From: thepipeline_xyz
Logan Jastremski is a managing partner at Frictionless Capital, a venture capital firm focused on new infrastructure and high-throughput blockchains within the crypto industry [00:02:22]. He co-hosts “The Pipeline” podcast [00:00:06].
Early Career and Transition to Crypto
Jastremski began his career in Silicon Valley, eventually working at Tesla where he spearheaded the supercharging network on the softwaring side [00:01:14]. He admired Tesla’s product development and their “first principles” thinking, which later influenced his approach to the crypto space [00:01:29]. He personally got involved with Ethereum in 2017 [00:01:37].
He eventually “fell a little bit out of love with it” due to the high gas fees, which reached $1,000 in the 2021 bull market [00:01:43]. This experience led him to seek alternative ecosystems focused on scaling the industry [00:01:51].
Focus on High-Throughput Blockchains
Jastremski became excited about new infrastructure, including Monad, that could onboard the majority of the world to crypto through low transaction fees, high throughput, and unique applications [00:01:59]. He believes this is essential to push the industry past its current phase [00:02:11].
Founding Frictionless Capital
Frictionless Capital was founded in early 2023 with a focus on these “new infrastructures” and “high throughput blockchains” [00:02:22]. At the time, their thesis was deeply unpopular, particularly their support for Solana when it was often dismissed as “dead” or the “FTX chain” [00:04:20].
Despite the contrarian view, Jastremski and Frictionless Capital were early believers in Solana’s unique position as a high-throughput blockchain [00:04:50]. Their conviction stemmed from reasoning from first principles, recognizing the necessity of scaling for mass adoption [00:10:10].
By the end of 2023, Solana began its historic run, validating their thesis [00:03:35]. Frictionless Capital recently closed its fund and is now focused on full-time deployment, looking to back teams that can leverage high throughput [00:06:42]. Beyond Solana, they see potential in other high-throughput blockchains like Monad, Aptos, and Sui [00:06:57].
Investment Philosophy and Identifying Promising Projects
Jastremski emphasizes the importance of unique applications made possible by high-throughput blockchains, citing how order books, common in traditional finance, become viable on faster chains, unlike the limitations that led to automated market makers on lower-throughput systems [00:07:05].
His due diligence process involves:
- Talking with Technical Co-founders: He prefers engaging with technical leads over marketing personnel, as engineers are typically more honest about engineering tradeoffs [00:17:20].
- First Principles Thinking: This involves “ripping apart people’s arguments and trying to find flaws” in their thinking and his own to get to the root cause [00:10:17].
- Focus on Product: While he enjoys the technical aspects, he believes technology is a starting point for building unique products that will grow the industry [00:18:41].
- Seeking Unique and Challenging Perspectives: He values individuals who can highlight flaws in his logic or gaps in his understanding, viewing it as invaluable information for learning [00:19:09].
He highlighted examples of projects they are backing or watching:
- Dlow: A company focused on payment for order flow, which he sees as complementary to MEV solutions like Jito, helping makers provide better liquidity and execution [00:20:35].
- Decentralized Physical Infrastructure Networks (DePINs): He views DePINs as a new way for capital formation, with the potential to enable applications with millions of monthly active wallets on-chain, such as Helium’s expansion into personal cell phone plans [00:21:35].
Analogy of Internet Evolution
Jastremski draws an analogy between the evolution of blockchain and the early days of the internet. He compares the current state of blockchain to the transition from 56k modems to broadband internet, where faster connections enable more interesting applications [00:11:51]. He believes that “block space,” or the network’s transaction propagation capacity, is the limiting factor, similar to internet speed [00:12:07].
He identifies modern blockchain features that will be crucial for the next generation:
- Integrated Blockchains [00:13:34]
- High Throughput [00:13:37]
- Parallel Processing [00:13:37]
He believes that these features, especially parallel processing, are fundamental requirements for scaling, particularly in the context of the EVM [00:33:05]. He likens Monad to a “baby” of Solana and Ethereum due to its parallel processing and high throughput capabilities combined with EVM compatibility [00:32:33]. He stresses that integrating the technology stack simplifies the experience for both users and engineers, allowing engineers to focus on product development rather than infrastructure concerns [00:34:22].
Future of Crypto and Applications
Jastremski is excited about the “Golden Era of crypto products” [00:28:27]. He anticipates:
- DeFi 2.0: Leveraging order books and high throughput natively [00:36:56].
- Decentralized Physical Infrastructure Networks (DePINs): Believing they could enable the first applications with 10 million monthly active on-chain wallets [00:37:17].
- Social Experiments: Continuing on high-throughput blockchains, citing projects like Farcaster as examples [00:38:16].
He emphasizes that high-throughput blockchains will enable “unique capabilities” and entirely new applications that were not possible on previous architectures [00:39:08].
Advice for Newcomers and Personal Philosophy
Jastremski offers several pieces of advice for those navigating the crypto space:
- “Everybody’s wrong, and your goal is to be less wrong”: He encourages individuals to find flaws in their own thinking and to synthesize information from various sources [00:24:24].
- Talk with Smart People: Engage with knowledgeable individuals to refine understanding [00:24:43].
- Do Your Own Homework: Don’t rely on a single source of information, as everyone is biased to some degree [00:24:57].
- Prioritize Health: Going outside, getting sun, and working out are crucial for mental and physical well-being, which are necessary for effective decision-making [00:41:31].
- “Do you want to make money or do you want to be right?”: He advises that making money often means taking unpopular positions. If you’ve done your homework and believe in something, stay the course, even if it’s not popular [00:42:00].
- Believe in Yourself and Do the Work: He recounts how he was initially rejected by many popular venture capital funds but ultimately found success by pursuing his own differentiated thesis [00:43:30].