Animoca Brands’ scales back their ambitions.
Animoca Brands, a Hong-Kong based blockchain gaming developer, had initially proposed a metaverse fund worth $1 billion in January of 2023. The proposed fund was aimed at financing investments in the development of a metaverse ecosystem, which is a virtual world where users can interact with one another in a virtual environment.
However, in a recent development, Animoca Brands has scaled back its ambitious plan by reducing the size of the fund to $800 million. This reduction represents a 20% decrease from the initial target of $1 billion. The reason behind the scaling back of their ambitions is largely attributed to the recent volatility of the cryptocurrency market.
The cryptocurrency market has experienced significant turbulence in recent months, with a series of events affecting prices of cryptocurrencies such as Bitcoin and Ethereum. These events have ranged from regulatory crackdowns to concerns over energy consumption and environmental impact, resulting in significant price fluctuations. As a result, many cryptocurrency investors and developers are exercising caution, and it appears that Animoca Brands is no exception.
The decision to scale back their proposed metaverse fund suggests that Animoca Brands is taking a cautious approach in response to the current market conditions. By reducing the size of their proposed fund, Animoca Brands may be seeking to minimise the risks associated with investing in a volatile market, while still pursuing their vision for a metaverse ecosystem.
Despite the reduction in the size of the fund, Animoca Brands remains committed to its goal of developing a metaverse ecosystem. The company has a proven track record in blockchain gaming development and has been successful in raising funds in the past. The scaling back of their proposed metaverse fund is a strategic move aimed at managing the risks associated with investing in the cryptocurrency market, while still pursuing their long-term goals
Bitcoin gains as S&P begins to buckle.
Bitcoin, the world’s largest cryptocurrency, has seen a significant surge in its price over the past month. The price of Bitcoin rose by around 18% in March, reaching a high of over $60,000 per coin. This sudden increase in price can be attributed to market worries brought on by the recent Credit Suisse and Silicon Valley Bank crises. These events caused a sense of unease among investors, leading them to turn towards safe-haven assets such as Bitcoin.
The Credit Suisse crisis, in particular, has had a significant impact on the market. The Swiss bank was hit by a series of scandals that led to a decline in its stock price. This decline caused a ripple effect throughout the market, with investors becoming more cautious and risk-averse. The same can be said for the Silicon Valley Bank crisis, which led to a drop in the stock prices of some of the biggest tech companies in the world.
The rise in the price of Bitcoin is not only a reflection of market worries but also a sign of growing mainstream acceptance of cryptocurrencies. Over the past year, we have seen an increasing number of institutional investors and corporations embrace Bitcoin and other cryptocurrencies. Companies such as Tesla, MicroStrategy, and Square have all made significant investments in Bitcoin in recent months, which has further boosted its legitimacy as an investment option.
Ethereum blockchain continues to dominate deFI
The Bank of America’s report, published on March 21st, 2023, highlights the continued dominance of the Ethereum blockchain in the decentralised finance (DeFi) space. DeFi refers to the ecosystem of financial applications built on decentralised blockchains, which aims to provide financial services without the need for intermediaries like banks or other financial institutions.
According to the report, Ethereum still remains the most widely used blockchain for DeFi applications, accounting for more than 80% of the total value locked in DeFi protocols. Ethereum’s dominance in this space can be attributed to its ability to support smart contracts, which allow developers to build and deploy decentralised applications on the blockchain.
However, the report also highlighted a potential challenge facing Ethereum in the form of its throughput bottleneck. Ethereum’s current design limits the number of transactions it can process per second, which can lead to congestion and higher transaction fees during periods of high network activity. This issue has become more pronounced as the popularity of DeFi applications built on Ethereum has grown.
The report notes that unless Ethereum can address this throughput bottleneck, developers may start to explore alternative blockchains that can offer higher transaction speeds. In recent years, there has been a growing number of blockchain platforms that aim to address the scalability issues of existing blockchains, such as Cardano, Polkadot, and Solana. These platforms offer faster transaction processing times and greater scalability, which may make them more attractive to developers building DeFi applications.
NFT trading volume hits all-time high
The world of non-fungible tokens (NFTs) continues to boom, with a recent DappRadar report revealing that NFT metaverse trading reached an all-time high of $311 million in the first quarter of 2023. This represents a significant increase from the same period in the previous year, where NFT metaverse trading was valued at $25 million.
The report indicates that the success of NFT metaverse trading has been largely driven by the popularity of ‘land purchases’ on metaverses such as Decentraland and MG land. These virtual worlds allow users to buy and sell digital land, which can then be developed and customised using NFTs. This has created a new market for NFTs, with users buying and selling virtual real estate using cryptocurrency.
The success of NFT metaverse trading has also led to the emergence of new marketplaces and platforms that cater to this growing industry. Marketplaces such as OpenSea, Rarible, and SuperRare have become popular destinations for buying and selling NFTs, while platforms such as Decentraland and Somnium Space have created their own virtual worlds where users can buy and sell virtual real estate using NFTs.
Stablecoin wobbles amidst the looming USA banking crisis.
Stablecoins have become an increasingly popular option for cryptocurrency traders and investors looking to reduce their exposure to the volatility of the crypto market. However, recent events surrounding Circle USD and Tether have highlighted the potential risks involved in using stablecoins.
Circle USD, one of the largest stablecoins in the market, experienced a significant reduction in its market cap this month, dropping from $43.8 billion to $36.8 billion. This came after the company disclosed that it had assets stored in Silicon Valley Bank, which was experiencing financial difficulties following a data breach. The news led to concerns among investors about the stability of Circle USD, and many chose to divest from the stablecoin, leading to the drop in market cap.
In contrast, Tether, the world’s leading stablecoin, saw its market cap increase by around $4 billion during the same period. This was largely due to increased demand for the stablecoin, as investors sought to reduce their exposure to the volatility of the crypto market.
However, the recent acquisition of Silicon Valley Bank by First Citizens has done little to calm the nerves of investors. The situation has highlighted the potential risks involved in using stablecoins, particularly those that are not fully backed by reserves of fiat currency. This has led to increased scrutiny of stablecoin issuers, with regulators calling for greater transparency and accountability in the sector.
As for Circle USD, the stablecoin is still struggling to return to its pre-March market cap. The situation highlights the need for stablecoin issuers to be transparent about the reserves backing their tokens and to take steps to mitigate the risks involved in storing assets with third-party providers.
Disney lay-offs affect their Metaverse team.
Disney’s recent decision to lay off their team of 50 Metaverse developers has raised questions about the company’s future in the Web3 space. The move comes as part of a broader restructuring effort aimed at streamlining the company’s operations and focusing on its core businesses.
The decision to lay off the Metaverse team has left many wondering about Disney’s plans for the future, particularly in regards to Web3 technology. While the company recently released a series of NFT artworks for Valentine’s Day, it remains unclear whether they have any long-term plans for further involvement in the NFT or Metaverse space.
This move by Disney is not unique, as other large companies have also been reevaluating their involvement in the Web3 and Metaverse space. While some have made significant investments in the technology, others have taken a more cautious approach, waiting to see how the market develops.
However, it’s important to note that the Metaverse is still in its early stages and is expected to grow rapidly in the coming years. The potential applications of the technology are vast, ranging from gaming and entertainment to e-commerce and virtual real estate. As such, it’s likely that many companies will continue to explore the potential of the Metaverse, even if they take a cautious approach in the short term.
For Disney, the decision to lay off the Metaverse team may be a strategic move aimed at focusing on its core businesses and maximising profitability. However, it remains to be seen whether the company will fully exit the Web3 space or if they will continue to explore new opportunities in the future.
The staggering pace at which the world of Web3 continues to develop makes it hard to stay current with on-going events. Maximist’s This Week in Web3 keeps an ear to the world of NFT’s, Cryptocurrencies, Metaverse and the frontier of Web3 as a whole. Subscribe to get all of the major news events surrounding Web3 delivered to your inbox every week.
