Today, we’re excited to announce our lead investment in Uranium Digital (UD), a category creator at the intersection of nuclear energy and blockchain. UD's thesis is bold yet simple: to use crypto rails to financialize uranium and build the economy around it.

This investment falls under our current thematic focus of “Crypto Rails for Latent Markets” to improve market efficiency and unlock financial innovations on top of dormant markets, in this case, uranium.

Nuclear Energy: A Primer

Uranium has historically had a PR problem, largely due to the Fukushima overhang. It is one of the most misunderstood yet promising energy sources of the future. Here are some facts about nuclear energy as a refresher.

Nuclear energy currently provides 10% of global electricity and 20% of U.S. electricity. With 440 reactors in operation and 50+ under construction, countries like China and India are ramping up their nuclear capacity, with China aiming for 16% nuclear power by 2030 and India targeting 10% by 2032.

Most efficient

• Energy Density: Nuclear provides 1 million times more energy per gram than fossil fuels, and 10 million times more than coal.

• Capacity Factor: Nuclear plants operate at 90% efficiency vs 50-70% for fossil and 20-40% for wind/solar.

• Land Use: Nuclear requires far less land than solar (1-2 vs 75-200 square miles).

• Reliability: Nuclear runs 24/7, unlike intermittent renewables.

Cleanest

• Zero Emissions: Produces virtually no CO2 during operation (compared to 800+ grams for coal).

• Low Life-Cycle Emissions: Nuclear has lower lifetime emissions than fossil fuels.

• Waste: Generates much less waste than fossil fuels and can be safely stored.

• Sustainability: Uranium is abundant, offering a more sustainable long-term solution.

Safest

• Low Fatalities: Nuclear has caused fewer than 100 deaths worldwide, while coal causes 10,000-20,000 annually.

• Safety Systems: Modern reactors have multiple fail-safes to prevent disasters.

• Radiation: People receive more radiation from natural sources than from nuclear plants.

The Timing: Nuclear Renaissance

The timing is impeccable: nuclear energy is experiencing unprecedented catalysts driven by macroeconomic factors, geopolitical competition, and AI-driven demand hikes.

Financial & Regulatory Catalysts:

• Declaration to Triple Nuclear Energy: In a historic move, 14 major global banks and financial institutions have pledged to support the tripling of nuclear energy capacity by 2050.

• Nuclear Prosperity and Security Act: to ensure the availability of uranium mined in the United States in the event of a market disruption

Supply and Demand Imbalance:

• Supply Shock:

  • From geopolitical tensions: the U.S. ban on Russian-enriched uranium imports are exacerbating supply disruptions. Russia controls a significant share of uranium enrichment, approximately 44% globally, making this a key vulnerability in the market​

  • Production Cuts: Major suppliers like Kazatomprom have slashed production targets, cutting nearly 9% of the global uranium supply.

  • Past Underinvestment: A prolonged period of low uranium prices following the Fukushima disaster led to mine closures and a lack of investment in new projects, leading to the current supply gap just as demand is surging​

  • Emerging Economies: As developing countries pursue higher living standards, their energy consumption is compounding.

  • Reversal of Nuclear PR: Once stigmatized, nuclear energy is now recognized as the most cost-efficient, scalable, and ESG-aligned clean energy source.

• Rising Demand:

  • From AI: demand from data centers & AI operations for computational power. Microsoft has partnered to reopen the Three Mile Island plant, while Google has signed a deal to source energy from small modular reactors (SMRs) developed by Kairos Power.

  • From clean energy initiatives: countries like France and China expanding nuclear capacity as part of their decarbonization strategies, while 28 nations aim to triple nuclear power by 2050.

  • Global Growth: In China, the government plans to increase nuclear’s share of the energy mix to 16% by 2030, with over 20 reactors under construction. India aims to boost its nuclear contribution from 3% to 10% by 2032. The United States, which already derives 20% of its electricity from nuclear, is exploring new reactor technologies, including Small Modular Reactors (SMRs), to enhance flexibility and safety. Globally, more than 50 new reactors are under construction, and nations like Russia, South Korea, and United Arab Emirates are expanding their nuclear fleets.

The Opportunity: The Least Efficient Market for the Most Important Commodity

From the nuclear renaissance, the stars have never been more aligned for uranium as an increasingly valuable asset. In many ways, uranium is the "bitcoin" for regular people: price volatility, rarity (as a finite resource), high growth potential, and being non-mainstream.

However, where they differ is that uranium has one of the most inefficient market structures and liquidity, not just compared to Bitcoin, but to most other commodities. Here are several glaring (and shocking) gaps in the capital market structure that have fundamentally thwarted financial innovations:

1. No spot market to get direct uranium exposure for retails and institutions alike: a fully liquid spot market for uranium does not exist in the same way it does for many other commodities. The two main options for gaining exposure to uranium are:

   1. Becoming a licensed trader or broker and purchasing uranium through over-the-counter (OTC) transactions.

   2. Investing in uranium-focused ETFs or uranium mining stocks

   Here one may wonder, maybe there's a good reason for that - Uranium yellow cake is a highly regulated substance. How can UD enable uranium transactions among non-licensed traders in a compliant way? 

   The answer lies in the distinction between physically settled trades vs. non-physically settled trades.

   • Physically settled trades are primarily conducted within the warehouse ecosystem and facilitated by UD’s GTM partners from day one. Participants must meet KYC/AML & licensing requirements before exiting the platform.

   • Non-physically settled trades are for retail and non-licensed institutional participants looking to gain direct exposure to the commodity without the complexities of physical delivery.

2. Lack of financial instruments for speculative trading: Uranium’s price volatility is a magnet for speculative traders but historically they have nowhere to trade

3. No oracle for price discovery & no derivative market: without a spot market, there is also no functioning oracle, which precludes the possibility of building derivative products based on the underlying asset (uranium). This is a giant elephant in the room: historically, the majority of commodity trading volume comes from derivatives vs. the physically settled trades. For example:

   1. Coal: The notional dollar value traded is 7 times the size of the physically settled market

   2. Natural Gas: The notional dollar value traded is 23 times the size of the physically settled market.

   Today, uranium's global annual physical trade volume is estimated at approximately $16 billion, and US 3 billion. This WITHOUT a liquid spot market, price discovery mechanisms, or derivatives like futures, forwards, perpetuals, swaps, or options.

Imagine what it could be.

Enter Uranium Digital

UD is here to build a new on-chain economy and the most efficient market structure to unleash financial innovation on top of the historically dormant commodity. The vision is to transform uranium into a liquid asset like other widely traded commodities by providing instant access to physically & non-physically direct uranium exposure, along with a full suite of derivatives products:

• A tokenized spot market with optional physical settlement (for licensed traders)

  • Physically-settled trading to drastically improve trading velocity & capital efficiency of licensed institutional traders

  • Non-physically settled trading for both institutional and retail buyers looking to gain direct uranium exposure

• The first oracle for transparent & instant price discovery

• A full range of derivatives products: future, option, forward, perps, etc.

• and more ancillary financial products to come

Blockchain and uranium are a natural fit due to the highly regulated nature of uranium, which requires strict pound-by-pound tracking. By tokenizing uranium and bringing it on-chain, UD can streamline compliance for miners, traders, and regulators; enable real-time tracking and authentication across the supply chain; and enhance verifiability and efficiency in a market that is often opaque and illiquid.

Beyond the sector, a key aspect of pre-seed investing is backing the right team. In my interactions with the UD team, I've been very impressed by their thoughtful insights, history of excellence, thorough research, and, most importantly, their unwavering passion for the uranium market.

The bet is to back a high-caliber team who has been thinking & experimenting in the space for the past two years, right at the inflection point of nuclear energy. A first-mover with real traction at the intersection of energy, blockchain, and finance—couldn’t be more excited about what’s to come for Uranium Digital.