Multicoin Capital - Our Investment in Delphia

By Tushar Jain
JUNE 8, 2022
Today I’m excited to announce that Multicoin Capital has led a $60M Series A in Delphia alongside Ribbit Capital, FTX Ventures, Valor Equity Partners, FJ Labs, Lattice Ventures, Cumberland, Road Capital, and M13. 

Delphia is the first instantiation of a new form of capital formation that we have been thinking about for some time that we call  “DataDAOs.” DataDAOs aim to harness user-owned data to 1) achieve some greater benefit, and 2) share those benefits with the user who contributed the data.


One of Multicoin’s core theses is that blockchains provide a novel mechanism for capital formation. We recently highlighted this in our essay on Proof of Physical Work, in which we walked through some examples in which crypto enables coordination for geographically distributed physical infrastructure at unprecedented scale and speed. DataDAOs also present a new method for capital formation. We believe that large numbers of small data sets can be aggregated to produce emergent value that exceeds the sum of its parts.

Before starting Multicoin, I co-founded a company called ePatientFinder that allowed physicians and clinics to analyze their electronic medical record databases to discover clinical trials or other advanced treatments for their patients. While one individual's health record data is not very useful beyond the scope of the care of that immediate patient, collecting a large data set of many patients’ health records was tremendously helpful to unlock important insights relevant to the entire population, versus just the individual.

However, as I acutely learned, it is extremely difficult to collect a large number of unique data sets because there is a fundamental alignment problem between the contributors and the aggregators. Data contributors are rarely rewarded for their contributions (beyond their own care) because they don’t have a right to  the value created by the aggregate data, nor are they entitled to govern how their data is used, which leads to a massive leap of faith in the aggregator—which, unfortunately, has been violated many times over. DataDAOs solve this misalignment by giving data contributors direct economic upside in the aggregate data and the ability to govern it.


Delphia is a premier algo-advisor that helps people invest smarter together. Underneath their mobile investment platform, they are building a DataDAO. In addition to unlocking greater financial inclusion with a minimum $25 investment, users (i.e., fund investors) are also invited to contribute their data alongside their money to improve the trading algorithms that manage their money. With each new investor that joins, the algorithm gets smarter.

Our thesis is that users will willingly contribute their commerce, device, search, and social media data in exchange for tokens, which serve as both their interest in the data’s aggregate value and their governing power. This data can then be used by hedge funds and other investors to forecast the key performance indicators of public and private companies, which, in turn, can generate investment returns (alpha) attributable to the data. Here are some simple examples of forecasting and attribution that Delphia facilitates:
  1. A large spike in search queries for a specific product can predict that the revenue of the company that makes that product will increase
  2. Significant movements of employees between directly competitive companies can predict a dispersion in corporate performance
  3. A material change in foot or car traffic at a business can be predictive of revenues for both that company and its competitors
  4. Influencers promoting a product or service on social media can predict an uptick in sales

Following its attribution algorithm, Delphia shares revenue generated by the data with users contributing to the dataset. This creates powerful alignment that has never existed before. 

There has been a long running joke in tech that Google (and more recently, Amazon and Shopify) could operate the world’s most profitable hedge funds. We think Delphia can actually fulfill that vision, and do so in a way that shares the upside with the data contributors.

Historically, retail investors pay a robo-advisor a percentage of AUM (e.g., 0.25% / year) to manage their money using relatively undifferentiated strategies. Delphia disrupts this model and allows retail investors to invest in differentiated strategies with an active return layered on top—for zero fees. “Pay to play” is replaced with “contribute data to earn” (as described in the next paragraph). All of the contributed data is then used to improve the managed portfolios in which the user has invested.

Delphia’s app (live in the App Store) gives users the ability to 1) create an investment account and 2) opt-in to contribute their own data — which will soon include Amazon purchase history, Google search history, LinkedIn data, Twitter data, credit card data, GPS data, etc. Soon, Delphia will also be launching a chat-like interface in the app for asking users questions about themselves and the world around them. This data is then transformed by Delphia into features for consumption in machine learning models.

By collecting data that is 1) not commercially available and that 2) uses a unified identifier across data sources, Delphia can build a dramatically richer data set for predicting asset prices and consumer trends than what exists today.

To be clear, Delphia does not give any consumers of the data access to personally identifiable information. Rather, the system anonymizes the data set and will only allow access to the data via a secure training environment. 

Returns to Scale

Delphia is the classic example of a network-effect based business model: as more users contribute data, the returns for funds using the data should theoretically improve. This creates a flywheel, in which more users are incentivized to provide data because hedge funds and other businesses (who benefit from crowdsourced data at scale) are willing to pay more for access to the aggregate data.

While one individual, or even 1,000 individuals, contributing data would not generate incremental returns for data purchasers, hundreds of thousands or millions of users contributing data (and reaping the returns for providing that data) provides a material edge.

Curation Games

In addition to providing users the opportunity to contribute data and receive tokens, Delphia and data purchasers can use subTokens to incentivize subDAOs/communities around a specific data connection (like Twitter or Robinhood data), or even around a creator and their audience. Investors can then value the subTokens of the various communities based on how valuable they view that specific data set to be.

As an example, Alice can speculate that Twitter sentiment data will become increasingly important for capital markets forecasting over the next few years, while shorting Facebook data (e.g. she thinks that Gen Z users primarily signal their preferences on Twitter, and they are slowly becoming a larger part of the economy over time). The curation games will be settled based on data set purchasers’ attribution analysis in identifying and signaling which data sets were most valuable for them.

These curation games provide a powerful mechanism for the Delphia DataDAO to gather more data which further strengthens Delphia’s edge.

The Rise of DataDAOs

Trusting a company with your data is a scary proposition for some. However, trusting your data with a DataDAO presents an entirely new trust proposition. When a company like Google or Facebook monetizes their users’ data, not only are the users not compensated, but the users also don’t have any say in how their data is used. These companies often have misaligned interests between their users and their stockholders/executives.

With a DataDAO, the data contributors can use their tokens to vote and govern how their data is used. Gone are the days of relying on a corporate entity like Google promising not to be evil, instead users can take control over their data into their own hands.

We believe that data is the most valuable commodity of the modern era. Users deserve to be compensated for the value they create with their data. Users deserve governance over how their data is used. DataDAOs will help make this vision a reality.


Disclaimer: This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Potential DataDAO participants and Delphia investors should review the written materials related to such DataDAO and Delphia fund, if any.  Multicoin is not involved in the operation of (and does not act as an investment adviser to) any DataDAO or any Delphia fund. This blog post does not constitute a recommendation in connection with any DataDAO or Delphia fund.
Disclosure: Multicoin has established, maintains and enforces written policies and procedures reasonably designed to identify and effectively manage conflicts of interest related to its investment activities. For more important disclosures, please see the Disclosures and Terms of Use available here
"The DeFi Stack" by Multicoin Capital "The DeFi Stack" by Multicoin Capital
"The DeFi Stack" by Multicoin Capital "The DeFi Stack" by Multicoin Capital
"The DeFi Stack" by Multicoin Capital "The DeFi Stack" by Multicoin Capital
"The DeFi Stack" by Multicoin Capital "The DeFi Stack" by Multicoin Capital
Looking for more?
Read more of our reports and analysis on our blog.

©2017-2022 Multicoin Capital, All rights reserved.

Austin, Texas 78701

unsubscribe from further emails here.

Older messages

The Ball Multicoin Bitwise Metaverse Index

Tuesday, June 7, 2022

Over the last 6 months, as the term “metaverse” has become more popular in mainstream lexicon... WRITING The Ball Multicoin Bitwise Metaverse Index By Kyle Samani JUNE 7, 2022 Over the last 6 months,

Proof of Physical Work

Tuesday, April 5, 2022

One of the most powerful features of crypto-economic protocols is their ability to create incentive structures... WRITING Proof of Physical Work By Tushar Jain and Shayon Sengupta APRIL 5, 2022 One of

Fractal: The Web3 Amusement Park

Friday, April 1, 2022

Today I'm excited to announce that Multicoin Capital has co-led a $35M investment in Fractal. WRITING Fractal: The Web3 Amusement Park By Mable Jiang APRIL 1, 2022 Today I'm excited to announce

Building Bridges (Our investment in LayerZero)

Wednesday, March 30, 2022

Today I'm excited to announce our investment in LayerZero, an omnichain interoperability protocol. WRITING Building Bridges By Kyle Samani MARCH 30, 2020 Open 18 months ago, Ethereum was the only

Move Move Move

Tuesday, March 15, 2022

Broadly speaking, there are two ways to think about scaling blockchains... WRITING Move Move Move By Kyle Samani MARCH 15, 2022 Broadly speaking, there are two ways to think about scaling blockchains:

A Serious Debate, GLXY Slashes BitGo, & The Date We've Been Waiting For

Thursday, August 18, 2022

August 17, 2022 | Issue #232 Sponsored By: Coin Snacks MUST READS Galaxy Digital ❌ BitGo What was at one point the largest crypto deal in history and the first to be more than $1 billion seems to now

Crypto Newsletter - Issue 385

Wednesday, August 17, 2022

Crypto Daily News - Aug 17, 2022 View on the Web Archives ISSUE 385 August 18th 2022 Crypto News Floki Inu Introduces Treasury Bills To Allow Users To Purchase FLOKI At A Discount Floki Inu reveals in

Mutually Assured Destruction - The Daily Gwei #526

Wednesday, August 17, 2022

If you try to censor us, we will nuke you from orbit. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Weekly Update - Defi and Layer 1 & Layer 2 News (Week 32, 10/08/2022 - 16/08/2022)

Wednesday, August 17, 2022

Acala Network suffered a security breach and aUSD depegged. Curve Finance's website was hacked. Crypto users were hit with a “dust attack” after being sent a small amount of $ETH from Tornado Cash.

Weekly Update - Defi and Layer 1 & Layer 2 News (Week 32, 10/08/2022 - 16/08/2022)

Wednesday, August 17, 2022

Acala Network suffered a security breach and aUSD depegged. Curve Finance's website was hacked. Crypto users were hit with a “dust attack” after being sent a small amount of $ETH from Tornado Cash.

A look at LVMH's Blockchain Consortium....🦍

Wednesday, August 17, 2022

August 17, 2022 The day of fortune is like a harvest day, We must be busy when the corn is ripe. -Torquato Tasso Market Bitcoin $23779.00 -1.28% Live Prices Ethereum $1878.35 -1.47% Live Prices Tether

⚡ I gained over 210 new subscribers with ONE lead magnet. Here's how.

Wednesday, August 17, 2022

#SummerRerun edition ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Jose Delbo: From Comic Artist to NFT Comic Creator | Decentralized Arts

Tuesday, August 16, 2022

Dear Bankless Nation, Congratulations to BanklessDAO for the start of Season 5! The DAO has changed a lot since its inception. Many of the initial contributors have stepped down from core roles over

Crypto Newsletter - Issue 384

Tuesday, August 16, 2022

Crypto Daily News - Aug 16, 2022 View on the Web Archives ISSUE 384 August 17th 2022 Crypto News Terra Founder Do Kwon Reveals He Was Never Investigated By South Korean Authorities The collapse of the

Analyze the future application scenarios of the NFT AMM innovative solution SudoSwap

Tuesday, August 16, 2022

Since August, SudoAMM has attracted the attention of NFT users with its rapid growth in volume and users, with Dune Analytics data showing that as of August 14, current SudoAMM volume has exceeded 6900