TL;DR

• B2B first, plug into pro workflows and budgets, then consider consumer when retention proves out.

• Treat AI agents as a new distribution channel, publish clean APIs and intent-findable capabilities.

• Durable moats came from creation-data flywheels, open standards with partners, and trusted relationships.

B2B and monetization

• 💼 B2B first wins in creative AI
  Land inside existing tools and budgets, use enterprise proof and retention to extend runway, then expand to consumer once the graph speaks.

• 🧮 Price on outcomes, not “AI”
  Anchor plans to time saved, quality gains, and revenue impact, this is how seed leads judge traction and Series A readiness.

• 👩‍🔧 Consumer monetization is hard right now
  Near-term dollars sit with pros and prosumers, focus on workflows where ROI is obvious, not one-off novelty.

Distribution and the agentic shift

• 🤖 Design for agents, not only users
  Own stable, valuable endpoints so assistants can route intent to you, clean schemas and predictable responses beat clever demos.

• 🔎 Make your product intent-findable
  Capability docs, minimal auth for read-only discovery, and crisp error semantics act like the new SEO.

• 📣 Distribution > features
  Products that created evangelists and organic loops outperformed those with extra model controls and no adoption plan.

Moats that actually held up

• 🧩 Marketplace + data + partners
  One team reported ~200k MAU in nine months, ~160k captured models, ~3M downloads, zero paid marketing, while 35+ companies adopted the open format behind it, liquidity plus data plus partners formed the moat.

• 🎯 Start hyper-specific to earn trust
  Rights-sensitive wedges, for example instant instrumentals for sync teams, built credibility before broader rollout.

• 🤝 Relationships are a real moat
  How you enter creative industries shapes negotiations for years, shared wins and respectful workflows compound.

• 🪙 Compensation paths built in
  Where user assets train or seed features, default-on consent and payouts reduce friction and increase supply quality.

Product craft that moved the needle

• ✨ Ship fast delight moments
  Turn a static sample into a playable instrument in seconds, generate similar-but-unique samples to keep flow state.

• 🧪 Portfolio R&D with kill criteria
  Mix quick wins and deeper bets, define when to stop a line of work to avoid roadmap thrash.

• ⚙️ Reliability beats one more toggle
  Latency, error handling, and great presets often decided adoption more than new knobs.

Fundraising reality, 2025 edition

• 🧭 Narrative over timing
  “Done a lot with a little,” clear milestones, and a why-now tied to distribution or ROI outperformed runway pleas.

• 🪪 Start with insiders, then broaden
  Raise first from people living the problem, then bring in generalist capital once retention and usage are obvious.

• 🧑‍🔧 Founder-problem fit > vision decks
  Investors pressed for firsthand problem stories and current usage, big vision works once the graph supports it.

• 💶 Check sizes with proof
  Seed leads talked about 2-5M checks when there is organic traction, early business model evidence, and strong reference calls.

• 🤝 Pick partners, not just logos
  Founders who chose investors for partner quality and founder-to-VC referrals reported smoother rounds.

Data flywheels, standards, ecosystems

• 🔁 Creation data compounds
  High-signal creation events and edits, captured with consent, fed back into models, drove the fastest product quality gains.

• 🧩 Build on living standards
  Picking an already adopted open format unlocked distribution via dozens of plugins and devices with minimal sales effort.

• 📈 Show measurable improvement
  Demo visible quality deltas, lower error rates, or time-to-result drops, not just version bumps.

Infra to watch

• 🆔 Identity and metadata
  KYC gaps and asset ID mismatches still block payouts, teams fixing this unlock faster and fairer royalties.

• 💸 Royalty plumbing
  Clean audit trails and fewer ownership ambiguities look investable, especially where dollars sit idle.

Reality checks

• 🎧 Deep behavior change is the moat
  Retention with a core audience beats viral novelty, build habits that stick.

• 🎛️ Not everyone wants to compose
  Broad push-button music demand remains unproven, strong demand exists for tools that make serious creators faster.

• 🏁 Vertical platforms must monetize
  Given major distribution algorithms, niche platforms need users willing to pay and clear monetization mechanics.

Founder cheat-sheet

• Land B2B first, inside existing pro workflows and budgets.

• Document ROI in plain numbers, time saved and quality gains.

• Publish a small stable API surface, with clear capability docs.

• Choose one open standard that already lives in the ecosystem, integrate deeply.

• Start with a rights-sensitive wedge, expand after trust and retention.

Investor cheat-sheet

• Look for evangelist loops and usage, not single demo spikes.

• Favor creation-data loops with consent and payout, plus partner adoption.

• Validate pricing against outcomes, not model novelty.

• Do reference calls early, check retention before writing big seed checks.

What I am watching next

• Agent-origin traffic as a real distribution source for creative tools.

• Open formats gaining hardware and plugin adoption.

• Static-to-playable workflows that keep creators in flow.

• Practical identity and metadata fixes that reduce payout leakage.

• B2B tools that quietly change behavior, not just ship features.

If you are building or funding in creative AI or music tech, reply or DM to trade notes, compare early signals, or discuss partner intros. Angel investors and VCs in music tech / GenAI audio, DM me for the highlights or to hear how Deep Noise is putting these ideas into practice. DM me also for early access for AI Synthesizer (text-to-sound).

What stood out at SF Tech Week on AI and music, and how it affects how we make and release tracks.

If you don’t make music: the big shifts are about control (more knobs than magic), choice (picking the right tool for each step), trust (clear rights and records), and distribution (reach matters as much as capability).

Why now for GenAI Audio

Across the week, the strongest work came from tools that expose real controls, not just one-shot prompts. Speakers showed small, task-focused UIs with knobs for precise edits, plus editors that can combine AI-generated parts with recorded material. In audio, that means stems and layers, parameters you can dial, and versioning that keeps choices reversible.

The model landscape is diverse by design. Different models behave like different directors, each better at a specific job. That’s why model routing matters, simply picking the right model for each step under your constraints.

The trust bar is rising. Buyers want to know what data models were trained on, whether user inputs stay private, and how outputs can be used commercially. Clear policy, model cards, and audit trails are becoming product features, not legal footnotes.

Distribution is the constraint. Attention is scarce, incumbents move faster than a year ago, and shipping cadence matters. Great tech without reach still stalls.

Seven takeaways you can act on

1) Controls beat one-shot

What we heard. Interfaces with explicit parameters and orchestration layers beat single prompts. Editing stayed non-destructive and repeatable.

Why it matters. Professional audio needs reversible decisions, not one-way renders.
Plain meaning: sliders and “undo” win over one big button.

What creators should do next.

• Work in stems and layers. Save versions at each decision point.

• Treat prompts as drafts. Refine tone, timing, and texture with parameters.

• Keep a short control sheet per project so decisions are easy to revisit.

What builders should do next.

• Make parameters first-class features, not buried toggles.

• Expose version history and state diffs to support review and rollback.

• Log parameter changes end to end so releases are auditable.

2) Route across models by task

What we heard. Model diversity will persist. Users care about accuracy on specific tasks more than a single universal model.

Why it matters. One engine may excel at timbre, another at rhythmic feel, another at transitions.
Plain meaning: use the right tool for the job.

What creators should do next.

• Split the workflow: texture model, rhythm tool, then mix and master.

• Save routing chains that work and reuse them on new material.

• Note which engine produced each stem for future edits.

What builders should do next.

• Implement policy-based routing keyed to capability tags and response-time goals.
  Record provenance per segment so teams see which engine made what.

• Provide deterministic fallbacks when a route misses constraints.

3) Enterprise trust is a product surface

What we heard. Clear positions on training sources, user data, and studio agreements reduce friction. Guidance on human involvement is entering the conversation.

Why it matters. Rights clarity unlocks releases and partnerships.
Plain meaning: know where the data came from and who can use what.

What creators should do next.

• Keep a release pack: stems, prompts, seeds, and settings together.

• Track sources for any reference material you provide.

• Store edit history alongside audio so decisions are reviewable.

What builders should do next.

• Publish model cards and plain-language data policies.

• Offer tenant isolation and no user I/O training commitments in contracts.

• Provide exportable audit trails and usage logs.

4) Distribution, not just capability

What we heard. Attention is the bottleneck. User-generated content still works, but saturation is higher, and partner channels matter.

Why it matters. Tools with no reach struggle regardless of model quality.
Plain meaning: great output still needs an audience.

What creators should do next.

• Share process, not only finals. Short before-after clips show control.

• Participate where your audience already gathers, music communities and forums.

• Package small, reusable assets that travel well across platforms.

What builders should do next.

• Reduce share friction. Enable remix flows that credit the source.

• Pair SDKs and APIs with co-marketing so partners benefit as you grow.

• Ship small improvements often and narrate the changes.

5) Real-time and cross-clip consistency are still gaps

What we heard. Real-time inference is hard. Consistency across long pieces is also hard. Style tools help, but end-to-end coherence isn’t solved yet.

Why it matters. Live shows need low jitter. Longer works need stable identity.
Plain meaning: it must feel tight on stage and sound consistent on long tracks.

What creators should do next.

• Separate live rigs from studio rigs. Pre-render heavy elements.

• Use seed locking where available. It’s a toggle that makes repeats match.

• Load-test before shows, not during soundcheck.

What builders should do next.

• Publish clear response-time bands for anything labeled live.

• Expose reproducibility controls for regression testing.

• Provide graceful degradation when targets are exceeded.

6) If you use these tools at work

What we heard. Teams showed high-throughput APIs in production. Reliability, observability, and education for traditional industries were emphasized.

Why it matters. As tools become platforms, stability and transparency are table stakes.
Plain meaning: if others build on you, they need uptime and clear dashboards.

What creators should do next.

• Prefer tools with stable export to your DAW or engine.

• Keep local copies between app updates.

• Version project files the way you would version software.

What builders should do next.

• Offer SDKs, fair rate limits, and usage dashboards.

• Ship team-level permissions and regional hosting options.

• Document failure modes and recovery steps openly.

7) From novelty to craft and viable models

What we heard. Audiences notice sameness. Consumer video is hard mode. Control features are rising in importance.

Why it matters. Taste and fundamentals still differentiate work. Pricing should reflect where value is created.
Plain meaning: the “why” and “how” of your choices still matter most.

What creators should do next.

• Use AI for drafts. Invest time in arrangement, transitions, and mix.

• Charge for outcomes tied to your craft, not minutes of generation.

• Keep a personal library of best-practice chains for repeatable quality.

What builders should do next.

• Price around results that save time or earn money.

• Design controls that help pros avoid algorithmic sameness.

• Provide critique views that surface repetitive patterns.

How fast it needs to be (studio, live, batch)

We’re shifting from one-to-many delivery to many-to-many generation. Traditional media pipelines leaned on CDNs. Generative media leans on GPUs. A practical way to operate is to separate modes and evaluate them differently.

• Studio. Emphasize repeatability and quality. Keep reference seeds and settings for regression checks. Use human-in-the-loop review with short rubrics for timbre, timing, and artifacts.

• Live. Emphasize response-time bands and graceful degradation. Publish target bands and document what happens when you exceed them. Route heavier steps to pre-rendered assets; reserve real-time for expression.

• Batch. Emphasize throughput with sampling and re-queues. Log per-segment provenance. Triage outliers by audible defects rather than prompt similarity alone.

Quick definitions: model routing = picking the right tool for each step. provenance = saved “how this was made” details for each file.

Data provenance and licensing

Studios ask similar questions: where did training data come from, what rights do outputs carry, do inputs remain the user’s. Product answers are straightforward: publish model cards, provide audit trails, and make data-use choices explicit in contracts. For creators seeking commercial releases, keep stems, prompts, seeds, and settings packaged with each deliverable so the release is auditable downstream.

Creator UX patterns

The patterns map cleanly to audio. Prompt plus parameters for fast iteration. Small micro-apps for targeted edits. An editor that can orchestrate multiple generators with recorded material. For audio specifically, aim for a controllable generator plus MIDI in and out, tempo and key awareness, non-destructive edits, versioning by default, and DAW-friendly export.

What Deep Noise is building

Deep Noise focuses on controllable generative sound, modular loops, stems, and one-shots rather than one-click songs, with real-time editing and sync-to-video for practical workflows. Our Studio on the web and our AI Synthesizer VST for DAWs follow a bottom-up, MIDI-first approach that reconstructs audio from core synthesis parameters, which keeps parts editable across tools. The Studio Arranger works like a lightweight in-browser mini-DAW for arranging and exporting stems, and it includes a video import feature to score to picture. Generation covers drums, chords, melodies, FX, and instrument hits as building blocks for original compositions. Under the hood, we pair rights-clean data with audit trails and reproducible runs to support commercial use cases.

Watching

• AI, Infra, & the Future of Generative Media

• GenAI APIs in Motion, Video, Audio & Design at Scale

• AI x Creativity, Hedra, Descript & a16z Panel + Happy Hour

• Consumer AI VIP Breakfast, Inworld, TRMNL4, Lightspeed, Maven, SignalFire

Closing

If this maps to your workflow or platform needs, feel free to reply with context. Happy to compare notes or share a short demo.

The Gnosis Pay Visa card is a powerful new addition to Europe’s growing lineup of crypto debit cards. It stands out by offering:

• Self-custodial wallet support on Gnosis Chain (formerly xDai)

• An Estonia-based IBAN for euro deposits

• Up to 5% cashback in GNO tokens

• No monthly fees or currency conversion fees

• A dedicated Google Pay rollout (already live for OG NFT holders)

Below is everything you need to know to sign up, fund your card, earn cashback, and even integrate Zeal Wallet for a more seamless user experience.

What is a Crypto Card?

A crypto card is a payment card that’s linked to a crypto wallet, letting you spend digital assets in stores, online, and anywhere Visa/Mastercard is accepted—often with some form of rewards program. Popular options include Bybit, Bitsa, Nexo, and ThorWallet. After trying several, I find Gnosis Pay particularly compelling for its:

1. Self-custody model: You control your private keys on Gnosis Chain.

2. 0% to 5% cashback in GNO tokens—one of the highest rates currently available.

3. No monthly service fees and minimal bridging costs, thanks to Gnosis Chain’s low gas fees.

Key Features of Gnosis Pay

1. Self-Custodial Wallet

   • The card is connected to your Gnosis Chain wallet, ensuring you hold the private keys.

   • You’re not relying on a centralized custodian to manage or secure your crypto.

2. Estonia-Based IBAN

   • Gnosis Pay provides an Estonia IBAN via a partnership with Monerium.

   • You can transfer fiat euros, receive salaries, and manage SEPA transfers, just like a regular bank account.

3. Cashback Program: Up to 5%

   • The base rate is 0–4%, determined by how many GNO tokens you hold.

   • If you also hold an OG NFT, you get an additional +1%—for a total of up to 5%.

4. Custom Daily Spending Limit

   • You can set a personal spending limit—up to €8,000 per day—for extra security.

5. No Conversion or Service Fees

   • Gnosis Pay does not charge extra fees to convert crypto to fiat (you only pay minimal gas on Gnosis Chain).

   • No monthly or annual service fees either.

6. Google Pay & (Soon) Apple Pay

   • Google Pay is live for OG NFT holders and will roll out to all users (region permitting) soon.

   • Apple Pay is not yet supported but is in the product roadmap.

How to Obtain a Gnosis Pay Card

Requirements

• An EVM-compatible wallet (e.g., Metamask, Zeal, Rabby).

• KYC documents: Usually, an ID card or passport plus proof of address if you’re in the EU/UK.

Step-by-Step

1. Sign Up with a 100% Discount

   • Use this referral link to get your card at no cost.

   • Connect your wallet to the Gnosis network:

Network Name: Gnosis 
RPC URL: https://rpc.gnosischain.com/ 
Chain ID: 100 
Symbol: xDAI 
Block Explorer: https://blockscout.com/xdai/mainnet/

1. 2. Complete KYC Verification

   • Provide required documents (ID + proof of address).

   • Verification times vary from a few minutes to a couple of days.

2. Order & Activate

   • Enter your shipping details. Delivery can take 5–10 days in Europe.

   • After receiving the physical card, scan the QR code or follow the dashboard prompt to activate.

   • You can then request an Estonia-based IBAN within a few minutes.

Crypto Cashback Explained (Up to 5%)

The cashback rate depends on how much GNO you hold in your Gnosis Pay “Safe.” The base tiers are:

+1% if you hold an OG NFT (requires inviting just two friends and making them pass KYC and ordering the card for free), making it possible to reach 5% total.

Example:

• Holding 10 GNO (~$2,270 if GNO is $227 each) yields a cashback rate of 3% + 1% (for OG NFT) = 4% .

• Spending $2,000 monthly would net $80 monthly in GNO tokens, or $960 annually, which is close to ~42% of your initial GNO outlay—ignoring price volatility.

You can buy GNO on the Ethereum blockchain on exchanges like Binance, Bitget, Kraken, or Gate.io, then bridge to Gnosis Chain (explained below). Cashback is paid weekly in GNO, which you can hold, swap for EURe, or spend as you wish.

Adding Funds to the Card

Option A: IBAN Transfer (Fiat SEPA)

1. Request Your IBAN in the Gnosis Pay dashboard (via Monerium).

2. From your regular bank, send euros to that IBAN.

3. Funds arrive as EURe on Gnosis Chain, typically within 1–2 business days.

4. No additional fees on the Gnosis Pay side.

Option B: Crypto Top-Up

Because many centralized exchanges don’t support Gnosis Chain withdrawals, you’ll likely bridge tokens from another chain. You need:

• EURe for spending.

• GNO if you want cashback.

• Some xDAI to cover transaction fees on Gnosis Chain (usually a few cents per tx). You can get small amount of xDAI to get you started once per week here (received the link from the support).

1) Directly via deBridge in Gnosis Pay

• In the dashboard, go to “Add Funds” → “Swap tokens via deBridge.”

• Pick your source chain/token (e.g., USDC on Arbitrum) and the destination token (EURe or GBPe on Gnosis).

• Approve and confirm in your wallet. Funds typically arrive in under a minute.

2) Manual Bridging

1. Withdraw your crypto (e.g. USDC) to a self-custodial wallet on Ethereum, Arbitrum, Polygon, etc.

2. Use bridging tools like the official Gnosis Chain bridge, CrossCurve, Bungee.exchange, or Relay.link to move tokens to Gnosis Chain.

3. Swap a small portion into xDAI for gas (even $5 can last a long time).

4. Swap some tokens for GNO (if you want cashback).

5. Convert the rest to EURe for daily spending.

6. Deposit EURe to your Gnosis Pay account via “Add Funds” → “Top up EUR.”

Note: The cost of bridging is typically <$1 if using a cheaper L2 (e.g., Arbitrum) instead of Ethereum mainnet.

Why Use Zeal Wallet?

Zeal (formerly Gnosis Safe mobile) is a mobile and browser wallet with a user-friendly interface that’s optimized for Gnosis Chain. Consider it if you want to:

• Check account balance, cashback etc. directly from your phone;

• Easily top up GNO from the wallet to increase Gnosis card cashback;

• Earn yield from DeFI protocols such as Maker, Aaave etc.;

• Automated recharge of Gnosis card from earning accounts based on set minimum balance.

Installing & Using Zeal with Gnosis Pay

1. Download Zeal

   • Mobile: Zeal.app (iOS/Android)

   • Chrome Extension: Zeal in Chrome Web Store

2. Create or Import Wallet

   • Start fresh with a new seed phrase, or import an existing EVM wallet.

3. Connect to Gnosis Pay

   • At gnosispay.com, go to the Account Tab; in Account details, go to “Account Owners”, click edit and add the wallet address you are using with Zeal.

   • In Zeal, choose the connect Gnosis card.

4. Bridge & Swap

   • You can use Zeal’s integrated bridging or the Gnosis Pay dashboard’s deBridge feature.

   • Acquire GNO for cashback, or just stick to EURe + xDAI for daily spending.

5. Top Up & Spend

   • Send EURe to your Gnosis Pay “Top up EUR” address.

   • Spend in stores, online, or withdraw at ATMs (subject to daily limits).

Daily Spending Limit

• Gnosis Pay allows up to €8,000 (or local equivalent) in daily purchases.

• You can set a lower limit for extra security in your dashboard.

• ATM Withdrawals are capped at €500 daily. Some ATMs may impose extra fees.

Supported Countries

• Gnosis Pay supports 32 European countries and the UK at launch. Actual list you can find in the documentation.

• Future expansions include Brazil, USA, Indonesia, and Mexico.

Areas for Improvement

1. Web Interface Issues

   • Cashback below 0.01 GNO (~€2.55) displays as 0.00.

   • Daily limit field lacks validation, so you must refer to docs for accurate input.

2. ATM Limit

   • €500 daily withdrawal may be low for some heavy travelers or business users.

3. Apple Pay

   • Not yet supported, though the team has indicated it’s in development.

4. No Virtual Card

   • A virtual version would help with online purchases before the physical arrives.

5. Limited Exchange Support

   • Most CEXs do not support direct withdrawals to Gnosis Chain, requiring bridging.

Referral Program & OG NFT

Referral Program Season 4 (current as of this writing):

• OG NFT Holders: Earn 40 EURe per referral; your friend gets 10 EURe after their first transaction.

• Non-OG: Refer 2 friends to unlock the OG NFT, which gives you +1% cashback on top of the base rate.

• Deadlines: You must order the card by January 31, 2025, make a transaction by February 28, 2025, and receive rewards on March 15, 2025.

Final Thoughts

Between its Estonia IBAN, no service fees, and up to 5% crypto cashback, Gnosis Pay is one of the most compelling crypto debit cards currently available in Europe. Though bridging can be tricky if you’re new to multi-chain wallets, the low transaction fees on Gnosis Chain and flexibility in how you hold/spend your assets make it worth the setup.

• If you spend moderate amounts, holding 1–10 GNO might be the sweet spot (2–3% cashback) while limiting price risk.

• Larger GNO holdings (e.g., 100 GNO for a 4% rate + 1% NFT bonus) can unlock the 5% tier, but consider your risk tolerance.

• Zeal Wallet is a convenient companion for Gnosis Pay if you prefer an all-in-one app with easy bridging and potential multisig security.

With Google Pay already available to OG NFT holders, and Apple Pay planned, Gnosis Pay continues to evolve. For anyone comfortable with bridging and on-chain wallets, it offers a cost-effective, robust way to convert and spend crypto daily—with a healthy dose of cashback rewards to boot.

Helpful Links & Resources

• Official Gnosis Pay: gnosispay.com

• Sign Up (100% Discount): Referral Link

• Zeal Wallet:

  • Zeal.app (mobile)

  • Chrome Extension

• Bridging Tools:

  • CrossCurve

  • Bungee.exchange

  • Relay.link

• Block Explorer: Blockscout (Gnosis)

• AAVE on Gnosis: Docs

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Crypto assets are volatile; always DYOR (Do Your Own Research) and comply with local regulations.

If you have any questions or tips, feel free to comment below or join the Gnosis Pay Discord. Enjoy your new card and happy spending!

P.S. I will update this article in few weeks after having more experience with spending in multiple currencies, GNO cashbacks etc.

As the dust settled down, and I (almost) recovered from the French flu; I would like to share my thoughts on NFT Paris from the perspective of a web3 founder, ex-VC, but also NFT collector. I will divide my observations into two parts: my EXPERIENCE (in comparison with similar events e.g. NFT.London, NFT.NYC, NFC etc.) and THE TRENDS I have seen in the space.

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A)   THE EXPERIENCE

💪 NFTS NOT DEAD • Similarly to what happened at NFT.London, where a photo of empty panels went viral, this time around at NFT Paris, a photo of long queues with the Eiffel Tower in the background circulated. The conference was filled with over 18,000 attendees, and I don't believe that the NFT space is lacking global attention.

🔎 CURATED COMMUNITIES • Overall, I found that the more exclusive and selective communities at the in-person events led me to meet more fascinating individuals. This was especially true during the Rug Radio show and Admit One event, where I met OGs and leaders in the NFT space. One thing that people often underestimate is the importance of keeping an eye out for side events. I learned this the hard way and suggest doing so weeks before the event as it can have a direct impact on your overall experience.

🛠️ BUILDERS OVER VCS • Compared to previous NFT events, the presence of investors at NFT Paris felt noticeably weaker. I had the pleasure of meeting numerous builders, some of whom had received funding during the bull market while others were still seeking it. It seems that discussions about investment have shifted from dedicated events to smaller, more intimate dinners behind closed doors or 1-on-1 meetings.

💎 QUALITY OVER QUANTITY • NFT Paris opted to have fewer speakers, but ones that represented major stakeholders in the NFT space. This resulted in two things: A) attendees could spend most of the day at the main stage and receive decent value from the discussions, and B) the depth of individual segments covered was limited. This approach differed significantly from NFT.NYC, where there were numerous panels available and as a result, A) careful time curation was necessary, and B) attendees had the option to niche down and focus solely on panels from tracks that they were interested in, such as web3 music.

🤝 POAPS STILL NOT THERE • I found that many individuals either weren't aware of the Proof of Attendance Protocol (POAP) or didn't have the necessary app. Alternatively, the maxis opted for more streamlined solutions such as NFC cards or 9dcc shirts containing NFC chips, which allowed for easy collection of POAP.

🚧 A KING AMONG TOKENGATING • When it comes to token-gating experiences, the Tokenproof App remains the go-to solution, as it guarantees a seamless process, while some events still reverted to the guest list, like Ledger x Artblocks event in Factory or Rekt in Paris. I guess we are still not fully there yet.

👥 QUEUES AS THE MAIN MOTTO • One of the negative aspects of NFT Paris was the extensive queues, which appeared to be a recurring theme throughout the event. While managing such a large event with over 18k attendees is undoubtedly challenging, waiting for two hours to gain entry to the main stage or official afterparty seems a bit wild, especially considering the high ticket cost of 400E.

B)   THE TRENDS

👨‍⚕️ HEALTHY CONSOLIDATION • NFT Paris demonstrated signs of healthy consolidation of top projects, especially in the PFP corner (see The Rise of PFPs panel, link below). These people build for the long term and ignore the noise.

🎮 GAMIFICATION & STORYTELLING • Gamified experiences and mini-games are popular in the NFT space, as seen in the success of Yuga Labs' DookeyDash game and projects that use burning mechanisms like Open Editions and Checks. Strong storytelling is also a key factor in successful NFT projects, particularly in the Yuga Labs ecosystem (Applied Primate Engineering, Jenkins the Valet). These approaches offer valuable lessons for brands.

👀 NEW EYES ON WEB3 • The fact, that many Fortune 500 brands are piloting web3 and taking it seriously even during a bear market goes without saying and was only confirmed at NFT.Paris. and many big brands without any web3 exposure were present to learn. Even French EY acquired a web3 agency through which it wants to target web3.

🛍️ PHYGITALS AND CERTIFICATES • NFTs as certificates of authenticity for physical goods and tools to build communities around products are gaining more support. One good example is the 9dcc t-shirts, where others can scan the NFC chip to collect POAPs as proof of meeting someone in person.

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C)   THE PANELS

If you weren't able to attend NFT Paris, don't worry as most of the panel discussions have already been made available on the NFT Paris YouTube channel. From my perspective, there were a few panel discussions that stood out and provided valuable insights:

COMBINING TWO WORLDS • Tom Sachs, Verbal, Gmoney, Adriana Hoppenbrouwer

FIRESIDE CHAT WITH ADIDAS • Erika Wykes-Sneyd

THE RISE OF PFPS • Frank Degods, Luca Schentzler, Harri Thomas, Bryan Pellegrino, Fanfaron

THE FIRESIDE CHAT WITH YUGA LABS • Greg Solano

NFTS AT SCALE • Marc Mathieu, Tim Walther, Eva Assayag, Samir Addamine

DAOISM • Jonathan Perkins, OSF, Aubtoshi, Mando

Have an opinion on the above? Are you interested in/building something in NFT and web3 space? Drop a comment or message me on Twitter or Telegram and let’s chat.

I have taken a bit of a break from writing NFT memos during the last few months focusing on The Divergents (NFT collection), Playgrid (Steam for blockchain gaming), and attending conferences NFC, NFT.NYC or UTXO (spoke at NFT use cases panel) evaluating my position in the NFT space.

Instead of the usual NFT market analysis, this time I have decided to put together a list of communities and platforms that could be valuable for founders & digital entrepreneurs dedicated to building in the web3 space. As an NFT founder & advisor, I continuously search for supportive and resourceful collectives and platforms, that would help me in my web3 journey. Whether it be knowledge, tools, network, advice, or investment opportunities. Especially in the bear market and potential incoming recession, these collectives may now be more important than ever. I love this picture from Nathan Valadares [内森] Ξ - the builders, who build during bear markets GMI.

Due to the fast-paced environment, use of gate-keeping mechanisms, and fragmentation into a large number of communities, it may be hard for a newcomer but also an experienced participant in this ecosystem to have a good overview of these communities & platforms. I have therefore decided to call on the web3 community to throw two cents on what space was most helpful on their journey and why.

Are you a creator or founder? I would be grateful for your opinion on what community or platform helped you on your journey (click here).

Below I provide a list of communities, platforms, initiatives, DAOs or IRL events that I know of and could be a good starting point. I am not in all of these, so I will always appreciate a second opinion. With a background focused mainly on NFTs, I may be leaning more towards NFT-focused spaces but will do my best to keep the list balanced.

Communities

• Crypto Packaged Goods (CPG) - a collective that runs on two token-gated Telegram chats - for Genesis and Pop NFT holders. CPG runs also its own incubator for POP members that opened applications on 23rd May and consulting arm managed by CPG members. (Public Telegram)

• Midnight labs - is a web3 collective for collectors and builders created by Giancarlo, who a few months ago opened member applications. You can apply if you hold at least one of the recognized NFTs. (Discord)

• Admit one - is a private group created by Gmoney for 1000 web3 enthusiasts, builders, and thought leaders token gated by Admit One NFT. If you want to dig deeper here is the manifesto. (Discord)

• Arc Community - people of Arc are meant to unite passionate builders and culture-pushers. From what I heard the team has good attention among top communities. You can apply and upon being allowed listed you can mint Pyxis, your key to the community. (Discord)

• Origamasks - upcoming NFT project that wants to help onboard builders to web3 such as consultations, education, Learn2earn etc. You can apply here. (Discord)

• HUG – is a community for collectors and web3 creators (HUGHub). Its original project is groupHUG - a creator accelerator program for post-mint NFT projects and up-and-coming 1/1 artists. The platform also runs an advisory program for early-stage pre-mint NFT projects. (Discord)

• Y00ts - one of the most awaited projects this year made by frankdegods, a name that stands also behind DeGods, a sort of SOL-based version of BAYC. To be able to mint you had to apply for a y00t scholarship. (Discord)

DAOs

• Orange DAO - a collective open only to YC alums supporting founders of crypto startups. Part of Orange DAO is also Orange Fund - a web3 venture fund. You can apply for funding here. If you are not YC alumni, you can apply to get informed if Orange DAO decides to extend their web3 community.

• LobsterDAO - an OG collective of DeFi & NFT degens and whales. Might be worth exploring for those with DeFi focus - DeFi research chat, general NFT chat, and NFT-gated chat, for which you need LobsterDAO NFT.

• Friends With Benefits (FWB) - a social DAO that describes itself as “a worldwide group of cultural creators, thinkers, and builders who convene digitally and IRL to collaboratively shape Web3´s future”, you can apply to join here. I have attended their events, but still, have a pending application, so would be happy for an opinion on this one. (Discord)

For those looking for application designers and devs, VectorDAO could be of interest - a “collective of application designers & developers contributing work to crypto protocols in order to accelerate their mainstream adoption.“ You can apply to join here.

Accelerators & launchpads

• Seed Club - social token incubator, that helps developers launch successful social tokens. Seed Club operates an accelerator to provide support to and bring together exciting new social impact projects. You can dig deeper by checking out their intro article, Notion, applying as a community member or into their next cohort. (Discord)

• Alliance DAO - web3 accelerator and builder community running 10-week programmes in 3 cohorts per year. You can apply for the next cohort of a join all 10 programme by 16th Jan 2023. The graduates can join the DAO community, which certainly could bring an interesting network of buikders.

• Base Camp (Outlier Ventures) - web3 accelerator by Outlier Ventures running usually 12 weeks. It offers several tracks based on the startup focus from sustainable fashion to DeFi. Outlier Ventures is a known name in the space and next to helping with tokenomics, governance, community building etc. the next cohort could also provide an interesting community of founders & devs to newcomers.

• Forefront Studio – a launchpad for web3 founders that want to create a tokenized community that is behind Terminal - a dashboard for DAOs. Part of Forefront is Canon - a curated list of resources for digital communities, FF Labs which throws workshops and aims to execute the best ideas submitted by the community. (Discord)

• Launchpad by Magic Eden - for NFT-focused projects and collections a good call could be to apply for launchpad by NFT marketplace Magic Eden, where you can receive marketing and technical support. Magic Eden was behind some mints such as Ezu - a sister wear2earn project of Psychadelic Anonymous.

• Launch House - a paid social club supported by a16z for founders, engineers, and investors. You can apply to different cohorts based on your background - web3 founder residency (Launch House), Investor residency (Venture House), or Design house. This may make sense for mainly CEOs get reach to a greater network, investors and help with raising investment.

If you work on NFT project or are building NFT community, a lot of alpha groups or NFT collections have launched their own launchpads, an example of this is Angel Labs - web3 accelerator from Meta Angels NFT managed by Cheryl Kellond to support the next generation of NFT projects. The accelerator so far had only one cohort in early 2022. (Discord).

In real life (IRL) events

IRL events might be sometimes the best way to make meaningful relationships with founders and creators. A good overview of blockchain events you can find here.

• NFT.NYC (US) - NFT.NYC is the biggest global NFT event. From my experience, if you do not plan to catch speakers right after their talks, it is better to focus on the satellite events themselves. Most of the listed communities throw events on their own during the conference. Next event is NFT.London on 3-4th November 22.

• EthCC - heard only good things about Ethereum Community Conference that took a place on 19-21 July 22 in Paris. Whereas the event has a wider focus on the Ethereum ecosystem, you can meet plenty of devs, VCs & founders. Same as in case of NFT.NYC, usually the conference is surrounded by high-quality side events.

• Veecon (US) – the first Veecon, a conference organized by Gary Vee, took a place on 19th-22nd May in Minneapolis. Ticket NFTs for Veecon were airdropped to Veefriends Series 1 holders as this is a core utility of the NFTs. I heard only good things from friends that have attended. Let´s see about next year.

• Non-Fungible Conference (EU) – I consider NFC the biggest NFT event in Europe. It took a place in Lisbon on 4th-5th April. I met some founders there but to a limited extent. I share my experience from NFC here. Next year NFC is taking place on 24th-25th May.

Other

• Premint Creator key - a good tool for NFT projects. As this tool is intended primarily for core teams, it is likely that at Discord you will run into and can DM other NFT founders. From my experience, it is way more likely they actually reply than writing them on Twitter. You can join without buying the key, but you will not be able to see hidden channels for collaborations etc.

• NFT Avenue - general NFT chat on Telegram created by LobsterDAO open to the public. One can occasionally catch there some interesting updates or projects.

Wrap-up

I hope this list was helpful. If you do not see a community or platform in here that you have personal experience with and would recommend for web3 founders and creators, please share it here with the community.

I will be continuously updating this list and asking OGs, founders, devs & degens this very same question so that we can together provide a guide for navigating founders, creators, and digital entrepreneurs that decide to embark on the web3 journey.🚀

Bonus: If you are a starting founder, you might want to check out START by a16z.

Have an opinion on the above? Are you interested in/building something in NFT and web3 space? Drop a comment or message me on Twitter or Telegram and let’s chat.

What happened - selected topics

Compared to the previous week Yuga Labs did not dominate the NFT news space anymore (apart from seed investment announcement & Apecoin DAO staking discussion) replaced by several feature announcements, crypto art news, and NFTCon.

• Gamestop, launched a beta version of its NFT marketplace targeting gamers built atop Loopring L2;

• Universe.xyz, new NFT marketplace on Ethereum, launched a beta version

• ApeCoin DAO put forward several AIPs (Ape Improvement Proposals), two of which concerning staking process and staking pool allocations stirred quite wide Twitter discussions;

• Gem, NFT aggregator, introduced Safety Mode to protect users from losing money due to failed transactions;

• LooksRare, NFT marketplace, introduced functionality for users to mint own NFTs by integrating Manifold and announced an auto-compounding option;

• XCOPY, a famous Crypto Art artist sold 7394 NFTs each priced 0.1 ETH as an open collection confirming the position of Crypto art in the current NFT space;

• US government charged two men with fraud and money laundering over the cryptocurrency "rug pull" scheme, a positive impulse given the high number of scams and frauds in NFT projects.

Investments

Next to multiple investments into blockchain gaming only notable raises were by Yuga Labs and Altava.

• Yuga Labs, a studio behind BAYC with 2021 financials - rev $138M & net profit: $127M (92% margin), raises $450M, seed round, $4B valuation, among investors also some BAYC holders via Party Round (link);

• Altava, a platform bringing fashion into the metaverse, raises $9.1M, seed round (link).

Project watchlist candidates

• Probably Something, a community-led project with a focus on creating software for NFT creators/collectors. The direction of product development established by the community gate-kept by allow list for NFT genesis passes that are to be minted on Monday 28th March.

• Coinvise, a powerful toolset for creators to build & operate tokenized communities.

Ethereum & Solana blockchain NFT activity

Looking at activity on Ethereum, OpenSea volume this week reflects a significant recovery from a cooldown in previous weeks i.e $559.87M vs. previous week $462.01M, currently ~21% increase (LooksRare volume ignored due to wash trading).

Weekly NFTs trading volume on Ethereum blockchain by marketplace [USD, 3m]

Looking at NFT activity on Solana blockchain TBD. DappRadar reports 7d USD volume $147.92M on the biggest NFT marketplace Magic Eden, a ~29% increase compared to the previous week of $101.32M. It is safe to say that there is a significant improvement in NFT activity on a macro level.

The use of NFTs as a gate-keeping mechanism and proof of NFT ownership IRL

The NFT market historically quickly evolved from PFP-only projects to introducing further utility to its holders. It is nowadays common that project teams want to create as much added value as possible for their communities as this has a direct effect on floor price. This soon gave a rise to using NFTs as a gatekeeping mechanism to either completely closed (alpha) communities or locked inner sections on discords. As the NFT communities need to also build their brand externally in order to raise awareness and create a sense of exclusivity/utility, it is only natural that the gate-keeping spilled over also into real life (IRL). In consequence, it is more and more common for NFT projects to throw events exclusive to their holders. We could have seen examples of this at Art Basel last year or more recently at SXSW.

The problem

Whether in a case of a real-life event that is exclusive to members of an NFT community, a conference ticket in a form of NFT (that is more and more common), or some digital content or experience online, the holder needs to prove the ownership of an NFT. To allow for validation of ownership the holders needs to connect their wallet, which can however be problematic in terms of security as even despite multiple tutorials on how to secure your NFTs I can imagine that a large number of holders do not possess the knowledge to set up multiple hardware wallets with passphrases and in case of mass adoption this will surely remain so. For those who do, they keep the high-value NFT assets in a hardware wallet that they would hardly have on them in case of IRL event or it is simply painful to be confirming Ledger combination every time you want to verify online.

Tokenproof - the solution?

When looking at whether someone tackles this problem I have stumbled upon a thread by @FonzGm introducing Tokenproof. Tokenproof enables NFT holders to verify ownership of NFTs and other assets either online or IRL, while not exposing the assets to a security risk. It binds your Ethereum accounts with your phone creating a proof of ownership token with which you can confirm your NFT ownership with your NFTs being stored in cold storage. It is a fairly easy process and takes only a few minutes. The verifier then scans a generated QR code to validate your NFT ownership (IRL scenario).

Proof of concept

Tokenproof threw their own event at SXSW and dropped POAP to everyone that RSPVd and then validated it through their app for everyone who attended as a proof of concept. On 4th March Tokenproof introduced mobile apps in both App Store and Play store. The team is rolling out more events, where the app will/was used for gate-keeping including Las Vegas NFT event, NFT LA or by Metakey project at Blockchain Australia. The team expects a wide rollout at NFT.NYC later this year.

Based on the roadmap the NFT ownership verification IRL is already available now and the online verification of NFT ownership would be finished in April-May 22. Most likely in terms of usability, we could expect more demand for the latter. I can imagine an example, where NFT ownership would unlock safely via Tokenproof some benefit/access online, but only in cases where the NFT project in the role of verifier does not require KYC. If that is the case like recently with BAYC, there are plenty of other solutions like Blockpass that are better suited at also verifying your identity.

Monetization & funding

There is a case for monetization both on the user side and verifier (NFT project, conference, etc.) side. Currently, Tokenproof offers a 30-day free trial for NFT holders after which users opt for either yearly Standard Membership for 0.05 ETH or Founder´s Circle lifetime membership for 0.1 ETH that is to be sold as NFT next month. In early April 2022, Tokenproof wanted to initially mint the Founder´s Circle Memberships as a form of community-led fundraising but based on my conversation with @FonzGm they are also considering letting the community mint this for free and try to secure the funds in a traditional seed round. Whereas it is common for NFT projects to monetize access to tools/features via NFT sale, I can see how the short-term motivation of the community mainly caring about floor price could pressure the team and lead to an unhealthy environment.

Based on our discussion I also understand that monetization of the service towards verifier is something they are considering in the long term.

Behind this project is @FonzGm as a part of 10 people team with some working on a full-time and some part-time basis. The engineering team is composed of CTO and four developers.

Opportunities & competitive landscape

When looking at other projects that focus on providing secure proof of NFT ownership, I have not found any direct alternative. There are other projects that focus on enabling creators to monetize their content such as Unlock protocol or Lit protocol, but either has a bit different focus or do not provide instant frictionless solution on how to solve the problem i.e. secure verification of NFT ownership.

I believe we are very early in this space and even though Tokenproof redirected its existing product towards different use case, technically it is 1,5 months old. In my opinion, they can fully enjoy first-mover advantage. I also think that we are at the beginning of a cycle during which NFTs will become the new digital standard of ownership. Tokenproof removes a security obstacle to wider application.

Risks

As one of the main risks for Tokenproof, I consider that the possibility of some large platform that is already first screen for NFT holders (e.g. any platform that is central to NFT ecosystem such as a wallet, marketplace, or social network) would internally develop and integrate similar functionality. Convenience and simplicity goes a long way and if a user has a simpler alternative available via a platform/tool he is using already, looking for other solutions will not be needed (downloading an additional app that needs to be connected with a wallet etc.).

Wrap-up

I like Tokenproof in the sense that the product is directly trying to solve a current pain point of NFT holders and is in my opinion in a position to exploit first-mover advantage. The main success factors in my opinion will be if the dev team is able to deliver fast on the online verification of NFT ownership, be able to close partnerships with verifiers, and fully exploit first-mover advantage. It could get significant traction after a successful showcase at NFT.NYC or when used by larger NFT projects with high exposure. I am in touch with the founder and want to discuss ways on how we can help/participate.

🔗 Want to dig deeper?

• Tokenproof introduction thread

• Tokenproof Whitepaper

• Tokenproof SXSW proof of concept

• Unlock protocol Whitepaper

• Lit protocol Whitepaper

Have opinion on the above? Are you interested in/building something in NFT and web3 space? Drop a comment or message me on Twitter or Telegram and lets chat.

Leave a comment

What happened - selected topics

The news were this week heavily dominated by Yuga Labs. Further confirmation of plans to integrate NFTs by Facebook and Spotify, Gamestop confirming earlier intention to launch own NFT marketplace.

• Supposedly a deck from Yuga Labs leaked to the hands of The Block, which triggered discussion on roadmap incl. sale of virtual land and later announced as outdated by Co-founder;

• ApeCoin (tokenomics, summary, Yuga Labs 15% + BAYC founders 8% of tokens) launched yesterday as primary token for all products and services incl. planned P2E game MetaRPG by Yuga Labs & is owned/operated by ApeCoin DAO. Next to DAO also Ape Foundation was established to serve as legal steward through which DAO operates. BAYC holders could claim an $APE airdrop, funny fact - someone borrowed 5 BAYCs from NFTX to claim $APE and returned them in one transaction;

• The Ape Foundation board had first public discussion yesterday, board for 1st 6m: Alexis Ohanian (776/Reddit), Amy Wu (FTX), Yat Siu (Animoca Brands), Maaria Bajwa (Sound Ventures) and Dean Steinbeck (Horizen Labs).

• South by Southwest (SXSW) festival was attended by several NFT projects such as Doodles, Flufworld, Sandbox or ASM and NFTs were used for entry at certain events (I recommend insightful take on SXSW by Platformer)

Investments

Investments into NFT projects were this week traditionally dominated mainly by blockchain gaming with Animoca Brands involved in multiple investments. Two notable investments are UNLOC and Magic Eden on the SOL ecosystem.

• UNLOC, a platform providing loans against NFTs on Solana as collateral, raises $1.25M, seed round, $15M valuation (link)

• Magic Eden, largest Solana NFT marketplace, raises $27M, series A (link)

• LiveArtX, a premium NFT marketplace focused on artists, galleries, and collectors, raises $4.5M, seed round (link)

Project watchlist candidates

• LandWorks, a project from EnterDAO that enables users to lend and rent virtual land. It currently supports only Decentraland, but with moving closer to metaverse adoption, this project could provide an interesting use case.

• Artiva helps you build your own NFT marketplace with no coding knowledge. Your marketplace is then placed on .artiva.app subdomain. It is yet another platform next to Manifold and ultimately Universe that allow creators to build their own platform

Ethereum & Solana blockchain NFT activity

Looking at activity on Ethereum based on USD volume we can expect a significant improvement in OpenSea volume this week of $462.01M vs. previous week $350.81M, currently ~31.7% increase (LooksRare volume ignored due to wash trading). We can say with confidence that Yuga Labs news contributed significantly to NFT activity on ETH as volume was heavily dominated by Yuga Labs collections.

Weekly NFTs trading volume on Ethereum blockchain by marketplace [USD, 3m]

Looking at NFT activity on Solana blockchain it remains fairly similar to previous week. DappRadar reports 7d USD volume 101.32M on the biggest NFT marketplace Magic Eden, a ~4.8% drop compared to previous week of $106.52M. The increase of NFT activity on Ethereum chain could be therefore driven mainly by Yuga Labs news and does not change the macro picture of NFT market.

Launch of new NFT marketplace Universe.xyz, what do we know?

Universe protocol is expected to launch it´s marketplace next week and there are not many eyes on it in all the current Yuga Labs noise. Universe protocol is intended to be social media NFT platform built on Ethereum and aims to provide artists with a set of digital solutions (minting, marketplaces, social tools, NFT tools, and auctions) to easily mint and monetize NFTs.

Universe however brings on the table several important features & characteristics that distinguish it from the current market leader OpenSea:

1. Decentralization of smart contracts - the artists and collection creators will unlike on OpenSea own the smart contract of the project;

2. Decentralization of data - Universe in the long run intends to store all data on decentralized blockchain such as ICP;

3. Community-owned - in xyzDAO $XYZ holders are given voting rights to participate fully on the future of the project. Token holders were also able to vote on the launch of marketplace.

Strong team with all-star contributors

I think that one of the strengths of this project is long track record of the team and wide network of well-known contributors especially in DeFi space. Universe.xyz was cofounded by Tyler Ward, Tim Kang, Troy Murray and Milad Mostavi. The team has a wide track record in the DeFi/NFT space as they also work on projects like BarnBridge and set of DAOs i.e. LeagueDAO, EnterDAO, FiatDAO and PleaserDAO.

Among the strong contributors base can be found names such as Kain Warwick of SNX and his brother Kieran of Illuvium, Stani Kulechov from Aave and Robert Leshner of Compound Finance, Aaron McDonald of Centrality, Artia Moghbel of Dfinity and Anton Bukov of 1INCH.

Fees & selected features

Universe is very creator-focused as it has very fee-friendly policy and has first rolled out minting functionality. There is no transaction fee on primary sales & according to whitepaper 1% on secondary sales. The transaction fee would in that case be notably lower than the 2% at Magic Eden or LooksRare, or 2.5% at OpenSea.

One of strong upsides of Universe for creators is the possibility to mint their NFTs or NFT collection without the need for smart contract developer. This can be a great pain reliever for creators. Another upside already mentioned is the possibility to mint a project on a smart contract that you already own. Universe is also planning a functionality to run auctions in an auction house with 0% fees. This could be an interesting tool for creators that want to test the market with their NFTs.

Seed round last year

Universe.xyz closed $4.3M seed round with $21M valuation in May 2021. Unlike in other seed rounds opportunity to participate was given to various leaders of funds, DeFi & NFT protocols that believed to provide value.

Rocky road ahead

Since NFT space is an attention market, one of the obstacles I see for Universe is that they have a lack of it. With a small community and lack of involvement of NFT OGs with large tribes behind them or vampire attack on OpenSea with airdrop and activity incentives it may be very hard to attract meaningful user base.

There have been discussions on DAO level related to airdrop & user incentives, but to my knowledge the team does not plan an airdrop to OpenSea users. I understand that since the $XYZ ecosystem exists for a while now, airdrop would strongly dilute the value for holders. Also since the team is fully doxxed, due to US security laws Universe will most likely not be implementing the web3 user incentives (e.g. tokens for activity) we see on LooksRare marketplace. The team argues that this is because it is simply too easy to exploit and All the transaction fees will go to the xyzDAO treasury, therefore there is no incentive in place for the users that are not $XYZ holders at the same time.

It is also surprising to me that the team did not roll out any visible marketing initiatives prior to marketplace launch. Strategies like waitlists based on referrals could potentially bring a lot of traction like we see with Coinbase NFT or Limewire. Based on the last AMA I did not get a feeling that there is strong marketing team dedicated to strategy & communication. This corresponds to the picture of small community following the project and absolute lack of coverage of Universe on the internet.

I can imagine that Universe would attract mainly creators due to the easy minting, however it is not clear to me how the marketplace wants to differentiate from other alternatives focused at artists such as Manifold. The team also intends to power marketplaces of other projects that are built on the top of Universe protocol. If implemented, this could help with the user acquisition.

Wrap-up

Universe ticks all the boxes on the technical side of the project. There is a strong team with all-start contributors network that demonstrated good progress over time. I also think that building a complete independent ecosystem for NFTs (similar to Magic Eden) not just an isolated marketplace could prove to be very competitive in the long run. Universe also follows the ideals of decentralization from smart contracts to data that will be strongly appreciated by the web3 community as well as functioning in a full-scale DAO.

Where I see potential downsides is lack of attention and marketing especially this early into the launch and absence of web3 incentives towards users. Since discoverability is almost an inherent issue in NFT space, the technical execution is not the only success factor. It will be interesting to watch the NFT marketplace launch next week and what the team has planned to attract both NFT creators and collectors.

🔗 Want to dig deeper?

• Universe & xyzDAO – Building a Sustainable NFT Ecosystem with Tyler Ward

• UniverseXYZ Whitepaper

• Universe Docs

• UNIVERSE XYZ AMA #8

Have opinion on the above? Are you interested in/building something in NFT and web3 space? Drop a comment or message me on Twitter or Telegram and lets chat.

Leave a comment

What happened - selected topics

The news that stood out - the future of PFP due to consolidation of CryptoPunks and BAYC by Yuga Labs or anonimity based on BAYC KYC requirement, further announcements of NFT infrastructure projects such as marketplaces, integrations such as Gem x LooksRare.

Yuga Labs acquiring the IP of CryptoPunks and Meebits from Larva Labs triggered a wide discussion in the community, announced that commercial rights will go to holders as with BAYC, good summary from @6529

Stripe announced support for NFT sales potentially making it easier to to give birth to new niche NFT marketplaces and released commemorative NFT collection on Nifty Gateway (link)

Music NFTs marketplace under LimeWire brand, some label & artist backing, denomination of assets in USD could be a good step towards mass adoption (link)

NFT aggregator Gem newly supports next to OpenSea also LooksRare, competitor Genie currently supports OpenSea and Rarible (link)

KYC required by BAYC latest initiative for holders triggered discussions about whether retaining anonymity with mainstream NFT brands feasible in long term, majority consensus KYC ok but with reasons why, BAYC poor communication (link)

Investments

Mainly blockchain gaming projects continue to enjoy the attention from VCs from launchpads to infrastructure. What stands out for me is a seed investment into ASM as investments into utility & AI NFTs are not that common.

Selected investments:

• Altered State Machine, platform for applying artificial intelligence to the metaverse as NFT, undisclosed investment, seed round (link)

• Space Runners, metaverse fashion brand with with digitally wearable NFTs, raises $10M, seed round (link)

• Gamepad, Gamefi & metaverse launchpad, raises $2.5M, seed round, $25M valuation (link)

• Immutable, L2 for NFTs on Ethereum, raises $200M, $2.5B Valuation (link)

Project watchlist candidates

Gradient is a DeFi lending protocol that enables immediate loans using any NFT as collateral while allowing anyone to earn yield from the NFTs they own

Courtyard is an infrastructure to securely tokenize physical assets into NFTs

Probably Something is a platform of software tools for NFT creators & collectors by PxinDAO, control over the direction of products via NFT ownership, founder write-up

Ethereum & Solana blockchain NFT activity

NFT activity on Ethereum based on USD volume continues weekly downtrend, so far the week of 7/3 OpenSea volume $350.81M vs. week of 28/2 $694.83M, currently ~50% decrease (weekend activity not counted in, LooksRare volume ignored due to wash trading). There seems to be rather bearish sentiment prevailing in the community including both general nft market and 1/1 art.

Weekly NFTs trading volume on Ethereum blockchain by marketplace [USD, 3m]

Looking at NFT activity on Solana blockchain DappRadar reports 7d USD volume $106.52M on Magic Eden, a ~20.3% drop compared to previous week and $1.92M on Solanart, a ~22.80% drop, two biggest NFT marketplaces on Solana based on volume.

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Do NFT aggregators stand a chance against NFT marketplaces?

Next to web3-friendly LooksRare and incoming Coinbase NFT, the leading OpenSea NFT marketplace could be met with serious competition also from NFT aggregators. NFT aggregators are relatively new in the space compared to NFT marketplaces, where first NFT aggregator Genie (by @Scott_eth) was launched in Nov´21 with simple propositions of buy/sell multiple NFTs across marketplaces in single transaction. It aggregates Rarible, OpenSea, NFTX and NFT20 marketplaces. Based on NFTX and NFT20 integration it can sell NFT into one of liquidity pools for instant liquidity usually significantly lower under the floor price. Another NFT aggregator Gem (by @vasa_develop) launched on 16th Jan´22 and thanks to better UX and gas savings became fast the dominant player.

Gem is in comparison with OpenSea still a small player with that in terms of USD volume peaked in Feb´22 with $15.16M daily volume and daily average since then would probably be between ~$5-7M. For comparison OpenSea on the same day experienced daily volume of $359.96M i.e. Gem volume was cca ~4.2% of OpenSea.

Assessing digital marketplaces according to web2 optics

Next to trading volumes, no. of transactions and active wallets, it could be interesting also to look back at the optics through which web2 digital platforms can be evaluated. Some approaches could point to 1) whether there is any experience delta, 2) economic advantages by using the platform, 3) edge provided by technology, 4) size of the market opportunity (total available market or TAM could be harder to estimate with ever-changing use cases of NFTs), 5) enhancing features that could also expand the market, 6) frequency of the use case or 7) network effects. Some of these factors I will cover in the next section.

Ideal conditions for digital marketplace would be highly fragmented supplier and buyer base which is very true for NFT space, low friction of supplier sign up or automatically adding fees into the price, which feels like a market standard for a long time. The aggregators enjoy a significant success in the web2 arena, could the same effect eventually spill over into web3?

The case for NFT Aggregators

The main case for NFT aggregators is that they are simply cheaper when buying multiple NFTs. NFT aggregators can be helpful in batch buying (also from different collections) and selling NFTs as they can save significant portion of the gas fees. This could be a strong argument for users using Ethereum blockchain, where gas fees can be substantial.

UI/UX is often quoted factor when discussing NFT marketplaces. With continued mainstream adoption of NFTs, NFT aggregators could provide better UX by simply introducing basket shopping-like experience that we are used to from web2.

One of the potential issues I see is the discoverability of the aggregators themselves. Majority of NFT collectors is currently easily channeled towards e.g. OpenSea because NFT projects are directly linking to their OpenSea profiles. Unless you hear about the aggregator, there are in my opinion not many ways how users can discover them. The lack discoverability options is however also typical for NFTs themselves. There are growing amounts of tools that analyze volumes, price outliers of collections, exploring wallets etc. like Nansen, NFTscoring or tracking specific whale wallets such as Context etc., but other than that NFT collectors are often limited to alpha chats and Twitter. If NFT aggregators would try to leverage this gap and curate the attention, they could become the next go-to-place.

When considering the frequency of use case, it is fair to say that features like “floor sweeps” i.e. buying several NFTs at the floor price are more likely to be used by more experienced NFT collectors or whales. The direct need of a user would arise however in case of buying multiple NFTs. Listing multiple NFTs in one transaction could increase on frequency of use case in case of significant market fragmentation e.g. either with LooksRare growing on popularity or entrance of Coinbase NFT.

Some of interesting features of Gem compared to NFT marketplaces is the option to pay with not just ETH but any ERC20 tokens. You can buy NFT e.g. with tokens of BanklessDAO or Metaverse Index by Indexcoop. Downside is the absence of fiat payments that is often a standard at NFT marketplaces and significantly contributes to mass adoption. Gem pulls out data directly from smart contracts so even if the marketplace is down, it does not affect the potential transaction. Recently Gem rolled out two significant updates yesterday that will contribute to Gem usability, but could also bring significant organic volume to LooksRare (buy/sell activity rewards can be claimed via Gem).

Neither Genie or Gem launched yet there native tokens so some voices could naturally argue, that influx of early adopters can be explained also by hopes of receiving allocations once they do.

Wrap-up

It is unlikely that OpenSea would despite its multiple technical/security issues or centralization narrative loose its first mover advantage in the short run as that is where all the projects and users are for now. However, in case of further segmentation of NFT market NFT aggregators could gain a significant upside and Gem is best positioned to take advantage of that. Both Stripe´s recently announced support of NFT sales & incoming Coinbase NFT marketplace could significantly contribute to that.

Update 16th March 22: Genie granting access to V2, could it mix the cards when it comes to usage of Genie vs. Gem NFT aggregators?

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🔗 Want to dig deeper?

• A guide on using NFT aggregators like Genie and Gem to buy NFTs

• Introduction To Genie: All You Need To Know About This NFT Marketplace Aggregator

• All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces

• Genie: The Metaverse’s Aggregator

• The Top Five NFT Marketplace Alternatives to OpenSea

News

• Largest-ever NFT-backed loan backed by 101 CryptoPunks (link)

• Anonymous buyer purchased World of Women NFT via Moonpay for $754,000 at Christie's auction (link)

• SEC having a closer look at NFT space for potential security violations (link)

• Treasure NFT marketplace attacked via exploit that allowed hackers to get several listed NFTs for free, most of which were later recovered (link)

• CryptoPunk #5364 donated to Ukraine´s campaign (link)

• Ukraine to issue NFT collection to fund armed forces (link)

• CryptoPunks Owner boasts of 'rugging' Sotheby's, NFT auction canceled (link)

Tweets

• Jason Choi, takeaways from talking to 50+ web3 metaverse companies (link)

• Loopify, current thoughts on the NFT market (link)

• Ukraine official acc., confirmation of airdrop for donations to Ukraine (link)

• Mykhailo Fedorov, cancellation of airdrop and announcement of NFTs (link)

• Richerd.eth, Manifold Merch Bridge for redemption of merch via NFTs (link)

Project updates &NFT integration

• MetaPortal, project by EnterDAO, released $GAME NFT gaming index (link)

• Rakunen, japanese e-commerce firm, announced launch of own NFT marketplace (link)

• DeFrag, non-custodial liquidity protocol allowing borrowers to use NFTs as collateral, announced strategic partnership (link)

Investments

• Karmaverse, GameFi multiverse project, raises $6M, private round (link)

• NFT3, unified decentralized identity & credit network raises $7.5M, seed & strategic rounds (link)

• Gamespad, gaming NFT & metaverse ecosystem, undisclosed investment (link)

• DNABLOCK, design & mint NFT avatar platform, raises $7M, seed round (link)

• X Rush, GameFi project, raises undisclosed investment, $10M valuation (link)

• Web3Games, integrated blockchain gaming platform, raises $4M, seed round (link)

• Nifty League, NFT gaming metaverse, raises $5M, seed round (link)

• Pianity, music NFT marketplace, raises $6.5M, seed round (link)

• Ignite Tournaments, P2E mobile esports tournament organization & streaming platform, raises $10M, seed round (link)

• Sandstorm, platform connecting metaverse NFT builders & brands, raises $2.5M, seed round (link)

• Rarify, API provider enabling creation, management & scaling of blockchain-agnostic NFT products, raises $10M, series A, $100M valuation (link)

Project watchlist candidates

• Backdrop, helps participate in tokenized communities, creates your profile after connecting a wallet, allows you to discover new communities etc.

• Genie, NFT market aggregator that allows to batch buy & list NFTs across all major marketplaces in a single transaction

Ethereum blockchain - continuing weekly NFT USD volume downtrend, the week of 28/2 OpenSea volume 694.83M vs. week of 21/2 1039.24M, a ~33% decrease (LooksRare volume ignored due to wash trading). The amount of transactions in week of 28/2 with 0.85M transactions slightly dropped by ~15% compared by to previous week with 1.01M transactions.

Weekly NFTs volume by marketplace [USD, 3m]

Weekly NFT transactions by marketplace [#, 3m]

The current breakdown of NFTs by category in Nansen NFT-500 Index is dominated in terms of value by social NFT projects that represent 76% of the marketcap. In the last days all categories follow the overall NFT market movement and continue to decrease in value as the NFT market cools in my opinion partially also because of the Russia-Ukraine conflict negative sentiment.

Marketcap per NFT category, Nansen NFT-500 Index [ETH, 1m]

Nansen NFT-500 Index = broad market index tracking the market activity of NFTs on the Ethereum blockchain, consists of 500 NFT collections weighted by market cap representing cca 85% of daily market volume since 1/1/22, rebalanced every 30 days. It can be used to track how different NFT categories develop over time in terms of market cap and in comparison with other Nansen NFT indexes (bluechip, social, games, art) to compare how individual NFT categories retain value over time.

Solana blockchain - there is not yet that much available data on USD trading volumes of NFTs on Solana blockchain, but DappRadar reports in terms of last week a ~37% and 33% drops in 2 biggest marketplaces Magic Eden and Solanart compared to previous week. Continuing downtrend is visible also in terms of daily transactions.

Daily NFT transactions of popular programs [#, 3m]

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Magic Eden NFT marketplace

👀tl;dr: Bullish. Magic Eden NFT marketplace dominates the Solana NFT landscape and gets a lot of things right - competitive transaction costs and unique features, community-friendly approach, own launchpad, strong partnerships including DEX Raydium & gaming projects or recent launch of MagicDAO airdropping Magic Ticket NFT gate-keeping token to most active users. Worth further monitoring.

NFTs on Solana

Solana NFT ecosystem exploded in 2021 and has grown ever since with cumulative unique Solana NFT ownership reaching to around 2.59 million today.

The volumes of NFTs minted per day seem pretty consistent during last few months, however are also subject to a recent cooldown of the overall nft market.

First NFT collections appeared on Solana in March 2021. A good summary on NFTs on Solana can be found here.

Magic Eden NFT marketplace

Magic Eden has become the leading NFT marketplace on Solana blockchain. When looking at the platform I had a brief look at its features, approach to creatures and their own launchpad, partnerships activity and numbers. Magic Eden raised $2.5 million investment in seed round in October last year.

Team

The marketplace was started by 4 co-founders, Jack Lu, Zhuoxun Yin, Sidney Zhang, and Rex, who are a group of friends from Silicon Valley with diverse backgrounds and prior work experience in Facebook, Uber, Google, Coinbase, FTX, dYdX, Amazon, Bain & Company, and Boston Consulting Group (BCG).

Features

On features and user conditions level I believe Magic Eden is very competitive. Listing NFTs on Magic Eden is free for users and the transaction fees are quite low at 2%. Magic Eden is also first platform to introduce features such as rarity index or own launchpad. Creators can also take advantage of both dutch and english auctions functionality along with many other interesting features. Some users may also appreciate the support of Japanese, Vietnamese, Turkish, Korean or Russian languages. Last month Magic Eden also rolled out beta version of their Android App.

Approach to creators, mint authority, & launchpad

Creators can list their collections by uploading materials to Creator Portal. Creators can also apply for Magic Eden Launchpad, where they can create and sell NFTs, get full-service NFT minting support or outbound marketing support. One of the examples of (gaming) projects rolled out via launchpad is Mini Royale Genesis drop by Faraway.

Magic Eden also rolled out last year Mint Authority - self-service minting solution for creators and easy way for collectors to discover upcoming mints.

Unlike OpenSea, Magic Eden was recently forced by rug pulls to invoke doxing policy for creators. This could make NFT trading on the platform safer, however also dissuade some creators from listing their projects on the marketplace.

Partnerships

Actively looking for large partnerships can bring a lot of value for users. Magic Eden concluded partnership with Raydium that offers creators liquidity and exposure for their NFT collections that gave birth to Raydium NFT platform. The platform also looks for partnerships in the gaming space. Among other the projects can use the launchpad for their NFT collections.

Gaming

Solana can be considered ideal gaming platform due to its super-fast speed and low fees. Trying to take advantage of this and active focus on gaming space is in my opinion a good move and is a logical choice. To follow this logic Magic Eden closed a partnership last year with Faraway - a crypto gaming company. Magic Eden became the primary marketplace for their genesis drop and powers game called “Mini Royale - Nations” in-game marketplace. The game can also be played directly on the Magic Eden under the “Play Now” tab. Another cooperation in the gaming space was concluded in January with Zoolana to launch its Alpha Blue NFTs.

According to Magic Eden the games can use launchpad to drop their in-game items, use Magic Eden infrastructure to power in-game marketplace experiences or leverage reach of the marketplace to acquire and engage new users.

Market share on Solana & comparison with OpenSea

Magic Eden has made its way eventually into top 10 NFT marketplaces across all blockchains. Based on DappRadar it is currently ranked 6th in terms of total volume reaching over $710 million since its launch in mid-September 2021. For comparing Magic Eden with other NFT marketplaces the most logical benchmark is OpenSea. Whereas OpenSea ~94% market share on Ethereum blockchain, Magic Eden climbed to a bit under 90% market share on Solana blockchain followed by Solanart and Solsea.

Based on analysis by Derek Walkush Magic Eden daily transactions were tracing cca 2.5x OpenSea´s, were up ~290% since October and about 10% MoM. It is safe to assume that low transaction fees as well as gas fees add a significant upside to nft trading on Solana blockchain and Magic Eden marketplace.

When looking at the comparison of average transaction value on OpenSea and Magic Eden nft marketplaces it becomes clear that transactions on OpenSea have significantly higher average transaction values, which directly affects the total traded volume.

Magic Eden goes MagicDAO

Magic Eden also decided to make a step closer to web3 dynamics via launching MagicDAO and airdrop NFT membership passes called Magic Tickets to existing users to benefit early supporters and expand project´s ecosystem over time. Magic Eden also put for a start 1000 SOL into the treasury to start things off. In the long term the treasury will be funded by 5% of creator royalties on secondary sales and 2% of trading fees from Magic Ticket. According to Magic Eden the initial perks of joining MagicDAO are being able to vote on governance aspects, be nominated as an advisor or vote on NFT collections. Detailed roadmap for MagicDAO can be found here.

Magic Tickets as gate-keeping tokens

The NFT membership pass that was airdropped is called Magic Ticket, which is a gate-keeping token for MagicDAO. It was airdropped to users of Magic Eden NFT marketplace based on their activity, but it is also possible to buy it on secondary market.

Magic Eden has in total airdropped 30 602 tickets and they were divided into three clasess i.e. OGs, Degens and Normies based on when the user made 1st transaction. The type of Magic Ticket defines the different roles of the individual in a community.

Both MagicDAO and Magic Tickets are according to Magic Eden a part of multi-year roadmaps. More information on this can be found in the litepaper.

MagicDAO

Once you have Magic Ticket in your wallet, you can verify yourself on Magic Eden Discord to access MagicDAO section. So far there is a section with announcements and community section with general topics but also special channels for individual community groups such as OGs, degens or creators. There is also MagicDAO alpha section with alpha channel that as often is the case looks more like shilling channel, another one to submit upcoming mints and also a channel for curated selection of upcoming NFT projects. From what it seems like the governance at this point is not a full governance model defining the future of Magic Eden but rather deciding about small issues such as what NFT collection will be on the homepage etc.

Wrap-up

When it comes to what Magic Eden has achieved so far I like what I am seeing. A strong team turning the project relatively fast into the biggest NFT marketplace on Solana with competitive transaction costs and unique features. I think leveraging partnerships through own launchpad is also with focus on gaming .or following web3 principles to airdrop Magic Ticket and launch of MagicDAO to involve the community.

In case Magic Eden would ever spill over to Ethereum ecosystem, it could prove to be a worthy adversary to OpenSea, Coinbase, Looksrare and other NFT marketplaces in the space. I think it is worth it to closely watch the next steps Magic Eden takes. I will further monitor this project (and maybe in time come with another updated view).

Update 13th March 22: Magic Eden completed a successful raise of $27M led by Paradigm (Series A) with undisclosed valuation. It seems like a logical move for Paradigm to back a strong project and also hedge it´s bet on OpenSea.

It will be interesting to monitor the progress of Magic Eden further especially in case OpenSea adopts Solana or Magic Eden decides to adopt Ethereum blockchain. Magic Eden today also launched Eden Games, a content hub for game publishers.

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🔗 Want to dig deeper?

Articles:

• 2021: A Year Of NFTs On Solana

• Solana NFT Marketplace Magic Eden Is Airdropping Tokens, Launching DAO

• Magic Eden x Faraway: How Marketplaces & Blockchain Games Can Grow Together

• About Magic Ticket Airdrop & MagicDAO Roadmap

• MagicDAO / Magic Ticket Litepaper

• Rug Pulls Force Solana NFT Marketplace Magic Eden to Invoke Doxing Policy for Creators

• 10 Solana NFT Projects You Should Know About in 2022

• List Your NFTs with Solana’s NFT Marketplace, Magic Eden, with 0% Listing Fees

🛠️ Web3 tools & projects worth a note

• Zookeeper.club - wallet explorer & wallet valuation app for Solana blockchain

• NFT Scoring - analyzes and ranks NFT collections based on community engagement and more.

• Flipper.zone - NFT analysis tool by Bankless DAO in the making, access via holding NFT, expected launch during this month, currently presale waves in their discord for Alpha Access community and Bankless DAO

🛠️ Essentials - before you even start interacting in the space get a Phantom wallet. DEX that you can use on Solana is Raydium. To send e.g. Ethereum to Solana or any other cryptocurrency/stablecoin you can use Portal Token Bridge by Wormhole. Here is a step-by-step tutorial on how to use it.

✏️ What are your thoughts on this? Are you working on a project in web3 space? Feel free to drop me a comment under the memo or reach out to me on Twitter. Happy to discuss & connect. WGMI. Circus Matt

NFTmemo by Mattbullish - synthesis of NFT news & investments, interesting projects, overview of NFT activity on Ethereum and Solana blockchains and weekly analysis: ooksRare NFT marketplace after a month - the past, present and the way ahead.

Since it´s launch in January earlier this year LooksRare captured a lot of attention in the NFT space, mainly because you could say that unlike VC-backed OpenSea it truly adheres to the web3 principles giving back to the users with rewarding them for activity and staking its own token $LOOKS. It quickly attracted attention in terms of both trading volumes (a lot of noise coming from wash trading) and protocol profitability.

First of all, I have two notes to disclose. Firstly, my ambition is not to look at the price action of the token & short term dynamics, I am more interested in the used go-to-market approach of the project, fundamentals and what LooksRare could become. Secondly, fundamentals aside, I think that LooksRare certainly brought some value to the web3/NFT space solely by airdropping tokens to OpenSea users. I have seen a lot of statements on how others gained their very first experience with staking because of the airdrop.

Go-to-market approach - “vampire attack”

“Vampire attack” as Coinbase likes to put it is “a method for sucking users out of an existing platform into a competing one by offering some kind of incentive (typically tokens)“. For better understanding I recommend a nice summary from Jordi Alexander on the game theory aspects in the LooksRare ecosystem.

LooksRare applied approach can be summarized in the following few points:

• choose a market leader with high user base i.e. OpenSea, airdrop tokens to the users;

• establish the amount of airdropped tokens based on traded volume in last X months x the no. of transactions executed (with certain coefficients);

• set the condition to claim the airdrop a listing on NFT so that you incentivize the user to overcome the friction of learning the process;

• introduce web3 inspired trading activity and token-holding rewards to incentivize activity and in the meantime intensively work on the product, strong marketing campaigns & improve user experience to try to take advantage of the network effect;

• start with steep incentives to attract attention and acquire the user base followed by decreasing the incentives in phases to achieve sustainability.

Staking

As staking $LOOKS rewards the user from part of the trading fees, LooksRare naturally needs to incentivize trading. Two days ago, LooksRare entered a Phase 2 of LOOKS Emission.

The staking and trading rewards of $LOOKS were both to decrease by cca 53%. APR on LooksRare is however composed of both $LOOKS and $WETH and $WETH rewards generation is mainly based on the trading activity (i.e. largely wash trading). You could therefore argue that if the wash trading ceased without significant increase in organic activities on the platform, it could have significant negative effect the staking incentives and indirectly on the model. I think that rewards in both $LOOKS and $WETH is a nice touch as the user´s exposure is diversified between the token but also Ethereum. It is also very convenient that the rewards in $LOOKS are automatically added to the staked amount and you let the compounding to do the magic.

MoonCat2878 nicely summarized arguments on why the wash traders are likely to stay. Interestingly enough, the appreciation of the $LOOKS token could have an interesting multiplier effect on the $WETH rewards provided $ETH maintains similar price levels.

Team

Two anons known as Guts and Zodd have built the platform only in (currently) 14 people team. According to the interview with The Block the co-founders are “NFT nerds” that are active in the NFT space for a long time under different pseudonyms. They could not fork OpenSea to achieve what they wanted and they created LooksRare based on their frustration with current NFT marketplaces. The team said that they coded the marketplace’s smart contracts in modular way that will allow them to make big changes at rapid pace. They also have an intention to support L2 networks that would allow for cheaper and faster transactions.

What I like is that the team is very active, does a lot of polishing in terms of UX and makes a steady progress.

Product

I will touch upon the website only very briefly. I like the simple, clean and user-friendly interface. I must say that LooksRare went a long way but still has a long way to go. I do hope that they also plan to soon develop a mobile app for Android/iOS as that is a must nowadays.

I like that on the UX level LooksRare introduced several quite unique features. As one of the reactions to wash trading issue, there has been an interesting suggestion to incentivize floor bid buyers only. Technically bidding on floor price is now possible with the Make Collection Offer, where the offer will be applied across the whole collection.

Numbers game and the wash trading story

The natural downside of trading rewards i.e. the daily 2.8M $LOOKS given out for activity is that it incentivizes wash trading. For wash trading the users target collections, where there is no royalty fee set (currently mainly Meebits & Terraforms). The wash trading is painfully obvious as e.g. Meebits are listed for a huge multiple of market price.

In that case only 2% fees are paid on each transaction toward the platform and back to $LOOKS stakers. The traders simply With this tactic NFT traders accumulate volume to earn a share of the daily 2.8M $LOOKS given as trading rewards.

Lets have a look at the numbers. From the daily volume graph, it is apparent LooksRare statistics point to significantly higher volumes than on OpenSea, but…

…when we compare the daily volumes with the number of daily transactions, you can clearly see that LooksRare disposes of microscopic amounts of transactions compared to OpenSea.

Based on the hourly volume we can see inconsistent volumes on OpenSea with few high-value transactions.

The overall picture is confirmed by the amount of daily users with OpenSea having cca 20–40 times more active users than LooksRare.

For a comparison here is the real LooksRare daily volume for January 2022. According to Steven LooksRare´s organic volume continued to grow during January after LooksRare added basic filtering to their UI/UX.

There are multiple problems caused with wash trading from setting the wrong incentives for the users to distorting the numbers, however I agree with the argument that such mechanic if temporary in nature is proportional to vampire a network effect and take a chunk of OpenSea volume that daily generates millions of USD in fees. LooksRare approaches the wash trading as risky for the traders as they do not know how much volume other traders are going to make. Looksrare also added in the interview that they intend to make such practices unprofitable in the future without any further details.

Wrap-up

Surely one could question the sustainability of LooksRare model that is largely dependent on the liquidity powered by wash trading. There is a long road to utilizing the network effect and would in my opinion have to go hand in hand with stellar development of the platform. It is also questionable whether LooksRare is worth the current $560M market cap, but as the OpenSea valuation is $13B, there certainly is some space for growth.

Due to the combination of proactive and responsive team, good UX & technical stability (unlike OpenSea), lower fees, enlarging the team, the concept of trading rewards and upsides originating from the “web3 compliant model” I remain bullish on the project. It will be interesting to observe, whether LooksRare will be able to use the web3 narrative to their advantage and grow their community around it. I perceive this as a key advantage towards other marketplaces as it is likely to remain the only NFT marketplace built on web3 principles on Ethereum chain for a while. Devin Finzer, founder & CEO of OpenSea stated in the interview by Bankless that centralized teams can build faster. In comparison due to US securities laws, I believe it would be very hard for OpenSea to issue a community token, so it may never tap into the full power of web3.

I also think that those who remain staking also in the 100-200% APR zone are driven by the usability and web3 narrative rather than opportunism. In such strongly interconnected communities as the ones in the NFT space, adhering to the web3 principles could provide a strong advantage.

LooksRare establishes an interesting precedent on how to launch a web3 platform with a significant userbase from day 1. As with everything it is faced with mixed responses from the community. It remains to be seen whether the platform can compare in long-term with incoming giants such as Coinbase or Gamestop. In case of Coinbase I perceive the upcoming NFT marketplace more as a gateway for the public with little to no experience to enter the NFT space from where they may move further down the NFT rabbit hole to more powerful platforms such as OpenSea or … LooksRare.

BONUS: Plot twist - in true web3 ecosystem no marketplaces at all?

Update 14th Feb: there was bit of a drama due to LooksRare team cashing out cca 10,500 ETH through Tornado Cash. The team reacted to this, Cobie had a thorough look on the incentive structure LooksRare uses.

Update 15th March: LooksRare partially on Github, intention to be fully open source. I think that is certainly a step in the right direction as it would provide more transparency and legitimacy that may be lacking now due to team composed of only anons.

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🔗 Want to dig deeper?

Articles:

• LooksRare halving imminent, but Wash Traders are here to stay?

• Why two 'NFT nerds' built LooksRare — and where they want to take it next

• [LIVE] The $LOOKS Token by The First Mint (audio)

• Coinbase blog: Vampire attack! LooksRare vs. OpenSea

• Bankless: LooksRare analysis

• From Airdrop to $307M in Revenue in 30 Days — LooksRare Surges Past OpenSea in Torrid Month

Tweets:

• Crunching the number on LooksRare incentives, by Yuga Cohler

• A Twitter thread on the game theory of LOOKS by Jordi Alexander

• LooksRare’s growing organic volume, by Dogetoshi

• Why LooksRare’s launch was a success despite washtrading, by AllNick

• LOOKS Emission Phase 2, by Mooncat2878

📰 Recent updates in NFT space

• Salesforce announced to employees that it is working on NFT cloud service

• Sotheby´s plans to organize a sale of 104 CryptoPunks in a single-lot auction, that were bought by 0x650d in August and who explained his rationale behind it the cooperation, there are opinions that this could be rather bearish for the floor price

• Anchain put together a list of most influential Twitter profiles and created an interactive map with categorized communities such as BAYC and CryptoPunks, shared a short write-up with the 100 Twitter accounts list

• Gala Games only reconfirmed their NFT-focused commitment with 5 billion USD allocation

• A new NFT platform may be on the horizon called Quantum co-founded by Justin Aversano creator of NFT photo project Twin Flames, raised $7.5M, backed also by Flamingo DAO or Gary Vaynerchuk

• NFT Ethics Twitter account (a moral compass in the NFT space) was down for several days after reporting a scam ring around NFT Collection Squiggles, in their opinion someone was paid to take them down

• NFTs and DAOs once again found an interesting new use case, when 55M was raised by 10k AssangeDAO contributors in defense of Julian Assange (WikiLeaks publisher)

🛠️ Web3 tools & projects worth a note

• zk.money - nice tool on how to anonymize ETH/DAI and especially payments such as anonymous donations, check out their detailed how-to

• Disperse - useful tool on how to send cryptocurrency to multiple addresses in one transaction

✏️ What are your thoughts on this? Are you working on a project in web3 space? Feel free to drop me a comment under the memo or reach out to me on Twitter. Happy to discuss & connect. WGMI. Circus Matt

Leave a comment

I also help projects and communities test & build decentralized future, I am actively involved in several DAOs and Contributooor is my middle name so feel free to contact me. :)

I will be happy for any feedback or discussion. Afterall, that is where the (web3) magic happens. Feel free to also reach out on Twitter.

Exciting times ahead and looking forward to fall through many more rabbit holes. Sign up to receive my Meta memos and join me on this journey. WGMI!

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