Currency instability undermines individuals’ ability to participate in the economy
Michel grew up in Venezuela–a place that experienced continuous and uninterrupted inflation throughout his lifetime, reaching the highest inflation rate in the world by 2014 and exceeding 1,000,000% by 2018.
In 2016, Michel caught wind of the opportunity to mine crypto in Venezuela. At the time, for roughly $600, Michel could buy a couple machines, set them up at a friends’ place, check on them occasionally, and profit. Machines, electricity and labor were cheap, and there was a significant amount of transactions with USD and BTC–underpinning Venezuela’s status (still today) as one of the biggest mining hubs in the world.
Many individuals in developing markets need dollars, and are obtaining them by holding stablecoins, which Michel describes as “a safer and more attractive way to save, rather than holding your local currency and see your savings get eradicated.” Michel sees these instances as indicative of “where the majority of crypto use cases come from.”
Down the line, Michel sees a world in which ultimately, even the dollar will have trouble retaining its global reserve status due to “spending and inflation going through the roof.” He believes that “eventually, you’ll see a world in which people will transact with digital currencies,” and so, has set out to create a protocol that will allow everyone to connect and transact with each other in a seamless way.
Founding C3 on the principles of interoperability, transparency and ease of use
After growing up in Venezuela, Michel moved to the US to study finance and mathematics, and soon after, started his career by providing services to hedge funds to integrate machine learning and analytics to improve their portfolio construction. He then moved to work full time in crypto and founded a fund focused on early stage investments in the space, and in 2018, met his co-founder Pablo Yabo at a Bitcoin conference. Pablo had been a “crypto native” since 2013 (pre-Ethereum days), and the two joined forces to start Rand Labs, a blockchain development lab building leading infrastructure in Algorand.
Through their work together building products on Algorand and as dApp power-users themselves, Michel and Pablo experienced a significant pain point around DeFi trading’s user experience, which they recognized as a limitation in reaching mainstream adoption. “We saw that you had to be a sophisticated enough user to feel comfortable lending your money in a certain pool, bridging your assets to another blockchain, or transferring your assets to a different platform. We had always expected that DeFi trading would eventually be no different than trading in Robinhood, but it still is not. Pablo and I realized that the technologies and infrastructure had finally advanced enough to build the type of user experience we would like.”
It was the combination of these experiences–Michel’s foundational understanding of traditional finance; his exposure to the promise and need for crypto, especially in the developing world; and his recognition of a gap in the marketplace–that lay the foundation for what would become C3.
C3 sets out to tackle the big challenge of breaking down walled gardens in DeFi trading. As a decentralized exchange that is accessible from multiple blockchains, Michel wants C3 to truly deliver on the values users care about: freedom and optionality around counterparty risk and how to custody assets, transparency regarding matching logic for trades, and interoperability and ease of use in participating in the economy.
Ironically, one of the primary challenges Michel has encountered in Web3 and wants to shake up, is tribalism at the expense of pragmatism. He believes many crypto enthusiasts are too passionate about evolving their own ecosystem, rather than focusing on what it will take to accelerate mainstream adoption, and believes multi-chain solutions like C3 will play a role in realizing that goal.
Andy Kangpan, Principal at Two Sigma Ventures who led our investment in C3, notes, “The on-chain economy is lathered in friction. Even for users who view themselves as crypto native, it is challenging to navigate this ecosystem. The C3 team has an extremely focused, pragmatic approach to breaking down barriers in the DeFi space, delivering a seamless user experience, and designing a venue that is as robust as centralized exchanges. This is incredibly exciting because their protocol would allow anyone with an internet connection to participate in truly accessible and robust financial markets.”
For builders in Web3
There is so much opportunity to create meaningful solutions in Web3. Michel encourages founders not to make unnecessary tradeoffs at the expense of the user experience by focusing too much on making their products as decentralized as possible, and underscores the importance of building towards interoperability and a better non-custodial experience.
He also points to opportunity areas for innovation related to user experience where many pain points lie today. Michel shares how he personally has to be very careful in prioritizing what to build first, or which problems to solve for their most high-priority audiences.
