#38 The Future of Crypto - Accommodation, Not Annihilation. Doodles 2.0: the Plan for Mass Adoption.

Disclaimer: Everything we write in "The Crypto Insider Report" is an x-ray of the industry as we see it, through the lens of publicly available information. We are not financial advisors. 

The Future of Crypto - Accommodation, Not Annihilation

Paul Brody shares his thoughts on the future of crypto regulation in a recent piece on CoinDesk. There is large-scale agreement that the future of crypto, especially niches such as DeFi, is largely uncertain at the moment due to the unknown amount of regulation headed its way. While in the end, having a level playing field is good, in the meantime the uncertainty makes people hold off on committing to either build or invest in this space.

Many parallels are drawn to the current banking system and its regulation, but as Brody highlights, that system operates on different assumptions than crypto, such as the know-your-customer (KYC) process and the behind the scenes, private disclosures that bank can do - versus the publicly inspectable, pseudonymous ledger that e.g. Bitcoin works with. Instead, he claims we should be looking at previous moments in history when a traditional way of doing things was displaced using technology. The first example is media - music and movies. Piracy came first, disrupting the economics of media distribution, but in time things settled down and now people pay for subscriptions and rarely outright buy albums or movies. The second example is ridehailing - from the strictly regulated taxi setup in New York, where a medallion would cost 1 million USD, now players like Uber strive to onboard as many drivers as possible, leading to taxi medallions now being worth a fraction of that.

In general, we see that regulation for 2.0 replacements is usually more permissive than the original, lowering the barrier of access and increasing adoption. Paul Brody assumes that crypto will experience the same thing versus the strict rules that banks have to follow right now, and he argues that traditional finance players are aware of this and preparing themselves by either investing in crypto companies early or spinning off crypto native businesses of their own. Time will tell if this assumption is correct.

Mihnea

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Double down on a vertically-integrated, community-centric NFT marketplace

On June 21st Magic Eden announced that it closed a $130m Series B round co-led by Electric Capital and Greylock Partners at a $1.6bn valuation. Other investors include Lightspeed Venture Partners (new anchor), Paradigm and Sequoia Capital. Its valuation has increased roughly tenfold since March 2022 when it raised a $27m Series A round. At the same time, it has become the third NFT marketplace to achieve unicorn status alongside $13bn OpenSea and $7bn LooksRare.

Magin Eden is a vertically-integrated NFT marketplace, operating as both a primary and secondary trading platform. The primary market provides NFT creators a space where they can launch their collections through the platform’s Launchpad feature, while the secondary market provides traders and collectors the possibility to sell already minted pieces. The marketplace receives an average of 22m unique sessions per month and sees over 40,000 NFTs traded daily. Its launchpad has successfully launched over 250 projects to date.

On top of these, Magic Eden has expanded into games offering through Eden Games, a discovery portal, in March 2022. It provides dedicated tools for projects that want to mint NFTs/game items on its platform. Magic Eden has launched 50+ games and metaverse projects and has seen 90% of all gaming NFT volume on Solana traded on its marketplace. The community-centric trait comes into play through the end-to-end creator services (via Launchpad), assistance for creators to build a customized marketplace, while on the community-side, Magic Eden considers marketplaces are more than just a point of sale and works with communities to provide additional tools for the discovery journey (e.g. analytics).

The funds raised will be used to expand the primary and secondary marketplaces, explore multi-chain opportunities, invest in the team and technology, and build new features to enhance user experience. 

Looking at the monthly volume data compiled by The Block, we notice that Magic Eden has enjoyed a relatively stable monthly volume of around $300-320m during the past months. However, the drawdown in the market has also affected its sales volume for June, with run-rate sales amounting to c.$100m. Stacking it up against the other two unicorns, OpenSea and LooksRare (chart on the right), we can see that it has a lot of catch up to do in terms of total revenue - keeping in mind the strength of the communities behind projects developed on Ethereum and the reputation and positive spillover effects of the Ethereum blockchain. 

A $130m Series B round in the midst of a downturn and negative sentiment in the market might seem odd. From the public headlines we can infer that it is a doubling down strategy by (mostly) previous backers on a platform that has strong competitive advantages, fast execution and a lot of white space in front in its segment. Besides a signal of strength (the ~10x valuation in three months) and the achievement of unicorn status, the round provides capital to Magic Eden’s integrated business model to further expand into other chains (Ethereum soon?). 

Razvan

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Doodles 2.0, the Plan for Mass Adoption

Doodles have been absolutely on fire lately, reaching the No.1 position regarding daily sales volume on Opensea a few days ago.

Why? Well, mainly because of the announcements that were made during the participation at NFT NYC and they were really a lot of important ones for the next steps that the collection is going to take:

Doodles 2 teaser Video

 

Amazing animations and keep an eye for the box that gives any doodle a lot of different traits. In the end, there is the announcement of Doodle 2 collection that's going to launch soon.
The difference between Doodles 2 and Doodles that exist now are big:

This will be accessible, it will not be a scarce NFT collection

Their goal is to embody millions of people into the ecosystem (not thousands of NFTs, but millions)

From Jpeg in series 1, series 2 will move to Audio/Visual as well, so these will be 2D animated NFTs and there will be audio behind them as well

They are not planning to have these NFTs on Ethereum, but they didn't announce yet on what blockchain will they mint these NFTs on.

One of the big aspects of Doodle 2 will be Traits and Wearables: you will be able to change your look, without any paid gas, and unlock music from the biggest artists (will get on that in just a second), and also buy/sell or trade these Wearables.

Also, NFTs from the ecosystem were given a more suitable purpose, for example, the Dooplicator, which will be able to duplicate Traits from the OG collection.

On top of all this, as I wrote in yesterday our Romanian newsletter, @Pharrell was named @doodles new Chief Brand Officer. Pharell will also act as executive producer on Doodles’ first music release, launched in partnership with Columbia Records. @jholguin, Doodles CEO, says that the NFT technology will transform the music business. Artists can earn as much money as they would if millions of people listened to their music on another site with "a small subset of fans that are willing to pay."

All this adds up a lot to adoption, almost engraving in stone what a lot of people are already saying: Doodles Blue Chip top10 NFT projects.

Cosmin

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Mastercard partners with NFT marketplaces to make purchases more accessible 

Payment processing giant Mastercard announced that it will be teaming up with Immutable X, Candy Digital, The Sandbox, Mintable, Spring, Nifty Gateway and Web3 infrastructure provider MoonPay to allow customers to purchase NFTs without owning crypto. 

In a statement Mastercard explained that these partnerships are meant to accelerate Mastercard’s adoption of Web3, “ a new version of the internet based on blockchain”. All these integrations are designed to make crypto more accessible and help the digital assets ecosystem mature, innovate and bring in more users. 

The decision was taken as a result of a survey conducted by Masterclass that found that more than 45% of the respondents would consider buying NFTs if the process of doing so would be more flexible and accessible. Security has also remained a major concern preventing people from interacting with crypto projects. Mastercard has declared they are also working on ways to boost its cybersecurity tools to better protect and safeguard users’ data for purchases using a Mastercard card. 

This move also comes after Mastercard announced the partnership with Coinbase, where users are able to purchase NFTs directly with their Mastercard. Mastercard, however, is not the only mainstream payment processor that is taking active interest in the crypto space. Back in March Visa announced a one year supporting program for creators interested in growing their businesses through NFTs.

Evelyne 

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