welcome home Chain reaction.
Last week I saw web3 without a web2 winner. This week we’ll be looking at meme investment crossovers.
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Power to the pump
Weekly dispatch from TechCrunch Cryptographic Editor’s desk Lucas Matney:
What happens if a meme stock collides with a meme asset class? Now, each investor wants the result to be an extremely realistic money tsunami.
This week, GameStop launched the NFT Marketplace. The reception was not particularly overwhelming and the market recorded sales of approximately $ 2 million. This is equivalent to trading fee income of less than $ 50,000 on the first day. Over the next few days, daily trading volumes are declining, but far from embarrassing launches, especially given the failures endured by competing emerging markets like Coinbase NFT.
GameStop wants to find a revenue-generating industry that reduces its reliance on physical stores. Timing may be better for the company as the volume of NFT dollars plummeted as the price of cryptocurrencies was hit, but this is clearly a vision registered in the company’s very unique kind of investor profile. is. GameStop has fallen by more than 40% from its November highs, but the situation in the last two months hasn’t deteriorated much as the company’s share price has risen by about 50%.
Defeating current market leader OpenSea isn’t easy, but GameStop doesn’t seem to be aiming for a straightforward copycat by feature, instead offering something different to the ecosystem. I am aiming.
Most secondary NFT sales occur on the Ethereum or Solana blockchain. GameStop is launching the market with what is called Layer 2 of Ethereum. This is a secondary network that handles most of the computation, but relies on Ethereum on the mainnet for data storage. On the blockchain.
This is the vision of a modular blockchain that Ethereum creator Vitalkik Buterin is far behind, but with so many Layer 2 options, crypto investors need to get behind the new network. So things get complicated. GameStop currently bundles transactions using a rollup network called Loopring. The complexity is that you can only execute transactions with GameStop using NFTs created with Loopring. This means you can’t buy popular collections like CryptoPunks or Bored Apes at GameStop’s storefront.
This is a risky choice for GameStop and may add support for other chains in the future, but for now most of the NFT dollars are left on another railset spent today. This seems to indicate that the options are a bit more future-oriented than expected. If this was a pure cash grab, playing straight would have been more effective at earning existing cash.
Having pure intent only takes you so far in the crypto world, and GameStop remains a vertical uphill to achieve success here, but meme stocks. Buyers have achieved more challenging odds over the years, so their desire for risk remains difficult to satisfy.
Lucas and Anita resumed activity this week and they didn’t waste time getting into the headlines. In this week’s news lineup, we chatted with everyone’s favorite meme stock, GameStop, about their bold entry into the NFT market, even after losing $ 381 million last fiscal year. They also lost billions of dollars in other people’s money (yikes) and about yet another disappearing act from the founders of crypto companies who carried out some of the numerous crypto venture fund launches they saw last week. talked.
Participating in the show was Yat founder and CEO Naveen Jain. This is the company behind the emoji identifiers used by celebrities like Ke $ ha in their Twitter careers. Jain talks to them about the concept of identity in both web2 and web3, and Anita takes the opportunity to lobby Unicode for the long-deferred Biryani emoji. did. Everyone is welcome.
Follow the money
Where startup money is moving in the crypto world:
- Cryptographic-focused donation API startup Change We have raised a $ 5 million seed round jointly led by Freestyle and NEA.
- Fur caster A16z has led and raised $ 30 million for Merkle Manufactory, a distributed social network protocol.
- Animoka brand Raised more than $ 75 million from investors such as Liberty City Ventures and Kingsway Capital, and built an open metaverse as an extension of the funding round raised in January.
- Digital asset management platform safety With the participation of investors such as Tiger Global and Digital Currency Group, we have raised a $ 100 million strategic round led by 1kx.
- DeFi lending platform Morforabo He won $ 18 million in a seed round jointly led by a16z and the Variant Fund.
- DEX aggregation protocol LI.FI Raised a $ 5.5 million strategic round from investors such as 1kx and Dragonfly Capital.
- Cryptographic derivative trading platform Talex Closed € 7.5 million Series A from Bitfinex, Bitstamp and more.
- BidThe Liquid Staking Platform has raised $ 3 million for a seed round led by EdenBlock Ventures.
- Bravo Royale Raised $ 3 million in seed funding from Solana Ventures, 6thMan Ventures and others for NFT-based Battle Royale video games.
- MetaOasis DAOMetaverse real estate developers have earned $ 1.5 million in seed funding led by KuCoin Ventures.
Weekly window to web3 reporter ideas Anita Lamaswamy:
Most crypto investors don’t really use digital currencies much in their transactions. They tend to prefer to keep their ciphers, hoping that it will get higher over time. However, there is one notable exception that has motivated many US crypto holders to give up their tokens. It’s a charitable donation.
Studies show Cryptocurrency donors are actually more generous than those who donate cash. My optimists say this may be influenced by the strong community consciousness of web3. My cynic knows that it is also a wise financial move for these donors. Significant tax benefits of donating cryptoGiven that US tax law treats it like an asset rather than cash. Regardless of the motivation behind it, cryptocurrency donations can be a useful tool for charities looking for new ways to raise money.
The bull market in 2021 has benefited start-ups helping charities promote donations of these cryptocurrencies. However, startup Change has taken a different approach, developing APIs to help businesses and charities process donations.I caught up with founders Sonia Nigam and Amar Shah and chatted this week about the $ 5 million seed round they just closed to double in crypto space (you can read more about it). here). They have historically focused on flat donations online, but they believe that blockchain can provide the transparency that donors want, so they think cryptocurrency donations are likely. , Is not always guaranteed.
We already know that things will get ugly during the winter of this cryptocurrency, so instead of braking or running through hills, we’ll see startups spending this time investing more in web3 features. Is especially interesting. While there are many possibilities for charitable donations to the blockchain, it can be a daunting task, so whether a startup like Change can bring transparency to the opaque world of nonprofits. , Or whether they will face unmanageable challenges despite their goodness will become apparent over time, often relying on inefficient and misused carbon offsets to achieve their environmental goals. Intent, like the web3 Native Rehabilitation Finance (ReFi) project. The latter is another day’s topic, but I think it’s always worth thinking about how cryptography evolves as a force of good, even if the reality of implementation is much more demanding.
TC + analysis
Here are some of the cryptographic analyzes available this week on TC +, a subscription service from senior reporters: Jacklin Melineck:
U.S. government delves into the impact of NFTs on intellectual property
After the explosive growth of NFTs over the past year, the US Patent and Trademark Office and the US Copyright Office have begun collaborative research to investigate the impact of digital assets on intellectual property rights. The study was about 1 in which Democratic Senator Patrick Leahy and Republican Senator Thom Tillis wrote to the office to investigate the exponentially growing NFT in a short period of time. It will be done in a month.
NFT sales are declining, but the market has more underlying strengths than you might think.
The bearish sentiment of the crypto market has penetrated into the NFT subsector. According to data from NFT aggregator CryptoSlam, NFT sales across the top 10 blockchains have declined over the last 30 days. “The NFT market isn’t that big, but it’s still gaining momentum,” Nick O’Neill, CEO and co-founder of The Nifty, told TechCrunch. Still, O’Neill pointed out that it’s difficult to ignore bearish macro headwinds.
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Lucas & Anita