NFTY #30: social capital 👑

Niantic's new raise, OpenSea's acquisition, and Social Capital in Web3

NFTY #30: social capital 👑

The NFTY News tracks the ever-evolving narrative of how the mainstream will enter crypto. In each edition I explore non-fungible tokens, dApps, and the ecosystem affecting consumer crypto applications.

Edition #30. Whew. The newsletter has evolved a bunch over the past few months, but I’m still tracking the mainstream’s move into crypto. This week Niantic announced a new raise from the same investors as Dapper Labs, OpenSea acquires a NFT marketplace, and I reflect on the problems with web3 on-chain work to build a reputation.

This week’s news

Niantic raises $300M for a Series C with participation from Samsung NEXT and aXiomatic Gaming

Niantic Labs, the creators behind Pokemon Go, raises a monster $300M round on the brink of the release of their Harry Potter game in 2019. 

Participants in the round include aXiomatic Gaming and Samsung Next, both of which participated in Dapper Labs’ round of $15M in early November. This is super ironic considering Tencent is creating a blockchain game that combines both CryptoKitties and Pokemon Go. It has remain to be seen what Dapper Labs’ plans are going forward — but the new raise from Niantic with similar investors might foreshadow some big moves. 

OpenSea’s ship goes into high speed with an acquisition AtomicBazaar

OpenSea, the largest non-fungible token marketplace, has acquired the p2p NFT marketplace, AtomicBazaar. The founders of AtomicBazaar also created KittyHats, one of the first examples of extensibility on existing non-fungible tokens.

OpenSea’s is way ahead of the game in its feature set compared to other platforms. DCLBlogger, a Decentraland trading blog, recently outlined some of the benefits that OpenSea provides over using Decentraland’s auction marketplace. OpenSea will continue to build out its feature set with non-fungible token swaps and more as it further cements its title as the go-to trading hub for blockchain gamers.

Epic Games release their new games SDK to track player behavior.

Epic Games is opening up their cross-platform tools to outside developers. While some games are starting to support cross-platform gameplay, very few actually allow a user to port their own profiles between games.

This is an intriguing move. It sounds like Epic wants to control your video game identity. The company could also potentially get a lot of insight on user habits even if they’re playing non-Epic games — Romain Dillet from TechCrunch

Discord also announced the release of their games platform with a 10% fee, down from Epic Games’ offer of 12%. The distribution strategy of games is shifting dramatically as eyes start to shift towards decentralization. This also comes at the same time when blockchain game publishers are allocating pools of money toward user-generated content and artists. 

Read of the Week

Gwei or Die — Is gas holding back the adoption of crypto-native applications? This is a great post from Shiv Malik highlighting why gas might not be such a bad thing. 

Release of the week

FOAM’s Holiday Game — FOAM released one of the first games built on top of the protocol to incentivize users to add locations to the map. If you add a hidden location to the FOAM registry, you’ll be rewarded with a NFT. This is a great way to incentivize users to complete actions in the network without giving away too much financial rewards.

Thoughts of the week:

A reflection on social capital vs. financial incentives

Last week, I posted my newsletter on Cent. Cent allows you to earn on your content, similar to Steemit. I’m experimenting with Web3 content platforms as a new method of content for my newsletter to measure the tradeoffs between financial incentives + social capital.

The problem I keep coming back to is that there’s hundreds of way to make a buck in crypto. Besides creating content to earn crypto, you can mine, stake, complete bounties, vote on prediction markets, become a keeper, validator, relayer, and many more. With each of these, there’s opportunity cost + price volatility. Financial incentives are easy to come by, but there’s not really a direct path to build reputation in cryptonetworks.

That’s because in cryptonetworks, there’s less of a social feedback loop. We participate in on-chain work for financial incentives as a means of side income. 

However, if we were able to accrue social capital along with financial incentives, we can start to build a pseudo-brand. Not only could we build a brand, but we could start anonymous incomes-sharing agreements by pointing towards our past on-chain work. It’s more likely that pseudonyms become our identity in cryptonetworks than our real identities because of the security, privacy, and authenticity that creators are accountable for as they start to complete on-chain work.

I’m still unsure on how real identity content creators transition to anonymized content as financial incentives start to build. I’ve been thinking that virtual celebrities like Lil Miquela would actually be the first type of personal identity to use income-sharing agreements. 

TL;DR — Real-identity content creators will have a difficult time to transition to web3-native content creators because of the misaligned incentives between financial + social capital. The social networks of today won’t show-off our authentic selves. We need entirely new platforms that enable us to show-off authenticity.