JZL Capital Blockchain Industry Weekly Report No. 16
1. Industry dynamics last week
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1. Industry dynamics last week
Last week, the encryption market continued to retreat, the geopolitical situation continued to be tense, European and American stock markets suffered a sharp drop, and because Russia announced that it would accept Bitcoin as a means of energy payment, the United States stepped up its supervision of the encryption market. SEC Chairman Gary Gensler said that he would work with the CFTC (U.S. Commodity Futures Trading Commission) to formulate a new regulation for the regulation of cryptocurrency trading platforms. Treasury Secretary Yellen also said on Friday that digital assets have the risk of disrupting the financial system and the economy (but the main purpose is to support innovation. , embrace risks), on the whole, the United States has significantly tightened the regulation of cryptocurrencies. Bitcoin fell nearly 9% during the week, crossing the 128-day moving average, and even the annual Bitcoin 2022 summit failed to cause a wave of waves in the market.
Looking back at the performance of the sector last week, after experiencing consecutive rises in the previous three weeks, the performance of the Gaming sector is still unsatisfactory in this down cycle. Top Assets and Smart Contract Platforms took the lead due to the excellent performance of Doge Coin and Near. Among them, Elon Mask joined Twitter's board of directors and suggested that Doge Coin may become a payment token, which successfully pulled Dogecoin; while Near was a blockbuster last week due to the favor of institutions.
From April 6th to 9th, 2022, the four-day "Bitcoin 2022" summit was officially held at the Miami Beach Convention Center. The conference attracted 35,000 participants, more than 3,000 blockchain companies, more than 450 speakers, and more than 100 artists contributed their works. However, compared to the "star-studded" 2021 Bitcoin Conference, this year's participants are slightly inferior in terms of importance and popularity. At the "Bitcoin 2021" conference, President Bukele of El Salvador announced plans to make Bitcoin a local legal tender, which instantly ignited the world; speeches by former Twitter CEO Jack Dorsey and Tesla CEO Elon Musk also Add more glory to the conference. In this year's conference, the president of El Salvador released the "pigeons" of the conference on the grounds of national affairs. Except for Jack Dorsey and Miss Mumu, few industry leaders showed their faces.
To commemorate the opening of the Bitcoin 2022 conference, the mayor of Miami unveiled the "Miami Bull" statue, a mechanical sculpture resembling a Wall Street bull, designed to symbolize Miami as the "world cryptocurrency capital."
Crypto payment provider Strike has announced a partnership with e-commerce giant Shopify, aiming to allow U.S. e-merchants to receive bitcoin payments from users anywhere in the world. In addition, Strike has established a partnership with NCR, the world's largest Pos machine provider, and Blackhawk, a payment company, to help Strike and Shopify integrate merchants smoothly.
Although this year's heavy content is relatively small, the increase in the number of participants still shows that fresh blood is constantly being injected, and the vitality and confidence shown by the entire industry will show qualitative changes in the future. In the annual strategy of JZL at the beginning of the year, we pointed out that "building in a bear market" also has the same concept.
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2. Macro market analysis
The overall decline of BTC will test the strength of the support of the round number. If it falls below the round number mark in the short term, it is not ruled out that it will fall inertially and fall back below 40,000. At present, the previous suggestion is still maintained, and the overall cautiousness is the main priority.
As we expected, the U.S. stock market began to rise and fall as a whole following the Fed’s hawkish expression.
As the market fluctuates downwards, we believe that we should pay attention to the integer mark. The macro negative has been gradually reflected in the currency price. The follow-up will still be greatly affected by the macro, but the degree of reflection in the currency price will gradually decrease.
1.Metaverse
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3. Ecological Tracking
1) Wallet manufacturer Ledger plans to purchase Sandbox land, a total of 36 lands will be purchased. Ledger buys land mainly to build educational games. user. Sandbox launched "SHIBUYA109 LAND", in cooperation with Japanese designer Minoru Takeyama, bringing Tokyo fashion shopping malls into the metaverse.
2.Layer 2
2) Metaverse company Meta has made plans to introduce virtual currency and loan services in its application. Facebook’s financial arm, Meta Financial Technologies, has been exploring creating a virtual currency for the company, known internally as “Zuck Bucks,” according to several people familiar with the matter. Meta tends to introduce in-app tokens, centrally controlled by the company, similar to tokens used in gaming apps. Or create social tokens like Reddit has done, or community-based reputation coins that reward contributions to specific groups, etc. The move could help advance Meta's earnings.
3) Metaverse technology company Improbable completed a financing of US$150 million. This round of financing was led by a16z and Softbank Vision Fund, and Mirana Ventures, CMT Digital, DCG, Alliance DAO, etc. participated in the investment. Funds raised will be used to build and develop M² (MSquared), an interoperable Web3 metaverse powered by its Morpheus technology. Improbable is a game technology company based in the UK. It started from video games in the early days and received investment from Softbank in 2017. It is a company with strong strength in the field of games and CG.
1) Polygon, the expansion network of Ethereum, announced that it will launch the scalable blockchain network Avail test network in the second quarter. Avail will become an independent network under Polygon, helping to host and verify the off-chain data of the blockchain integrated with it. To improve the scalability of blockchains inside and outside the Polygon ecosystem. Polygon said that Avail will serve as a data availability layer for Ethereum Layer 2 solutions (such as Optimism, etc.).
3.GameFi
2) The blockchain interoperability protocol Celer Network announced that it has reached a cooperation with the Flow public chain, the underlying platform of Web3, which will realize the cross-chain bridge between the Flow ecological assets and NFT and the chain supported by cBridge. In the initial stage of cooperation, cBridge will bridge projects with native assets on Flow, and introduce blue-chip assets such as WETH, WBTC, DAI, Frax, USDT, and UST into the Flow ecosystem. In the next stage, cBridge will support the NFT cross-chain bridging of the Flow ecosystem, such as NBA Top Shot, NFL All Day and UFC Strike. The current cBridge TVL is $761 million.
3) The proposal of the Boba Network Forum, the second-layer expansion network of Ethereum, to enable BOBA as a Gas token on the Boba Network has been unanimously passed. The proposal states that ETH will be the default Gas token, with users having the option to change to BOBA tokens, being able to switch between BOBA and ETH as Gas tokens.
1) Ronin Hacking Event Tracking – Hackers continue to transfer assets, and the project party finances compensation for losses
A week after the theft of assets worth approximately US$625 million (173,600 ETH and 25.5 million USDC), Sky Mavis, the parent company of Axie Infinity, completed a 1.5% round led by Binance and participated by existing investors Animoca Brands, a16z, Paradigm and Accel. The financing will be used to compensate user funds affected by the hacking incident. At the same time, Sky Mavis will join up to 21 validators in the next three months;
As of April 9, 2022, the Ronin attacker address has transferred a total of 13,100 ETH (approximately $42 million) to Tornado.Cash, with 159,710 ETH (approximately $512 million) still held in the wallet;
2) Lego & Epic Games - strong cooperation sword refers to the metaverse
On April 8, the LEGO Group and leading game publisher Epic Games announced a long-term partnership to shape the future of the Metaverse. The two companies will work together to create an immersive, creative, inspiring and engaging digital world for children of all ages;
The "Retailtainment Concept" proposed by the LEGO Group brings consumers an immersive and entertaining consumption experience. For example, in major Lego flagship stores, consumers can add their favorite facial expressions, hair accessories, clothing and other parts to Lego minifigures, and they can also add their own names-after submission, the staff will use professional machines to convert them into pieces. Your creation becomes a personalized LEGO minifigure.
The author believes that each exclusive Lego villain is similar to the NFT concept based on ERC-721 casting. Lego relies on a wide audience base, coupled with the strong influence of Epic Games (Unreal Engine) in the field of game development. Strategic cooperation will bring a sense of crisis to existing projects.
4）Animoca Brands
3) Chain game projects run away, and detailed due diligence is required before investment
On April 8, the P2E game Crypto Klash project deployed on the Binance chain deleted the social account of the project and transferred 800 BNB collected through the game to Tornado Cash, suspected of running away. Affected by this, the price of the project token KLH launched on April 4, 2022 basically returned to zero on April 8.
Animoca Brands announced a strategic partnership with Metaverse game platform MOBOX. Animoca Brands will accelerate the construction of the MOBOX ecosystem, including the development of the decentralized autonomous guild (DAG), MOBOX chain, and various other products on the MOBOX roadmap.
5）Binance Labs
Anicube (a joint venture between Animoca Brands and Cube Entertainment), announced that it will airdrop video NFTs of popular K-pop artists under Cube Entertainment for free. To be eligible for the air investment, fans must connect their MetaMask wallet to the website before 10:00 am (Beijing time) on April 15, 2022. Anicube is building a music metaverse using NFTs and ecosystem tokens based on the intellectual property of Cube Entertainment's globally popular K-pop music artists and performers.
DEFY Labs, the developer of the Move to Earn AR game DEFY, completed a $3.5 million seed round of financing led by Animoca Brands and Spartan Group, followed by Polygon Studios and GameFi Ventures. DEFY requires players to explore physical environments with the help of augmented reality, and rewards are distributed to players in the form of cryptocurrencies and NFTs. An alpha version of the mobile app will launch in mid-April.
Binance Labs made a strategic investment in the Move to Earn game STEPN (token GMT). The specific investment amount has not been disclosed yet. STEPN will use the proceeds to help develop its application and further develop the community. Other investors include Sequoia Capital, Alameda Research, Solana Ventures wait.
1) Near：
Community Gaming, a P2E game e-sports competition platform, announced the completion of a US$16 million Series A financing led by SB Opportunity Fund under Softbank Group, followed by Animoca Brands, Binance Labs, and Multicoin Capital. Community Gaming provides a platform for e-sports organizations and game unions. It can not only announce the upcoming tournament arrangements and registration details, but also manage game bonuses through the CG platform. After the event ends, the winning team will be sent as soon as possible.
4. Public chain
Near is a development platform designed for usability based on sharding, proof-of-stake, and Layer1 blockchains. It includes a permissionless base layer, independent native tokens, a predetermined monetary policy, and a marketplace for computing resources. The Near team consists of more than 90 world-class developers and researchers from tech giants such as Google, Meta, Microsoft, and MemSQL
As of the date of writing, the price of NEAR currency is about 16.35 US dollars, and the total market value has entered the top 20 currencies, ranking 19th. The two public chains before it are Polygon and Polkadot, and the next two public chains are Cosmos Hub and Tron.
NEAR has increased by nearly 50% in the past 30 days, and nearly 20% in 90 days. There are two main reasons for the unique market in a weak market. One is the appointment of a new CEO, and the other is capital bets and support.
At the end of 2021, the NEAR Foundation announced the appointment of Marieke Flament, a former Circle and Mettle executive, as its new CEO. Co-founder Illia Polosukhin also said that Flament will help NEAR accelerate the adoption of the next stage and help it realize its vision. In terms of development, the Flament mission has been accomplished well.
NEAR has been favored by crypto venture capital since its inception. In 2019, it received $21.6 million in investment from a16z and Coinbase Ventures. In January 2022, it received new capital from Three Arrows, Alameda Research, Jump Capital and Circle Ventures Waiting for a $150 million raise. The latest round of financing of US$350 million took place on April 6, with eight investors including Tiger Global, FTX Ventures, and Hashed. The total financing amount has reached US$522 million so far. On the whole, the trend of currency prices also reflects the market's recognition of venture capital institutions.
It can be seen from the trend of the currency price last week that the currency price rose by as much as 30% in a short period of time around the 7th, mainly due to the influence of capital. In addition to the financing news of 350 million US dollars, DCG CEO Barry Silbert also announced on Twitter that the company The third largest holding currency is NEAR. However, according to past experience, the large amount of DCG holdings has not brought better development to the project. There are also voices in the market that are worried about NEAR and thankful for other public chain tokens. As for whether NEAR can stand the test and let We will wait and see.
On April 7, Zoran Kole, the founder of Crypto Insiders, posted that Near will be launched on Coinbase in the next few months, which also paves the way for the integration of Near NFT into Coinbase's upcoming NFT market. Additionally, Kole claims that Near will soon announce the launch of an algorithmic stablecoin called USN, a digital asset that will be deployed in partnership with “other well-capitalized stablecoins.”
2）Polkadot
JZL also began to pay attention to the Near ecology in the early stage and plans to deploy it in 2021. We believe that in the medium and long term, the development of the encryption ecology will still be based on multi-chain development, and the market will also recognize the value of public chain native tokens and major blue-chip project tokens .
Compared with Solana, Avalanche, Terra, Cosmos and other public chain ecosystems that we are paying attention to at the same time, the development of Near is still in the early stage, and there is a big gap in data such as the number of chains, the number of users, TVL and NFT transaction volume. With the support of heavy capital, it is more likely that NEAR will step out of a similar growth trend. Let us look forward to the later development of Near and subscribe to JZL Capital's Weekly Report to get the latest developments.
Polkadot announced that the network security company QuarksLab completed a comprehensive second audit of the "cross-consensus message format" XCMv2 (Cross Chain Messaging), and Quarkslab found no important security issues. After a full audit, XCMv2 is ready for production release, while XCMv3 is currently in the final stages of development.
3）Cosmos
Juno
The interchain messaging format XCM provides a fundamental utility for the Polkadot technology stack. It supports seamless communication between blockchains and smart contracts (including cross-chain bridges and shards), and realizes true cross-chain transmission through the same token format XC-20.
The Web3 Foundation, the foundation behind Polkadot, has been invited to become a partner of the World Economic Forum and will participate in the Davos Annual Conference and many other regional conferences held in Davos, Switzerland from 5/22 to 5/26 this year.
Terra
On April 5, Juno, the smart contract public chain in the Cosmos ecosystem, posted on social media that its main network stopped producing blocks at block height 2578108, and the reason is being investigated. Juno originally planned to upgrade Lupercalia at the block height of 2582000 on the same day, including: security vulnerability patches, performance optimization, etc. On April 8, the Juno network was restarted, blocks were resumed, and the Lupercalia upgrade was completed.
The price of the token JUNO dropped further from about $26 on April 4 to about $21 on April 10. According to CoinDesk, an unnamed Juno core developer said that the network crash was due to a malicious smart contract attacking a blockchain vulnerability.
On April 7, Luna Foundation Guard announced that it will purchase AVAX worth 100 million US dollars as UST's foreign exchange reserves. AVAX has become the second foreign exchange reserve of UST after BTC. Terra founder Do Kwon tweeted that UST will support native casting on the Avalanche chain, and users will be able to use AVAX to mint UST on the Avalanche chain.
Kava
Last week, Luna Foundation Guard continued to increase its holdings of about 9,171 BTCs, and currently holds about 39,898 BTCs, corresponding to a market value of about US$1.7 billion. As of April 10, the TVL on the Terra chain is about 27.91 billion US dollars.
5. DAO
In the past week, LUNA has experienced a big drop, falling from nearly $120 to about $93 on April 10. LFG is binding UST with the entire encrypted world as a whole, using BTC as a gold reserve, and establishing the "Bretton Woods System" of the encrypted currency world.
On April 6, Kava announced that its Ethereum co-chain Beta test network has been launched. The test network has upgraded the EVM infrastructure. seam collaboration. Kava is a decentralized Layer 1 blockchain that supports cross-chain DeFi applications and services, with services such as Swap, lending, and liquidity mining. Kava's TVL is about $632 million.
2) On April 6, Ready Player Dao completed a financing of US$10.2 million at a valuation of US$150 million. This round of financing was led by The Chernin Group, with participation from Sterling VC, 1kx, Hashed, and Consensus Mesh. Ready Player Dao is committed to using collective power to create a fair gaming environment for all, so that everyone can profit through P2E. Ready Player Dao allows people to access the game and earn assets such as Token or NFT by renting NFT game assets. Currently, Ready Player Dao has more than 10,000 gamers in its community.
3) On April 9, Aragon co-founder Luis Cuende tweeted to announce the launch of Nation3 DAO, proposing to build a nation on cloud (A nation on cloud). The main content of the manifesto of Nation3 DAO is to criticize the current organizational form and propose to establish a "new nation" in the form of Web3. Luis Cuende said in a reply to other users on Twitter that Nation3 DAO will be built using Aragon.
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4. Follow-up by investment institutions
During the reporting period, a total of 33 financing events occurred in the encryption market, which was basically the same as the previous week, and the total amount of financing disclosed exceeded US$1 billion. Among the segmented tracks, the more active ones this week are Infrastructure, NFT/Games and Web3;
1. A16z
1) Metaverse：M²
This week saw 4 rounds of financing of over US$100 million, including the US$150 million Series C financing of Sky Mavis led by Binance, the US$200 million seed round of Binance. NEAR Protocol’s US$350 million strategic financing and M²’s US$150 million financing led by a16z;
It is worth noting that during the reporting period, Goldman Sachs (Goldman Sachs) successively participated in the US$88 million B3 round financing of the blockchain security audit company Certik, and the US$35 million C round financing of the blockchain data analysis company Coin Metrics.
2）Gamefi：SKY Mavis
Metaverse technology company Improbable announced that its new project M² has completed an independent financing of US$150 million led by a16z and SoftBank Vision Fund 2, DCG, CMT and others participated in the investment, with a post-investment valuation of US$1 billion; to establish a Morpheus-based technology Interoperable Metaverse Network "M²" (MSquared)
2. Tiger Global
1）Infrastructure： NEAR Protocol
M² will support enterprises, brands and creators to establish exclusive metaverse data and Web3 businesses on the network and organize large-scale experiences involving thousands of users, and provide interoperability with existing blockchain and Web3 businesses Improbable is committed to In order to optimize the virtual world development technology, the company provides multiplayer game technical support services for more than 60 publishers around the world. The Morpheus technology developed by it supports online VR social interaction for more than 10,000 players.
2）Infrastructure：Certik
As an existing investor, a16z participated in the US$150 million financing of SKY Mavis, which is used to compensate participants who suffered losses due to the Ronin sidechain attack.
Near Protocol, the underlying public chain, completed a strategic financing of US$350 million led by Tiger Global, with participation from Republic Capital, FTX Ventures, Hashed, and Dragonfly Capital. This round of financing will be used to "accelerate the decentralization of the NEAR ecosystem." In January of this year, Near Protocol just completed a financing of US$150 million led by Three Arrows Capital.
CertiK, a blockchain security company, has completed a $88 million B3 round of financing co-led by Insight Partners, Tiger Global, and Advent International, with Goldman Sachs, Sequoia Capital, Lightspeed and other new and existing shareholders following the investment. CertiK has completed the round in the past nine months Four rounds of financing, the total financing amount is 230 million US dollars, and the valuation is 2 billion US dollars.
3. Three Arrows Capital
With the continuous growth of decentralized application scenarios and assets, the decentralized Internet running on the blockchain through smart contracts has experienced many security attacks, and there is an urgent need for effective solutions provided by CertiK. According to data from CoinMarketCap, CertiK has a market share of more than 60% among blockchain projects that use third-party security audits. In March 2022, CertiK was included in the CB Insights 2022 Blockchain Top 50 list as the only blockchain security agency. Skynet is the leading product of Certik. As an active monitoring platform that can run 7*24 hours a day, Skynet can resist security threats in the complex blockchain network environment through real-time monitoring of blockchain and smart contracts.
Tiger Global’s investment speed in 2022 has increased significantly. As of April 7, it has made 20 transactions in 2022 (19 in 2022Q1), including 8 leading investments and 12 participating investments. The average financing amount of participating projects is as high as 1.5 One hundred million U.S. dollars. In comparison, Tiger Global has only 20 shots in all of 2021. In terms of investment preferences, Tiger Global focuses on centralized financial service platforms and infrastructure with strong technical support, while Web 3 and NFT are in the stage of experimentation.
Crypto Raiders announced a $6 million round of financing led by cryptocurrency investment firm DeFiance Capital and research firm Delphi Digital, with participation from GuildFi, Merit Circle, Yield Guild Games and Three Arrows Capital.
This is an NFT RPG role-playing game product developed based on Polygon. It is committed to providing players with relevant metaverse game experience and services. Players can conduct dungeon duels and equipment upgrades, and earn income from them.
4. Coinbase Ventures
The financing amount will be used to expand the team and NFT production, so that it can be distinguished from other GameFi projects that rely on NFT financing (such as Star Atlas, etc.), allowing players to obtain NFT in the ecosystem without paying, thereby enhancing user participation experience .
The company prefers the term "Play-to-Own" because it emphasizes ownership rather than potential financial transactions. Founder Kneuper said, "For us, P2E is more like a job than a game. We are trying to create some content that real players will like and enjoy."
5. Electric Capital
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