What is Hashed? An overlooked Venture Capital from South Korea

In Asia, South Korea gained its reputation for quick-adopting new ideas, especially blockchain technology and cryptocurrency. The country has released complete cryptocurrency regulations to manage and facilitate this fast-growing industry. Many new crypto exchanges, Dapps, and venture capitals were founded to bite a piece of the crypto cake.

Hashed is one of the biggest crypto names in Korea that can walk abreast with other high-profile venture capitals in over the world. And in this article, we will walk you through Hashed venture capital, which covers:

• Hashed Overview.
• The portfolio breakdown.
• The performance of Hashed.
• The investment thesis.

What is Hashed?

Hashed is a South Korean crypto venture capital focusing on bootstrapping new and innovative ideas all over the world. Over 50% of Hashed investments are in the US, and the other investments are in Asia and other countries. The VC defines itself as the gateway to dip into the Asian crypto market.

Engaging in crypto since 2017, Hashed built its reputation for long-term support and constructive contribution for backed projects, as evidenced by the Terraform Labs project, Terra. We will dive into the relationship between Hashed and Terraform Labs later in this article.

In late 2021 (December specifically), Hashed announced a $200M fund named The Hashed Venture Fund II, concentrating on the hottest crypto sectors such as Metaverse, GameFi, NFTs, and DeFi. The Hashed CEO said this second fund will be fully deployed over the course of 2 years.

One year prior to the second fund, Hashed raised a $120M fund named Hashed Venture Fund I. Most of the investment sizes ranged from $1M to $10M, targeting DeFi and NFT projects. Notably, dYdX was the biggest success of the first fund as it’s now dominating the decentralized derivatives market in crypto.

Hashed Team

Simon Seojoon Kim - CEO & Managing Partner

Simon Kim, the CEO of Hashed, has spread the popularity of crypto in South Korea. Prior to full-crypto engagement and the position as Venture Partner at Softbank Asia, Kim has founded multiple startups in his hometown and in the U.S. In addition to his entrepreneurial spirit, he was previously worked at top-tier companies in Korea, such as Line, Kakao, Watcha, and Spoqa.

Ethan Kyuntae Kim - Co-founder & Partner

Ethan Kim, the Co-founder of Hashed, contributes to the growth of the venture capital as an active technical head at Hashed Labs since he has strong computer background as an engineer for several years at Electronic Arts and Tictoc.

Ryan Sungho Kim - Co-founder & Partner

Ryan Kim, the Co-founder of Hashed, handles the investment and enterprise sides with his throughout assessments. Like other primary leaders at Hashed, he has experience in founding startups with successful exits. He was also awarded a math olympiad gold medal while attending school.

⇒ Given information about the three core leaders of Hashed, we see how experienced they were with the traditional tech market before fully engaging in the crypto market. Without a doubt, The competent trio has nurtured Hashed to become the biggest crypto venture capital in South Korea and a key player in Asia.

Hashed Portfolio

Portfolio Overview

In general, Hashed has a well-built portfolio with investments in various crypto sectors. It’s fair to say that Hashed aggressively invests in Infrastructure and NFT/Gaming with tens of investments. On the flip-side, DeFi is not a favorable sector of Hashed as most trading platforms were invested by the venture capital in 2019-2020, barely any new ones.

Notably, Hashed found out about blockchain platforms and NFT/Gaming, which have huge flywheels in the market. For more in-depth assessments about the portfolio, we will break down each lego part, and let’s see what potential underlying opportunities are waiting for us to explore.

DEX

Kyber Network (KNC) was invested in by Hashed in 2017 as one of the earliest investors. The platform is now live on multiple chains such as Ethereum, Polygon, BNB, Avalanche, Fantom, and Cronos. After the platform boomed in the TVL number in mid-2021, it was not able to sustain the cash flow on the protocol. The TVL and the trading volume were almost doomed, giving no recovery signal.

Convergence Finance (CONV) raised $2M in a funding round led by Hashed in Feb 2021 with the participation of strategic investors Alameda Research, CMS Group, Kenetic Capital, Pantera's Paul Veradittakit, and other investors. The investment aimed to accelerate the development speed of the platform to release the mainnet. Users can stake, swap, provide liquidity and participate in IDOs on Convergence Finance.

However, at the moment, TVL on the Convergence platform is not getting much traction from the community. And its launchpad bootstrapped only 3 projects in the last 8 months, and currently, there is no upcoming IDO. Therefore, we can jump to a conclusion that Convergence Finance is somewhat behind the DeFi trend.

⇒ Hashed invested in two DeFi projects building AMM DEX and liquidity as an early investor. In fact, they have made progress in development as well as gained traction in the 2021 bull run. After the hype, the liquidity and trading volume washed away, making it hard for them to sustain the growth.

Derivatives

dYdX, without a doubt, is one of the most high-growth investments of every investor who joined the crypto derivatives. It raised $10M in a Series B round led by 3AC, DeFiance Capital, Hashed, and Paradigm as investors in January 2021.

Later, it raised $65M from Paradigm and other venture capitals to expand beyond Ethereum in a Series C. The tradingplatform previously raised $10M in a Series A round led by a16z and Polychain capital. 

With the three consecutive investment deals from top VCs, dYdX is now the most profitable DeFi project in crypto. Hashed joined the Series B investment of dYdX at the beginning of 2021. One year later, the dYdX investment brought a massive result to its investors.

Polysynth (POL), a synthetic asset and perpetual platform on Polygon, concluded a $1.5M seed investment in November 2021, joined by the Polygon co-founders Sandeep Nailwal, Jaynti Kanani, the venture capital HASHED, DeFi Alliance, and other angel investors. It went live on Polygon mainnet, allowing traders up to 10x leverage with USDT, USDC, and DAI as collateral.

⇒ The derivatives market always thrives with the growth of crypto, contributing profoundly to the price volatility. After the dYdX investment with unpredictably massive results, Hashed rushed into the derivatives-niche investment in Polysynth with a fraction of its fund in late 2021. 

Tracing investment deals of top-tier venture capitals like Polysynth and dYdX by Hashed will give us clues on how to navigate during selloffs in the crypto market. As mentioned earlier, Hashed’s leaders are experienced in both technical and entrepreneurial aspects and they’ve skinned in the market for about 4 years. As a result, we can consciously refer to their thesis for our own investments.

Wallet and Payment

Coin98 Super App (formerly Coin98 Wallet) raised $11.25M in a strategic funding round co-led by Hashed and Spartan Group in May 2021, joined by numerous investors, including ParaFi Capital, IOSG Ventures, GBV Capital, etc.

Starting from a mobile wallet application to a suite of DeFi applications, Coin98 Super App is now supporting more than 50+ blockchains and has hundreds of thousands of users. Therefore, in Southeast Asia, Coin98 Super App is acting as a key player in the customer-end-service sector in crypto.

Chai, a South Korea-focused UST payment app, raised $60M in a Series B funding round led by high-profile investor Hanwha Investment & Securities, joined by SoftBank Ventures Asia, Hashed, SK Networks, Aarden Partners, etc as strategic investors in late 2020. CHAI will accelerate the UST adoption in South Korea where Terra was incubated.

The number of CHAI users has been growing at a fast pace over the last 2 years, which is now about 2.5M users (5% of the population in South Korea). This makes South Korea a nation of the first fast crypto adopters.

Orion Money, a multi-chain asset management app, allows users to deposit crypto assets to earn interest in an easy way without maneuvering them across the ecosystem. Hashed invested it in the seed round in Jun 2021.

⇒ Hashed, without a doubt, has been heavily investing in the crypto wallet/payment sector with three major deals. CHAI and Coin98 Super App own large user bases in two separate locations (Southeast Asia and South Korea). Crypto is getting adopted by the world day by day, and wallet/payment apps will be the key driver to bridge the blockchain services with the user frontier.

Lending

Anchor is one of the main factors for the success of the decentralized stablecoin UST on Terra. Since its launch, it has been sustaining the APY of nearly 20% for UST suppliers. The APY is guaranteed by Anchor Protocol to be around 20% no matter how volatile the crypto market is. To achieve such a thing, Do Kwon had to deposit into the UST Treasury over $400M to keep the rate stable during the high selloff in the crypto market at the beginning of 2022.

MakerDAO is now leading the crypto lending market on Ethereum with billions of dollars in TVL. Hashed invested in the lending protocol quite early, forming a strong partnership to popularize via DeFi conferences and deep engagement in Korea.
bZx Protocol, a lending platform with margin/leverage trading, was invested in by Hashed in July 2020. Two months later, the platform was exploited for $8M due to a code bug, which the insurance fund covered. Moreover, almost $1M was attacked by hackers using flash loans in Feb 2020. The damage made bZx’s TVL decline drastically, giving a signal of upswing barely.

⇒ Hashed heavily invested in DeFi lending protocols, especially Anchor on Terra, a favorite ecosystem built by Koreans. The venture capital gained its reputation for the Anchor and MakerDAO investments which were skyrocketing in the bull run of 2021.

However, we still don’t have a clue about how big the investments of Hashed in those lending protocols were. But we can estimate the growth is not mediocre.

Synthetic

Mirror Protocol, a synthetic protocol incubated by Terraform Labs, got invested by Hashed for a joint force to empower the use of UST with synthetic assets. As shown in the chart, the overall TV trend of Mirror Protocol is going downward despite Terra’s unstoppable bull run in late 2021.

Synthetix was the first synthetic asset investment of Hashed in 2020. The trading synthetic protocol can be now considered profitable in top DeFi protocols since it received over $28M in revenue.

⇒ Having been actively invested in DeFi products layer by layer, Hashed did not ignore the synthetic asset sector in crypto. We think Synthetic was a good choice for Hashed, but Mirror Protocol showed the opposite result while the TVL is now washing away.

Analytics

Dune Analytics, the top on-chain analytics for the Ethereum network, raised $2M from investors in the seed funding round led by Dragonfly Capital with the participation of Multicoin Capital, Hashed, Alameda Research, etc. in September 2020. The latest Series B investment of Dune was worth $69.42M, making the project valued at $1B. 

CryptoQuant closed a $3M investment in a funding round led by Hashed, joined by Galaxy Interactive, Mirae Asset Capital, and Youbi Capital as strategic investors in August 2021. The platform focuses on providing on-chain data services to users via vivid and robust graphs such as inflows and outflows of Bitcoin on exchanges.

⇒ Dune Analytics and Crypto Quant are two noteworthy names in crypto land. It’s clear that the two investments of Hashed in analytics tools have shown incredible results. In our perspective, on-chain data analytics will be a strong and reliable tool for users to navigate the crypto market since it can’t be manipulated or permanently deleted.

Infrastructure

Ethereum (ETH) is a reasonable candidate for being in Hashed’s portfolio as the venture capital was founded in 2017 and the team might purchase via exchanges and hold the bag till then. Ethereum is now indisputably the largest smart contract platform in crypto, with thousands of running Dapps.

Terra (LUNA), with its decentralized stablecoin UST, has been emerging to be in the top 10 crypto projects in terms of market cap. Terraform Labs and Hashed share many things in common such as Korean founders and crypto focus. We have a below section to break down the profound partnership between Terra and Hashed.

Kokoa Finance on Klaytn, developed by the +96% market share mobile platform Kakao Finance, raised $2.3M in a seed round led by the South Korea-based venture capital Hashed. In South Korea, there is a lucrative opportunity for crypto entrepreneurs like Hashed and Kakao to dominate the market. They introduced a modified version of MakerDAO’s stablecoin DAI, Kokoa Stable Dollar (KSD), to create a flywheel as the first movers in the country.

Cosmos (ATOM), a universe of EVM blockchains, was invested in by Hashed. However, there is little information about the deal and we assume that Hashed bought ATOM on secondary markets instead of directly discussing it with the Cosmos team.

TomoChain (TOMO) had the venture capital Hashed as one of the early investors in the private token sale which was a total of 7k ETH and $290k in Q1 2018. Later on, the blockchain conducted a public sale in March 2018. The total fund raised was worth over $9.3M at that time. After the Bitcoin frenzy in 2021, the ATH market cap of TOMO was $200M.

SKALE Network (SKL), a scalability sidechain on the Ethereum mainnet, raised $17.1M from venture capitals and investors, including Multicoin Capital, ConsenSys Labs, Hashed, Arrington XRP Capital, and so on in late 2019. Its ATH market cap peak was almost $900M in 2021.

Covalent, a decentralized data API network, closed $2M in a strategic round led by Hashed, followed by Binance Labs, Coinbase Ventures, Delphi Ventures, and many other investors in March 2021. Prior to the $2M round, it raised $3.1M in the summer of 2020.

⇒ The infrastructure investments of Hashed did not show the noteworthy position of the venture capital in crypto, as evidenced by the investment sizes in the chains and the infrastructures.

Hashed invested in ETH and ATOM possibly by flocking to the crypto secondary markets. SKALE and TomoChain might be out-of-breath, and Covalent is the latest infrastructure investment of Hashed. On the other hand, Hashed seems to have the Midas touch while Terra and Klaytn are moving beyond South Korea.

NFT/Gaming - The most aggressive niche of Hashed

The Sandbox (SAND) concluded a $2.5M investment led by Hashed in 2019 to build an open platform for game-content creators. At that time, it partnered with Kakao’s Klaytn blockchain to access the 50M+ user base of the leading mobile platform Kakao in Korea.

Decentraland (MANA), a virtual real estate platform, has been consecutively breaking numerous records by selling NFT plots. The highest record was $3.5M for the most expensive piece of land in the game. 

Axie Infinity (AXS), the first leading NFT game in crypto, soared 350k DAU and $170M monthly trading volume in July 2021. Recently, it has released the sidechain Ronin to free the game from the Ethereum Network.

Enjin Efinity (EFI) believes in the fact that Metaverse is inevitable. In November 2021, Enjin announced the $100M Efinity Metaverse Fund to back Enjin-based projects, making Metaverse an achievable thing in crypto. In March 2021, the team raised $18.9M in a private sale led by Crypto.com Capital, DFG Group, and Hashed.

Sipher, a Vietnamese blockchain game studio, concluded a $6.8M seed investment led by Arrington Capital, Hashd, and Konvoy Ventures, joined by other strategic investors.

GuildFi (GF) raised $6M in a seed round co-led by DeFiance Capital and Hashed, joined by Pantera Capital, Coinbase Ventures, Alameda Research, Animoca Brands, Coin98 Ventures,... in November 2021. The project is building a Web3 infrastructure to facilitate NFTs and NFT-based games. This will help create a shared community among players for mutual benefits across the games.

Derby Stars (DST), a blockchain game on Terra, is being developed by a studio backed by Hashed. The game is still in the development

Hashed has been strongly focusing on this NFT-based gaming sector since 2019 after the newfound application of NFTs can be fused with video games. The new metagame in crypto, Metaverse, ignited a whole new sector, especially fueled by the new name of Facebook, Meta. In crypto parlance, Metaverse is where users can do anything in the virtual world.

Read more: What is the Metaverse?

Decentraland, Axie Infinity, The Sandbox, and Enjin Coin are the four horsemen incubated by Hashed and other preeminent crypto venture capitals. First, they evolved the ambition from GameFi to Metaverse. This has helped them gain a massive number of users supporting the metaverse vision.

Besides the metaverse projects, Hashed continues to bag some GameFi or GameGuild. Sipher, GuildFi, and Debry Stars are in development progress. They’re envisioned to be the next-gen NFT games that eliminate all current challenges of GameFi. But they will take time since the developers need to build the game on top of blockchain and the gameplay.

In which ecosystem Hashed invested?

Hashed and Terra

Before diving into the details of the firm partnership between Hashed and Terra (LUNA), let’s get an overview of projects invested by the Korea-based venture capital.

• UST - The decentralized stablecoin pegged to LUNA on Terra.
• Anchor Protocol - A Lending Protocol with the UST supply APY of almost 20%.
• Mirror Protocol - A synthetic asset protocol.
• CHAI - A crypto wallet payment application in South Korea with 2.5M+ users.
• Derby Stars - A crypto game on Terra.

As the Terra ecosystem has been growing tremendously at the transition of 2021-2022, the UST stablecoin pegged to LUNA also smoked MakerDAO’s stablecoin DAI in terms of market cap. This has helped UST to be the largest decentralized stablecoin in crypto.

The next milestone is to flip the centralized stablecoin trio (BUSD, USDT, and USDC) and Anchor Protocol invested by Hashed will be the key driver to make it a reality.

Amidst market-wide chaos, the 19% - 20% yield for UST deposit on Anchor looks pretty dire due to the shortage of UST in Yield Reserve. Terraform Labs have deposited $450M worth in UST on Anchor to back the yield. However, Hashed was not mentioned in the deposit.

Hashed also invested in other lego parts such as synthetic asset protocol and payment, especially its GameFi moat with Derby Stars. As a result, we can conclude the portfolio is strongly made up of projects on Terra.

Learn more: Terra Ecosystem Overview

Hashed and Klaytn

Statistically, South Korea is a crypto well-adopted country where numerous startups and enterprises have rolled into the newfound and fast-growing industry. The entrepreneurs love collaborating with each other as a pledge of mutual development.

Hashed has been investing in Klaytn (backed by Kakao Finance - the top-tier conglomerate in South Korea) and its ecosystem since 2019. In our perspective, Klaytn is somewhat a South Korea-native blockchain since the Klaytn Governance Council is mainly controlled (centralized) by big South Korea-based companies such as LG, Kakao Group, and SK Networks.

Should we follow the Hashed portfolio?

Hashed Performance

Let’s review the performance of those project tokens that were invested in by Hashed (ATH prices with prices at the beginning of 2021) as follows:

• Terra (LUNA): 15,700%
• dYdX (DYDX): 2,500%
• Axie Infinity (AXS): 26,100%
• The Sandbox (SAND): 20,000%
• Decentraland (MANA): 6,200%

The GameFi investments contribute the most returns to Hashed’s portfolio. This has helped the venture capital have a solid position in the leaderboard of crypto VC performance, especially in the NFT/Gaming sector. At the moment, Hashed is still aggressively investing in crypto-based games and expanding horizontally across other blockchain platforms.

Hashed Investment Thesis

Hashed is now having a solid place among the high-ranked Venture Capitals in crypto, especially it’s the first leading crypto VC in South Korea. After many investments with success and loss, Hashed has formed its theses and is in line with them from now on. Let’s explore the principles and patterns of Hashed in the following highlighted bullets:

• Aggressively investing in the seed rounds: Hashed at least invested in at least 6 crypto projects in the seed round over the 2019-2020 period. Dune Analytics is a successful example of Hash’s seed investment. Moreover, with the venture capital spirit, at the beginning of 2022, it bagged Ramper, Ancient8, Flint, etc.
• Barely Series C-D investment rounds: Despite being a top-tier venture capital, Hashed is managing a medium-size fund when compared to the big one of Paradigm or a16z. Therefore, Hashed understandably finds it more viable to invest in seed funding rounds instead of Series C-D rounds requiring huge capital to invest.
• Support South Korea-based projects: Despite 50% of the investments in the US, Hashed formed partnerships with numerous projects in South Korea, all with an aim to mark the country on the crypto map. As a result, in case you’re Korean entrepreneures in crypto, you should reach for Hashed.
• Tokenomics in Video Games: 2021 was an epic year for crypto games such as Axie Infinity, The Sandbox, Decentraland, etc. Hashed was one of the early venture capitals identifying the new hype. They’ve gained lots of reputation from it, and they continue to keep the winning streak with new investments.

Hashed in 2022

The latest investment of Hashed in 2022 is Ramper, an on-ramp SDK Wev3 infrastructure. The platform raised $3M in a seed round led by Hashed with the participation of Terra, Polygon, Goodwater Capital, Samsung NEXT, Golden Ventures, R7 Capital, 500 Global, Maple VC, and other angels.

Hashed picked out multiple blockchain games such as Derby Stars and Sipher or GuildFi in the Gaming Guild category. This they’ve filled the bag and are now holding for the next crypto strong movement.

The first $120M fund was actively accelerating Dapps on higher layers such as GameFi or Wallet/Payment. On the flip side, the latest $200M fund announced in Dec 2021 is dedicated to winding up the Web3 adoption speed.

Hence, in our opinion, Hashed is gradually shifting towards projects with upside impacts, especially Web3. In crypto parlance, Web3 is a very broad term where decentralization and the token economy collide together.

Conclusion

We’ve been through the detailed information about Hashed and its well-built portfolio. Furthermore, the relationship between Hashed and Terra is also significantly discussed in the article.

We hope you’ve gained the overview, and our well-thought insights will be helpful to you. There will be more articles for other VCs. Stay tuned!

If you want to know further about Hashed, please leave a comment below and join Coin98 Community for further discussions about Crypto.