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.
Our first Web3 infrastructure investment was Livepeer in January 2018. Since then we have made many more, including The Graph, Arweave, Ceramic, Render Network, and Fluence.
Meanwhile, we’ve observed a few trends:
- There isn’t a universal, generally agreed upon definition of what makes a metaverse a metaverse.
- We receive metaverse-centric pitches daily — the space is crowded, evolving rapidly, and complex.
- Investors increasingly ask us how we’re thinking about investing in the metaverse.
We recognized an opportunity to address all of these problems concurrently, and so we teamed up with Matthew Ball (who has established himself as the defining voice on the metaverse on the web), and Bitwise (the most prominent crypto-native asset management firm focused on passive investments) to create the Ball Multicoin Bitwise Metaverse Index.
This index will only include crypto assets (no equities) that will support a thriving world of metaverses. We believe this index will solve a few problems:
- Coupled with financial products launched by licensees, it will make it easier for investors to get passive exposure to an emerging, but complex megatrend in technology. By making it easier for investors to allocate capital to this theme, it will increase capital flowing into the sector, and therefore accelerate growth.
- It will help educate the market as to what makes a metaverse a metaverse, and how to think about the component pieces that make metaverses possible.
- It will be regularly updated to reflect the evolution of the metaverse megatrend.
On the surface, this seems fairly strange. Why has Multicoin Capital—a firm known for active, high-concentration, non-consensus investments—helped build a passive investing index with other parties? Because we view it as our mandate to help accelerate the growth of the metaverse ecosystem as part of the crypto ecosystem more broadly. We believe that a well-crafted, passive index can significantly increase the total capital flowing into the sector, and accelerate the development of the metaverse thesis. As the metaverse continues to evolve, we believe it will create many investable opportunities and as a firm we want to be as close to the metal as possible. We also recognize the interest from investors, and the overall confusion in the market, and believe that we, along with Matthew Ball and Bitwise, have created the best index methodology to allocate passive capital to capture this sector.
While we are contributing to the Ball Multicoin Bitwise Metaverse Index, we are not an adviser to the Bitwise investment vehicle or any other licensee of the index. Our advisory efforts remain focused on our core liquid fund and venture funds. Those strategies remain unchanged, and they will continue to invest across many themes—metaverses, DataDAOs, payments, consumer apps, open finance, creator monetization, telecom, and more.
At the same time, we’re very excited with our work on the Ball Multicoin Bitwise Metaverse Index. We are in the early stages of what will be one of the defining megatrends over the next decade, and we want to do everything in our power to accelerate it.
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