📝#89: Death Sentence for NFTs?
SEC sends Wells notice to OpenSea. Manchester City partnered with Sony to launch the virtual Etihad Stadium. Trump’s new NFT collection. PGA TOUR is building a Web3 golf game.
Hey, it’s Marc ✌️
Today we deliver you our obsessively-curated insights on Web3 consumer + gaming.
We will cover:
Consumer: SEC sends Wells notice to OpenSea. Manchester City partnered with Sony to launch the virtual Etihad Stadium. Trump’s new NFT collection. Floki is bringing memecoin to sports.
Gaming: PGA TOUR is building a Web3 golf game. VfB Stuttgart on Roblox. SBI Holdings partners with Oasys.
Plus: We untangle how digital identity will shape your business.
Crypto, Macro + AI follows on Tuesday.
Let’s dive in 🦈
⏱️ Read time: 3min
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📚 Our Top Reads
New study points to Roblox’s positive impact on brands. By Roblox. Link
How digital identity will reshape your business (podcast). Link
Plurality philosophy in an incredibly oversized nutshell. By Vitalik Buterin. Link
Brands, gaming & engaging Gen Z in 2024. By GEEIQ. Link
Rise of Telegram Mini Apps: How it started, and how it’s going. By Helen Partz. Link
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✨ Web3 & Consumer
Are Basketball Cards Securities?
OpenSea received a Wells notice from the SEC, indicating a potential lawsuit over NFTs being classified as securities.
What you should know:
Wells Notice: A formal SEC communication indicating potential enforcement action, but not guaranteeing a lawsuit.
SEC's Stance: The SEC views some NFTs as "investment contracts," potentially classifying them as securities, requiring compliance with securities laws.
OpenSea’s Response: It argues that NFTs are creative goods, not securities, and warns that SEC regulation could hinder innovation for artists and developers. It also highlights the positive effects of NFTs on artists, game developers, and collectors.
Support: OpenSea is pledging $5M to help cover legal fees for NFT creators and developers facing SEC challenges.
Why it matters: The SEC's focus on NFTs could disrupt thousands of creators who rely on OpenSea, the largest NFT marketplace, to sell their work. This would also further dampen the market and discourage new creators from entering the space.
By the numbers: OpenSea's trading volumes imploded from $5B/month in January 2022 to 43M/month last July, a decrease of 99%. It has more than 3M active users as of January 2024 and has facilitated over $40B in NFT trades to date.
Implications:
Brands: Brands already retreating from NFTs. More will follow, due to regulatory risk. Many already turned their collectibles into better "gift cards" through lengthy terms and conditions.
Creators: Cost and complexity of creating and selling NFTs would increase massively. The creator community would likely die out.
Trading platforms: Trading platforms would need to comply with securities regulations. This means: stricter KYC (Know Your Customer) and AML (Anti-Money Laundering) checks.
The end of wash trading? Maybe.
So what? NFTs as we've known them would become practically unusable for the mainstream consumer. This is another big blow for the NFT space.
NFT market overview:
Over the last year, NFTs imploded massively. Prices of most blue chip collections dropped 50%+ in 2024. More pressure will follow with this. Trading volume shrank from $18B in 2023 to $4B YTD. And about 90% of the 180+ consumer brands with NFT projects stopped them due to lack of engagement and revenue.
What they’re saying:
"99% of NFTs were worthless from the beginning. For OpenSea, this was big business, robbing people with large fees and never worrying about utility. Reminder: a16z crypto led the Series A for $23M and Series B for $100M – who made the money?"
Maja Vujinovic, MD of OGroupLLC, Investor & Builder
Manchester City X Sony
Manchester City introduced the "Man City Virtual Etihad Stadium," an interactive fan experience developed with Sony’s FavoriteSpace™ service.
What you should know?
Features: Fans can create avatars, join a virtual community, participate in challenges, social events, mini-games, and access digital merchandise in a virtual City Store.
Content: The app offers 3D match highlights powered by Hawk-Eye Innovations, a Sony group company, including immersive content from the current and previous seasons.
Partnership: The launch follows a partnership announced in November 2021 and includes innovative activations with club partners like Etihad and Nissan.
Availability: The app is accessible to fans in the UK, US, and Japan and is available for download on the App Store and Google Play.
Why it matters: Manchester City's Virtual Etihad Stadium redefines fan engagement. This platform deepens connections, expands reach, and opens new business opportunities (sponsors & partnerships) while gathering data to better understand and engage fans.
Stepping back: By launching virtual experiences on platforms like Roblox, and collaborating on digital collectibles and virtual spaces, Manchester City is exploring innovative ways to connect with fans and create new revenue streams.
Devil’s Advocate: Manchester City's digital efforts feel scattered. They're great at partnerships and one-off events, but there's no overarching plan. This makes it hard for their brand to stand out and their campaigns lose impact.
Be smart: Sony is using technology to help brands connect better with their audience. Their partnership with Manchester City and the launch of Soneium, an L2 blockchain, highlight their focus on immersive experiences and emerging technologies.
Punchline: Sony is positioning itself as a technology platform that empowers brands to connect with audiences and drive growth in the digital age.
👉 Read our deep dives on crypto, loyalty, and fan engagement:
More Web3 Highlights:
Donald Trump has launched another NFT collection, offering rewards like a dinner with him for purchasing multiple cards. This new "America First" series follows his previous digital trading card releases. Link
MagicEden, the NFT marketplace, launched "Mint Terminal," a platform that aggregates popular minting sites, ensuring users never miss another mint and can discover new art with ease. Link
Floki has partnered with Nottingham Forest and Sunderland, marking a push by meme coins into sports sponsorships. These deals include digital and in-stadium promotions, with Sunderland featuring Floki’s game logo on their shirts. Link
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🎮 Brands & Gaming
Stratton Studios, in partnership with the PGA TOUR and Chain Games, is developing "PGA TOUR RISE," a Web3 interactive golf game that combines professional golf with blockchain technology, set to launch fully in 2026. The game will feature real-time tournaments and mini-challenges, offering an immersive experience for golf fans. Link
Off The Grid, the first blockchain game to launch on the console, completed its first playtest on PlayStation 5, attracting 30,000 players and generating 400,000 transactions on Avalanche's Gunz subnet. The game features tradable NFTs and customizable weapons, with a mobile wallet running on the yet-to-launch GUN token. Link
VfB Stuttgart is the first German pro club to offer merchandise on Roblox, allowing fans to buy 2024/2025 season jerseys for their avatars. This move strengthens VfB's digital presence and connects with younger fans in the virtual world. Link
SBI Holdings has partnered with blockchain platform Oasys to boost Web3 gaming in Japan and improve the liquidity of Oasys' native token. This collaboration strengthens both companies' positions in the growing Web3 gaming sector. Link
🎙️How Digital Identity Will Reshape Your Business
In our latest podcast episode, we had the pleasure of hosting Vinny Lingham, Co-Founder & Executive Chairman at Civic Technologies, Rumi.ai, Newton Partners and GP at Multicoin Capital.
Why you should pay attention: Civic Technologies digital identity pioneer and leader in digital identity solutions. Founded in 2015 by Vinny Lingham and Jonathan Smith, Civic Technologies aims to provide individuals and businesses with a secure and user-friendly platform to manage and protect their digital identities.
Three key takeaways:
Adopt Decentralized Identity Early: Decentralized digital identities are crucial for enhancing trust and compliance in a rapidly evolving regulatory landscape. Early adoption can position your company as a leader in secure, user-centric data management.
Rethink Data Strategy: With third-party cookies disappearing, decentralized identity offers a secure, compliant way to manage first-party customer data, aligning with new privacy regulations while maintaining customer trust.
Prepare for Regulatory Shifts: The adoption of digital identity solutions will likely accelerate once global regulations around crypto and identity become more defined. Businesses should prepare by exploring these technologies now.
Listen to it on Spotify, YouTube, or Apple Podcasts.
💰 Money Moves
Funding rounds:
Space and Time: Blockchain data warehouse developer raised $20M led by Microsoft’s M12 Ventures. Link
Gameplay Galaxy: The gaming company raised $11M led by Blockchain Capital and Merit Circle. Link
double jump.tokyo: Blockchain studio raised $10M led by SBI Investment and Sony Group Corporation. Link
myco: Web3 streaming platform closed $10M Series A funding round. Link
Others:
Thrive Capital is leading a multibillion-dollar investment in OpenAI, the developer of ChatGPT, at a valuation north of $100B. Link
That’s all for now, folks.
The next edition on crypto, macro & AI will follow on Tuesday.
Talk soon,
– Marc & Team
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Thanks Marc,
what do think about the global NFT market?
the NFT market dead slowly-slowly or we will see it come back