Multicoin Capital

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Beyond Verticalization of NFT Marketplaces

By Kyle Samani

June 22, 2022 | 7 minute read

Why is the UX of OpenSea and Magic Eden generally the same (discovery on homepage, basic set of linear filters on the left side of collection pages, same search presentation, etc.)? Or, framed another way, why doesn’t the front page of OpenSea or Magic Eden have an activity feed (like Fractal or Hawku), or a livestream (like Twitch), or the results of a recent game tournament that heavily leverages NFTs?

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Beyond Verticalization of NFT Marketplaces

Why is the UX of OpenSea and Magic Eden generally the same (discovery on homepage, basic set of linear filters on the left side of collection pages, same search presentation, etc.)? Or, framed another way, why doesn’t the front page of OpenSea or Magic Eden have an activity feed (like Fractal or Hawku), or a livestream (like Twitch), or the results of a recent game tournament that heavily leverages NFTs?

Our Investment in Delphia

Today I’m excited to announce that Multicoin Capital has led a $60M Series A in Delphia alongside Ribbit Capital, FTX Ventures, Valor Equity Partners, FJ Labs, Lattice Ventures, Cumberland, Road Capital, and M13.

The Ball Multicoin Bitwise Metaverse Index

Over the last 6 months, as the term “metaverse” has become more popular in mainstream lexicon, we have come to the realization that many of our investments across various sectors—Web3 infrastructure, DeFi, asset ledgers, data networks, etc.—are good candidates to provide foundational infrastructure to power many credibly-neutral metaverses.

Proof of Physical Work

One of the most powerful features of crypto-economic protocols is their ability to create incentive structures that allow anyone in the world to permissionlessly contribute to a set of shared objectives. These incentive structures can be finely tuned to facilitate large-scale coordination to achieve specific goals. This represents a step-function improvement in capital formation.

Fractal: The Web3 Amusement Park

Today I’m excited to announce that Multicoin Capital has co-led a $35M investment in Fractal with Paradigm, with participation from a16z crypto, Solana Ventures, Animoca, Coinbase, Play Ventures, Position Ventures, Do Kwon, and Tim Ferriss.

Building Bridges

18 months ago, Ethereum was the only Layer 1 asset ledger that mattered. Today, there are over a dozen major asset ledgers across Layer 1— Ethereum, Solana, Luna, Polygon, Celo, Flow, Avalanche, Near, Fantom, BNB Chain—and Layer 2—Optimism, Arbitrum, StarkEx, StarkNet. We live in a multi-polar world. We will never go back to a uni-polar world. And that means that bridging is going to be extremely important.

Move Move Move

Broadly speaking, there are two ways to think about scaling blockchains: break them into smaller pieces and try to connect them, or optimize and scale a single shard. Rollups and sharding are the prime examples of breaking blockchains into smaller pieces. These approaches create several second-order problems:

Dialect: The Smart Messaging Standard

Today I’m excited to announce that we are co-leading a $4.1M seed investment into Dialect with our friends at Jump Crypto, with participation from Solana Ventures, Tiger Global, Joe McCann and several other prominent angels.

Rebundling The Audio Value Chain

Until the advent of Napster, the record label bundle consisted of three things: Risk-sharing — Record labels were VCs that invested in artists. The substantial majority of those investments were not profitable. A small minority were profitable, and produced the vast majority of returns. Record labels actually funded the development of the vast majority of music, even though the vast majority of music was unprofitable. Artists traded most of their economic upside for near term income certainty.

The Composable Web3 Data Network

A few months ago at the 2021 Multicoin Summit, I gave a keynote presentation highlighting composability as the most important development in crypto in 2022. Although that presentation specifically focused on composability of financial assets on the Solana blockchain, financial composability is not the only form of composability. There’s an even larger opportunity for composability: data composability.