Crypto VC can’t just buy a “community” – TechCrunch

Hello everyone, and welcome again Chain reaction

In our Chain Reaction Podcast This week, Anita and I spoke with Kevin Rose of True Ventures and Proof Collective about the latest cryptocurrency crash and what the future of NFT looks like in the bear market. Read more below.

Last week, we talked about regulators ’efforts to prosecute cryptocurrencies. This week the markets have collapsed and a new generation of crypto startups will likely learn that you can’t pay for loyalty.

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the hottest take

This week has been very busy for crypto investors, otherwise it is impossible to say. But it was a different kind of dope than previous accidents.

To summarize, hundreds of billions of value have been removed from global crypto-market capitalization this week as top coins such as Ethereum and Bitcoin fell significantly, while other blockchain networks essentially exploded. Hundreds of thousands of crypto-investors were liquidated at the auction when tokens indiscriminately collapsed in all directions, at the same time the Terco stablecoin fiasco that my colleague Jacques there are many details here – seems to have evaporated tens of billions of cryptocurrencies in a day or two.

For long-time crypto traders, the wild pressure on markets may seem old, but the amount of money lost and the number of people losing money is an order of magnitude greater than ever because crypto markets have expanded. sharply during this bull. If cryptocurrencies continue to go to hell in the hand basket, it will have a lot of long-term damage when it comes to consumer adaptation, as the paid budget for acquiring web3 ends with a reduction in volume.

After years of retail investors Robinhood and r / wallstreetbets gambling on government stocks, consumers were ready for the crypt, and the industry welcomed them with open arms. Over the past few years, venture capitalists have been betting on consumer-oriented cryptocurrencies, gamifying investments with real games that boast tokens and NFT integrations. All this time, web3 staff has singled out “community” as one of the striking features of crypto platforms, explaining that giving users a financial share in the platform will force them to act in the interests of the platform and spread the Gospel accordingly.

All of this played out well enough in the “just before” era of this crypto-bull race, but now comes the interesting part.

Providing users with financial incentives to enjoy your product works well enough if such financial incentives exist, but it looks a little different when the air leaves the space and users are left with a bare and unattractive platform. Gaming companies have raised billions on games that are fun only when you get rich, and otherwise – terrible. NFT projects have also persuaded users to trade card-like mechanisms that bring pleasure only when money flows. Meanwhile, venture capitalists have supported media companies, publications and social networks web3, which are too dependent on cryptocurrencies, while usually delivering bad products.

Some might read this as a general accusation of cryptocurrency, but another way to read it is that in the gold fever web3 the blockchain founders forgot what it means to love something because it was a great product and too indexed to resilience to consumer greed or financial despair. Now the crypto market may bounce back tomorrow, but it won’t be any less true that you can only pay for loyalty for so long.

under № 4: Kevin Rose

Hello, Anita here again. In the Chain Reaction podcast this week, Lucas and I talked about the crypto-winter looming for investors. Government stocks are generally taking over now, and the S&P 500 is falling five days in a row, while crypto-related companies such as Coinbase and Robinhood bear the brunt of market fears.

Cryptocurrency prices are also falling. Bitcoin, the world’s largest crypto by market capitalization, fell more than 50% from its peak in November. Over the past couple of days, it has repeatedly fallen below $ 30,000, which analysts say is an important threshold for the coin – if it continues to fall, it is likely that losses will increase. The fiasco comes with Terra USTwhich is partially supported by bitcoins certainly does not help the situation.

But cryptocurrencies like to talk for decades, not days, and tend to experience volatility that is not available in the broad market. This isn’t the first time bitcoin prices have plummeted, so take a look back and see how bitcoin worked during the last major cryptocurrency in 2017. Earlier that year, bitcoin peaked at $ 20,000 but fell below. $ 12,000 in late December as a result of hacking, regulation and investor hostility all came to mind. It again didn’t start to rise significantly in price until late 2020 / early 2021, when it finally surpassed the $ 30,000 mark, where it has (mostly) remained the highest ever since.

This time things may be different for OG cryptocurrency. Much more retail investors are holding bitcoin, and only time will tell if they have the means to withstand the storm. What’s more, Ethereum and new blockchains such as Solana are already eating away at Bitcoin’s competitive advantages. You can read more about the issues that concern Bitcoin, and about what its fans are doing to boost it, in my latest feature here.

Don’t forget to watch this week’s Chain Reaction episode to hear how Kevin Rose, co-founder of the Moonbirds NFT virus project, shared some wise words amid the recession.

Subscribe to Chain Reaction Apple, Spotify or your alternative platform for podcasts to keep up with us every week.

Anita Ramaswami

keep an eye on the money

Where is the startup’s money going in the crypto world:

  1. Crypto exchange KuCoin raises $ 150 million from Jump Crypto
  2. Crypto trading company Talos attracts $ 105 million from General Atlantic
  3. NFT Infrastructure Protocol Collaboration: create gets $ 25 million from a16z
  4. NFT Marketplace Protocol Dawn receives $ 50 million from Haun Ventures
  5. Launch web3 games LootRush raises $ 12 million from a16z and Paradigm
  6. Launch NFT Ariani receives $ 21 million from Tiger
  7. Launch NFT clearance Paper receives $ 9.3 million from Electric Capital and Initialized
  8. Launch the web3 community Select receives $ 11 million from Haun Ventures
  9. Launch NFT Media Dirt receives $ 1.2 million from Collab + Currency
  10. Run crypto games MechaFightClub gets $ 40 million from a16z

added analysis

The collapse of the UST Terra will complicate the life of the crypt as regulation comes
Last week, stablecoins took the lead in conversations in the crypto world as a number of factors shocked the industry. As the crypto market responds to bearish sentiment, the main question arises: what does all this mean for the future of stablecoins? A number of market players have considered what the road ahead might look like.

Kevin O’Leary of Shark Tank talks about crypto and why it’s about stablecoins
Speaking about stablecoins, Kevin O’Leary of Shark Tank met with TechCrunch to share his thoughts on a number of topics related to cryptocurrency, such as cryptocurrency regulation and why he is a fan of stablecoins. We also discussed the institutional firms that make up the space, and the type of crypto-oriented company he would have created if he had decided to do so, among others.

The NFT Coinbase market started dimly
In other news, Coinbase NFT launched a beta mode three weeks ago today, but has yet to adopt it – even after it opened its doors to the public last week. The prediction of where it should be now did not meet expectations, one source said, and it is unclear whether it will ever be. Given the scale of the Coinbase cryptocurrency exchange, one would think that its NFT market would also be successful, but others say it is unlikely and that its approach to entering space.

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