Lattice Capital is excited to announce our investment into DIMO, a web-3 enabled crypto network that will power the world’s machine-based data economy. We believe that DIMO has the potential to change how data is collected, used, and most importantly monetized in the increasingly internet connected world. The DIMO network is focusing its initial go to market plan on the massive $10T mobility market with a particular emphasis on electric vehicles which is expected to balloon over the next 10 years as OEMs rush to electrify their fleets.
The DIMO vision will flip the script on device data monetization and will empower the individual to take control over how their data is utilized and monetized.
What is DIMO
DIMO is an open-source protocol leveraging the architecture of web-3 that will connect data producers and data consumers. Today in private beta, DIMO is providing an easy to use solution for electric vehicle owners to collect, use, and monetize the data their cars generate. Drawing inspiration from human powered 5G-network Helium, DIMO will rely on a cryptographic token to bootstrap initial growth and to govern the DIMO network with upgrades overtime. While DIMO will start with the narrow (but still large) focus of electric vehicles, the platform will provide the flexibility to expand into data from any device or service including, wearables, cell phones, environmental sensors, and more. DIMO supports 1,000 different vehicles and you can get today by pre-ordering a device for your vehicle (order here).
Lattice is excited to announce our investment into Lit Protocol, we believe Lit will be a key piece of the rapidly expanding infrastructure stack within Web3. The Lit Network provides web3 developers with a decentralized access control protocol for gating digital and real world experiences based on on-chain data including ownership of both fungible and non-fungible tokens.
What is Lit?
Lit (Lockable Interactive Token) Protocol is a decentralized access control network that provides infrastructure for granting permissions between blockchain users and the world they interact with. In order to understand Lit, one must understand Access control lists (ACL). In modern computer security, an access-control list (ACL) is a mechanism used to define who has access to your data and objects, as well as what level of access they have. An ACL specifies which users or system processes are granted access to objects and actions that users can take on specific data and objects within it. Lit acts a decentralized ACL which leverages on-chain data from user's wallets to grant access to certain content or software. The easiest way to think of Lit is middleware that enables gated experiences based on what's in a given users wallet.
Why does it matter?
According to Linda Xie, “a decentralized autonomous organization (DAO) is a group organized around a mission that coordinates through a shared set of rules enforced on a blockchain.” We strongly believe that DAOs will eventually change the way humans work. However, DAO’s face many challenges in their current form.
Specifically, there can be a high barrier to entry for new members to start contributing to DAO’s:
We're excited to announce that we've co-led a $2M round into xToken, alongside their existing investors. xToken is an on-chain asset management platform that offers passive and composable DEFi strategies. Their initial product focused on liquid staking derivatives of popular ERC20 tokens, but they've since expanded into Uniswap V3 LP strategies (and so much more!)
We believe that xToken is on the path to becoming a fully integrated DeFi Protocol that will allow people to leverage their assets in the most liquid and flexible way possible. I've known Michael, xToken's founder and Project Lead, for more than a year and a half and have been blown away by how much the project has grown since then. We're excited to get even more deeply involved in the community.
As DeFi has grown 100x in size over the last two years, it has also grown in complexity. Users can stake popular DeFi tokens like AAVE and KNC to help manage risk and govern those networks, but the staking process is not always straightforward. Users often to have manually claim (and re-stake) staking rewards, and staked tokens tend to be illiquid and not composable. Meanwhile, xToken's staking strategies like xAAVE and xKNC are set-and-forget, auto-compounding solutions that are liquid and composable.
Interest in Web3 has exploded over the past twelve months. NBA superstars are paying six-figures for NFT's and proudly displaying them. OpenSea is doing more volume than Etsy. The fastest growing game in the world runs on Ethereum. While this surge in interest has driven new users into the space, usage of crypto products still dwarfs that of their predecessors.
There are hundreds of Web2 apps and games with more than 10M monthly active users - Metamask is the only Web3 app at this scale. We believe that the nascency of Web3 growth strategies are the main reason that these apps have struggled to scale. Web2 companies have a decade of successful growth strategies to build off of and a rich ecosystem of platforms to leverage. Web3 projects are starting from scratch.
Web3 applications embrace a decentralized architecture, pseudonymity, and user-owned data. Web3's core tenets break every mainstream growth strategy. The leading Web2 consumer applications hit massive scale by leveraging centralized platforms like Facebook, bringing identity online to engender trust, and having massive proprietary datasets. Web3 applications have no app store, do not know who their users are, and have no method to communicate with them.
If Web3 is going to succeed in building an internet governed by open, community-controlled services, then entrepreneurs need new growth strategies. Web3 needs a new growth playbook.
Growth in Web3 is a challenge; Web3 has no app stores, no targeted Facebook ads, no email marketing, no re-marketing, no affiliate marketing...yeah, you get it. The tools relied upon by Silicon Valley growth marketers over the past decade have largely evaporated in our industry, and we've been left with only a couple arrows in the quiver. Beyond meme contests and an active Twitter account, Web3 teams have relied mainly on token incentives for early adopters. Using tokens as an incentive, while successful in some instances, is more recently being called into question as it has trained parasitic behavior as users rush into projects with liquidity to earn tokens only to dump them and when the incentives dry up, say goodbye to those users.