Asset management firm Stone Ridge launches Bitcoin-focused accelerator program • TechCrunch

Asset management firm Stone Ridge has launched a startup accelerator, In Wolf’s Clothing (Wolf), which will be dedicated to growing Bitcoin-focused applications, the team exclusively told TechCrunch.

The program will bring four cohorts per year, each consisting of roughly eight to 12 teams, or roughly 30 to 50 founders, to New York City from around the world for eight weeks at a time to focus on building on the Bitcoin-centric Lightning Network and the Taro protocol,” Wolf CEO Kelly Brewster told TechCrunch.

The Lightning Network is a layer-2 payment system built on top of Bitcoin that aims to enable faster payment transactions. Separately, Taro is a protocol launched in April this year to help issue digital assets on Bitcoin’s blockchain that can then be transferred to the Lightning Network instantly in low-fee transactions.

“They’re both generic and usable enough in such a wide range of applications that it’s like saying you’re starting an accelerator focused on HTTP,” Brewster said. “It’s a specific technology, but the business use cases can be incredibly broad. The fact that we’re very focused is a big part of the stage and can be a big draw for entrepreneurs.”

The teams in the accelerator will vary from small start-up teams to early stage companies. They will receive individual investments of $250,000, while a cohort winner will receive an additional $500,000 for a total of $750,000, Brewster said.

Some topics that Brewster is interested in seeing startups expand on include micropayments and tipping through Lightning and Taro.

NYDIG, a subsidiary of Stone Ridge, is also supporting the accelerator, along with mentorship and investment from Bitcoin-focused venture capital firms and operating companies. The names of companies providing outside capital will not be released, Brewster said. However, he added that all investors and mentors are already working with Bitcoin and Lightning. “It ranges from specialist VCs dedicated to Lightning up through public companies in fintech and banking.”

Prior to this role, Brewster was NYDIG’s Chief Marketing Officer and has worked for Stone Ridge for approximately six years. Before that, Brewster spent nearly 10 years at Goldman Sachs “in a variety of roles,” he said. “Over the past six years, I’ve had the opportunity to help start a number of businesses, and I’ve fallen in love with the process of taking an idea and turning it into a real thing.”

The Lightning Network is a layer-2 payment protocol built on top of Bitcoin that aims to provide instant payments and scalability at a low cost to the blockchain. It allows users to send or receive Bitcoin quickly by making transactions outside the blockchain network or, as Coinbase said, “like an HOV lane on a freeway.”

“At Stone Ridge, we’ve been watching the Lightning for quite a while now,” Brewster said. “The network has reached critical mass in the last 12 months, and there’s enough capacity now that you can do real-world things quite robustly on the network.”

In the past, the network has been implemented by Twitter for users to send and receive Bitcoin “tips” through Lightning Network-focused payment app Strike. It has also been implemented in El Salvador’s government-created wallet, Chivo, allowing citizens to transact across borders.

“The growth in Lightning over the past year has been extraordinary,” said Brewster. “In some ways, it’s the perfect moment to step back and see where there’s signal or just noise. Some of the clearest signals are coming from Lynet. The growth and network capacity has been hockey-sticking.”

The news comes at an interesting time for NYDIG, which recently laid off about 33% of its employees, according to a Wall Street Journal report last week. In December 2021, NYDIG raised $1 billion, valuing the company at over $7 billion.

Brewster declined to comment on the layoffs, but said, “The launch of Wolf should be a clear signal of Stone Ridge’s long-term belief and investment in Bitcoin. It’s obviously a difficult environment out there, but this is the time to make investments in a couple of years.” »

There are a number of crypto accelerator programs sprouting up across the ecosystem. Some range from layer-2 blockchain-specific accelerators like Polygons to general web3-focused programs like Alliance DAO. While some offer capital as Wolf plans, others invite investors to demo days in the hope that they will invest in the startups’ projects.

“In times like this, the companies that are being built will catch these secular trends and really take hold as they accelerate,” Brewster said. “So we think this is the perfect moment to build instead of trying to do something ourselves at Stone Ridge – we want to help and empower hundreds of other founders.”