Five New York Blockchain Companies to Watch

It’s that time of year again — the global crypto and blockchain community has descended on New York this week for the annual NYC Blockchain Week, and it’s no surprise why. New research we released last week with Startup Genome confirms that blockchain is a rapidly growing subsector, representing a 100% increase in early-stage startups across the globe, and it’s felt nowhere more than in New York.

We’re hosting our own Blockchain Week event tonight on New York’s cryptocurrency landscape, and we’re going into it with some exciting new stats: cryptocurrency initiatives generated over $500 million in venture capital funding last year, a five-time increase from the year prior, and blockchain jobs in NYC exceeded 2,200 in 2018, a yearly increase of 400%. That’s not to mention the ripple effects blockchain technologies are having on New York anchor industries who are increasingly relying on them to keep their businesses on the cusp of innovation.

To celebrate those wins — and our city’s financial services and engineering talent — we’re profiling five New York blockchain companies.

TAGOMI

What does your company do?
Tagomi co-founder and co-CEO Jennifer Campbell: Tagomi is a cryptocurrency Prime Broker that provides an end-to-end solution for investors who are trading in size from trade execution to custody.

Why did you found your company in NYC?
JC: Tagomi is a platform that takes a multidisciplinary team to build, and New York is the epicenter of many fields — finance, legal, tech, etc. — which I think is quite unique to the city.

You left the world of venture capital to found Tagomi. How did investment experience help shape your approach to founding a company?
JC:There are definitely some things — understanding the core mechanics of how to raise outside capital, understanding how companies are valued, understanding the perspective on the other side of the table — that are helpful. But outside of that, I’ve found that they are fundamentally two very different jobs, and the benefits of having that background are probably a bit overestimated. The biggest thing is that in both cases you are in the business of picking people and choosing who to partner with; from an investment standpoint that’s across multiple industries and from an operating standpoint that’s picking the people to be part of your team on a specific mission.

Not only was that experience largely shaped by venture, but also by being at such a storied New York firm. How has the New York tech ecosystem influenced your thinking as a founder?
JC: New York’s distinguishing advantage as a startup hub is that it attracts talents in not just in software engineering, but many other important disciplines — finance, legal, operations, customer service, enterprise sales — that is many times difficult to find in one place. Tagomi is not just a software company. In fact, I think a lot of our success has also been due to the strength of our team in other areas, legal and operations in particular, which don’t typically get much appreciation at most startups.

You founded Tagomi a year ago, and secured a second funding round last month. What has such rapid growth taught you about scaling and leading a business?
JC: I think what I didn’t realize until later on, is that it’s really different job every few months. A very different job. Especially when the company is changing very quickly, you really have to stay ahead of the learning curve to stay afloat.

You grew up in Hong Kong and Vancouver. One a major player in the global finance space, and one a little bit less so. How did those different experiences inform your career path?
JC: Growing up in Hong Kong, you really learn at an early age how fierce and tenacious the competition is. At the same time, you’re really put in a tight conventional track early on, and there isn’t much opportunity outside of that. That’s different in the west. You have a lot more agency early on, and you aren’t forced to ‘optimize’ prematurely — and it’s very important not to you want to become an entrepreneur.

Unique to Tagomi in the crypto space, you offer a consulting element to your clients. Why that differentiator?
JC: When we started, we found that new investors found it very hard to navigate the space, and were looking for a counterparty that was completely aligned with them to provide best execution and help tailor strategies to their needs. Our agency-only model means that we are never using client information to trade against them, which allows us to provide that consultative element clients are looking for, and eliminates any misincentives that exist in other models.

The crypto space is large and growing, what else do you see changing? What would you like to see change?  
JC: We need legal safe harbors so that builders who are trying to do the right thing, can drive the space forward without the angst of potentially crippling liabilities. Many of the new innovations in the space don’t fit nicely into an existing box in our current legal system. The great companies we think of in the internet age — Youtube, Twitter, and others — relied on safe harbors such as the CDA and DMCA, and we need analogous laws for innovation in the crypto space to really flourish.

What brought you to New York?
JC: I moved to New York after college for my first job and have stayed here ever since.

How do you get to your office?
JC: Uber.

Where do you get your favorite pizza slice?
JC: Marta.

Where do you get your favorite bagel?
JC: Black Seed Bagels.

What is the best New York waterfront?
JC: Battery Park downtown.

What’s your favorite New York building?
JC: The Flatiron Building.

What’s the best place in New York for a coffee or lunch meeting?
JC: Bluestone Lane in the West Village.

How are you celebrating Blockchain Week?
JC: The Paradigm + Tagomi party — the event of the week!

GAUNTLET

What does your company do?
Gauntlet founder and CEO Tarun Chitra: Gauntlet provides simulation tools and services to help developers, investors, users, and fans of crypto networks feel secure in their investments and decisions.

Your goal with Gauntlet is to make crypto networks interpretable and statistically sound. As a quantitative researcher, what made you pursue crypto?
TC: In 2011, I observed a peculiar happening at D. E. Shaw Research that was my introduction to Bitcoin. We were building Application Specific Integrated Circuits (ASICs) for physics research and had a multimillion dollar order of ours ‘front run’ by a Bitcoin miner. At that time, there weren’t many ASIC developers and it was really shocking to have a supplier not respond to our order and offer us a paltry 10% discount. After that, I had spent a lot of time reading the burgeoning academic literature in the space and even wrote a fake whitepaper in 2014 (chronicled in this blog post) that aimed to make D. E. Shaw’s ASIC the dominant mining rig. After D. E. Shaw, I went to high-frequency trading, which is where I learned a lot about backtesting and simulating human behavior within markets. In late 2016, there was a spate of prominent academic papers that promised to fix the scalability and privacy woes of Bitcoin and Ethereum and I began to think about how I could apply simulation tools from D. E. Shaw and HFT to these new systems. This led me to start writing simulation tools for fun (as a hobby project), which turned into consulting that later turned into Gauntlet.

When people think of crypto, they tend to think of a system without oversight. Why focus on its governance?
TC: For provenance, governance in cryptocurrencies refers to how the balance of power is split between the different users of a cryptocurrency. The simplest version of this how power to change protocol behavior is split between developers (e.g. people contributing to the open source code base) and investors (e.g. people buying the tokens on an exchange). One of the main criticisms of Bitcoin and Ethereum is that they don’t admit governance. In Bitcoin and Ethereum, the authors of the code in the Bitcoin core and Ethereum client repositories completely dictate the economic and security decisions for the network.

The next generation of blockchains aim to do more --- they want to be a decentralized, censorship resistant version of both banks and cloud providers --- and there is an even larger surface area for struggles between different classes of users. For these systems, financial holders, users, maintainers, and developers need much more confidence when they vote on changes to the system that can affect their protocol’s value. For instance, in the stable lending platform MakerDAO, certain token holders vote on the interest rate of the system, which naturally affects the token value. Some participants might want a larger interest rate --- they are net lenders --- whereas others might want a lower interest rate, because they are net borrowers. Governance allows for the system to continuously vote on these types of parameters and reward people for voting / positive participation. But these systems, just like financial systems, are very hard to design to be stable and this is where Gauntlet’s simulation technology comes into play. When equities markets design exchanges, they run millions of simulations to ensure that the market they’ve design is fair and equitable, encourages market makers and provided them tangible ROI, and frictionless. We’re trying to take these tools to the crypto space to bring statistical certainty to a field that has had anything but conviction.

You’re very active in the meetup space, regularly hosting and attending events. What do you think is most special about the collaboration that comes out of the tech community, and New York’s tech community specifically?
TC: Having spent the better part of the past eight years attending lots of events, ranging from the venerable NY Tech Meetup to the most curated events, I think the most special thing about New York is that people are always excited to learn about new innovations. Unlike SF, New York’s tech scene also has strong appreciation of the social and human impact of technology and how it shapes society. I think this stems from the diverse outside interests of people in the NY tech community — it is easy to find a developer who has a PhD in Comparative Literature or a product manager who has a PhD in art history in New York.  As the general public begins to demand more from technology and the entities that provide it, New York will be in a stronger long-term position to ensure that technology provides meaning and value to humanity. It is much harder to find people who want to go to art museums, listen to slam poetry, or compete in pun contests in SF!

Gauntlet itself has a strong relationship with the New York community, working directly with groups like JP Morgan’s Kadena. What is most exciting about working alongside other players in the field?
TC: I think the most exciting thing about working with other players in the crypto space is that we, as a service provider, are unbiased and can interact with everyone in the space. New York’s crypto community is a bit more private than those in SF and Berlin and there is, unsurprisingly, a lot of competition to be the network that gets mass adoption first. I’ve found that companies in New York are oddly more collaborative than others, although they tend to be less public about their collaborations. Amazing community spaces, like our office at Distributed Global, augment the feeling of collaboration between New York entities.

What brought you to New York?
TC: My first job, but really…the music scene.

How do you get to your office?
TC: I usually take the A train, but I often walk or bike home across the Brooklyn Bridge.

Where do you get your favorite pizza slice?
TC: I’m allergic to dairy, so I will shill my favorite vegan pizza place: Double Zero in the East Village.

Where do you get your favorite bagel?
TC: Daily Provisions!

What is the best New York waterfront?
TC: Long Island City — there is this excellent outdoor bar called Anable Basin that has an amazing view.

What’s your favorite New York building?
TC: The Williamsburgh Savings Bank building.

What’s the best place in New York for a coffee or lunch meeting?
TC: For coffee, Interlude Coffee. Lunch, China Blue. In Union Square, Kellogg’s store (seriously, it is always empty and has great WiFi!).

How are you celebrating Blockchain Week?
TC: Our office is hosting events and breakfasts every day and on Friday we’re co-hosting an event on validators economics with Bison Trails and Tezos. Please attend! We’re also attending a lot of events and our whole distributed team is in town.

BLOCKSEED

What does your company do?
Blockseed founder and CEO Aniruddh Jain: We are building a CRM 2.0, an automated one that aligns your sales/raise interests and helps build and maintain relationships. We aim to find, incentivize, and help build new relationships by mapping network, while incentivizing the clients to provide feedback on the pitch. This feedback is of tremendous value to the sell side, but really hard to quantify today without a tool like Blockseed. It’s the entire sales pipeline reimagined with deeper insights.

Why did you found your company in NYC?
AJ: I have lived for work or studies in Delhi, Mumbai, Paris, London, Zurich, Brisbane and New York. While I learned a lot from each of these cities, I never really could call one home. The ambition and vigor in this 3 by 8 mile island is what keeps me going. It’s the final frontier for me. From a business standpoint, all the decision makers are accessible in New York, and it’s easier to get funding and meetings.

Blockseed seeks to alleviate the friction so often found by startups. As a startup yourself, what has been one of the most valuable lessons you’ve learned and brought to Blockseed?
AJ: I’ve grown a lot of respect for the human resources and recruitment industry in general. I’ve learned it’s best to always have regular check-in of your hires, especially if it’s the first time you are doing it, with your advisors. Another lesson is that investors who stay with you during the hard times are more valuable than the one that bring in capital in the good times, so choose wisely.

Blockseed’s beta opened in February, and had its public launch in March. What did the beta process teach you about development? What would you tell other founders working to deliver a highly technical product?
AJ: The Blockseed closed beta launched in late January and the public beta in March. We will launch once we have enough case studies and build some more features out. With our double-sided platform, technical challenges are secondary to the launch — we need a healthy balance of marketing capital and development capital. To other founders, I would say, know the perils of a double-sided platform, regardless of technicality. And for the technical side of things, nothing speaks more than hard, data-based validation of your concept, even if it is with a small sample set. Blockseed is exploring a new space, so presenting data-based case studies is critical to show what value we can bring to the table.

Your first venture came out of groups designed to support the tech community – an incubator and a hackathon, respectively. What do you see as being the most valuable pieces of the tech ecosystem? How do you see infrastructure like those continuing to grow?
AJ: Incubators and hackathons are a great way to meet people and get critique in a closed environment. If you are a first-time founder, an incubator is a great resource for learning the ropes.If you are a more experienced founder, accelerators are great way to build a network in the space of your venture. I think that corporate venture capital is going to grow via accelerators, both because of the PR value and for the ease of acquisition, if the are the first equity in and can pre-determine terms. There are so many independent accelerators these days, it’s almost like the accelerator is the new startup — there’s a struggle to stand out. With new rating agencies and accelerator networks coming up, I see a good and firm standard for accelerators coming up soon.

What brought you to New York?
AJ: Columbia University, mainly. But I always wanted to live in the top market. If something launches, it’s either in NY or SF. But this city has a grasp on me — it’s been four years and I still feel like I am discovering something new each day.

How do you get to your office?
AJ: The express 6 train — it has never failed me.

Where do you get your favorite pizza slice?
AJ: Neapolitan Express at 40 Wall Street is a go-to.

Where do you get your favorite bagel?
AJ: I’m not into bagels. Since I don’t get as many workouts in as I want, I compensate with sweetgreen.

What is the best New York waterfront?
AJ: I fell in love with South Street Seaport district — it’s quaint and charming. Else, DUMBO is a good second if you can avoid the touristy times.

What’s your favorite New York building?
AJ: There are a few, but has to be the Art Deco style of the Chrysler Building designed by William Van Alen.

What’s the best place in New York for a coffee or lunch meeting?
AJ: The Freehand is quite a good place for a meeting in Gramercy.

How are you celebrating Blockchain Week?
AJ: I got in touch with the Digital Currency Initiative via the MIT Technology Review’s Business of Blockchain event, and I’m also reading up on the two major developments in the blockchain technology that happened earlier this year: Schnorr and Taproot.

BLOCKFI

What does your company do?
BlockFi co-founder Flori Marquez: We offer financial products for crypto investors.

Why did you found your company in NYC?
FM: New York City is the FinTech capital of the world.

You’ve spent your entire career working in lending. How has that background informed your transition into the crypto space?
FM: I’m primarily driven by learning. My co-founder, Zac Prince, had the idea to build financial products for crypto investors. Having come from FinTech, I found the ability to use my existing expertise in a nascent industry an incredible learning experience. From the moment Zac told me about his idea, I knew we had to work together.

After launching the first interest-bearing accounts for bitcoin and ethereum earlier this year, BlockFi’s demand has skyrocketed. How are you preparing for serve a constantly growing customer base?
FM: We are preparing in two ways. First, we pride ourselves on offering the best customer service in the industry and we will continue to bring on qualified, intelligent team members to support our clients. Second, we will continue to build out our product to support client needs. We’re constantly listening to client feedback and analyzing how our clients interact with our platform to determine how our product needs to adapt to meet their needs.

The blockchain and crypto spaces are, to date, quite male-dominated. How is being a female founder — and a woman in tech broadly — differentiating how you run and grow your business?
FM: I enjoy being able to bring a different perspective to the table. As we scale out our team, our focus is on bringing on different perspectives and skillsets. Having different voices is what allows companies to continue to innovate and develop a comprehensive view on how to successfully build their products.

Have there been any changes in the crypto space you didn’t anticipate? What has that meant for investors?
FM: We did not anticipate our most recent product to have grown as rapidly as it has. As of today, we have over $100MM in assets under management in the BlockFi Interest Account (custodied by Gemini). This was positive news for investors in BlockFi and crypto investors alike.

What brought you to New York?
FM: I moved here after college to work at the fixed income asset manager, Oak Hill Advisors.

Where do you get your favorite pizza slice?
FM: Peppino’s in Park Slope!

Where do you get your favorite bagel?
FM: Murray’s, if I’m in Manhattan.

What is the best New York waterfront?
FM: Brooklyn Bridge Park.

What’s your favorite New York building?
FM: Odd choice on this one – I love the Spring Street Salt Shed. It’s unlike any other building in New York.

What’s the best place in New York for a coffee or lunch meeting?
FM: I love Little Park on Chambers Street – 2 minutes from my office, quiet ambiance and beautiful design.

What’s the craziest thing that’s happened to you in NYC?
FM: Does starting my company here count?

SNARK.ART

What does your company do?
Snark.Art co-founder and CEO Andrey Alekhin: Snark.Art explores the creative and commercial possibilities of blockchain in art.

Why did you found your company in NYC?
AA: We live here, and this is the ideal place to build a project at the intersection of art and blockchain, as New York is a capital for both industries.

You were surrounded by artists growing up, and studied aerospace engineering in college. Could you tell us a bit more about how those two experiences led to Snark.Art?
AA: I’ve been interested in crypto for a very long time and was running a digital arts festival in Moscow for several years. Misha, my co-founder, was leading a dev team and participated in several video art projects. We’ve known each other for several years, and the intersection of art and tech was always a main theme of our discussions..

Our office has strong feelings about Cryptokitties. How did that platform inspire you? What do you think it contributed to the blockchain space?
AA: Cryptokitties is a great project, as they were first to add an interactivity aspect to art/collectibles. And this opened a whole new world of possibilities!

Snark.Art revolutionized the art space by using blockchain not only as an identification tool, but as a medium itself. Art is a creative, but relatively constant, industry. Painting, sculpture, music – we’re familiar with their forms and how they have been generated for thousands of years. What has it been like introducing an entirely new mechanism for creation? Has there been pushback? Has it influenced the non-crypto art community?
AA: Artists are all about experimentation —  you do not need to convince them to try new things, they’re already into it. The possibilities of this new medium is enormous — it’s a whole new universe. Imagine artworks that mutate with a change of ownership or reveal themselves in a hundred years from now. Artists can now create whole new worlds with internal logic and rules — and these worlds could run forever and be independent of anything, including their creators. How cool is that?

What is another crypto subculture you find particularly interesting? How do you see it influencing its non-crypto counterpart?
AA: Speculation in frictionless markets is an important part of crypto-culture. This is something very new to an art market. It’s really interesting how these two cultures will eventually merge.

What brought you to New York?
AA: Four years ago, my wife was admitted to NYU Tisch graduate film program, so we decided to move here from Moscow.

How do you get to your office?
AA: Bicycle.

Where do you get your favorite bagel?
AA: The new Russ & Daughters at the Brooklyn Navy Yard.

What is the best New York waterfront?
AA: Williamsburg!

What’s your favorite New York building?
AA: The New Lab building.

What’s the best place in New York for a coffee or lunch meeting?
AA: Nostrand, a small Korean coffee place in Brooklyn.

All illustrations by Elly Rodgers

Close up of finance business graph by Vintage Tone/Shutterstock.com