White Star Capital Digital Asset Fund - newsletter #77
From Twitch to Fractal: Justin Kan success story
From Twitch to Fractal: Justin Kan success story
White Star Capital Digital Asset Fund - newsletter #77
Justin Kan - co-founder of the streaming service Twitch, which exploded in popularity for broadcasting video games - has a new crypto startup that on Friday said it raised $35 million from investors including Paradigm and Multicoin Capital. He is betting on Solana, an up-and-coming blockchain protocol that claims faster transactions and lower costs than Ethereum.
What is Fractal?
Fractal sells nonfungible tokens like virtual pets, weapons and avatars that are used in games based on the Solana blockchain. The remote-first company chose to specialize in gaming NFTs because blockchain technology enables people to actually own their digital assets and trade them outside of a game.
Taking a page out of their playbook from when founders launched Twitch, they decided that Fractal would focus on being the best friend to blockchain gaming studios. The idea was that if they could help those game studios be successful, then they would be successful.
High velocity
Since they announced Fractal mid-December, they have been moving super fast. On December 30th, after just a month of coding, they launched their secondary marketplace. In the days leading up to their launch, founding team members Brent Liang and Jen Lee launched their Discord to over 100k community members.
On February 1st, they launched their Fractal Launchpad product to help games release their NFT collections to the public. From the outset, they decided it was important to only partner with game studios that they felt were going to deliver on their promises to players. To that end, Fractal applies a filter to the games they work with on their launchpad, vetting for quality.
Vision from Twitch to Fractal
Founder’s goal is to build Fractal into the trusted marketplace for the best blockchain games and AAA titles that are coming out.
Today, greater numbers of games are moving to listing their virtual items on public blockchains, giving players complete control over those assets, and allowing them to own and resell them later. Gaming NFTs are the fastest-growing category of NFTs, and have recently surpassed one million active crypto wallets holding gaming NFTs last month. Blockchain games generated more than $5 billion in sales in 2021.
Streaming on Twitch upended the gaming industry’s business model a decade ago. Introducing blockchain based assets will be an even bigger change. Founders think games are how the next 100M users get onboarded into crypto.
Investors and purpose of the fundraising
Founders have closed a $35M Seed financing round from some of the sickest investors in crypto and gaming. The round was led by Paradigm and Multicoin Capital, with participation from Andreessen Horowitz, Solana Labs, Animoca Brands, Coinbase Ventures, Play Ventures, Position Ventures, Zynga founder Mark Pincus, Crossover, Shrug Capital, TerraForm Labs CEO Do Kwon, Tim Ferriss, Eric Glyman and Karim Atiyeh (Ramp), Twitch cofounder Kevin Lin, Zynga cofounder Justin Waldron, dao5 founder Tekin Salimi and many more.
With this new capital, they will focus on building out their engineering team and making the best product possible for gaming companies who want to build around blockchain and turn their games into truly open economies.
🔦 White Star & Portfolio Spotlight
Atlendis protocol smart contract audit is completed
After publishing the Atlendis protocol V1 whitepaper, Atlendis Labs is excited to announce the completion of the Atlendis protocol’s smart contract audit conducted by Runtime Verification.
Safello Enters Into LOI With Avanza Regarding Potential Partnership In Relation to Crypto Services
The ambition with entering into the LOI is to evaluate a potential cooperation regarding distribution of Safello’s cryptocurrency services via Avanza’s platform.
Index Coop launches Interest Compounding ETH (icETH) product
icETH provides enhanced yield over staked ETH through a liquid staking strategy
🏦 Enterprises & Institutions
OpenSea plans to launch Solana NFTs on its platform in April
Opensea aims to capture market share of the Solana NFT marketplaces which has been thriving recently
Visa launches a program to help content creators grow through NFTs
Visa is working with a small group of creators to help them monetize and incorporate NFTs intro their business models
MicroStrategy subsidiary receives a $205M loan to purchase Bitcoin
MicroStrategy uses a portion of its Bitcoin as collateral in the loan from Silvergate
Citi predicts that the Metaverse will be an $8-13B market by 2030
Citi also believes users will reach 5 billion by 2030
⚖️ Government & Regulation
US introduce legislation aimed at mitigating risk from El Salvador
Two US representatives are attempting to pass legislation responding to El Salvador use of Bitcoin as legal tender
UK government amends regulatory framework to incorporate stablecoins for payments
This is part of a “package of measures” aimed at incorporating crypto assets and blockchain technology into the UK
UK government plans to issue an NFT
The NFT is to signal the UK commitment to a forward-looking approach on cryptocurrency
💰 Funding & Exits
LayerZero Labs raises $125M at a $1B valuation
LayerZero aims to become the premier Omni-chain interoperability protocol and solve the recent wave of cross-chain exploits
Wormhole planning to raise close to $200M at a $2.5B valuation
Wormhole a cross-chain bridging protocol is attempting to raise through a private token sale of HOLE tokens
Helium raises $200M at a $1.2B valuation
Helium the decentralized wireless network raises a new round led by Tiger Global and A16z and rebrands to Nova Labs, the blockchain remains under the Helium name
Fractal raises $35M for a marketplace for gaming NFTs
Fractal aims to be a gaming marketplace and launchpad on Solana
BattleBound raises $4.8M for its play to earn game
BattleBound is planning on using the funds to fund the development of 2 games
Crypto Raiders raises $6M for its RPG NFT game
Crypto Raider blends elements from RuneScape and World of Warcraft for its RPG game
Blockchain.com raises Series D round at a $14B valuation
Blockchain.com raises a round led by Lightspeed Ventures Partners
🚀 Project Launches & Updates
Polygon releases identity services using zero-knowledge proofs
Polygon ID will help verify user’s information while maintaining on-chain privacy
gCC raises $110M VC fund focuses on early-stage investments
gCC’s second fund will focus on equity and tokens, raised mainly from Japanese companies
OpenSea launches credit card payments for NFTs
Opensea is taking direct card payments through MoonPay, simplifying the buying process
🔥 Other Bits We're Excited About
Binance announces partnership with Grammy Awards
Binance will bring “web3 solutions” to the Grammy Awards and become the first crypto partner