Web3 funding dips + All the Web3 news you missed this week
Crunchbase reported this week that Web3 funding has seen a huge drop in the 3rd quarter of this year. Venture capital investments in Web3 startups totaled a little over $3.3 billion — the sector’s lowest point since Q4 2020 ($1 billion) and a massive drop from its all-time high in Q4 2021 ($9.3 billion).
This isn’t totally unexpected, given the pull back in the crypto markets and uncertain macro economic conditions. I suspect over the next few quarters we’re going to see more activity in the early stage Web3 funding environment - with funding rounds that return to more reasonable levels.
Now on to all the other Web3 news you missed this week.
Here’s the Web3 news from the past week
After FTX’s Sam Bankman-Fried made waves with a controversial memo on crypto regulation, Ethereum co-founder Vitalik Buterin shared his own thoughts on the matter in a Twitter thread. His perspective is that crypto players should avoid “enthusiastically pursuing large institutional capital at full speed” because the space still needs time to mature. “Regulation that leaves the crypto space free to act internally but makes it harder for crypto projects to reach the mainstream is much less bad than regulation that intrudes on how crypto works internally,” Buterin argued. (SBF, for his part, called Buterin’s take “pretty reasonable.”)
Even as NFTs Plummet, Digital Artists Find Museums Are Calling (New York Times)
Major museums — including New York’s Guggenheim, Whitney, and Museum of Modern Art — are making a full-court press into digital art and NFTs. Case in point: MoMA is about to open an installation by artist Refik Anadol that uses machine learning to create abstract images from materials in the museum’s archive. The art establishment has been slow to embrace digital art, but, the Times reports, “curators want to connect with younger, tech-obsessed audiences and catch the interest of any crypto millionaires who might donate.”
Apple Has Its New Guidelines for NFT and Crypto Usage on App Store (The Coin Republic)
Apple’s recent App Store restrictions on NFT functionality recalls a lawsuit that Fortnite developer Epic Games filed against Apple in 2021, after Apple banned Fortnite from the App Store for allowing third-party transactions in the game. Epic Games claimed that Apple was engaging in monopolistic behavior; a court found that it wasn’t on 9 out of 10 counts. Looking at the new App Store rules, “such moves increase chances for the organization to deal with a similar situation in future,” writes Coin Republic’s Anurag.
Many companies don’t understand what makes a metaverse experience worthwhile, designing them as “pricey ads that might draw a few eyes at first, and then fritter off into forgettable detritus.” Here are a few of their errors: focusing on technology over people, treating metaverse experiences as a way to connect with products and not other people, and designing activations in a top-down way. “Successful metaverse experiences… are often community driven, ground-up, and spontaneous,” writes Samantha Cole.
The Metaverse Isn't Real (CoinDesk)
For all the metaverse experimentation happening right now, “the hype surrounding the metaverse is betting on a future immersive and experience-rich virtual world infrastructure that does not yet exist,” writes Sam Ewen. Brands that want to invest in the infant metaverse would do well to follow certain principles: stay flexible, focus on “emotion-based experiential design thinking” over selling to consumers, and embrace mixed reality experiences over full-on VR.
Per Meta’s Q3 earnings released last week, the company saw its quarterly revenue drop for the second time since it went public, while its profit was sliced in half from the same period last year. And in the first year of its big metaverse push, Meta’s VR headset “remains a niche product” and Horizon Worlds “can feel like a ghost town,” reports CNN.
In an interview, Chainalysis CEO Michael Gronager shared his outlook on the crypto landscape, warning that regulation of the space may take longer than some wish. Gronager was part of a lobbying group around an EU anti-money laundering initiative, and, he told PYMNTS, “it took four to five years before anything actually became law and rolled out.” Meanwhile, Gronager identified the question of whether cryptocurrencies are securities as one of the space’s most pressing regulatory issues.
In case you missed it - this was the most opened article from last week’s news roundup
Tim Cook took a tempered approach to the metaverse in a recent interview with a Dutch publication, saying, “I always think it’s important that people understand what something is… and I’m really not sure the average person can tell you what the metaverse is.” Cook did, however, speak with enthusiasm about AR, calling it a “profound technology that will affect everything.”
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.