📝 Field Notes #63: The End Game
📝 Field Notes #63: The End Game
Impressions from NFT Paris. Nike cuts Web3 team. Yuga Labs acquires blue chip & appoints new CEO. Pudgy Penguins' record sales. Reddit invests in BTC. Japan pushes crypto. Google Gemini 1.5 & more.
Hey, it’s Marc. ✌️
Reporting live from NFT Paris this week, where consumer Web3 and big brands meet. Today’s impressions:
The community is stronger, energetic, and as more positive as ever. The breadth of projects is incredible, the culture is alive. Paris is the right place for this.
I've spoken with numerous startups that are beginning to tokenize consumer engagement (e.g. watching an ad, reading an article, sharing content, visiting a place) to generate new data points for brands. In the past, this type of engagement would have gone unnoticed.
The end game: Most of our lives will become tokenized, most physical objects will have a digital twin. We’ll have “on-chain graphs” for everything. And brand engagement will become hyper-personalized.
Be inspired✨
“Ignore the noise, just build.”
Partner with us
⚡️ Get in front of thousands of Web3 industry leaders 👀
Partner with Dematerialzd to get your brand in front of thousands of b2b Web3 industry leaders & access the Dematerialzd network to grow your business. Get in touch today or reply to this email.
📚 Top 4 Reads
The rise of community-curated knowledge networks. By Sari Azout. Link
We need to talk about digital ownership. By Molly White. Link
Why brand comes first. By Ana Andjelic. Link
The absence of bad things. By Pantera. Link
✨ Web3 & Brands
Nike cuts Web3 division👟
Nike announced layoffs of around 1,600 people, including the Nike Virtual Studios (NVS) Team. Link
NVS was founded in January 2022 to oversee the brand’s Web3 and metaverse experiments.
Zooming out: This comes as a surprise. In January, Nike announced a push into in-game wearables and additional functionality for .SWOOSH NFT holders.
Why it matters: Nike has been a Web3 pioneer among consumer brands. These layoffs raise questions around the future priority of its Web3 platform .SOOWSH.
Dress to Impress🧢
Digital fashion season is in full swing this week at NFT Paris, the Future Fashion Summit, Future+, and Digital Fashion Week. Meanwhile:
Gmoney’s 9dcc, a leading digi-physical clothing brand, is launching their first full luxury fashion collection; each piece has NFC chips linked to NFTs. Link
Beyond Paris: Milan Fashion week is also embracing digital fashion with the official Digital Couture Summit (hosting DressX and Seamm), alongside Digital Fashion Week by Clare Tattersall.
Beyond the runway: Next-gen consumers are big on virtual fashion.
In the latest Roblox study, 56% of Gen Z users now say styling their avatar is more important to them than styling themselves in the physical world.
In 2023, total avatar updates grew 38% YoY to 165 billion, and people bought nearly 1.6 billion digital fashion items and accessories, up 15% YoY.
Be smart: Digi-physical (e.g. Dior, Nike, Adidas, Tribute Brand1), augmented reality (e..g. The Fabricant) and fully virtual (e.g. RTFKT, DressX) are the three digital fashion categories brands experiment with.
Punchline: Fashion has become one of the most active industries experimenting with blockchain, AR and VR fashion experiences. The more time people spend online, the more digital value they create and consume, including virtual products.
Growing up🦄
The biggest bluechip NFTs had big news this week:
Yuga Labs acquired PROOF Collective, which includes Moonbirds and Oddities. This wasn’t well received.
Yuga Labs then announced a new CEO, Greg Solano, also known as Garga and co-founder Yuga Labs, replacing former Activision Blizzard executive Daniel Alegre.
Pudgy Penguins has announced the launch of a second line of toys in collaboration with Walmart, expanding to 3,100 locations; they also reported $10M in sales last year, with over 10,000 units sold. Link
Zooming out: While Yuga Labs struggles to commercialize its franchise, Pudgy Penguins is on the rise. They’ve recently launched OverpassIP, a platform to license NFTs and saw a 5x increase in NFT prices in the last three months.
Be smart: In 2022, a16z led a $450M funding round for Yuga Labs and a $50M funding round for PROOF. It’s possible that a16z pushed for an acquisition to consolidate its assets.
Why it matters: Both projects are trailblazers in building up a community-led IP-franchise around NFT collections and could potentially establish a new business model for the industry.
More on Web3:
Warner Bros. Discovery & Acme’s latest accelerator cohort includes innovative business models with Web3 tech. Link
Absolute Labs partners with Crypto.com. Link
🌎 Crypto & Macro
Making Moves🔵
Coinbase had a massive Q4 and posted quarterly profit for the first time since 2021, with transaction revenue rising to $529 million (+64% YoY).
Why it matters: Coinbase is America’s largest centralized crypto exchange and by now likely the “Trusted Name in Crypto”. They’re also the main touchpoint for tons of brands dealing with crypto (Anheuser-Busch, Alo Yoga, Messari, Unicef, Chicago Bulls, etc.)
Zooming out: A few years ago it looked like all major crypto companies would follow the inevitable path of centralization, regulation and integration into the traditional financial system.
With the launch of its Layer 2 chain Base, Coinbase moved in the opposite direction, while remaining fully compliant and regulated.
Punchline: If Coinbase thrives, it bodes well for the entire industry, and vice versa.
More on crypto:
Reddit disclosed that it invested its excess cash reserves into bitcoin and ether. Link
Japan advances legislation to let investment firms hold crypto. Link
Crypto venture activity picked up late last year, with deal value increasing to $1.9B across 326 deals in Q4 2023. Link
🧠AI
Google releases its next-generation model Gemini 1.5. Link
Reddit user content being sold to AI firm in $60M licensing deal ahead of IPO. Link
🏗️ Start-ups & Tools to watch
LimeChain: A leading blockchain consulting & development agency with 120+ chain-agnostic devs. Link*
*partner of Dematerialzd.
💰 Money Moves
Eigenlayer: The Ethereum restaking protocol raises $100M from a16z. Link
Monkey Tilt: Crypto-enabled gambling platform raised $21M from Polychain Capital, Hack VC, and others.
RW3 Ventures launched a $60M early-stage venture fund focused on Web3. Link
Hack VC raised $150M fund dedicated to the digital asset industry. Link
That’s all for now, folks. Thank you for being part of the journey.
Talk soon,
– Marc
PS: Follow me on LinkedIn and X for shorter insights.
PSS: Get a 10% discount on Token 2049 in Dubai with the code “MARC10”. ✨
📈 Top 3 Charts to Share with Friend
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⚡️ Get in front of thousands of Web3 industry leaders 👀
Partner with Dematerialzd to get your brand in front of thousands of b2b Web3 industry leaders & access the Dematerialzd network to grow your business. Get in touch today or reply to this email.
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Tribute Brand is a pioneering digital fashion brand that designs and sells virtual clothing and digital-only collections wearable on avatars in virtual worlds. They are considered a leader in the fully virtual fashion category, alongside other startups like RTFKT.