to the blockchain, we can build a fairer and more equitable world by cutting out the middleman and democratizing investment opportunities.
What does this mean for Subzero?
On the surface, we aim to provide the same benefits as a traditional venture capital company — Subzero will invest in early and exclusive opportunities that you wouldn’t normally have access to, seeking to outperform the market. Except under the decentralized model, the efforts will largely be focused on crypto opportunities, crowd-sourced by the token holders, completely transparent and anyone is welcome to participate in the ecosystem.
While there is little regulation in our teams jurisdiction/s currently, we expect this to change, so it is important to clarify that we operate without express guarantees of investment returns, performance or even work being performed. The long-term vision is for the protocol to develop free of centralized ownership or regulatory constraints, which in many cases restrict opportunities for investors. We aim to become truly decentralized and community-driven by our token holders. We expect our team members to still operate within an ethical framework, always providing disclosure according to their interest in the projects that we work with.
In future, any community member may become a team member through the value of their input. With that said, the current team will do what they can to keep this project going long-term. They believe there is a huge market-fit for this DVC model and they have strong belief in the potential value of decentralized technologies, especially in providing solutions to more traditional industries.
What are the benefits for holders?
We will aim to outperform traditional VC investment returns (which typically aim for 30–40 percent per year) with a hyper-aggressive growth strategy. If successful, this will ensure that our staking rewards rate can be sustained over time.
It’s important to note that our staking rewards are already lower than typical seigniorage protocols and therefore more sustainable, with only 25,000 shares emitted per year over a total span of 10 years and a max supply of 250,000. Of course, higher rewards are possible and will come from regulation of the supply through seigniorage with positive price performance (when SUB is above peg).
On top of staking rewards for holders, our partner projects may offer some portion of equity in their project, which will be either airdropped or held by the treasury. Treasury investments can be potentially sold for buybacks of the SUB token and to sustain ABZERO rewards, but it is our intention to focus on relatively long-term investments and build an asset-base.
As Subzero develops, we will invest in more-developed projects, but this would be dependent on us having more capital available. We expect this to occur over time, as investors become increasingly confident in our ability to find high-return projects.
How can Subzero benefit my project?
Subzero will not only provide financial investment, without the expectation of repayment, but also provide several other tangible benefits to our project partners. We have a team and community that can offer managerial expertise, perform in an advisory role, provide development advice or collaboration. We also have design capabilities, exclusive marketing channels and industry connections, offering visibility and awareness.
When we invest in projects, our community shares a common desire for success with you and Subzero should not be thought of as simply a lender.
The presence of Subzero as a partner and stakeholder also lends credibility because it means we have thoroughly investigated the project. We can provide a signature on multi-sig wallets or treasuries to increase the integrity and trustworthiness of the project. Going forward, we will also offer KYC and audit services, in some cases via partnership with other dedicated providers.
If you are a project team member, feel free to reach out to us to discuss mutually beneficial opportunities.
What are we looking for?
Ideally, we are looking for strong management teams that show dedication to their projects. We want to see capable and committed teams who are adaptable to change. Crypto is prone to short-term trends, but a good management team will have a long-term vision and can overcome adversity. This can be more important than the protocol itself. We are also looking for market-leading blockchain technologies and projects that are positioned for rapid growth.
Any good venture capitalist would want to see a realistic set of financial projections and requirements. Being crypto-focused, we are naturally looking for a high rate of return. The earlier the project, the higher the risk and therefore compensation required. However, it’s worth noting that this compensation can be distributed across a wide range of Subzero stakeholders and therefore brings value in itself, as we have regularly seen with crypto airdrops.
The team members’ commitment to the project through personal financial stakes is also key. We should be wary of investing money in any enterprise in which the principals are unwilling to invest their own.
Traditional venture capital firms typically aim to have a 4–7-year lifecycle per investment before exiting, often via an IPO. Our investment lifespan will typically be shorter, around 6–24 months. Where there is a vesting term, the security requirements will be higher and the tokenomics must be sustainable.
Let’s go
So that’s how Subzero aims to operate as both a cryptocurrency and a DVC organization in future. You may also want to check out our roadmap which includes many of the internally developed projects we are working on or the Discord which contains further detail on partner projects.
We look forward to you joining us on the journey. For more information on our tokenomics and our investments, check out the documents and join us on Discord.
Website: https://subzero.plus/
Twitter: https://twitter.com/subzeroplus
Telegram: https://t.me/subzeroplusofficial
Discord: https://discord.com/invite/3Ce4BY4Yqs
Nothing in this article should be considered as financial advice. Cryptocurrencies are extremely volatile and carry high levels of risk. Investment in any DeFi project should be considered as equal risk to gambling. Do not invest money you cannot afford to lose.
