#209: Web3 ➡️ Web2 - The industry's new path to mainstream

With examples from Sotheby's, Arcade, Pudgy Penguins, Polygon, Goblintown, and adidas

Over the past couple of years, we’ve heard countless takes on what will onboard the next wave of users to web3.

Music, gaming, brands, finance, you name it. I believe all these industries and use cases will in due time. However, these exclamations feel a little bit more like this recently:

It gets a litttttle tiring after saying it for the 29,178th time, regardless of the passion (myself included!).

Yesterday, David Horvath had a line in his newsletter that stuck out to me.

Here’s where opinion steps in… but in my view, collections which rely on bringing value to holders while growing may have a harder time, long term… or are at least facing quite a few challenges. Short term, I see some very clever solutions to the “holder-factor”… but as we go decades in, the fix eludes me, I must admit.

Some smartys out there will crack it, but if I had to guess, my gut says the answer will be in relation to bringing web3 people out vs trying to bring web2 people in.

In 2021-2022, the industry didn’t have to try as hard to bring ‘web2 people in’ thanks to rising prices, speculation, and what felt like an infinite flow of VC funding coming in. As web3 has cooled off considerably over the past year, the industry has its back against the wall.

The best part of having your back against the wall?

You are forced to be more creative. The irony is that I believe ‘innovation’ in web3 isn’t relying on native solutions (over the long-term it will), but rather embracing traditional strategies and tactics.

By doing this, we are ‘bringing web3 people out’, as David mentions.

What are some examples of this?

Sotheby’s Grails Part II

The renowned auction house is conducting the largest-ever live digital art auction today, consisting of 37 pieces from famous generative art collections such as Fidenzas, Autoglyphs, and Cryptopunks.

There is one lot that is only available for live bidding and everyone is watching it closely: The Goose.

Ringers #879: The Goose

Do you see it?! I promise it’s not an illusion like the viral dress meme from 2015.

The estimate for this piece is between $2 to $3 million, with many expecting it to go over the estimate.

As anticipation for this auction rose, multiple prominent artists showed their support by doing what they do best: create art.

Beeple:

Grant Riven Yun:

Jake Fried:

And plenty more from Batzdu, Killer Acid, ThankYouX, and Vinnie Hager.

This reminds me of the moment when the NFT community ‘suited up’ to support the Christie’s auction of Bored Apes in September 2021.

Bored Ape or not, the broader community rallied together and put on their suits to celebrate this milestone.

And now, we’re seeing it again in an alternate format.

Just our luck, bidding on The Goose concluded with a final bid of $5.4 million 🤯 ($6.2 million after fees).

The new owner? None other than 6529, arguably the biggest supporter of NFTs.

Securing on-chain loans with real-world assets

Yesterday, someone secured a $14,500 loan with 2 rolexes…on the blockchain. This was possible thanks to Arcade (a DeFi lending protocol) and 4K (a DeFi storage protocol for physical assets).

This is not only a new use case of DeFi loans, but the 12% APR is a steal when compared to the average pawn shop APR of 200%. How did this work?

• The borrower sent their physical Rolex watches to 4K protocol to be held in escrow

• 4K tokenized the watches into NFTs

• The borrower used the Rolex NFTs to take out a loan on Arcade

This was notable to me personally because I first learned about Arcade at ETH Denver a few months ago. The CEO hosted a talk about the financialization of NFTs, and now we can see how this can happen beyond just digital assets.

Check out my notes from the talk.

NFTs head to conferences

No, not to your local Crypto or web3 conference. We’re talking about conferences that traditional companies and brands attend.

This week is the Licensing Expo, and Pudgy Penguins was ready to shake hands and sign some deals. The Pudgy team has publicly shared their intentions to make a splash at the event off the heels of their successful toy launch, and from what I can tell it seems like they have.

I encourage you to watch this video of Luca (Pudgy CEO) showcasing their booth igloo:

Luca talking to someone from Sony? 🤔

It isn’t a proper Pudgy Penguins event without their legendary claw machine. I imagine this helps break the ice with brand executives.

Lastly, this tweet piqued my interest 👀

Clearly, the team was prepared for conversations that led to immediate action. Now we wait.

Pudgy Penguins aren’t the only NFT brand that is pursuing this type of strategy either. Yesterday, Cool Cats shared that they would be attending Comic-Con next month.

They’ll be joining 0n1 Force, who will be previewing their comic books at the conference.

These efforts don’t go as far as the CuteCon I proposed in the past, but it’s a great start.

The Value Prop by Polygon Labs

Earlier today, Polygon Labs shared The Value Prop, a database that showcases different use cases of blockchain technology. Our industry receives top marks in building, but does not do as well in organizing and showcasing all the great things that have been built.

The Value Prop addresses this with a simple way to search by vertical, use case and/or network.

So next time you need to do some research on a web3 solution for X or show a colleague or boss how blockchains are pushing Y industry forward, this resource will be a trusty sidekick.

Goblintown is featured in a video game

The darling NFT project from the 2022 bear market is back, and is prominently featured in a new popular indie game, Only Up!

The game is currently being streamed on Twitch by popular streamers. For example, here’s a stream by EsfandTV (1.2M followers) with 5k people watching.

Goblintown website

Looks kinda similar. The goal of the game is to go up. If you fall down, you start over again. Yup, that’s it.

Where does Goblintown come in?

• The main character is wearing a jacket with the collection’s goblin mascot on the back

• There are multiple areas that feature goblin art

How is this even possible? Is this a partnership? Are the developers going to get sued?

Partnership or not, Goblintown is a CC0 collection. Anyone can use the IP for other purposes, and we’re seeing it in action with Only Up!

adidas x FEWOCiOUS featured in an ad

Earlier this morning the adidas x FEWOCiOUS sneaker was featured in a Google Pixel ad.

I’m pretty sure 90% of the tweet engagement came from web3 folks like myself, but hey I’m not complaining.

Considering the fact that this is a well-produced video and is 30 seconds long, I’m pretty confident we’ll see this as a TV ad soon.

So what? ARE BAGS ARE SAVED?!

Absolutely not. However, we are seeing the resilience of the industry and are beginning to see seeds being planted (eg: Pudgy Penguins, Polygon) and trees bearing early, unripe fruit (which may turn ripe! eg: Goblintown, adidas x FEWOCiOUS).

This is all from this week (and it’s only Thursday!).

To be clear, when I say ‘web2’ approach, I mean this in the context of it’s a strategy that everyone understands vs. something like minting, token-gating, or providing liquidity to a liquidity pool.

Some of these examples sit in stark contrast from some of the flashiest activations of last year. One in particular that I remember, and in hindsight was way too excited about:

I’m cautiously optimistic that we’re doing it more prudently this time around vs. the last couple of years. We’ll bring web3 out, then bring web2 in 🙂

See you next week!