DeFi Visions: Dusan Kovacic

In DeFi Visions, a series of video interviews, the 1inch Network talks to the most prominent people in the DeFi space. This post offers key takeaways from a recent interview with Dusan Kovacic, CIO at Rockaway Blockchain Fund.

Rockaway Blockchain Fund is a crypto-focused venture capital firm investing globally in exceptional Web3 projects. Since 2017, it has invested in over 25 funds and 35 projects operating in the DeFi space.

The growth of the crypto market has increased investment in the sector over the last few years. Dusan is thrilled to share the company’s current success: “Our fund manages around $300 bln of assets. Now we have even more possibilities to support founders and help them go global.”

According to Dusan, certain innovative DeFi areas are particularly attractive for early-stage VC funds. Specifically, he says he is excited about NFTs. “[But] it is important to understand the real evaluation of non-fungible tokens, maybe advanced ML methods could handle this matter,” he adds.

Speaking of other potentially attractive DeFi areas, he mentions insurance companies, derivatives and infrastructure, where, in his opinion, “there is still a lot to improve on the layers and bridges level.”

Meanwhile, as investors are getting impacted by a bear market, Dusan says the amount of venture capital going into early-stage projects has decreased dramatically over the past two months.

“It all started with the Terra crash when multiple of most recognized venture funds were hit,” he explains. But he highlights the slowdown’s silver lining: it offers more time “to build relationships with the team and to develop an investment strategy.”

Speaking of BTC, Dusan says there are no reasons for its transformation into a widespread means of payment. “Most holders just want to hold BTC, and it’s not going to change. I can only see its value proposition as a store of value,” he elaborates.

As for stablecoins, Dusan says he believes in their stability under certain conditions. “Everything depends on the design, trust in the issuer, issue traffic, collateral and the ability to maintain their reserves,” he comments.

Dusan says that algorithmic stablecoins can still be used, as long as a system of checks and balances is created. “The regulation must prevent instant liquidity outflows from the ecosystem, as happened with Terra,” he offers.

Following up on regulations, Dusan adds: “Retail needs to be protected from losing money and money laundering. Regulation focusing on these two aspects rather than taking more control is the way how it should be done.”

Commenting on blockchain interoperability, Dusan compares the situation to that of six years ago, when the market was very fragmented. He says that the current general-purpose cross-chain solutions, such as LayerZero or Axelar, are now able to consolidate the market. “And the market decides which trade is better in terms of performance, speed and security,” he adds.

Addressing the subject of mass adoption, Dusan assumes it can be viable under the condition of equal speed in the crypto space and real world, where adoption is slowed down by regulation. He brings up the example of buying and selling real estate that “could be performed much faster and easier in a smart contract.”

“That’s all about the ability of regulators and government bodies to accommodate crypto technologies and allow us to take crypto to the mainstream,” he adds.

Anonymity has recently emerged as a hot topic within the crypto space, and Dusan suggests that it is going to be even more heavily targeted. “Eventually, all such mixers like Tornado Cash will be outlawed and the fund that will be deposited into them will not be accepted,” he elaborates.

Overall, Dusan says he is very enthusiastic about Web3 changing almost everything, from finance to music and intellectual properties in universes.

“Web3 will disrupt all these verticals, which is pretty much exciting,” he concludes.

Watch the full interview with Dusan Kovacic on the 1inch Network’s YouTube channel.