Inside Dragonfly's $650M Fund IV — Stablecoins, Onchain FX, and the Next Decade

You're our third I think our third East Denver guest of the day. The sentiment every every kind of sentiment I've been getting is a little, like, it's it's okay. It's not as, like, hype as last year, but what what's what's been your experience on the ground there this week? I was so close to, like we had a thing with Coinbase potentially tonight to do some media there, and I was like, I Zach, I haven't even told you about this. I don't know if I wanna Yeah. But we I'm kind of happy we decided not to go.

I think doing this has been a huge a huge lift. But how's it been on the ground, Omar?

It's been good. I would say spirits are probably not as high as I've seen them in previous years, but generally, like, still quite positive. I think at this point, the people that are still here, like, genuinely believe in crypto, and that's like a great spot to be. And historically, I feel like over the years, you've just seen a range of different people come to this space, come to the conferences, and then, you know, any negative price action and you see a a big exodus.

And this year, it's kinda just like the people that have believed all along or are like newfound true believers. And they're building long term businesses and long term protocols, and they're working on partnerships. And it's like a very intentional time in Denver. A lot of people are here for very specific reasons. Right. And that's great to see.

It I mean, it's something that you see all the time in New York, but, it's nice to see it at a place like Denver, which has, like, oscillated in the past between euphoria and despair. And so so it's I I think it's, like, quite good relative to at least what I expected coming in.

So so diving into this a bit, would you say this is kind of representative of the moment Dragonfly is in? Because I think one of the key things when I was reading on some of this, you know, this fourth round fun, this shift away from token protocols into RWAs and kind of like you said, the the sector of crypto that in a way has decoupled from price action from maybe some of the euphoria because

these businesses are gonna be here to stay whether whether Bitcoin's up or down. How how do you feel about that? And maybe give the give the news as well before you miss it on the big the big week you guys have had. Yeah. Yeah. Been an awesome week for Dragonfly, I guess, first off. We raised 650,000,000

for a support fund. And so incredibly exciting time for the firm, and we're very lucky to be doing what we do. And I think maybe just diving into the questions. I would say like historically, even across the industry, there have been periods of washouts. And I think, you know, the common perception today is tokens are done. We certainly don't believe that.

We just think it's a time for, you know, reflection and making sure that the protocols that are being built on chain are being built durably and they turn into real self sustaining businesses. I think the days in the industry where token inflation was this thing that was just generally accepted and used and even with the aim of not necessarily creating an underlying business that could sustain itself. Those days are long gone.

And now it's just like, we need to build real things that provide real goods, real value, real services to real people. And that is a foundation is what you can use to build successful on chain business. And so we're still extremely bullish on that side of the industry. I think to the other part of your question, which is like stablecoin payments, RWAs, it's been awesome to see just like the continued traction. I think if you go back like two years, there's a 130,000,000 30,000,000,000 of stables outstanding.

And like, you know, today, it's a 300,000,000,000 plus asset class in the stablecoin space alone. And it's become detached from price at this point, which has been awesome to see. And in turn, the types of services that are being delivered on the back of stablecoins, whether that's digital banking products, whether that's payment services, those continue to get adopted day in, day out, irrespective of price movements.

And so we're quite bullish on that whole side of things, and we've continued to invest over the years in that theme and in that sector. And so there's like two sides to the industry, both of which we have deep conviction in. They just look slightly different at this point in time. Like, this stablecoin space has certainly found its footing in, like, what is the grounds for successful business. And there's a number of public companies that or there's a big public company that won, that IPO'd earlier in the year.

And and so it's been derisked, guess, from that standpoint. And in turn, there have been a lot more businesses being built in that vertical. But we continue to see so much growth across the world, across a range of different corridors. So it's really exciting in terms of the opportunity to fund the next generation of businesses being built there as well.

So when I wanna ask this question kinda going back to the token protocol. You know, we've seen projects like Avicii launch on on MetaDAO, and we've seen companies like Figure start to announce that they're gonna tokenize, you know, when they IPO. Do you think we'll see this shift more towards that route of tokenized equity and the Internet capital markets thesis?

Do you think we'll see protocols on the side of maybe, Athena and their governance token and those models evolving where it's not just pure equity, or are we gonna land somewhere in the middle?

Yeah. I think depending on who you ask, you'll get a different answer to this question. My my view certainly is that tokens, for the most part, application tokens, to be specific, are gonna look a lot like equity instruments in the traditional financial world, and they'll ultimately end up looking like stocks if I were to guess. And what that means is token holders will have all of the rights that equity holders have in the traditional world. And in turn, those businesses will be run off the base of their token.

The token will be the instrument that is used to issue new capital. It will be the instrument that accrues all the value over time. And, you know, we're starting to see some of this stuff. Like Blockers put out, some good disclosure filings yesterday, which is a really big step in the right direction, where token holders now can take a look at these filings and they can say, okay, this is the actual entity structure. This is where revenue accrues. This is the prior fundraising history. This is the team involved.

So And we're starting to get to this point where these filings, you know, still a long way to go from traditional equity filings, but they're getting closer and closer. And I think it's like a great spot for the industry. It's with that type of disclosure and that type of clarity, people can make real long term investment decisions into those protocols and those businesses and, like, put real meaningful money to work and help those businesses grow and scale over time.

And so I'm incredibly excited about that because, like, that is the foundation for the future. And it feels really, really good to see that despite, like, what is going on in this space right now. Omar, is this the the area of Blockworks you're talking about, the token transparency stuff? Yeah. If you, like, look into one of the filings, like, download, you'd be able to see, like, some of the stuff that they that they disclose.

Really cool. And so how how are you guys, you know, it's probably great marketing for them that we're asking you this question. But, like, how are you how are you using a token transparency framework like this? What kind of insights does it provide you, as an investor? How are you leaning on this? I don't know if you saw maybe I'll I'll try to pull this up. The, setting hilarious ad that they also came out with, I think, yesterday with their Solana, you know, the book the the barista book ad. Did you see that?

Yeah. Yeah.

How are you using this type of information? Is it more just, like, following the markets or specific investments?

Yeah. I would say, like, for us, we're lucky. We we start out in the private markets, and so we have the level of transparency and disclosure when we initially make our investments. I think over time, we have we have a long only token fund called MediStable, and that informs investment decisions on the liquid side. And so using some of these filings just to get a baseline level of clarity and transparency into the project before making a decision is like a really good starting point.

That helps not only us, but also helps everyday retail investors. And you know, when we go to talk to the teams, you can obviously find out a lot of this information through those conversations. But just having that in the public domain is such a good move in the right direction for the space overall. And so I think from our day to day, it doesn't change things too much, but I think just access to information is so incredibly important in a space where people are making financial decisions.

And so it it really helps just overall, I guess, is the way I would articulate it.

And so how does your outlook in in going into 2026, you know, investing in in companies like Athena in the past or Monad or Mega ETH? You know, where are you looking towards now? You know, we hear I think OnchainFX has been a huge a huge narrative that keeps coming up, stable coin cards. Help help paint the picture of maybe what the rest of the year in 2027 might look like.

Yeah. I think on, like, the on chain maybe we can start on the on chain stuff, and then we can go to the off chain stuff. But, on the on chain stuff, I would say, like, you know, Monad, Mega ETH, Athena, those are big Dragonfly investments, and we're very fortunate to be investors in those companies and those protocols. I think it's funny, a lot of people expect those businesses to be smashing successes on day one. Like the reality of the situation is they are start ups and they are building for the long term.

And when we look at them, we look at them over a ten year, fifteen year duration. And this is just the very beginning of their story. And all great success takes time. And building an on chain business, starting with a protocol, is like first the protocol has to be built, then everything on top of it has to happen. And so we'd take such a long term view to this stuff, and we'd almost ignore the price action in the short term. Sure. It has some implications, but it really doesn't matter to us.

We wanna do what we can to help and support those teams and help them grow their businesses over time so that they can realize the visions that they set out to fulfill when they founded those companies. And so I think nothing really changes there. Like, we're still looking at all kinds of stuff on in the on chain world from new d five protocols to new borderland primitives to everything in between. We're looking at new blockchains. We we look at everything.

And at the end of the day, our job is to put money on behalf of our LPs into the projects that are gonna move this space in the industry forward. And so we're on the lookout for that every day. We just have a very long term view. And so that's how we approach that side of things. And then on the payment stablecoin RWA, like off chain version of the world. It's funny to call it off chain because a lot of those businesses are on chain, especially the stablecoin component.

But, you know, I think we see so much incredible growth in a number of different corridors globally. And for us, our job is to find the best companies and entrepreneurs. And we've done that, you know, historically, and we continue to do that to this day. Like some of these companies like RAIN, who are just like growing like weeds almost. And like it it levels out that we haven't seen in the crypto space in a long time.

Our job is to also help those companies and help them grow their businesses through business development partnerships, through, you know, relationships with our portfolios and people we know in the industry and and the space at large. And so, you know, I think when it comes to that side of things, it's just keeping our eyes open and looking at everything.

And so you'll I I mean, I guess, maybe to put some tangible stuff around this, we're starting to see a lot more stablecoin issuers in foreign markets that are launching local stablecoins, to your point about, on chain FX. And for that to be like a real thing, you need to have underlying liquidity, each of the individual stables and and deep markets for for for each of those. And so we're taking long hard looks at that. We're looking at different neo banking products across the world.

We're looking at a number of different fintechs that are adopting crypto into their businesses. On the RWA side, there's all kinds of different asset issuers. There's all kinds of new borrow lend primitives. There's all kinds of new exchange primitives from, you know, perpetuals for specific types of RWAs.

We're we're looking globally with a very broad aperture as to like what people want, what products are gonna be successful, what teams are gonna build the businesses of the future and finding ways to put money into those businesses and helping those entrepreneurs.

What gets you really excited?

Yeah. I my my crypto story started when I worked abroad in Central Asia. And I think the big thing for me has always been democratizing financial services. I mean, sounds like broad nebulous and a bit altruistic, but I really think, like I live in The US. I'm Canadian, and, like, Canada and The US combined are roughly 400,000,000 people. The world is 8,000,000,000 people.

You know, there's, like, 7,600,000,000 people, you know, if you just, like, use some rough math that don't have access to the same types of financial services that we do in Canada and The US. And I think being able to access anything financial on the Internet, for instance, just being able to store value online, and then being able to move that value without anyone's permission, without any censorship resistance, and then being able to access all kinds of financial services.

That's like the end goal, and that's what gets me fired up. And so being able to fund all of these things that are like the baseline primitives for that future is like extraordinarily exciting. And if you just, like, fast forward twenty years, it's, like, inevitable that everything that we want to access the financial world will be on chain and will be accessible through an Internet connection. And that's super exciting to me.

And so it's really fun just to make investments in the companies that are building towards that future. It's just a matter of time, and and, you know, it's finding the right people that are that are gonna accelerate that version of the of the world. And so, that's what gets me excited.

That's awesome. You know, I think about one project that just came to mind was was ONRI. You know, it's kinda one of those on Solana where I think even six, twelve months ago, probably not that many people heard of, and it's just you've we've you've seen that meteoric growth in in really, this RWA sector that it's not one that's the first thing that comes to mind, you know, insurance premiums.

But it's also because I think for most consumers, it's a financial product that I I would have never thought I wanted access to until I start seeing the yield. And it's like, what? How many more of those products are out there?

Totally. I mean, like, yeah, Henri, like, just I mean, there have been a bunch of shots on goal with insurance and crypto, and the Henri is, like, you know, going towards the next version of that. And I think it's incredibly exciting. Like, you are seeing the baseline for these future primitives that everyone will have access to in on chain environments, and there's gonna be lots of different attempts to get there. But, it is really, really exciting to see these things being built.

And in a market where, you know, sentiment's probably at some of the lowest I've seen in a long time. But to your point, it's like it's it's exciting to watch things being built in real time that give people access to products that they never would have had access to.

Omar, question for you. We're gonna be we're gonna be talking to a lot of investors on this show and a from a lot of different VCs around the space. And, I'm curious when you guys think of yourselves Dragonfly, what are some, like, defining characteristics about the firm as you've been been at it that you find are really unique about Dragonfly specifically and maybe how you guys work with founders or the the approach that you like to take?

You've you've talked about thinking very long term and who you work with and how you measure success. Like, what are some of those other things that you think is really uniquely special about Dragonfly as a as a firm?

Yeah. I would say, hey. When you look at the firm from Boda, Steve, Tom, Rob, and everyone on the investing team and across the organization more broadly, everyone's in the arena, I would say. And like we live and breathe this space. And I think it's just tangible if you go look at, you know, Twitter or the podcast world or any anything that comes out of Dragonfly. We are certainly here and we love the space and we are deep in the weeds and we are down to participate in any conversation.

And I think what gives us the clarity and conviction to do that is we spend a lot of time just doing the work on the space. And we are in the sausage. And I think when I step back, what really sets Dragonfly apart is domain expertise. And we really, really do love it. And because we love it so much, we can think about it in so many different dimensions.

And then when you look at the composition of the firm, there's a lot of different expertise that comes from either working at protocols or working in traditional finance or seeing, like, the earliest innings of venture capital more broadly in technology. And when you bring all of those together, I think what Dragonfly has is an amalgamation of, like, great talent that can work with entrepreneurs no matter where they live in this industry and truly help them succeed.

And so I think that's probably how I think about our firm in, like, this competitive landscape. There's a number of very good investors that we compete with. But I think we we do the work day in, day out to set ourselves apart, and I think it's reflected in the in the way we all conduct ourselves and and in the investments that we've made. And so, you know, that that's what just what we do. Yeah. I was having a conversation recently. I won't I won't name who it was, but it was a portfolio founder under Dragonfly.

And he was,

mentioning just why he values Dragonfly and what he has really enjoyed about working with with Rob and team.

And, the feedback that he shared was, actually around how challenging and how much he respects the kind of feedback that Rob specifically would be giving at certain times in the journey and, like, how much he respects the the the hands on nature of, like, we actually really trust the the investors at Dragonfly because you are in the game and because you are, you know, in the sausage, as you said, you actually I think you have a lot of, like, founders who are building and looking for guidance and looking for partnership.

I think that that really means a lot. And when founders are trying to think about who they wanna strategically partner with in that way, like, the feedback that I've heard on the ground from the portfolio companies, like, totally off the record seems to really prove that. So just it it is a big testament to you guys.

I think one of the first ever things we even did as a business was throw one of Borderless's we we go through, like, a happy hour in New York with Borderless and Privy and, gosh, a handful of other companies at that time. And then Dragonfly was, you know, willing to get behind it and split the bill. And, like, you guys are just in the weeds. Like, you're just everywhere. Yeah. On the on the media side, in person. So it's cool to see people live and breathe this space, like you said.

And you can just tell that you really you genuinely like it. I don't think Rob would be I think I'm probably I follow what he's put out most on x and just a lot of the thought leadership he has. But you can just tell that you get to work on stuff you're fascinated by, and some of the perspectives that he brings to the table are just really, really

important. I'd love to see more of that from you, Omar. We can we can I can be a part of that? Just let us know how we can help. Okay. Well, no. Thank you. Thank you. Yeah. I mean, that that is a that is something we hear often across the portfolio. And Rob's obviously excellent along with everyone on the team.

And I think, you know, there's some ancillary stuff that probably doesn't get enough credit from our portfolio support to recruiting, and we truly have world class talent that helps across a number of domains, like, with the businesses that we fund and invest in and work with. And and so I think top to bottom of the firm has really, you know, been in the weeds at every level, and I think that's what's really helped over the years.

I got one question maybe to maybe to wrap up. Hey, man. Any any words for maybe a founder going through right now? They're looking at their pre seed. They're looking at their seed round. Any words of advice, encouragement, how they should go you know, fundraising tips,

and Don't do that. Things that you shouldn't do.

I think the the thing that's doesn't come across enough is, like, investors can smell conviction. Mhmm. And you have to truly believe in what you're doing. And it the second you truly do believe in it, it comes across effortlessly. And that is like the framework or the underlying infrastructure for the investment. And at the end of the day, like early stage investing is us betting on people. And like that's really what it is. It's somebody with an idea.

And I think one of the things I've just seen over and over and over again is the people that are the most convicted tend to build the greatest things. And it can be the most non consensus idea, but if you have conviction, if you have conviction for the right reasons and you can explain it, that transcends the conversation and evolves into the business. And, and so I'd say just like have deep belief is probably my, like, one piece of advice.

It's like obviously a tough market, but there are plenty of pools of capital out there that are willing to fund things, especially when the entrepreneur has deep conviction. And so, I would say just believe in something, to use the Twitter term. And, and and, you know, the the rest will certainly follow. Like, crypto is one of those these incredible places where if you build something people want, they will use it instantly. And the feedback is is real time in a way that not many other industries are.

And so, I would say just, like, keep fighting, keep believing, keep pushing. Don't hesitate to reach out to people. And, there's lots of different ways to get in touch. And I think maybe just to go off a little bit on a tangent, but, one of the things people struggle with is getting in touch with investors. I think there is no it's not that hard if you, like, just pull every string in the closet. And so, like, message people on LinkedIn, message people on Twitter, message mutuals, show up at their office.

And maybe maybe don't do that, but, you know, go to big events, go to events that they're hosting, and, like, you can find your way into the right rooms and and and, like, the rest will follow.

I also think sharing your perspective has been really big too. Like, we've we've seen founders who are early or maybe in the fundraising journey just to just to throw this on the table too. Like, showing, not telling what you believe on x or LinkedIn or whatever using your own media as a tool is a really great way to get distribution for your own brand, but also awareness. Like, I think there's a lot of power and influence if you can actually, as a founder, stand by or an investor.

Like, we talked about how Rob does this. Like, I think a lot of the brand and association of of Dragonfly comes from the owned media that people at the firm are are building. So that's always something that we like to throw in there too. It's just Oh, totally.

Real Yeah. Think is real. You go create something. Yeah. No. It's a it's a really good point, and I think people are sometimes scared to share ideas. But, you know, in the investing business, everything like, the ideas are commodities for the most part. The execution is is where the magic lies. And so, like, Twitter and LinkedIn are such fantastic places to share those ideas and explain why you're thinking what you're thinking. And everyone pays attention to both those channels.

And so they're great spots to your point of being able to show off what you know and solicit funding a lot of the time. And a lot of deals start on Twitter and LinkedIn and end with the term sheet.

Hey. I saw your tweet. Let's let's talk like that. Like, that is the much that. That's probably, like, 75% of our business at this at the at this point in the past year has been like, hey. I saw this. Let's do this. Totally.

Totally. No. It happens all the time.

Awesome. Well, thanks for coming on, Omar. I think we're going to wrap up. I think three and a half hours, we we did it. Thank you for, like I said, being flexible and the grace of coming on after Tuesday.

Hope to have you on in the future, Omar. Glad we got it. Of course. Good. Thank you guys for having me, and pre we appreciate it.