What Zuckerberg’s money can’t buy

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We looked at the post- Apple tech industry. We are looking at a web3 without big tech.

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no trillionaires allowed

It has become clear that there isn't a huge whitespace open for Big Tech in defining the future for cripto

Meta will be shutting down its wallet in September. This pilot, which was only available in a few countries, was the last of the company's ambitious plans and leaves the company without a clear path forward for a coin that expands beyond its current network.

Meta has been a punching bag for regulators over the years and that has led to the sell off of its Diem assets and the exodus of its top talent Meta isn't the only $1T+ market cap company that hasn't made aBlockchain play. It's clear that the regulatory risks are too present for the company to endanger their other revenue streams

The government has no idea how to regulate internet-native social networking companies while they have a good idea of what they are doing with financial instruments and vehicles. This isn't an investment that GAFAM is going to be dropping in web3 anytime soon.

While most in the industry aren't going to cry over Meta's lack of inclusion in the core toolkit of crypt, relying on the good fortunes of financial firms that are completely bought into crypt alone is why the current flavor of consolidation is so chaotic. The deep war chests of the top tech companies won't make life easy for the crypto industry this year.

the latest pod

You got to hear from us last week. She's back. Thanks to Jacquie, who replaced Lucas this week, I was able to unpack some incredibly juicy but complicated topics, including how the Defi downturn seems to lead back to the same hedge fund.

Tux Pacific, the founder of Entropy, joined us as our guest. Pacific raised $25 million in seed funding last month. They joined us to discuss what it is like to raise venture capital as an anti- capitalist and what they think is wrong with how digital currency are stored.

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follow the money

The place where startup money is moving.

1. Echo3D raised $5.5 million for cloud storage and AR/VR streaming in a round led by Qualcomm Ventures.
2. Web3 scaling protocol AltLayer closed a $7.2 million seed round with Polychain as lead investor.
3. Crypto gaming firm Cauldron raised $6.6 million led by Cherry Ventures to build the “Pixar of web3.”
4. Binance Labs led a $3 million seed investment in Magic Square, a crypto app store.
5. DeFi platform Increment Labs scored $1 million in seed funding led by Dapper Labs.
6. Crypto tax platform KoinX brought in $1.5 million from angel investors including Polygon’s Sandeep Nailwal.
7. Gaming-focused layer two blockchain Oasys raised $20 million in funding from a private token sale to investors including Republic Capital and Crypto.com.
8. DimensionX, a play-to-earn gaming firm, nabbed $3 million in a funding round led by Coatue.
9. Klang Games nabbed $41 million led by Animoca Brands and Kingsway Capital for its Seed virtual world.
10. Singaporean metaverse startup Enjinstarter raked in $5 million from True Global Ventures.

Crypto gaming firm Cauldron raises $6.6M to build ‘Pixar of web3’

this week in web3

After a week out of work, I had some time to reflect on the weird cognitive dissonance that seems to be unfolding across web3 The industry is now worth less than a third of what it was a year ago, and valuations are looking bad. Sebastian Mallaby of the Washington Post points out that the same financial fate has befallen many other technologies that went on to transform the world.

The jury is still out on what this downturn means for the industry, but one thing is clear to me when I look back at the past few years. Many investors and participants will have you believe that this is the first time we have seen this. There are two major things that have changed from past downturns, one of which is the change from a niche hobby for eccentric people to a mainstream one.

First of all, the companies are more connected now than they were in the past. Sam Bankman-Fried is bailing out other companies. The industry may have had a Lehman Brothers moment. I can't say I'm surprised the markets sobered up, but there are a lot of parallels between the two crises. Mortgage-backed securities and CLOs are still around despite the carnage of 2008, even if the underlying technology stays.

The second big difference I see between this downturn and previous ones is that it isn't that weird anymore. The journey to the mainstream has brought with it a heavy dose of groupthink.

The crash is a black swan event, but not to worry, we have seen it before. The best time to build is during a downturn, as long as the founders keep at it.

I'm not saying I'm a coin OG. When a lot of people were doing the same, I began to follow it closely. When I was younger, I would listen to a relative of mine explain to me why the world would be a better place if there was a digital currency. It makes me nostalgic for when there was a lot of independent thinking in the space. That is the most interesting thing about this space to me.

TC+ analysis

Some of this week's analysis can be found on our subscription service.

Losses in the second quarter were $670 million, up from the year-ago quarter.

There was a tumultuous period of market madness in the second quarter of the year. According to a new report, Q2 was full of huge losses in the form of hacks.