The VCs Are Selling. That Changes the Game | Leigh Drogen on the Real Edge in Crypto
Excess ReturnsAugust 19, 202501:08:36

The VCs Are Selling. That Changes the Game | Leigh Drogen on the Real Edge in Crypto

In this episode, we sit down with Leigh Drogen of StarKiller Capital, alongside guest co-host Kai Wu, for a deep dive into crypto investing strategies, momentum in digital assets, and market-neutral DeFi yield opportunities. Leigh shares his perspective on where we are in the crypto evolution, the parallels with past technology cycles, and how to survive and advance in one of the most volatile asset classes in the world. From time-series and cross-sectional momentum to the economics of yield farming, this is a comprehensive look at building systematic strategies in digital assets.

**Topics Covered:**

* The parallels between Web1 → Web2 and today’s crypto transition
* Why the “fat protocol” thesis is giving way to the “fat app” era
* The role of Bitcoin vs. Ethereum in the next stage of crypto adoption
* The “survive and advance” investing philosophy
* Time-series momentum and cross-sectional momentum in crypto
* How VC behavior is changing momentum dynamics
* Sector-level momentum and narrowing lookback periods
* StarKiller’s approach to asset selection and quality screens
* Building a market-neutral DeFi yield strategy
* Bootstrapping network effects and early liquidity provisioning
* Diligence, counterparty risk, and managing protocol risk
* The competitive landscape and where the biggest edges remain in crypto

**Timestamps:**
00:00 – Crypto’s infrastructure milestones and evolution
02:53 – The “fat protocol” vs. “fat app” thesis
08:09 – Bitcoin’s role vs. Ethereum’s potential
14:20 – “Survive and advance” and limiting drawdowns
19:20 – Time-series vs. cross-sectional momentum
23:00 – VC selling behavior and regime change in momentum
31:47 – Sector-level momentum trends
36:13 – Shorter lookback periods and market speed
39:56 – StarKiller’s investable universe and filtering process
48:00 – Designing a market-neutral DeFi yield strategy
52:56 – Rewards farming and bootstrapping network effects
58:00 – Market-making vaults and APR opportunities
01:00:10 – Managing counterparty and protocol risk
01:04:02 – Has crypto alpha become more competitive?
01:07:41 – One lesson for the average investor