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

Still betting on tokens

Omar Kanji rejected the idea that tokens are done. He called the current period a time for reflection and for making sure onchain protocols become durable, self-sustaining businesses. Dragonfly looks at those protocols over a ten to fifteen year horizon, he said, and also runs a long-only token fund called MediStable that informs its liquid investment decisions.

Kanji's guess is that application tokens will end up looking a lot like equity instruments, and eventually like stocks. He called Blockworks' new disclosure filings a big step in the right direction because holders can now see entity structures and where revenue accrues.

Stablecoins break from price

Omar Kanji said stablecoin supply has grown from $130 billion two years ago to more than $300 billion today. He said the sector has become detached from price, with digital banking and payment services built on stablecoins adopted every day regardless of price moves.

Where the money goes

Dragonfly is looking at new DeFi protocols, insurance primitives, new blockchains and stablecoin issuers, Kanji said: "We look at everything." He said portfolio company RAIN is growing at levels not seen in crypto in a long time, and that more issuers are launching local stablecoins in foreign markets, which he tied to the rise of onchain FX.

He predicted that within twenty years, everything people use to access the financial world will be onchain and reachable through an internet connection. He said the firm's edge is domain expertise.

Advice for founders

Omar Kanji described early-stage investing as betting on people, and said investors can tell when a founder truly believes in the idea. He told founders to message investors on LinkedIn and Twitter, reach mutual contacts, and go to big events and the ones investors host.