Our Investment in Predicate
Crypto needs infrastructure that opens doors. The creation and adoption of new on-chain use cases is critical to expanding crypto’s reach beyond its existing insular user base. Whether targeting institutions or new classes of consumers, we believe crypto’s future will be defined by applications that are increasingly opinionated and specialized within specific verticals. Crypto’s early adopters have already arrived and have kept the industry afloat for the past 15 years. The next wave of adoption will introduce a new set of users with different expectations and preferences. To successfully onboard them, applications and their respective communities must first be able to meet their needs.
At Figment Capital, we believe the needs of new on-chain users will inspire customization at the application layer that is difficult to achieve today. Part of how we anticipate this manifesting is through conditional transaction execution, otherwise known as prerequisites. We define prerequisites as customizable pre-transaction conditions that users must meet in order to interact with a given application. Much like tailored compute and access controls in Web2, prerequisites will be prevalent across on-chain applications and will vary widely across verticals. They will ultimately play an integral role in realizing the full potential of crypto.
Nikhil and Jesse: Pioneering Prerequisites for On-Chain Applications
In mid-2023 when we first met Nikhil and Jesse, they were employees at the Celo Foundation and cLabs. Nikhil was the Head of Strategy & Innovation and Jesse spearheaded Special Projects. At Celo, they led pursuits into market opportunities which few other teams in crypto had seriously approached before. While some efforts were more successful than others, they often received feedback involving critical gaps in the underlying infrastructure. Many of the use cases they sought to onboard to Celo simply lacked the resources or tools necessary to adopt crypto in a meaningful way. Nikhil and Jesse witnessed firsthand the challenges application developers face when attempting to onboard new users, especially those facing regulatory hurdles or other business needs that were met with added friction when migrated on-chain. From these shared experiences, Nikhil and Jesse created Predicate.
Predicate is a flexible framework for conditional transaction prerequisites that allows applications to set modular, ownable “policies.” Their decentralized network serves as a toolkit to simplify the process of embedding pre-transaction logic. Fundamentally, Nikhil and Jesse sought to enhance the expressivity of applications and collective barriers of entry for their respective users.
When first speaking with Nikhil and Jesse a year ago, the market opportunity and team fit was obvious. We formed strong conviction that Predicate would be foundational for applications and on-chain communities seeking greater control over their users’ experience. Recognizing this potential, we knew we had to support Predicate and made the easy decision to lead their pre-seed round.
Enabling Policy: The Technical Core of Predicate
Since our investment last year, Predicate has made substantial progress in positioning itself as essential infrastructure across several verticals. Core to its modular framework for simplifying transaction prerequisites are “Predicate Functions,” which define transaction rules and can be combined to form comprehensive policies. These policies are enforced by the Predicate Network and govern users’ interactions.
When it comes to policy creation, Predicate empowers developers by offering access to on-chain and off-chain data, such as historical flow-of-funds, blockchain analytics, verifiable credentials, and dynamic allowlists. The network collaborates with on and off-chain information providers to make this all possible.
Security, transparency, and ownership are fundamental to Predicate’s architecture. Secured by restaked ETH on Eigenlayer, the network operates as a trust-minimized system, allowing individuals, organizations, and DAOs to create, manage, and own their policies on-chain. The decentralized network’s operators ensure verifiable computation and control over policy management, enabling seamless integration of expressive pre-transaction rules into applications.
Predicate’s emphasis on customizable transaction prerequisites is crucial for the future of crypto adoption. By addressing anti-money laundering, collateral verification, integrated identities, rate limiting, and more, Predicate not only facilitates the onboarding of new users but also elevates the overall user experience.
Positioning Predicate for Success
Predicate is poised to be an essential tool for users, developers, and communities who need to navigate the complexity of today, while also preparing for integration with the broader global economy. With clear demand signals from small and large partners, Predicate’s policies have found their foothold. The team has secured partnerships with several major projects that view Predicate as a critical building block for growth and expansion. In the coming months, more information will become available about the wide ranging list of applications and infrastructure projects that Predicate will support — starting with privacy protocols, bridges, real-world asset (RWA) protocols, and intent-based applications.
Predicate has established themselves as the foundational and generalizable framework for building transaction prerequisites. We are excited to continue supporting the team as more projects across the industry leverage this new network for enhancing on-chain interactions and connecting crypto to the broader global economy.
