Framework is, at its core, a technology company. We build products and services to support open blockchain networks. To do so, we marry a combination of investment strategies with a team of technologists and researchers to find, support and grow the best blockchain networks and companies. In most cases, we buy a proportion of the network’s tokens, help facilitate initial validation or staking operations, work with the community to develop tools and services, and govern the protocol on an ongoing basis. We approach these opportunities from an entrepreneurial perspective because at our core, we are entrepreneurs ourselves. We take a build-first mentality, evaluating how much alpha can be generated from our support and development. Our experience suggests this approach to ecosystem development presents an opportunity that’s unique to the blockchain industry, given the open nature of the technology. What this means operationally for Framework is a combination of an investment firm with a research & development company—a model that doesn’t easily map to existing investment firm or technology company archetypes. Our investment strategy is to take a low volume, high conviction approach to the networks that we partner with. The areas that we believe are most exciting are web 3.0 development, decentralized finance, token-based games & decentralized media. Some of these areas overlap. We believe blockchain technology and the decentralized web represent the next major paradigm of computational technology. Unlike any capital asset class we’ve seen before, blockchain-based, cryptographic digital assets are unique, both individually and collectively as an asset class, and as such the pre-existing models for evaluation don’t fit. Additionally, the networks and companies within this emerging industry require new models for support and growth, which is where Framework comes in. Said simply: we are a team of technologists, researchers and investors who buy assets of, who build for, and who participate in open crypto networks. In the computer industry, there is a clear lifecycle of infrastructure development leading to an eventual realization of new applications for new technologies: In the 1960s mainframe computers put a man on the moon. In the 1970s and 1980s, the PC enhanced the professional output of every knowledge worker in the world. In the 1990s client/server architectures enabled the internet to flourish. In the 2000s cloud computing changed countless types of business software into a SaaS model. In the 2010s mobile computing fundamentally changed the way we communicate, shop, travel, and dine. Blockchain is the next, new computer architecture in this evolution. While many have ideas for the potential applications of blockchain technology, history tells us we have no idea who or what the real winners will be. Our core thesis is that where the internet democratized content and information, blockchains will democratize value and trust. As this technology continues to succeed we expect to see an explosion of innovative products and new business models in areas like financial services, marketplaces, insurance, games, media and entertainment. While there are many similarities between blockchain industry and internet 1.0/2.0 industries, there are fundamental differences between them. These nuances will dictate how value will be created, who will capture this value, and what strategy is optimal to build or invest in the space. We believe there are three main distinctions to be made: Value Creation: Companies vs. Open Networks Companies: The internet industry was previously fueled by companies building closed products and services on top of free, open source protocols. Open Networks: The blockchain industry is building open protocols that underlie the products built on top of them. Value Capture: Equity vs. Tokens Equity: Companies (Google, Amazon, Facebook) captured value during the internet revolution by controlling and containing the data originating from their platforms Tokens: With data monopolies non-existent, blockchains use network tokens as an incentive instrument that captures value for the open network. Valuation: Cash Flow vs. Network Valuation Cash Flow: Internet companies are valued based on revenue and profit. Blockchain companies don’t have revenue or profit, they are valued based on use of their network. Network Valuation: While some have proposed equations for valuation of protocol tokens, each token is unique and needs to have specific analysis done to evaluate it.