Episode Summary
Executive Summary: Laura Shin interviews Hack VC managing partner Alex Pack about the firm’s $150M fund, his value-investing approach to crypto, and where he sees the industry heading. Pack argues crypto is still in an early, mid-90s-internet phase, with the biggest opportunities in infrastructure, stablecoins, DeFi, security, and crypto-AI convergence rather than hype-driven narratives.
Main Topics: Hack VC’s fundraising and investment style (Priority: 5/5): Pack explains that Hack VC raised a $150M opportunistic fund during a difficult post-FTX market, but sees bear markets as ideal for fundamental, thesis-driven investing. The firm positions itself as a crypto value investor focused on early-stage infrastructure rather than momentum or meme categories. Sam Bankman-Fried, diligence, and reputation risk (Priority: 4/5): Pack revisits the now-famous incident in which SBF publicly criticized him after he passed on FTX. He says the episode reinforced Hack VC’s diligence-heavy, anti-FOMO culture and the need to avoid backing founders who behave sociopathically or recklessly. Hack VC’s ecosystem-building model (Priority: 4/5): Pack describes Hack Summit and Hack Labs as differentiators: a developer community, technical tooling, and hands-on use of protocols for staking, governance, and DeFi. He argues these assets improve diligence, portfolio support, and founder network effects. Crypto and AI convergence (Priority: 5/5): Pack says crypto can solve AI’s compute bottleneck by enabling decentralized GPU markets and other permissionless infrastructure. He highlights investments like Ritual and decentralized GPU networks as part of a broader thesis that crypto can give AI agents financial rails and compute access. Modular blockchain architecture (Priority: 4/5): While not ideologically maximalist, Pack favors modular systems because specialization can better solve scalability, security, and decentralization trade-offs over the long run. He notes monolithic chains like Solana may optimize for today’s UX, but modular stacks may win over time. DeFi, stablecoins, and real-world assets (Priority: 5/5): Pack sees DeFi and stablecoins as crypto’s strongest real-world use case and the core infrastructure for consumer apps. He emphasizes the need for better stablecoins, more institutional-grade tooling, and more real-world assets such as T-bills onchain. Security, mainstream adoption, and the next bull market (Priority: 5/5): Pack argues crypto will not go mainstream until security improves materially. He believes the cycle’s big catalysts are not necessarily flashy new narratives, but better infrastructure, stablecoin growth, ETF-driven awareness, and more usable financial primitives.
Key Arguments: Crypto is still early; Pack compares it to the mid-1990s internet, with real utility emerging but UX, security, and scalability still poor. Bear markets are the best time for Hack VC’s style of investing because fundamental mispricings are easier to find. Hack VC avoids hype categories like NFTs, gaming, and metaverse and instead focuses on early-stage infrastructure and technical diligence. The SBF/FTX episode validated the firm’s diligence process and reinforced the importance of avoiding charismatic but reckless founders. Crypto can help AI by creating decentralized markets for GPUs, storage, and eventually models/agents. AI can also help crypto by bringing programmable agents that can interact with smart contracts and stablecoins. Modular blockchains are a long-term optimization strategy, even if monolithic chains currently offer a better user experience. DeFi is the most important non-Bitcoin use case in crypto, and stablecoins are its main gateway and killer app. Real-world assets and institutional-grade DeFi tooling could expand the market by orders of magnitude. Security improvements require better languages, formal verification, shared security, and possibly reversible transaction mechanisms in some contexts. ETF approval is a major structural catalyst because it validates crypto in TradFi and expands access, even if it is not the most composable on-ramp. The bull market may be driven more by infrastructure and capital-efficient financial primitives than by a new meme narrative.
Data Points: Hack VC fund size: $150 million - New venture fund raised in a challenging 2023 fundraising environment Prior Hack VC vehicle: $200 million - Vehicle raised in 2021 during the peak bull market Hack Summit community size: 130,000 engineers/developers - Developer community tied to Hack VC and its events AI company count backed: ~30 companies - Pack says he and his partners have backed many AI companies over the years Decentralized GPU price: $40,000–$50,000 per H100 - Illustrates scarcity and cost of top-tier AI compute Meta GPU spend: $10 billion of H100s - Example of large tech companies hoarding compute Bitcoin ETF inflows expectation: $14 billion in year one - Pack cites Galaxy’s prediction as a benchmark Bitcoin ETF inflows achieved so far: $7.5 billion - Pack says inflows were already more than halfway to the cited annual estimate Stablecoin volume: $50 billion+ per day - Pack says stablecoins now settle more daily value than card networks FTX/Terra/3AC/Celsius timing: Post-2022 - Describes the tougher fundraising and reputational environment after major collapses Zuzalu first event size: A few hundred full-time and another thousand part-time - Pack describes the Montenegro gathering Zuzalu duration: 2 months - The first event ran for about two months Audit burden example: 7 audits - Pack cites a protocol that required seven audits before launch Mainstream adoption analogy: 10–15 years - Pack says internet mainstream adoption lagged infrastructure by about a decade or more
Pivotal Quotes: "we're closest to mid-90s internet" — Alex Pack: Pack’s analogy for crypto’s stage of development and why infrastructure remains the priority "we don't even use the word narrative in our investment team meetings" — Alex Pack: Explaining Hack VC’s anti-hype, fundamental-value investment culture "you could create like your own financial ecosystem without having a military, without threats of violence, without actual use of violence" — Alex Pack: His broader point about what DeFi and algorithmic financial systems make possible
Implications: For listeners, the message is that the next crypto cycle may be shaped less by memes and more by infrastructure: stablecoins, DeFi, security, modular scaling, and AI-linked compute markets. Pack believes the biggest winners will solve real usage and trust problems.