#20 Rennick Palley: Founder of Stratos Technologies on Incentive Structures in Crypto

“If there's one innovation in crypto, it's incentive structures that actually drive people to do things that benefit the whole. That is so huge. But these automated market makers create liquidity for the long tail. And so if everything is suddenly liquid, what happens there? What are the emergent results?” – Rennick Palley
Rennick Palley is the Founder and Chief Investment Officer of Stratos Technologies. Prior to founding Stratos, Rennick worked as a Research Associate at Sanders Capital, which manages over $40 billion in global equities. To date, Stratos Technologies has made 16 investments with an aggregate transaction value of over $250 million into companies like Rezi, Tala, Dave, Compound Finance, and Clearbanc.
In this second interview, Rennick and I zoom way out to discuss everything from the recent boom in SPACs to the world of DeFi protocols, and how crypto gets incentive structures right. For more, listen to the first part of this interview in Episode 19 of Outliers with Daniel Scrivner. In that episode we discuss the war of growth vs. value investing, the concept of reflexivity, and Stratos' approach to investing across the capital structure in early-stage technology companies.
Chapters in this interview:

00:01:36 – What’s next for Stratos Technologies

00:03:16 – Why SPACs are the activist investing tool of the future

00:08:24 – What the youngest generation of investors want to invest in

00:12:30 – How SPACs can play by different rules when telling their story

00:19:48 – Exploring crypto and protocols built on top of Ethereum

00:32:52 – How Stratos helps DeFi protocols launch new markets

 
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“If there's one innovation in crypto, it's incentive structures that actually drive people to do things that benefit the whole. That is so huge. But these automated market makers create liquidity for the long tail. And so if everything is suddenly liquid, what happens there? What are the emergent results?” – Rennick Palley

Rennick Palley is the Founder and Chief Investment Officer of Stratos Technologies. Prior to founding Stratos, Rennick worked as a Research Associate at Sanders Capital, which manages over $40 billion in global equities. To date, Stratos Technologies has made 16 investments with an aggregate transaction value of over $250 million into companies like Rezi, Tala, Dave, Compound Finance, and Clearbanc.

In this second interview, Rennick and I zoom way out to discuss everything from the recent boom in SPACs to the world of DeFi protocols, and how crypto gets incentive structures right. For more, listen to the first part of this interview in Episode 19 of Outliers with Daniel Scrivner. In that episode we discuss the war of growth vs. value investing, the concept of reflexivity, and Stratos' approach to investing across the capital structure in early-stage technology companies.

Chapters in this interview:

00:01:36 – What’s next for Stratos Technologies

00:03:16 – Why SPACs are the activist investing tool of the future

00:08:24 – What the youngest generation of investors want to invest in

00:12:30 – How SPACs can play by different rules when telling their story

00:19:48 – Exploring crypto and protocols built on top of Ethereum

00:32:52 – How Stratos helps DeFi protocols launch new markets

Sign up here for Outliers Weekly, our Sunday newsletter that highlights the latest episode, expands on important business and investing concepts, and contains the best of what we read each week.

Follow Outliers on Twitter: https://twitter.com/heyoutliers.

If you loved this episode, please share a quick review on Apple Podcasts.