Balaji Srinivasan: The genius investor with the most moves in the cryptocurrency field

Author: Runsheng, ChainCatcher

If you haven't heard of Balaji Srinivasan, you have probably used the term "BUIDL" to express your aspirations and support for the crypto world. In fact, this buzzword originated from Srinivasan and has since spread widely, becoming a well-known industry term. Srinivasan's more recognized title is former general partner at a16z and the first Chief Technology Officer of Coinbase. Additionally, he frequently discusses crypto issues with Ethereum founder Vitalik and has been named one of the most influential figures in the crypto industry by several media outlets.

At the same time, Srinivasan can be considered one of the most active angel investors in the crypto industry. According to the crypto data platform Rootdata, as of the end of 2022, Srinivasan had invested in 85 projects in the crypto field, participating in a total of 86 rounds, ranking first among investors. Most of his investments are in high-quality early-stage crypto projects such as Opensea, Avalanche, Dapper Labs, NEAR Protocol, Celestia, and Farcaster.

So, who exactly is Balaji Srinivasan? What is his legendary background? What are his core thoughts and contributions to the crypto industry? With these questions in mind, this article attempts to provide a preliminary explanation based on publicly available information.

1. Inspirational Indian-American Immigrant

Public records show that Srinivasan was born in May 1980 in Long Island, New York, to immigrant parents from Chennai, India. From 1997 to 2006, Srinivasan earned his bachelor's, master's, and doctoral degrees in electrical engineering from Stanford University, during which he also obtained a master's degree in chemical engineering. After completing his PhD, Srinivasan stayed at Stanford to teach computer science and other courses until 2018.

It can be said that until he graduated with his PhD and began teaching in 2006, Srinivasan walked a challenging path of upward mobility through education as a new immigrant. As he revealed during his appearance on the Reason podcast in 2018, one of the people who influenced him the most was the Indian mathematician Srinivasa Ramanujan, who, despite coming from a poor family in India, became a renowned mathematician at Cambridge University due to his pure talent.

However, Srinivasan's main interest was not in teaching and research within the ivory tower. He firmly believes that technology can improve human welfare and chose to establish tech companies to practice this philosophy, ultimately achieving great success. In 2007, while in a Stanford dormitory, Srinivasan co-founded the genetic testing company Counsyl with his friend Ramji Srinivasan. Counsyl aimed to improve the identification and treatment of genetic diseases by conducting preconception screenings for couples planning to conceive to predict and avoid a range of hereditary disease risks.

In media interviews, Srinivasan expressed pride in the value of Counsyl and viewed himself as a social entrepreneur dedicated to family pregnancy testing. Unlike commercial entrepreneurs who focus on profit, social entrepreneurs typically place greater emphasis on social responsibility. His ambition to improve human society may explain a series of actions he took afterward. In 2017, former U.S. President Trump considered Srinivasan as one of the candidates for the head of the U.S. Food and Drug Administration (FDA).

Counsyl was just the first company Srinivasan founded, but it made a significant impact in Silicon Valley, and the returns were substantial, with Myriad Genetics acquiring the company for $375 million in 2018.

2. Serial Entrepreneur in the Crypto Field

Srinivasan's engagement with the crypto field began with Bitcoin, and he was an early participant in creating a Bitcoin interest group at Stanford University and teaching blockchain courses. Since then, the Stanford community has maintained a strong enthusiasm for discussing the crypto industry and has produced a large number of talents for the sector.

In 2013, Srinivasan co-founded the Bitcoin mining company 21e6 (later renamed 21Inc) in Silicon Valley, which received investment from a16z at its inception. Srinivasan aimed to integrate blockchain into existing PCs and other smart devices, even as part of the future Internet of Things (IoT). Later, 21Inc transformed into Earn.com. Earn.com was a paid information company where users could log their information on the website, and others could pay to access that information and contact them. Users could earn digital currency by forwarding emails or completing tasks.

At the end of 2013, the same year Srinivasan founded 21Inc, he joined a16z as the company's eighth general partner and the youngest general partner. According to Techcrunch, it took a16z six months to recruit Srinivasan.

In April 2018, Coinbase acquired Earn.com for $100 million and transformed it into Coinbase Earn, with Srinivasan becoming the first Chief Technology Officer of Coinbase. Rumors suggested that Coinbase's acquisition was primarily aimed at bringing Srinivasan on board.

However, Srinivasan left Coinbase in May 2019, just a year after joining. After that, he became more of an independent investor in entrepreneurial projects within the crypto industry.

3. Srinivasan's Investment Logic and Philosophy

Starting in 2019, Srinivasan became one of the most active angel investors in crypto, participating in early-stage investments in star projects such as the NFT marketplace Opensea, the public chains Avalanche and NEAR Protocol.

According to the crypto data platform Rootdata, as of the end of 2022, Srinivasan had invested in 85 projects in the crypto field. In 2022 alone, Srinivasan invested in 49 crypto projects, five of which raised over $20 million, including the modular blockchain Celestia ($50 million), the Web3 data index Nxyz ($40 million), the decentralized social platform Farcaster ($30 million), and the decentralized trading platform Hashflow ($26 million).

ChainCatcher's analysis through the Rootdata platform shows that Srinivasan primarily invests in infrastructure, tools & information services, DeFi, DAO, and DeSoc sectors. Specifically, he has invested in star projects such as Avalanche, Celestia, NEAR, Aleo, Arcana, and AltLayer in Layer1 and Layer2, as well as DeFi projects like lending protocols Solend and Sovryn, decentralized trading platform Hashflow, and crypto broker Rain. Additionally, Srinivasan is an early investor in Bitcoin and Ethereum.

Source: Crypto data platform Rootdata

Since the birth of Bitcoin, Srinivasan has accurately captured and invested in many hot opportunities in the crypto industry. Due to the limited disclosure of his personal investment information, ChainCatcher has not yet been able to determine his specific investment returns. However, as a well-known angel investor in Silicon Valley, Srinivasan's reputation clearly does not rely solely on investment returns. Many Silicon Valley insiders familiar with Srinivasan publicly praise his active thinking, noting that he generates new ideas every minute. It is precisely due to Srinivasan's profound reflections on crypto and human society, which differ from purely profit-driven motives, that he stands out.

Through his investment behavior, we can roughly outline Srinivasan's investment preferences, which include: Indian crypto startup projects, decentralized social media, and network state/city practice projects.

Balaji Srinivasan

1. Indian Crypto Startup Projects

Srinivasan has focused on the relationship between India and crypto, as well as the immense potential of India in the crypto field, in a series of articles. On his Twitter, he has consistently commented on and promoted India's political status, diplomatic relations, and economic prospects, while also criticizing the Indian government's crypto ban policy. It is reported that the Indian government imposes a high tax of 30% on all cryptocurrency trading profits and plans to prioritize crypto regulation during its G20 presidency.

Srinivasan believes that India's crypto ban could cost the country trillions of dollars in potential profits. Based on this, he is "moderately optimistic about India and extremely optimistic about Indians." Srinivasan has a special preference for Indian-founded teams; according to incomplete statistics from ChainCatcher, Srinivasan has invested in 12 Indian crypto projects (with at least one Indian co-founder), including the permanent file storage protocol Lighthouse.Storage, Web3 privacy infrastructure Socket, DAO management platform Samudai, DeFi lending protocol Timeswap, DAO structure optimization tool DAOLens, DeFi protocol MoHash, gaming infrastructure protocol Lysto, Web3 data index Nxyz, new public chain Shardeum, Web3 privacy infrastructure Arcana, Web3 communication protocol Push Protocol, and decentralized social graph Farcaster.

Interestingly, as a fellow Indian angel investor, Srinivasan often co-invests in Indian crypto startups with Sandeep Nailwal, Jaynti Kanani, and Gokul Rajaram. According to statistics from the crypto data platform Rootdata, among the top 10 angel investors in crypto, four are of Indian descent. In addition to Srinivasan ranking first, Sandeep Nailwal is second, Jaynti Kanani is fifth, and Gokul Rajaram is seventh, highlighting the unique influence of Indian individuals in the crypto industry, distinct from the Indian government's stance.

2. Decentralized Social Media

In July 2020, in light of frequent hacking incidents on Twitter and issues related to identity verification and distribution, Srinivasan publicly called for internet users to gradually exit Twitter and establish decentralized media. To this end, he published an article titled "How to Gradually Exit Twitter" on his personal website, suggesting that users purchase domain names and start their own newsletters, using decentralized tools to build their personal social networks.

Srinivasan's interest in social networks dates back even further. In 2017, he renamed 21 Inc to Earn.com, calling it "the first commercial social network." Reportedly, users could simply set up a verified public profile, and senders could message them through that profile and earn Bitcoin by replying.

Srinivasan's investments in decentralized social projects include: decentralized social graph Farcaster, Web3 content publishing platform Blogchain, Web3 content platform Mash, social token infrastructure for the creator economy Roll, social Q&A application Mem Protocol, NFT social platform Showtime, Web3 communication protocol XMTP, and more than a dozen other projects.

However, Srinivasan also recognizes that due to Twitter's current convenient user experience, Twitter will continue to be an important battleground on the internet for quite some time. Exiting Twitter and establishing decentralized media will be a long-term project, and success is not guaranteed. Even now, Srinivasan remains one of Twitter's most active users, with 740,000 followers.

This is the awkward issue facing decentralized social media: although new projects are emerging rapidly, establishing entirely new Web3 social networks based on open social graphs, NFTs, or token economic models, this sector is still in its early stages, and the direction remains somewhat unclear.

3. Network State/City Practice Projects

In July 2022, Srinivasan published the book "The Network State," vigorously promoting the concept of "network states" and proposing the establishment of decentralized digital communities to concentrate resources for building new autonomous cities and nations. In Srinivasan's vision, a network state is a highly cohesive online community capable of collective action, which can crowdfund globally and ultimately gain diplomatic recognition from existing nations.

Specifically, this network state is a group from different countries that will be built using blockchain technology, with the common goal of utilizing cryptocurrency. Srinivasan believes that with the help of oracle networks and Ethereum Name Service (ENS), reliable mechanisms can be established to prove its population and off-chain territory to gain diplomatic recognition.

Guided by this philosophy, Srinivasan has invested in crypto city communities such as Praxis, emerging network city projects like Cabin, and community-as-a-service companies like Afropolitan in Africa. In addition to these three crypto projects, Srinivasan has also invested in libertarian Patri Friedman’s initiative to establish autonomous "charter cities" in developing countries.

For example, Afropolitan aligns closely with the social and political ideals of the "network state" concept. The project's vision is to create a network state that provides the best opportunities in art, finance, technology, health, energy, sports, and media for local residents and expatriates, enabling all Africans to live prosperous lives.

In fact, Srinivasan has been contemplating the idea of network states for a long time. As early as 2013, he delivered a talk titled "Silicon Valley's Ultimate Exit" at Y Combinator's Startup School and published an article in Wired titled "Software Is Reorganizing the World," advocating for the digital exit of the tech industry from the U.S. and its relocation abroad. The network state is the product of his systematic thinking over the past decade.

Srinivasan is passionate about political topics and has long contributed to American political journals. After establishing a digital emerging worldview, he is filled with anticipation about the potential of blockchain technology to realize his ideals for online communities. The future of network states remains uncertain, but it is believed that Srinivasan will continue to increase his investment efforts in this area.

4. Conclusion

Coming from an Indian immigrant family, Srinivasan achieved personal success by studying at the world-renowned Stanford University and later teaching there. He founded several tech companies like Counsyl in Silicon Valley and seized the crypto wave to join industry leaders like a16z and Coinbase, ultimately practicing his social and political ideals through personal investments. Balaji Srinivasan's life experience is indeed rich.

At the same time, there are many labels and controversies surrounding Srinivasan. He is seen by others as a crypto evangelist, serial entrepreneur, knowledgeable scholar, and genius investor, while also frequently criticizing the tech industry and media, continuously expressing strong political views. Srinivasan positions himself as a pragmatist and technical expert, rejecting any type of political or ideological labels.

Srinivasan firmly believes that technology can improve human welfare. Perhaps what makes Srinivasan special is his grand social ideals; his technical background, entrepreneurial experience, and investment expertise all serve his vision of personal rights and a free society, which is his true path.

Related Links:

Balaji Srinivasan's personal website: https://balajis.com/

Network State website: https://thenetworkstate.com/

Rootdata investor ranking: https://www.rootdata.com/Investors