Silicon Valley has known for years that ownership is a keystone of building great products. In order to build the best products, startups need to attract the best talent, and to attract the best talent, offering equity in the form of stock options is a best practice to align employees with the company’s success. But today, only a small group of insiders — founders, investors, and employees — get to reap the rewards of ownership, while the broader community who are also instrumental to a company’s success are locked out of this opportunity for life-changing wealth creation. Just imagine: if every early Uber driver had received $5,000 of Uber stock when it was a seed-stage company, that equity would be worth $25 million by the time the company went public.

Given the overhead of legal contracts and legacy financial infrastructure, it has historically been infeasible to distribute ownership at the scale required to reward every user who participates in the value creation of today’s largest platforms. Crypto tokens are an innovation that enables the movement of value with the speed of information, akin to data packets. Tokens can unlock the vision of more meritocratic distribution of ownership and align incentives toward building networks that grow bigger, faster. We call this the ownership economy — products and services that are built, operated, and owned by their users — and it is unfolding even faster than we initially imagined when we started Variant.

We believe that ownership will be a keystone of all next-generation products and platforms. The first to realize this were the developers and technologists who contributed to the movement by building and operating the first multi-billion dollar internet scale networks: Bitcoin and Ethereum. Now, a new generation of entrepreneurs are rebuilding the internet with this more meritocratic and competitive model in mind. From developer-facing infrastructure to financial marketplaces, social media, gaming, digital art and collectibles, ownership has unlocked a new design space for scaling products faster than predecessors because users are aligned with their success. Some examples from our portfolio: Uniswap is a financial exchange, similar to Coinbase, where users who make the exchange liquid are rewarded with fees and given tokens conferring governance rights. Mirror is a publishing platform and toolkit for Web3 creators, where users — rather than the core team — decide how to grow the platform. Blitmap is one of the healthiest communities in Web3, whose users are anchored around ownership of NFTs created by artists and remixed by community members. And the list goes on.

The insight that next-generation networks would be built, operated and owned by their users is the reason why Variant was founded: to support and push forward the ownership economy. Beyond driving positive social outcomes in terms of how wealth is built and distributed, we believe that moving and distributing ownership at the speed of information is also the most optimal way to scale software services and communities. This is proven out by quantitative data: in April 2021, $122 billion in transactions took place on decentralized exchanges, up from less than $1 billion a year earlier. Ethereum settled more than $6 trillion in transactions in the past year despite being only 6 years old. Art Blocks, a curated digital art marketplace has seen billions of dollars in transaction volume grow alongside a fanatical community of collectors, including us.

Success for Variant is a world in which everyone becomes an owner of the products and services that they use. For this future to become reality, we need to continue to pull it forward. We believe it will take the support of a new kind of investor — one that is crypto-native but also has deep empathy and intuition for mainstream consumers. That is why we are thrilled to announce that Li Jin — our friend and a former colleague at Andreessen Horowitz — is merging her esteemed Atelier Ventures with Variant. The New York Times called Li the “It girl of venture capital,” but those that have worked with her know that she is an incredibly smart, thoughtful, and mission-driven investor. Li deeply believes in the values of the ownership economy, and her expertise in consumer and creator products is unparalleled in the crypto space.

As Li beautifully outlined in her blog today, crypto and the ownership economy are how we fully realize the vision of the passion economy that she laid out in 2019 with her seminal essay. The future of consumer technology is in crypto, and for it to fully blossom, we need investors who can help navigate the next wave of adoption from the early majority of internet users.

With that, we are pleased to announce a new $110 million first-check fund to continue investing in the ownership economy — from consumer platforms to gaming to infrastructure to DeFi. By design, we are sized for early-stage investing, where our expertise in startup building, protocol design, and consumer-focused go-to-market strategy can really move the needle for companies, networks, and DAOs.

Given our vision of user ownership, we also felt that it was imperative for Variant to embody and live our own thesis as a firm — to be owned by our users, the founders that we back. Therefore, we purposefully expanded Variant’s investor base to include over 100 of the brightest minds and builders in web3, crypto, and technology, including builders from Uniswap, Compound, Foundation, Zora, Yield Guild Games, Mirror, and more. This enables us to take a decentralized approach to scaling our operations. The Variant Community will take an active role in shaping the fund’s success and supporting projects in our portfolio. We aim to build a firm that adds value by turning our network into a product that founders can use and own.

If you believe in a more equitable internet and are building a crypto project in the ownership economy, we’d love to hear from you.