Investing in POAP
Lisa Cuesta and I are proud to announce our investment in POAP to increase the depth of peoples engagement with our social surroundings under conditions of scale.
Describing POAP has levels; there’s the lowest level (NFTs for doing stuff), the highest level (accelerating human development), and everything in between. I like to think of POAP as a human categorization and coordination mechanism that can permeate our social fabric.
In this post I want to cover why I’m so excited about it as an investment, but for this to make sense, I very highly recommend reading the fundraising announcement before continuing. It’s one of those rare pieces of writing where each sentence is included with purpose, imbued with meaning. If you’re not familiar with POAP parts of the announcement may come across as fluff, but if you’re paying attention, you’ll quickly see the tactical outcomes the existence of POAP infers.
POAP was started in 2018 and officially launched at ETHDenver in 2019. In some ways I’ve been a community member since the very beginning, as I was one of the lead organizers of ETHDenver that year. Back then, POAP seemed like a toy, but as Paul Graham says…
However one thing I couldn’t get over was how much I loved my POAPs. I hated the thought of having gone to an event and missed collecting my POAP for it. It really did feel like a memory; one that I treasured, and evidently so did many other people.
With POAPs, there’s no incentive to spread yours out among many wallets and the POAP team has been fighting hard against POAP farmers so the number of wallets holding POAPs is probably the closest estimate to the number of users possible within the crypto ecosystem. By those metrics, POAP grew to almost 700k users and millions of POAPs issued, the vast majority of the growth coming in 2021.
The stunning bit is that the vast majority of this growth came through word of mouth and community interest, not active solicitation by POAP Inc. of partners. When I went to the US Open in 2021 I was shocked to see that they were distributing POAPs for attendees — the use case resonated broadly and was quickly being adopted by some of the largest and most well known organizations on the planet.
POAP has many tactical, measurable, Silicon Valley-friendly metrics and outcomes. They have a value based on the quality/rarity of the event, artist, number of attendees, and other factors. They can be used to determine true fans, grant special access, distribute discounts, create social graphs, organize new events, and so much more.
But importantly, POAP is fundamentally a human endeavor. It’s a labor of love that must be widely accepted, adopted, and treasured. If POAP is to be successful, it must be meaningful to the individual before it can become meaningful to communities and organizations.
This requires careful curation, attention to detail, a focus on community, and intentional scaling. This is why I’m so excited to back Patricio as not only a co-founder, but also in many ways a spiritual leader of the project that helps give POAP its soul. Patricio and the rest of the POAP team continuously exhibit the right ethos to scale a project as ambitious, and ultimately as impactful, as POAP.
My friend Sarah frequently talks to me about moats when investing. It’s not as applicable in crypto because we’re so intentional about lowering barriers to entry and open competition. However, POAP has in many ways the widest natural moat I’ve ever seen.
Shared memories that entwine the fabrics of our lives are naturally non-transferable. Once you have a POAP for an event or activity, it gets folded into your web3/online identity, and as you continue to gather POAPs and expand your identity, it becomes harder and harder to stop or switch. It’s hard for a competing protocol to come along because it will only be able to begin competing for memories from the moment of its inception (since backdating their own version of POAPs and airdropping them to existing users for past events won’t be meaningful to their recipients). Users will now have a choice — should they abandon their existing POAPs, online identity, and shared memories for this new (and hopefully improved) protocol? Maybe, but I doubt it. We have POAPs for the meaning, not because it’s the best and most innovative tech.
There’s ways to do it of course by bridging or importing, but given the nature of POAPs being a shared experience, my thesis is that it will be hard for efforts to get off the ground that fragment this experience. Instead, I expect most of the innovation to come from building on top of POAP to enable users, organizations, businesses, and institutions to interact with the protocol. This is made possible by POAP being a public good.
POAP is one of the most useful and monetizable projects in the world, but the only way it can succeed is by being meaningful to its community. Once you have meaning, at scale, you open the doors to community, identity, credentials, commerce, and many other avenues that are on the horizon. I am beyond thrilled to support the POAP team and community on this endeavor.