Why XION? Spartan, Figment, and HashKey Weigh In

One of the most impactful developments in Web3 in recent months has been Chain Abstraction — the process of making Web3 more accessible to the everyday user by simplifying complex blockchain mechanics under a more sleek, user-centric hood. By abstracting away the technicalities, Chain Abstraction enables smoother user experiences, allowing more users to benefit from Web3’s promise of decentralization, sovereignty and true ownership. 

Leading VCs in the industry have also shown excitement towards Chain Abstraction, viewing it as the bridge that will connect Web3 to a broader audience. Their confidence stems from the belief that simplifying blockchain interactions will make it easier for both users and developers to engage with Web3 without needing in-depth technical knowledge, ultimately increasing adoption. Earlier this year, XION raised an additional $25 million to continue building the very first walletless L1, designed to abstract away crypto complexities and empower developers to build consumer-ready applications.

XION founder, Burnt Banksy, recently sat down with Figment, Spartan, and HashKey to discuss their views on XION and its mission to bring the benefits of blockchain technology to all. The panelists were:

• Burnt Banksy from XION

• James Parillo from Figment Capital

• Mia Mai from HashKey Capital

• Calvin Poon from The Spartan Group

• Moderated by Burnt Boots from XION

Listen to the full Twitter Space here.

On Strong Founding Teams and Initial Vision

Q: What were your initial thoughts on the XION vision?

Mia from HashKey Capital: "HashKey invested in the team before I joined. When I got to know Burnt Banksy and learned about this new narrative the team was building, it was the first time I saw someone so passionate about something. Initially, when I took over the project from the investment team, it was a completely different story. But when Burnt Banksy presented this new narrative on chain abstraction, it was a whole new story. I was really fascinated by the fast-moving working style the team maintained, and how clearly they thought about being user-driven, approaching everything from the user’s perspective instead of being like other core dApps that think from the technical side.

It was fascinating. It has been a pleasure to see how the team has transformed their white paper into something real, with actual users and clients, and so many chains integrated in the past six months. That was amazing."

Calvin from Spartan Capital: "Spartan invested in Burnt Banksy before my time as well. By the time I got to know Burnt Banksy, the first impression was that he’s quite bold and charismatic, generally being able to think out of the box. I was looking at all these news reports and thought, I'm not sure about all these fire stunts — but it's not every day you see someone burning down a famous piece of artwork and going as far as lighting himself on fire.

As I spent more time with Burnt Banksy, I realized he's quite long-term-oriented. It's important to note that many founders didn't manage to stick around or make it out from the 2020 timeline. Burnt Banksy did a great job of that. This leads me to the criteria of a strong founding team — it involves being resourceful, being agile, and being able to think out of the box. The market moves very quickly in crypto. Narratives change. It is very important for founders to move accordingly."

James from Figment Capital: "We met Burnt Banksy when he was raising for his original project. We were getting into the space and starting to look at Solana projects. Burnt Banksy lives in New York, I live in New York, the office is in New York, so we met up in person and got to know each other. We've been able to build a really strong relationship over the last three years. 

I remember there was a moment in late 2021 or early 2022 when I thought “Burnt Banksy is incredible.” He's incredibly hardworking, has built an incredible team, understands the market, understands how to onboard users and how to get attention. But in addition to that, he has worked really hard at building a product that people want to use.

When investing in or partnering with a founder or project, it's crucial to look for dedication, conviction, and a drive to succeed — qualities that Anthony has demonstrated over the years. Strong teams and ideas are important, but without that underlying determination and work ethic, projects are inevitably going to fall short.

The type of founder and team that XION has assembled is exactly the kind you want to bet on — one that is committed to pushing the boundaries of what's possible in blockchain while keeping the user experience as the top priority. This blend of innovation and usability is likely to be a key differentiator for XION as they work to onboard more Web2 companies and users onto the blockchain."

On Industry Challenges

Q: What are the biggest challenges preventing crypto from onboarding the next billion users?

Calvin: “The goal of crypto has always been to onboard as many new users as possible. This can be done in lots of ways, maybe through gaming, social prediction markets, or consumer apps. That’s why there’s so much conversation around account abstraction and chain abstraction. These innovations have the potential to bring in large user flows, giving hope that we can convert them into Web3 users, ultimately building the next super app.

That said, the path to broader adoption also involves advancing other core infrastructures, such as intent-based interactions. Currently, there are significant challenges for non-crypto-native users, particularly around private-public keys, token approvals, gas adjustments, bridging, swapping on different DEXs, and on-off ramping. For these users, familiarity is key — whether through leveraging what they already use or creating experiences similar to Web2. XION's solution is uniquely positioned to address these challenges.”

James: “Where XION comes in is that they focus on building products that people can use and that are easy and intuitive. XION's ability to enable account abstraction and allow users to pay for gas in stablecoins is a marked difference from what we've seen on many other blockchain platforms. This is likely to be a key differentiator for XION.

There is a lot of talk in the industry about bridging Web2 and Web3. XION has made a concerted effort to work with founders and projects that have connections in the Web2 space. This is not easy work, but the teams that focus on understanding their users' needs and motivations, and then build products people actually want to use, are the ones that stand to reap the biggest rewards.

The "unsexy work" of user research and building intuitive products is ultimately what creates the stickiest and most widely adopted applications. Rather than incentivizing users with tokens to perform certain actions, XION seems focused on building something that people genuinely want to use. This is a great approach that sets them apart.”

On Web3 vs Web2 Startup Dynamics

Q: How does building in Web2 differ from building in Web3?

Burnt Banksy: “If you were betting on a startup in the year 2000, you’d probably expect it to go public around 2015, making it a much longer-term gamble, which was reflected in the pricing of those rounds. Today, in 2024, you might expect liquidity within a couple of years, along with vesting schedules — though there are always exceptions.

This brings up a "chicken and egg" problem in the industry. Quite frankly, it doesn’t always make sense to focus on applications right now. Sure, infrastructure is crucial; it’s needed and certainly attracts attention. But the total user base is still capped by the number of wallets, like MetaMask, and friction rates are high.

When applying the Y Combinator model — achieving hypergrowth and hitting milestones — it often doesn’t work in this space because there simply aren’t enough users to justify growth targets, and the friction is too high to support scaling beyond initial milestones. The path typically taken is to hit that first milestone of crypto-native users through financial incentives, but after that, projects often pivot to infrastructure due to lack of users.”

Mia: “One thing that often defines success for L1 or L2 ecosystems is the number of apps built on top. People tend to view hundreds of thousands of applications as the gold standard for an active and performing ecosystem. But at the end of the day, do we actually need that many new applications? Or should we focus on converting existing user behaviors and integrating familiar apps or brands with blockchain technology to create a more robust experience?

This question of creating something entirely new versus iterating on and enhancing what already works is a dilemma I see in the blockchain space. XION has been impressive in this regard — not pushing aggressively for quantity in developer integrations, but instead focusing on making each use case unique. For example, the brands you’re working with clearly demonstrate why blockchain is essential to those specific use cases.”

On XION's Future Evolution

Q: Where do you think XION is headed?

Mia: “The best way for XION to exist is for users to feel like it almost doesn’t exist at all. That’s the perfect standard for blockchain — integrated so seamlessly into real-world use cases that, as a user, you have no idea what’s in the backend or what chain you’re relying on.

If we know you’re there but can’t even feel you’re there, that’s the vision we’d love to see. It may take years, but that’s the aim we’re working toward with XION.”

James: “Most people using Polymarket don’t even realize it’s on Polygon. This evolution in infrastructure may enable older blockchain application ideas to finally succeed. Timing, in fact, can be as important as the idea itself.

For example, I think we’ll see decentralized applications gain real relevance in the coming years. Some ideas that failed before may finally find their moment. It’s not just about what you know but who you know. Ticketing, for instance, has been challenging; I invested in a blockchain ticketing service ICO back in 2016. The idea has been around for years, but it often takes a key moment or an influential artist or company willing to give it a shot. That’s where the hard work in BD comes in — the unglamorous yet essential work of convincing partners and building relationships.”

Calvin: “Ultimately, our hope is that XION becomes an entry point for newcomers to experience all their favorite dApps on one interface. Imagine opening the app, interacting with any dApp with full interoperability, without needing to worry about wallets, bridging, gas — everything abstracted away. It’s that idea of being “there, but not really there,” and you’ve done a great job bringing it to life.

For example, your testnet tasks have been impressive, like the NFT mint with Neutron. It’s a seamless experience, enabling activities on separate chains within one interface, without needing to switch tabs, wallets, or bridges.

I’m also excited about your partnership with Circle, especially with Apple now opening up their NFC chips to third parties. Just simple use cases, like payments, become possible — like tapping a phone to pay in crypto. XION can serve a much wider Web2 crowd, and that’s the vision.”

On Fundraising and Building Connections

Q: With many builders in the XION ecosystem preparing for or considering fundraising, what advice would you offer them as they approach this process and potentially seek your guidance?

James: ”As someone who helps run a venture fund, I'll offer my best advice, recognizing that it may reflect my own investment perspective.

The first and most crucial factor is the founding team. Even though Anthony is a solo founder, he has an incredible support system around him. Solo founding is incredibly challenging, but Anthony's connections to other founders in his workspace provide him with valuable advice, ideas, and guidance. Being embedded in a community of founders, especially those building on the same base layer, is super important. Anthony can learn from their experiences and get the support he needs, especially in the critical early stages as the first few applications are built on top of his platform.

Having that kind of peer network and access to experienced founders who have "been there, done that" is invaluable. It allows Anthony to avoid common pitfalls and accelerate his progress. The founding team, even if it's just a solo founder, needs to be backed by a strong support system and connections to the broader ecosystem.

This type of community-driven approach is especially crucial when building in a new technology space like blockchain. Making sure you're plugged into the right networks and can learn from those who have navigated similar challenges before you is a key driver of success for solo founders or small teams tackling ambitious projects.

Collaborating with other teams working on similar problems is a key advantage in the blockchain space. When you're solving complex, novel challenges, being able to reach out to peers facing comparable issues can be tremendously valuable. They may have spent months tackling a problem you're grappling with, and by bouncing ideas off each other, you can arrive at better solutions than either team could have on their own.

This is one of the core benefits of open-source software development — the ability to learn from and build upon the work of others. In the blockchain ecosystem, this communal, collaborative approach should be embraced as a superpower, rather than seen as a liability.

The key is to identify teams and founders that you professionally respect, and then work together in a spirit of mutual support. At some point, you may have to compete, but the overarching goal should be to move the entire space forward, not to engage in a zero-sum battle. In areas like account abstraction, there is room for multiple successful projects — it need not be a winner-take-all dynamic.”

On Why Build on XION

Q: Why should developers build on XION?

James: “In a system with many interacting parts across different chains, chain abstraction could add value by improving the user experience and minimizing friction.

For example, with shared settlement layers or platforms like Astria, or Initia, ecosystems could get complex. This could sometimes be even more challenging than bridging to an Ethereum L2, as many Cosmos chains are application-specific rather than general-purpose, like Ethereum’s L2s. It's likely we’ll see application-specific rollups in this space, which makes reducing fragmentation — particularly liquidity and composability — critical.

Chain abstraction is instrumental here. With XION's native account abstraction, users can pay gas in stable coin amounts like USDC from Noble, making transactions more seamless, just like everyday interactions on delivery apps or PayPal. Essentially, XION is shaping up as a decentralized PayPal, where users could have a "pay" button linked directly to their digital wallet, without feeling any difference from traditional payment experiences.

We’re in conversations with teams building on-chain applications like food delivery services. For them, chain and account abstraction are essential, as users don’t want to deal with volatile gas tokens. Imagine an on-chain Uber scenario — nobody wants to open their wallet only to realize they can no longer afford the ride due to token price fluctuations.”

*A few quotes were paraphrased and edited for clarity.