Omar Yehia: Venture Capital and the importance of decentralisation

With Omar Yehia 

In this episode of the DeFi Download, Piers Ridyard discusses investing with applied mathematician Omar Yehia. They explore issues in academia, the importance of trust in crypto, and how to approach investing by examining personal assumptions and moving away from biases, while considering the trade-offs of decentralisation and the concepts of ease of use, robustness, and elegance in systems.

Summary

Omar Yehia has a background in science and applied mathematics. He is an expert on building successful primitives while avoiding common mistakes. 

Omar has done extensive research in the field of rocket science and photonics. Fascinated by the mathematical principles behind these fields, Omar became drawn to a reductionist approach to life and eventually went on to study applied mathematics. 

Key takeaways

• Academic institutions and government bureaucracies share parallels. The current academic system is inefficient and misallocates resources. 
• The private market for distributed ledgers and blockchains has contributed to a recent acceleration in cryptography, with more breakthroughs in the past four years. 
• The majority of individuals are uninterested in decentralisation despite its evident advantages. 
• At the heart of almost every financial crisis is misplaced trust.
• Constantly examining hypotheses is vital, especially for concepts that have never been tested in the wild and that you got from someone else. 
• In order to fulfil their obligation to their investors, capital allocators must abandon their personal biases and be patient as they refresh their information and worldview. 

Chapters

[00:53] Omar’s background

[03:50] Omar's response to Piers' thesis on misaligned incentives in academia and their resemblance to communism.

[10:32] Philosophical and practical issues pertaining to the crypto industry's balancing of long-term incentives

[13:17] Benefits and limitations of the private market

[14:48] Examining Omar's foray into crypto

[20:56] Omar’s journey from the Ethereum yellow paper to investing

[22:03] Omar's key insights from the evolution of cryptocurrencies from 2017 to the present day

[23:26] The Faustian pact of Web2, sacrificing privacy for ease, and the Faustian pact of Web3, centralization in exchange for convenience.

[26:26] Innumeracy regarding the law of statistics

[27:21] Fundamentally misplaced trust as the root cause of the FTX, Three Arrows, and Celsius tragedies

[29:22] The most crucial next steps for crypto and Omar's investments

[32:34] Decentralisation, usability, and robust elegance 

[38:55] Omar’s investing philosophy: Investing in what you believe will be most profitable vs the future you wish to see 

Further resources: 

Omar’s Twitter: @0xomaryehia