Investing in Seismic
In a typical business, trusted intermediaries are able to aggregate and utilize data from their users without revealing the particulars of any individual. Consider, for example, an insurance company. In order to properly price a given policy, the insurer must compute aggregated risk metrics over a wide range of data from existing policyholders – such as age, medical history, or driving records – while keeping each individual file private. In many industries, such as in healthcare or financial services, this level of privacy is mandated by law.
Now consider building that same insurance business on a blockchain, to access the growing population of customers moving onchain. On today’s major L1s, information that is made available to a smart contract becomes publicly visible by default, so you can’t protect an individual’s personal information. This has been a critical barrier to blockchain adoption in massive markets such as financial services, healthcare, logistics, social networks, and identity management.
The typical approach to building a private smart contract platform involves clients creating zero-knowledge proofs of correct execution on their local machine, and then sharing those proofs with a decentralized network. This approach can guarantee correctness, but hampers composability. All parties know that the state transition function was executed correctly, but only participants with the transparent state can compute over it. This means that applications involving computation over shared private state are all but impossible.
We’ve led an investment in Seismic, which offers a new approach. By restructuring the modern blockchain stack around secure hardware, Seismic has created blockchains that encrypt at the protocol level rather than the wallet level. It is live in devnet and already enabling prototype applications featuring novel mechanism design. For example, Level lets you trade assets based on belief rather than price.
We first met founder Lyron Co Ting Keh through a16z crypto senior research advisor and Stanford CS professor Dan Boneh, who spoke highly of him as one of the brightest undergraduate engineers he had ever taught. Immediately, we knew there was something special about Lyron, and his relentless drive and killer instincts have continued to impress us.
We’re thrilled to support Lyron and the Seismic team as they help blockchains power new applications and extend into new industries.
***
The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.
The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.