How to kill your metaverse + All the Web3 news you missed this week
This week Meta (aka Facebook) announced that they will take a 47.5% commission on digital asset transactions in their metaverse. Its hard to understand the decision making process at Meta that led to what seems like an unbelievably high commission rate for a product that needs to attract a broader creator/developer ecosystem and has very minimal consumer interest. Power has clearly been shifting more towards creators - I can’t see how an oppressively high commission rate is going to attract the highest talent creators.
Here’s the Web3 news from the past week
The hype around crypto seems to be holding steady, at least when it comes to investments. In a TechCrunch report, founders and VCs broke down their current strategies in the space.
Self-described crypto skeptic Nilay Patel interviewed Chris Dixon, who leads crypto investing at Andreessen Horowitz. On Patel’s podcast (also available as a written transcript), they got into the nuts and bolts of how Dixon makes investment decisions, whether blockchain is a necessary technology or “just the one we have,” and the problem of crypto’s environmental impact.
In this week’s Web3 Roundup interview, I spoke with Robert Masiello, co-founder of Arcade, a marketplace that allows individuals to take out loans against their NFTs. We talked about the genesis of the project, the market-wide challenges of pricing NFTs, and his advice for others building in the crypto space.
NFTs Are Here to Ruin D&D (Gizmodo)
Gripnr, a startup out of Revelry, is trying to build a NFT-based version of Dungeons & Dragons, drawing confusion and criticism from some in the games space. As one D&D podcaster put it, this push represents a “self-centered and self-enriching concept that is anathema to the group collaboration and sense of mutual giving that makes the RPG hobby so special.”
How DAOs Could Change the Way We Work (Harvard Business Review)
As with the industrial revolution and the advent of computing, Web3 marks a fundamental shift in how we work, argues Steve Glaveski. He predicts DAOs will power that sea change, offering contributors greater autonomy, more flexibility, the freedom to do work that aligns with their values, and innovative compensation structures.
Fortnite maker Epic Games and Lego are developing a metaverse specifically for “kids and families.” They offered scant details about what it will look like or when it will launch, but said that they’re striving to “protect children’s right to play by making safety and wellbeing a priority; safeguard children’s privacy by putting their best interests first; empower children and adults with tools that give them control over their digital experience.”
Meta is exploring a digital token exclusive to its own platforms, reportedly dubbed “Zuck Bucks” by staffers. According to Fortune, citing a report in the Financial Times: “Zuck Bucks would be controlled by Meta directly—much like the in-game currencies used in Fortnite and games on the Roblox platform.”
Meta is allowing a trial cohort of creators to sell virtual assets within its VR platform Horizon Worlds — and confirmed that it will be taking a 47.5% cut of those sales. Needless to say, this policy elicited some very angry reactions.
Emerging DeFi Technology Trends to Watch (CoinDesk)
In the final installment of its series on understanding DeFi, CoinDesk broke down the sector’s up-and-coming technology, including crypto bridges, self-repaying loans, and synthetic securities.
The USDN Fiasco Spotlights Economic Risk in DeFi (The Defiant)
The crash of USDN stablecoin is the latest example of crypto’s economic risks. According to IntoTheBlock, a crypto-focused data science company, more than half of all DeFi incidents are related to economic risks, or “imbalances in key supply and demand metrics that create vulnerabilities that can result in protocol illiquidity and loss of deposits.” (The other major risk category is technical risks, like hacks and rug pulls.)
With the meltdown of several major NFT-based games, this category is proving to be a house of cards, writes Paul Tassi: “Absolutely zero trust has been created here in any of these high profile examples. There’s nothing preventing your hot web3 game from seeing total economic collapse at a moment’s notice.”
In an interview with Bloomberg, Ryan Wyatt of Polygon Studios said that he understands gamers’ resistance to in-game NFTs, from environmental concerns to the sense that companies are prioritizing their bottom lines over user experience. Still, he believes specific NFT applications can work for gamers, including weapon skins that are already the basis of thriving marketplaces.
Off-topic stories I found interesting
Space Perspective has released renderings of its contribution to the space tourism race: purple-hued luxury cabins, appointed with WiFi and drinks bars, that travel 20 miles into the upper atmosphere courtesy of a massive hydrogen balloon. The company, which priced tickets at $125,000 a pop, aims to start launching flights in late 2024.
Success and Failure at Pebble (@ericmigi Medium)
In honor of the 10th anniversary of Pebble’s launch on Kickstarter, founder Eric Migicovsky offers a detailed rundown of why the once-hot smartwatch startup ultimately failed to become a sustainable business. One lesson he learned? “Never forget to define and talk about your long term vision for the future. When things are going well, it’s easy to get caught up in growth. But you need this to carry your company through hard times.”
In case you missed it - this was the most opened article from last week’s news roundup
Podcaster and NYU marketing professor Scott Galloway doesn’t buy the notion that Web3 will redistribute power back to the people, noting that the top 2% of account addresses own 95% of the $800 billion-plus supply of Bitcoin. “Web3 has different colored hair, but the same DNA as… earlier web paradigms, which decentralized services at an unprecedented scale in order to turn around and centralize wealth again at an unprecedented scale to a select few,” writes Galloway.
NYC Web3 Meetups
I’ve been hosting a regular series of Web3 in person get togethers in NYC. They range from small table breakfasts to larger happy hours. If you’re interested in attending or sponsoring one of these events sign up here:
Hi, I’m Andrew Chang - I created the Web3 Roundup to share what I’m learning in this space. I’ve spent my career at the forefront of the technology industry in areas such as crypto/blockchain (Former COO @ Paxos, co-founding partner of Liberty City Ventures), video and adtech. I learn by meeting with founders, investors and other thought leaders and approach Web3 with the same enthusiasm – and skepticism – I had about crypto/blockchain technologies 10 years ago.