IP rules everything around me

What is this? Probably Nothing. Every week we showcase growing trends in web3 and crypto.

What's on the block:

🤑 FTX announces it's monster revenue

⛓ Tornado Cash lead contributors arrested globally

🏎 web3 gaming is happening, but it's not what you think

🏆 Top 3 funding rounds

💎 Nike & Tiffany billion dollar opportunity

🦸🏻‍♂️ How Marvel, Disney & DC are entering NFTs

😳 FTX grows 1000% in revenue.

This week FTX it leaked that FTX grew over 1000% in revenue which was pretty much confirmed by SBF in 2021, will be interesting to see those 22’ numbers.

Probably Nothing?

• ~15% of revenue is on marketing

• FTX US only makes up 5% of FTX overall revenue

• 2/3 of it’s $270m in revenue in Q22 was done from futures trading fees

• $388m net income in 2021

DYOR: It's stands that FTX still makes considerable amount of money from OTC and institutional trading. It's interesting to see the small amount that FTX US has to play in its overall revenue as a company that is probably made up in brand and trust. Full article in this piece from CNBC here.

🌪 Tornado Cash sanctioned by U.S Treasury

Tornado cash was sanction by the U.S Treasury resulting in their codebase being removed from Github.

• One of the key contributors to the repo was reported arrested in the Netherlands for their implication in the codebase.

• Several high profile companies and influencer wallets also got restricted from protocols like Aave, Uniswap and Balancer

• Trolls are transferring from the tornado contract to protest the sanction efforts and troll public wallets

Probably Nothing?

We can see that countries are starting to take action on their stance on crypto. Because understanding regulation provides more stability than uncertainty.

DYOR: Highly recommend checking out a16z podcast with Michele Korver, head of regulatory at a16z crypto & Jai Ramaswamy, chief legal officer at Andreessen Horowitz as they deep dive on the future of regulation and crypto policy.Check out the full coverage by the block.

🏎 Web3 Gaming ft. Paradigm CTF

Paradigm a leading crypto venture fund launched its Capture the Flag (CTF) competition for security researchers and degens last weekend. A series of exploit, loophole and speed focused challenges.

It’s highlight was a on-chain player vs player (pvp) racing game called 0xMonaco, fans of F1 rejoice the chaos that ensued was just like its namesake track off the coast of the Mediterranean. A back and forth epic of last minute losers, winners and upsets.

It focused around core concepts of game theory and pvp, you can read the full ruleset here if you’re interested. It's geeky Mario Kart.

• You purchase acceleration or a shell to reduce acceleration of who's in front immediately to 0, the price is determined by the market

• You have 15k coins to make purchases, the price is determined by supply/demand in the race

• Be first place by the end of the race

Here's a breakdown on exactly how the strategies played out on race day:

• teamSnake took out 2nd place and broke down their strategy in their blog post here

• onemanbandplus2 broke the game so bad the devs actually had to do something. You can read how they broke 0xMonaco here

Probably nothing?

• 0xMonaco has shown us that crypto gaming can often take interesting forms and also create opportunity for new innovation in web3

• Security is an extremely important part to a safe decentralised world as billions continue to be lost in bridge hacks and insecure contracts

💰👀 Funding

🕸 Thirdweb

Thirdweb raised $24m @ $160m valuation from Haun ventures with participation from Coinbase and Shopify. It's web3 infrastructure suite to deploy pre-made smart contracts and governance control.

Thirdweb was founded by Steve Bartlett (Dragon’s Den, co-founder of Social Chain ETR: PU11) & Furqan Rydhan (co-founder App Lovin, Bebo).

Probably nothing?

• Created a marketplace to deploy popular contracts in 1-click and plans to allow developers to sell audited contracts on their platform

• Strong combination of SDK for developers and no-code tools

• The first public web3 investment from Shopify

🍊 Orange DAO

Orange DAO closed a $80m fund to continue to invest in YC and YC alumni creating companies in the web3 space. The DAO which is a seperate entity from the fund is made up of 1,300 members all from YC companies that help in due diligence and sourcing.

Probably nothing?

• Great example of community focused investing that has led to a great community

• Portfolio track record is showing great promise

• A derivative approach to a extremely strong existing IP that is Y combinator

📈 Ultimate.Finance

Ultimate raised $12.4m from Lightspeed for its yield focused mobile DeFi wallet.

Probably nothing?

• UX friendly approach to crypto similar to the e-toro model for traditional finance

• Bundling a web3 degen’s toolkit, bringing it into a mobile first platform

• Early investment from Lightspeed’s new crypto fund announced apart of their $7.1b in new capital last month

💎 The future is Mint Tiffany Blue

This week we look at the traditional retail and its efforts to break into web3.

Brands are entering the space left and right over the course of the last 18 months, but how successful are these collaborations and launches?

We can see the big winner so far is Nike with $183.69m in revenue through primary ($93.10m) and secondary transactions ($90.59m). With brands like Dolce & Gabbana, Tiffany and Gucci following suit.

We’ve seen brands take a couple of different approaches to dipping their toes in the web3 space with Nike being the most aggressive acquiring web3 design studio RTFKT (Art-ti-fact) a couple days after their successful Clone X launch.

While other brands have taken a collaboration approach with Tiffany recently selling out of their punks necklace collection in 20 minutes. Only claimable from owning the respective punk and for 30eth (~$48k) at time of sale.

Probably nothing?

• Early results can show us is people are willing to spend money in this market. While Nike’s web3 profits make up only ~0.38% of Nike’s overall global revenue

• Secondary revenue and royalty is much more important. Nike missed out on the $10b secondary sneaker market in 2020

• We're entering era where IP franchises like games, shows and merchandise will make on break projects

🔧 Sudoswap: What a tool

Sudoswap continues to turn heads as a marketplace with the continued discussion around perpetual royalties coming into question for NFT projects.

It also enters as Opensea volume reaches a record low. Earlier this month Looksrare volume surpassed Opensea for the first time as its volume drops 99% from its ATH.

What is Sudoswap? Sudoswap and it’s SudoAMM is a new marketplace protocol that features fully on-chain liquidity pools for NFTs rather than stand alone listings similar to how Uniswap exists currently.

Probably nothing?

• A great step to further drive decentralisation in NFT markets

• Opensea and other marketplaces have royalties at a marketplace level in the seaport contract, however platforms like sudoswap mint at the collection contract level, bypassing royalties set by these marketplaces and leaving creators behind.

• Active users (7 day) at 1.3k, however the majority of its users are participating in low floor pools, in what looks like an effort to farm activity for a potential airdrop

DYOR - Zenaca dives deep into royalties and the importance for creators and smart contract developers in his letter here.

this newsletter is probably nothing, but subscribe and send it to a friend... in case it's something.Not financial advice.

This week's cover photo: sam bankman-fried wearing a crown on his head while sitting on the iron throne from game of thrones with a neon logo saying 'FTX' above him, painting landscape.