\nGameStop looks to diversify its meme money<\/br>
\n2023-01-20 22:28:07<\/br><\/p>\n
Welcome back to Chain Reaction.<\/strong><\/p>\n Last week, we looked at web3 without Web 2.0\u2019s winners. This week, we\u2019re looking at a crossover episode for meme investing.<\/p>\n You can get this in your inbox every Thursday afternoon by subscribing on TechCrunch\u2019s newsletter page.<\/a><\/p>\n A weekly dispatch from the desk of TechCrunch crypto editor Lucas Matney<\/a>:<\/em><\/p>\n What happens when a meme stock and a meme asset class collide? Well, investors in each hope that the result is a tidal wave of very real money.<\/p>\n This week, GameStop launched an NFT marketplace. The reception wasn\u2019t particularly overwhelming; the marketplace reportedly raked in about $2 million in sales volume, which equates to less than $50,000 in transaction fee revenue on the first day. Daily volumes have trended downward in subsequent days, but it\u2019s far from an embarrassing launch, especially when one considers the failures endured by competing upstart marketplaces like Coinbase NFT.<\/p>\n GameStop is hoping to find a revenue-generating vertical that decreases its reliance on brick-and-mortar sales. The timing could be better for the company as NFT dollar volumes have plummeted as crypto prices have taken a hit, but this is clearly still a vision that has registered with the company\u2019s very unique breed of investor profile. GameStop is down more than 40% from its November highs, but things have gotten much less bleak in the past couple months as the company stock has rallied some 50%.<\/p>\n Taking down OpenSea \u2014 the current market leader \u2014 will be no small task, but it doesn\u2019t particularly seem like GameStop is aiming at a straight feature-for-feature copycat and is instead aiming to contribute something different to the ecosystem.<\/p>\n Most secondary NFT sales happen on the Ethereum or Solana blockchains; GameStop is launching their marketplace on what\u2019s called a layer-2 of Ethereum, a secondary network that handles most of the computation but still relies on the mainnet Ethereum when it comes to storing data on a blockchain.<\/p>\n This is vision of modular blockchains that Ethereum creator Vitalik Buterin very much stands behind, but it makes things complicated because it forces crypto investors to rally behind a new network, as there are many layer-2 options. GameStop is currently using a rollup network called Loopring to bundle transactions; the complication is that you can only transact on GameStop with NFTs that were minted on Loopring, meaning that you can\u2019t buy a popular collection like CryptoPunks or Bored Apes on GameStop\u2019s storefront.<\/p>\n This remains a risky choice for GameStop, which will probably add support for other chains down the road, but for now is left on a different set of rails than the majority of NFT dollars spent today. This does seem to signal the option as being a bit more future-minded than one might expect; if this was a pure cash grab, they could have grabbed at the existing cash more effectively by playing it straight.<\/p>\n Having pure-ish intentions only takes you so far in the crypto world, and GameStop realizing success here remains a vertical uphill climb, but meme stock buyers have realized more challenging odds over the years so their appetite for risk remains hard to satiate.<\/p>\n Lucas and Anita are back in action this week and they wasted no time getting into the headlines. This week\u2019s news lineup had them chatting about everyone\u2019s favorite meme stock, GameStop, and its bold foray into the NFT marketplace even after posting a $381 million loss last fiscal year. They also talked about yet another disappearing act from the founders of a crypto firm that lost billions of dollars of other people\u2019s money (yikes), and ran through some of the numerous crypto venture fund launches they\u2019ve seen in the past week.\u00a0<\/span><\/p>\n Joining them on the show was Naveen Jain, founder and CEO of Yat, the company behind those emoji identifiers you\u2019ve seen celebrities like Ke$ha use in their Twitter bios. Jain spoke with them about the concept of identity in both Web 2.0 and web3, and Anita used the opportunity to get him on board with the cause of lobbying Unicode for a long-overdue biriyani emoji. Y\u2019all are welcome.<\/span><\/p>\n Subscribe to Chain Reaction on <\/span>Apple<\/span><\/a>, <\/span>Spotify<\/span><\/a> or your alternative podcast platform of choice to keep up with us every week.<\/span><\/p>\n Where startup money is moving in the crypto world:<\/span><\/i><\/p>\n A weekly window into the thoughts of web3 reporter Anita Ramaswamy<\/span><\/a>:<\/em><\/p>\n Most crypto investors aren\u2019t actually using their digital currency for transactions very often. They tend to prefer holding on to their crypto in the hope that it will appreciate over time. But there\u2019s one notable exception that has motivated numerous U.S. crypto holders to part ways with their tokens \u2014 charitable giving.\u00a0<\/span><\/p>\n Research shows<\/span><\/a> that crypto donors are actually more generous in their giving than those who donate cash. The optimist in me says that this might be influenced by web3\u2019s strong sense of community. The cynic in me knows that it\u2019s also a smart financial move for these donors because of <\/span>the significant tax benefits of donating crypto<\/span><\/a>, given that it\u2019s treated like an asset rather than cash under the U.S. tax code. Regardless of the motivation behind it, crypto donations could be a useful tool for charities looking for new ways to fundraise.\u00a0<\/span><\/p>\n 2021\u2019s bull market was a boon for startups that help charities facilitate these crypto donations, including The Giving Block and Endaoment, which both saw donation volumes surge on their platforms during the year. But startup Change is taking a different approach, developing APIs to help companies and charities process donations. I caught up with the founders, Sonia Nigam and Amar Shah, this week to chat about the $5 million seed round they just closed to double down on the crypto space (you can read more about that <\/span>here<\/span><\/a>). They\u2019ve historically focused on online fiat donations, but see strong potential for crypto donations because they believe the blockchain can provide the transparency donors desire but isn\u2019t always guaranteed to them.\u00a0<\/span><\/p>\n We already know things are getting ugly during this crypto winter, so it\u2019s especially interesting to see a startup that\u2019s using this time to invest more deeply into its web3 capabilities rather than pumping the brakes or running for the hills. Charitable giving on the blockchain has lots of potential but can be a difficult undertaking, so only time will tell if startups like Change are able to bring transparency to the opaque world of nonprofits or if they\u2019ll end up running into intractable challenges despite their good intentions, like many web3-native regenerative finance (ReFi) projects that rely on inefficient, easily misused carbon offsets to meet their environmental goals. The latter is a topic for another day, but I think it\u2019s always worth giving some thought to how crypto could evolve as a force for good, even if the reality of implementation is much tougher.\u00a0\u00a0<\/span><\/p>\n Here\u2019s some of this week\u2019s crypto analysis available on our subscription service TC+ from senior reporter Jacquelyn Melinek<\/a>:\u00a0<\/em><\/p>\n The US government is digging into NFTs\u2019 impact on intellectual property<\/a><\/strong> Despite falling NFT sales volume, there\u2019s more underlying strength to the market than you\u2019d think<\/a><\/strong> Have a great weekend and remember you can subscribe on TechCrunch\u2019s newsletter page<\/a> to get this in your inbox every week.<\/p>\n Lucas & Anita<\/p>\n<\/p><\/div>\n <\/br><\/br><\/br><\/p>\n![\"\"](\"https:\/\/i0.wp.com\/techcrunch.com\/wp-content\/uploads\/2022\/04\/chain-reaction-newsletter.jpg?resize=680%2C191&ssl=1\")
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\npower to the pumpers<\/h2>\n
\nthe latest pod<\/h2>\n
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\nthe week in web3<\/h2>\n
\nTC+ analysis<\/h2>\n
After NFTs exploded over the past year, the U.S. Patent and Trademark Office and U.S. Copyright Office are launching a joint study to investigate the digital assets\u2019 impact on intellectual property rights. The study comes about a month after Vermont Senator Patrick Leahy, a Democrat, and North Carolina Senator Thom Tillis, a Republican, wrote to the offices asking them to look into NFTs, given their exponential growth in a short period of time.<\/p>\n
Bearish sentiment in the crypto markets has trickled down to the NFT subsector. Over the past 30 days, NFT sales volume across the top 10 blockchains has fallen, according to data from NFT aggregator CryptoSlam. \u201cThe NFT market has not been great, but there is still great momentum,\u201d Nick O\u2019Neill, CEO and co-founder of The Nifty, said to TechCrunch. Even with that said, it\u2019s hard to ignore bearish macro headwinds, O\u2019Neill noted.<\/p>\n
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