Alt Season? Nike, Adidas & Melania NFTs and Web 3
Another ho-hum week in crypto (at least in-have terms of price momentum). Bitcoin continues it’s mostly sideways move along with Ethereum. That being said, altcoins like AVAX, SOL, MATIC, LUNA have had a relatively good week.
Check out some of the charts people are putting out. The general consensus on BTC currently looks quite bearish in the short-term. It’s a bit unlikely we’re going to see a year-end BTC rally. That being said, some altcoins might be well poised for a rally so do your research!
Like many people, I’ve been thinking more about Web 3 recently. I’m still not sold on the whole metaverse changing the world narrative. Metaverse implementations like Second Life, Minecraft, Roblox and others have existed for more than a decade. There have been exciting things happening in all of these implementations but they’ve been a novelty. As commerce, driven by crypto and NFTs, permeates the metaverse, I think we will see some interesting developments but I still think that the metaverse can only have wide adoption when the user experience (UX) interfacing with crypto and NFTs becomes simpler and easier for “normies” to engage. The real trick here is how to maintain decentralization while providing an elevated UX coupled with possible economic benefits.
Play-To-Earn is all the rage at the moment and as a Venture Capitalist, it would be a disservice to your investors to not make some investments (at as reasonable valuations as possible) in the category. However, if startups are risky and crypto is 10x riskier than startups and NFTs are 10x riskier than crypto like bitcoin then play-to-earn games are likely 100x riskier than NFTs. They should provide a commensurate upside for investors. At the moment, bitcoin continues to show short-term bearish signals. I don’t think the bull market is over but game development can’t take quite a long time. If the greatest P2E game launches in a bear market, chances are the economic benefit to early investors won’t be very good, considering the risk they’ve taken on. Caveat Emptor is the phrase of the moment!
Web 3 is more than just the metaverse or play-to-earn gaming. It is the embedding of a financial and governance infrastructure into all aspects of using a service or engaging in a community, etc. For example, the DeSo project touts over 200 decentralized social media applications built on the protocol. The most widely known is probably, BitClout.
One can make the case that PeopleDAO which tried to buy one of the remaining original copies of the US Constitution, is an implementation of Web 3 technology and philosophy. The point is that Web 3 is many things. There are many definitions. There’s not one thing that makes something web 3 but a couple of crucial aspects emerging are:
Decentralization (there’s no such thing as complete decentralization IMHO, even in bitcoin)
Embedded commerce via crypto (NFTs rely on crypto)
Tokenized governance of a product, service or economic value
Keep an eye on this space. There’s going to be a lot of experimentation before we see winners and losers. Just remember, NFTs didn’t come to life in 2021. The idea of NFTs on the blockchain have been around for a very very long time (i think the first reference was related to the bitcoin blockchain).
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Happy Holidays and see you in 2022!