The hype's dead. What's next for web3 startups?
Bookingbug's co-founder wants to build a safer web3 with Fidesium
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With so much attention on A.I. these days, what becomes of that once much-hyped field of web3 and crypto?
Today we explore that question in a profile of a new startup co-founded by Bookingbug co-founder Greg Bock. Scroll down to read all about Fidesium.
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Fidesium wants a safer web3… and to sell you insurance for it
The upcoming arrival of Andreessen Horowitz (AKA a16z) to the UK with a focus on crypto has baffled some. Surely they should be focusing on A.I. these days? The web3 and crypto world is entering what could be a lengthy downturn in interest and hype, after all.
But a16z is a big company–at least for the venture capital world–with the capacity for multiple focuses, and it has what appears to be a strong, genuine conviction that web3 is more than just shallow hype, useless products, and scams.
As regulatory screws are tightened in the US and the future of cryptocurrencies seems uncertain there, shifting attention to a country that has pledged to devise crypto-friendly regulation makes a lot of sense - especially if they can help shape that regulation as an influential industry voice.
The quieter side of web3
The crypto/web3 world has its fans and its detractors, but both of those parties focus mostly on the hype-driven world of memecoins, scam tokens, shady exchanges, and highly misguided ‘blockchain for x’ startups.
The side I’ve always been far more interested in is the teams who just keep quiet and build new decentralised technologies. These are always super-passionate folk who seem a million miles removed from the latest drama around Binance or the quivering corpse of FTX.
If you focus on what people like them are doing, web3 looks more like an esoteric, experimental tech field akin to quantum computing; a bet on reshaping the internet in a new way, but one that is still a long way from delivering user-friendly tech for the masses. And it needs to offer things most people care about; decentralisation on its own is not a selling point for most.
Unlike quantum computing, this emerging field happens to be attached to a dirty, scammy, get-rich-quick mentality, but I see no love for that when I speak to technologists at its cutting edge.
Looking to bridge this gap and help clean up web3, is Fidesium. This London-based startup is working on a browser plugin that pitches itself as making it “safe and easy for you to buy, send, receive, manage, swap tokens, and collect NFTs on the Ethereum blockchain.”
It does this by simulating, scanning, and verifying transactions before they hit a user’s wallet. It highlights risks caused by malicious or just poorly-coded smart contracts that can leave end users out of pocket.
“The wonderful thing about web3 is all the data is there for you to consume, but it's a bit like drinking from a firehose,” says Fidesium co-founder Greg Bock.
“What we're trying to do is, through a risk lens, take all this immense data and turn it into useful information, so people can make a more informed choice of the amount of risk they wish to accept when transacting in web3.”
And eventually, the startup wants to move into the insurance space. Bock views the output of Fidesium’s tech as a “risk engine” capable of generating the kind of risk pricing that insurance underwriters use when bringing insurance products to market.
“It’s still a bit ‘Wild West’ out there, and there are lots of different barriers to entry. So what we're trying to solve is keeping people safe, protecting their assets, and making the whole journey a bit more seamless, with a bit more peace of mind,” says Bock.
The story so far
Bock previously co-founded Bookingbug–later rebranded as JRNI–a startup that will be familiar to many as one of those popular names floating around in London startup land a few years ago. It was acquired by private equity company Akmazo Capital last year.
After stepping down from Bookingbug in 2019, Bock eventually met Abraham Polishchuk, who would become his co-founder in Fidesium.
Polishchuk has a background working in technical roles at tech companies in heavily regulated spaces like finance and insurance.
The pair observed that while there are other products similar to Fidesium in the market, they are “relatively simplistic”, as Bock puts it.
To offer more than just an answer to ‘is this transaction likely to be safe?’, Fidesium takes a longer-term view of risk. For example, Bock says they’re currently building a wallet monitoring:
“If you hold 15 different assets that have varying degrees of risk, we can monitor and set you alerts in case the risk on any one of those assets changes.
“Imagine you hold a relatively new coin that you think has potential. We could look at it and if some giant movement happens in the number of whales [wallets holding a large amount of the coin] or some other risk profile changes in that asset, we can then alert you and say ‘you might want to have a further look at what's going on.’”
Fidesium’s browser plugin is in beta with what Bock describes as “a large handful” of users. Bock and Polishchuk have been busy testing it themselves too, by delving into the shadier (and sadly the not-so-shady) corners of Twitter, Telegram, and Discord.
They’ve also been testing it against notable scams from the past, which are of course all recorded on the Ethereum blockchain.
…About the timing
Timing is everything in the world of startups, and launching a web3 startup in 2023 might seem to some akin to a Sex Pistols-inspired punk band starting up in 1979: too late to catch the wave of hype.
Polishchuk points out the cyclical nature of technologies (A.I. has been through plenty of ‘winters’, let’s face it), and compares crypto today to where the internet was in the early 90s: a bunch of foundational technologies requiring more refinement before they reach mainstream adoption.
And Bock believes the EU and UK less harsh regulatory environments could mean that this part of the world becomes a hospitable place for startups in the space to base themselves.
He says while EU and UK regulation isn’t perfect, it’s superior to the US, where the difference between acceptance and being sued by the Securities and Exchange Commission is “whether Gary Gensler has had his bagel that morning.”
And if crypto and web3 does grow in parts of the world where it’s needed, products that promote safety and security are going to be increasingly important.
“I remember a time when to communicate over the internet, you had to Telnet into other people's machines. And for me, that's where we're at. I don't even think we've reached Geocities yet,” says Polishuk.
“I think that there is a class of UX software and a class of security software that needs to be built, the way that the likes of AOL and Norton Antivirus got built in the 90s that helped power the rise of the internet.
“And as those tools get built on-chain to simplify onboarding, improve UX, and make the safe space safer and less full of Nigerian Princess scams, a similar journey will happen.”
Calling back to my point at the start of this article, Fidesium sees a role for itself in helping the quiet, credible technologists break through the noisier side of the web3 space.
“Because scams proliferate, there is so much noise that it's almost impossible for the innovative, small projects to even get seen. So anything we can do to help put a kibosh on that also, I think we'll help the honest adoption, and get the technology where it needs to be.”
Fidesium is currently refining its algorithm and polishing its UX before the browser plugin comes out of beta.
And plans for the insurance product are already taking shape. The initial version of this would take a dynamic, real-time approach to the risk of a transaction, based on current market information.
“We look at risk as a utility in real time,” says Polishchuk. “So we charge you for the risk you're actually taking, rather than the potential risks you might take over the rest of the month [as a traditional insurer would].”
And Polishchuk even imagines a future where Fidesium works with traditional insurers to provide premium services to their customers.
Go deeper on Fidesium
Much more on their investment, vision, competition, and challenges: