With the explosive growth of the cryptocurrency industry in the past five years, tech-savvy professionals are seeking business opportunities in this industry in the form of entrepreneurship.
Founder of cryptocurrency startup Ava Labs Prof. Emin Gün Sirer, computer science, is one person taking advantage of the burgeoning industry, raising over $60 million in venture capital funding in less than two years.
Sirer started Ava Labs in 2018 with the help of two Cornell graduate students, Kevin Sekniqi ’20 and Maofan Yin ’21. According to the company’s leaders, the team’s success has relied on its unique “consensus protocol” — the technology that underlies the transactions of cryptocurrency and ensures its legitimacy.
Ava Labs’ novel consensus protocol, Avalanche, can expand cryptocurrency’s potential in the financial sector by offering greater transaction speeds, said Sirer. Unlike Bitcoin and other traditional cryptocurrencies, Avalanche does not rely on a complete record of all transactions in order to process payments.
Instead, by avoiding the process of recording all past transactions on a single ledger, Avalanche reduces processing time and can finalize transactions faster than existing networks.
As more people buy the Avalanche’s token, under the ticker symbol AVAX, it appreciates in value — much like Bitcoin. Stockholders are then able to make profits off of the token’s appreciation.
The viability of Ava Labs’ innovations were met with some skepticism from those within the cryptocurrency sphere. But to quickly prove them wrong, Sirer said, he brought Avalanche directly to the market, rather than subject it to a lengthy peer-review process.
“I thought, let me just jump in and show the world,” he said.
The launch of Ava Labs’ Avalanche came at a time of mixed sentiments for the cryptocurrency and blockchain world. Though initially hailed as potentially revolutionary by some, high-profile hacks and extreme volatility have dogged many cryptocurrencies, sowing doubt in their true potential to replace regular money.
In addition, cryptocurrency’s links to illegal activity have shaken its reputation as a legitimate alternative to currency. For example, the infamous, now-defunct online marketplace Silk Road relied on cryptocurrency to provide anonymity to facilitate illegal transactions.
However, a large part of Sirer’s strategy for Ava Labs rests on dispelling some of these preconceptions.
Considering himself just as much a professor as a startup executive, Sirer emphasized his commitment to the facts and academic rigor. His team, composed of blockchain enthusiasts from Cornell and beyond, shuns the type of sensational bravado that has accompanied Bitcoin’s meteoric rise.
“Our backgrounds, or personalities involved in our system, our discourse… It’s all science driven, empirically driven,” Sirer said.
When it first released the Avalanche protocol in March 2020, Ava Labs tapped the cryptocurrency community to identify bugs that could otherwise leave its network vulnerable to attacks. The company hosted an event called a Bug Bounty, which it used to incentivize participants to discover bugs by offering $50,000 in prizes.
By July 2020, Ava officially released its token into the market, ultimately generating $42 million in additional funding.
Sirer credited Ava’s rapid growth to his Cornell-educated team: “I’ve been blessed with access to the Cornell talent pool. The people who know about [the Cornell network] and have inroads into it do really well,” Sirer said. “But I feel that it’s actually under-utilized by industry.”
As technology stocks continue to receive sky-high valuations, Sirer underscored how entrepreneurship can often be rewarded in the current financial climate.
“There’s a lot of money lying idle in the economy,” Sirer said. “[Investors are] looking for credible, trustworthy teams doing things to improve the state of the world.”