Welcome back to Chain reaction.
Last week we talked about infinite pessimism in the crypto markets. This week we’re talking about parties and tattoos and booze and fun.
To get this in your inbox every Thursday, sign up on londonbusinessblog.com’s newsletter page.
It is no secret at this point that many onlookers are watching the crypto crash with delight, laughing as tokens tumble and NFT volumes shrink. The crypto industry has managed to create many consumer enemies during this bull run – with opponents emphasizing aggressive energy consumption, the addictive profile of crypto investments and how NFTs have become “MLMs for dudes” – as justification for their distaste.
With the bull market coming to an end, here’s probably a good time for introspection on how investors’ web3 view of the web may give consumers more to be excited about than skeptical, but something tells me the crypto industry is on the cusp. is about to become more insular than ever.
This week, NFT residents descended on Times Square in New York. Pricey images found their way onto the huge billboards, token-gated parties flourished, and a myriad of suddenly less wealthy collectors found their way to pity and double down. My co-host Anita had the chance to visit NFT NYC in person and gave some thoughts below, but in some ways the positive vibes show an industry going from growth mode to survival mode.
The survival version of the NFT world, of course, looks a little different. During this week’s event, Bored Ape Yacht Club hosted a festival featuring performances by Future, LCD Soundsystem and Amy Schumer. Tame Impala headlined Kevin Rose’s Moonbirds event, where token holders could get owl tattoos on the spot. The NYPD has broken up token-gated NFT parties. A project hired dozens of protesters holding signs that read “God Hates NFTs” to stand outside their event. An NFT startup hired a Snoop Dogg impersonator “Doop Snogg” to walk around their event as a tacit pseudo endorsement.
In the end, it’s no secret that the NFT market was filled with an awful lot of crap, and any bear market could and should restore some sanity in what’s left behind, but the lines are looking a little blurry in NFT land.
In some ways, it feels like the rich collectors of NFT space are plunging into space as the world they built prepares for collapse. So-called blue-chip projects with 10+ ETH floors, venture capital and significant trading volumes have shown surprising resilience in the face of the downturn despite falling values of the underlying cryptocurrencies they are based on, but NFT project floors across the board have been hit hard as less wealthy collectors seek exit liquidity where they can, and struggle all the way down.
the latest pod
We kicked off this week’s episode by unpacking a controversy sparked by none other than the Dogefather himself – Elon Musk. Musk and his companies, SpaceX and Tesla, being sued by a Dogecoin holder for allegedly inflating the cryptocurrency’s value, which has since crashed.
It’s time this week for NFT NYC, a crypto conference that has drawn influencers, investors, celebrities and the like to New York (more on that below from Anita, who walks the city talking to the NFT community). We have taken a deep dive into the NFT market itself and what could be causing the apparent exuberance of the NFT space even amid such difficult market conditions for crypto and technology in general. We wrapped up this week’s news with two DAO-related disasters that may not bode well for the future of this recently trendy, but undeniably messy, governance structure.
Musical and visual artist Latasha joined us on the podcast this week to talk about how NFTs helped her claim ownership of and live off her creative work. She shared her vision behind Zoratopia, a festival experience she has hosted at crypto events across the US, in her role as community head at NFT platform Zora.
Follow the money
Where seed money moves in the crypto world:
- FalconXa digital asset platform for institutional investors, announced a Series D round of $150 million at an $8 billion valuation led by GIC and B Capital.
- NFT Collection Project scribbles attracted an undisclosed amount of funding from Alexis Ohanian’s Seven Seven Six.
- Solana based NFT marketplace Magical Eden has raised $130 million in a Series B round led by Electric Capital and Greylock Partners, bringing the valuation to $1.6 billion.
- first trusta crypto and fintech infrastructure startup, raised $100 million for its Series B from investors including FIS, Fin Capital and Kraken Ventures.
- Protocol for unauthorized margin trading OpenLeverage has stolen a strategic investment of undisclosed magnitude from Binance Labs.
- NFT based comedy and meme tools company Terrible petsa project by the producers of the TV show Silicon Valley, has raised approximately $4 million in funding led by First Round Capital, XYZ Capital and Moment.
- Astariaan NFT liquidity provider, closed an $8 million starting round from investors including True Ventures and Arrington Capital.
- final statean NFT platform focused on sneakers, it raised $5.5 million in seed money from investors including Archetype and Castle Island.
- Algorithmic exchange rate protocol To increase has raised $1.56 million for its seed round led by ParaFi.
- Afropolitan has raised $2.1 million in pre-seed funding from Balaji Srinivasan and other investors to build a digital nation-state for Africans and the African diaspora.
this week in web3
Hey, here’s Anita, reporting (almost) live from NFT NYC this week. Everyone living in Manhattan, myself included, has been surrounded this week by a deluge of elated swordsmanship pushing off the downturn. You can listen to this week’s podcast to hear my take on this, but I want to address another question here: Does the crypto community practice what they preach?
There were tons of complaints on Twitter from people queuing for hours to get their NFT NYC passes. Even those speaking on panels had to wait in line, along with all the event attendees, they told me, who apparently walked around as many as three city blocks.
I’ve lived in New York for a while now, so a long line doesn’t put me off easily, but it got me thinking about the irony of the whole affair. NFTs and associated technology can provide simple authentication and identity verification. NFT-stans like to cite the example of events as a prime-use case for the technology, which they say could make the administrative burden, such as checking people in for a conference, so much more efficient. So where is that technology at this week’s conference?
I’m sure hosting a crypto event involves creating order out of chaos in a way that is far beyond my own capabilities, so I’m not naming the organizers of NFT NYC or anyone else in particular. But the rules at NFT NYC raised a bigger question in my mind about the contradiction between what the crypto community say is the future versus how the crypto community actually behaves. Why are personal conferences even such a big part of getting to know people in web3? Shouldn’t we all be past the point where we have to breathe each other’s air to feel human connection?
Based on what I’ve heard from much of the web3 community over the past year, I would have expected that we’d all be hanging out in the metaverse with our besties 24/7 now. It seems that cryptoconferencing itself presents a huge opportunity for web3 enthusiasts to actually tap into the technology they believe will change everything about how we live. So far, it seems that opportunity has been largely overlooked.
Here are some crypto analyzes from this week that you can read on our subscription service TC+ (written by Jacquelyn Melinek of TC):
Crypto’s Emphasis on Community Could Lead Followers Off a Cliff
The idea of the “family culture” that so many companies strive for is seeping deeper into the crypto world, as communities are formed on a sometimes toxic, cultic stance to staunchly support the projects in which they are invested. Don’t get me wrong, some parts of the crypto community are great – I’m part of a few communities myself – but when abused it can lead to the blind leading the blind.
Crypto Founders Face Falling Valuations, Pulled Deals Amid Market Volatility
As the crypto market continues to plummet, founders in the space are struggling to retain investors who are now trying to minimize their risk and pull out of funding rounds. The market is shifting towards a VC-friendly landscape, but not every founder is happy with the way they’re being treated now that investors are back in the driver’s seat.
Thanks for reading, and again, if you’d like to get this in your inbox every Thursday, subscribe to the londonbusinessblog.com newsletter page. See you next week!