Meet the trans and anarchist founder who just landed $25 million to reform crypto storage – TechCrunch

0

Tux Pacific is not your average tech founder. He is a self-taught cryptographer who dropped out of college, a proud member and advocate of the transgender community, and a self-proclaimed anti-capitalist anarchist who believes in free market principles deeply rooted in the early days of crypto, when Bitcoin reigned supreme and the banks had no interest in the sector.

Pacific also appeared as a guest on the July 7 episode of TechCrunch’s crypto podcast, Chain Reaction. You can listen below or on your podcast platform of choice.

Pacific’s dramatically different background compared to other entrepreneurs is precisely what informs their unique way of thinking, they told TechCrunch in an interview. Pacific founded and is CEO of Entropya decentralized crypto custodian that says it raised $25 million for its funding round led by Andreessen Horowitz alongside Coinbase Ventures, Robot Ventures, Dragonfly Capital, Ethereal Ventures, Variant, and Inflection. Prominent angel investors from the tech community, including Naval Ravikant, Sabrina Hahn and James Prestwich, also participated in the round, according to Entropy. This last round follows that of the company $1.95 million pre-seed in January.

The Brooklyn, New York-based startup aims to disrupt the way digital assets are held with its decentralized self-custody solution, according to Pacific. Before founding Entropy last year, Pacific worked on the NuCypher crypto network while living in Berlin, Germany, where they learned advanced cryptographic techniques.

In the status quo, large crypto custodians like Fireblocks, Coinbase, and Anchorage Digital that hold assets for crypto users are basically centralized and operate similarly to banks. In some cases, holding users’ private keys in a central location has left these custodians vulnerable to hacksand their users cannot always interact with their funds as they please.

“We heard a number of stories that were always like, we used people like Coinbase, or we used like all these other custodial solutions. They call them and they say, hey, we need to move funds. And [the custodian responds], oh, sorry, we have to wait for someone to do it,” Pacific said. They recounted an anecdote they had heard about a fund that was about to lose billions of dollars in an over-the-counter transfer because their point of contact at the custodian company was on vacation.

Entropy, on the other hand, leverages cryptographic techniques based on multi-party computation to give users a way to deposit and use cryptocurrencies on any blockchain, at any time, Pacific explained. Using Entropy’s protocol, users can implement their own rules for interacting with funds, such as time constraints – a particularly useful feature for groups like DAOs trying to make decisions around a collectively determined set of rules, Pacific said.

Pacific describes Entropy’s solution as comparable to Google Authenticator in that it doesn’t provide its own wallet or user-facing products – it simply handles the process of cryptographically “signing” their data. Other groups, including businesses and DAOs, can then use Entropy to deposit user funds in a safe place, but are not subject to the constraints of a centralized depository.

Most cryptographers start with a protocol and then consider a user experience that adapts to it, Pacific said. In the case of Entropy, Pacific conceived of the idea by reversing this process – thinking about what the ideal custody experience would look like for a crypto user, then designing the Entropy protocol to accommodate that.

“I approach the problem so differently from a lot of other people… There are competitors who just build wallets and just try to adapt their crypto protocols that they have developed to do that. [My perspective is that] all the other people who have built these crypto protocols before me, there’s nothing super new about them. I’m just going to dial it radically different from what they are and make it super user-friendly,” Pacific said.

Pacific also attributes Entropy’s advantage to its own willingness to move away from the traditional custodian business model, where users pay them a fee to hold funds and work in search of a model that can generate revenue. not only for the custodian, but also for the protocol itself. , as well as crypto users. They readily admit that Entropy’s nine-person team has yet to work out the details of this model, but the company’s backers don’t seem to care.

“When we started fundraising, one of the biggest things I started telling people was that we don’t have a business model,” Pacific said. They focus, as is usually the case with early-stage startups, on building a great product before thinking about monetization, Pacific said.

Entropy is also targeting a different audience than typical custodians, Pacific added.

“It’s not like an enterprise blockchain like Qredo“, Pacific said of the other decentralized digital asset custodian, which unlike Entropy provides users with a wallet. “We are building a product that is only for crypto-native people and decentralized institutions. don’t expect JPMorgan to use us,” Pacific said.

Entropy’s emphasis on serving individual crypto-native users stems in some ways from Pacific’s personal connection to the crypto community. Although they said they faced some pushback as a trans founder, for the most part they found crypto to be an unusually favorable environment.

In fact, I’ve never felt like I’ve been in a space where it was more acceptable for people to be so different. If you go to a [crypto] conference, it’s just full of weird, weird people,” Pacific said.

Pacific is used to forging their own path, they said, saying they had no role models they could identify with growing up. Today, there is still almost no research on LGBTQ+ founders and how they are funded, although venture capital firm Backstage Capital estimates that they receive less than 1% of venture capital dollars overall.

“Being able to see trans entrepreneurs would have been a huge thing for me as a kid, especially trans people who are entrepreneurs who have similar political values,” Pacific said.

Subscribe to TechCrunch’s crypto newsletter “Chain Reaction” for news, funding updates and takes on the wild world of web3 – and listen to our companion podcast!

Share.

About Author

Comments are closed.