JULY 29TH, 2022 6:30 MONTREAL, CANADA.

Hey Guys,

Crypto winter? No problem, the power of NFTs is all-knowing, I mean omniscient, I mean damn cute. What do I mean exactly?

Are you on a Mission to use NFTs for Web3 empowerment?

Li Jin is pretty awesome. Even Means of Creations say so.

2021 heights to 2022 floors, not a problem for Web3 glamorous celebrities. In FinTech they call 2022 “The Great Layoffs”, in Web3, just another “stepping stone”.

So let’s get into it.

Fresh of the press from a former member of my personal overlords (a16z funds Substack).

Mayson Nystrom of Variant Talks about #crypto, #bitcoin, #ethereum, #investing, and #blockchain. These young folk clearly know what they are talking about.

Backing the User Owned Web

A $150 million seed fund will focus on Web3 and a separate $300 million opportunities fund will double down on portfolio projects.

Variant, a crypto investment firm founded by Andreessen Horowitz veterans, has raised $450 million for a new umbrella fund split across a $150 million seed purse for Web3 projects and a $300 million opportunities vehicle that will “double-down on projects with demonstrated traction in our portfolio," according to a website post published Thursday.

I too want to learn about the NFT raining money effect.

I’m on Substack, but I might have to leave soon for the NFT Stack.

What an impressive infographic, might be worth a lot. Soon.

NFT innovation doesn’t sleep during a mild recession ya’ll.

Jesse Walden knows the score of NFTs. (Video)

Web3 is crypto.

Li is known for the Passion Economy.

Variant is best known as the Ownership Economy.

Genius next level guys!

In truth, FOMO and hype never really sleeps, when huge VCs can emerge to own a piece of the decentralized future.

Each “crypto winter” is different from the last, but every winter—or what non-crypto people would call a bear market—has something in common: It gives rise to a new surge of innovation. - Fortune (copywriter)

1,000 True Fans? Try 100

Podcast: How the Passion Economy Is Redefining Work

Groomed by a16z, where does this kidzone get their funding?

Early stage startups in Web3? Wow.

NFTs are about uploading files to the blockchain, owning assets in new ways. Verifiably yours without any dependent on a third party.

But who owns Variant?

The Garden of Magic Eden

Creators can make more money since they have proof of ownership without any third party platform.

So let’s get into the Variant PR:

Variant was founded on a simple idea: the networks that define the next generation of the internet will turn users into owners. - Lin Jin

• Open edition drop-culture (collectibles, series of edition works)

• Hyper exclusive collectibles (e.g. generative artwork)

Decentralized networks owned by users, like Uniswap, are outpacing their centralized competitors.

Variant, an early stage crypto-focused fund, sees great opportunity in the current state of things, its co-founders Jesse Walden and Li Jin have an ideology that’s very similar to the Godfather of Web3 Chris Dixon.

a16z happen to have a monopoly on early leading NFT platforms.

New models for token distribution are enabling startups to turn their users into owners who can influence the direction of projects. Communities around the world are raising funds on-chain to purchase and even govern other things.

Chris Dixon has created an entire (Tokenomics) ideology around how NFTs are the next stage in creator monetization where Ad-platforms are the worst. The best is tiered pricing, according to these NFT experts. So Open-editions are like tiered pricing in the NFT marketplace of 2021.

You can Mint an NFT and take it even to another NFT platform. It’s incredible!

Investment theses for Variant Fund III include financial empowerment through decentralized finance (DeFi), blockchain computing, Web3 consumer applications and new forms of decentralized ownership. The firm has doubled the size of its staff to 15 to support the new funds.

• DeFi

• Blockchain computing

• Web consumer Apps

• New forms of decentralized ownership (NFTs)

From digital fashion to digital art, there’s always new industries that opens up new monetization opportunities with huge early traction. It’s not just collectibles, there’s a ton of programmable artwork.

This is only a small fraction of what’s happening in the space.

Who has Variant Invested In so Far?

The firm has previously invested in privacy-focused smart contract platform Aztec Network, Ethereum-based DeFi protocol Euler Finance, Polygon and Uniswap, to name a few.

• Aztec Network

• Euler Finance

• Polygon

• Uniswap

Others include Mirror, Foundation and Magic Eden.

2021 Success

NFTs have enabled creators to earn from their content to the tune of $3.9 billion last year, without relying on advertising or the altruism of fans.

NFTs are so much more than Patronage.

People want to profit from their support of Creators.

NFTs are just the tip of the iceberg according to Walden.

The DeFi revolution has empowered a new generation of owners to take control of their assets and access capital and liquidity, just as simplified end-user experiences are lowering the barrier of entry for using new and complex financial products.

Go to 23:30 of this video to hear what Walden says about Mirro.xyz.

https://mirror.xyz/

Li Jin gets a bit emotional about this sometimes:

Variant Fund III follows a $110 million second fund last October, itself coming about a year after the $22.5 million debut fund.

“We feel like in the next three to five years, we’re going to see a wave of really high quality projects that then drive us towards mainstream [crypto] adoption,” Jin said.

This Moment in Crypto is Unique

“Variant was designed for this moment in crypto. And we have stayed small for a reason: because it enables us to work intimately with our portfolio and guide founders through the most important questions they face early on in their journey," Variant partners Li Jin, Spencer Noon and Jesse Walden wrote in the post.

Walden admits that the size of Variant’s latest fund is “relatively small compared to other funds,” like Andreessen Horowitz (a16z) or Paradigm. But it’s “for a reason.” 

If I was a16z I’d spin out a fund with trained young people so startups would trust them better. Wait a second, that this seems to be exactly what this is. Censor me crypto! Finally, I’d just like to say:

I’m so over-joyed to witness this moment in Variant Fund III’s birth.

I’m so glad you have joined me in how we embrace this together.

Thanks for joining me crypto brothers, till we meet again, on the blockchain!

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OpenSea may have lost some folk in an NFT storm.

No that the fun’s over you don’t hear about how much demand for NFTs are down. It’s pretty stark. Despite a significant depression in the crypto markets, many top players are hesitant to say that the good times are over, but an NFT Marketplace announced today it is laying off about 20% of the company’s workforce.

OpenSea backed by a16z is pretty much one of the main market leaders of Web3.

As if this wasn’t going to happen.

The company did not specify exactly how many employees were impacted by the decision, but the company’s LinkedIn page indicates the company has around 750+ employees currently. Finzer says that impacted employees will be receiving severance and health insurance “into 2023” as well as accelerated equity vesting.

• 20% of 750 is at least 150 impacted employees.

• Don’t worry though, they have raised $427 million already with a probably totally unrealistic valuation. (Series C)

The way we view NFTs will never be the same as they went to the moon in 2021.

OpenSea was one of the clear early winners for adoption of the NFT market that shone bright as pandemic stimulus flushed us with cash.

That they are having their own “Coinbase” moment is not so surprising. The layoffs raise questions about the company’s aggressive growth tactics and how they approached the sustainability of the NFT sector’s breakneck growth. In his note to staff, Finzer says the company has years of runway ahead of it with these changes, assuming things don’t get even bleaker, according to TechCrunch.

The Web3 leaders have so much sincere conviction too:

Devin has been CEO of OpenSea for nearly 5 years. Hopefully Chris Dixon tutored him well.

Their Series B was led by a16z, who has invested in multiple NFT platforms. All is always golden on the other side for NFTs.

OpenSea, is one of if not the largest NFT marketplaces around in 2022.

As for reasoning behind the decision, Finzer cited so-called crypto winter—an industry term to describe cyclical downturns—and the macroeconomy. It’s hard to blame just Bitcoin’s price doing down, but there you have it. All Ponzi schemes have someone pulling the strings.

After 11 furious months, demand for NFTs is practically nil all of a sudden.

Opps! How did that happen? Crypto Winter alert.

Thanks for reading!

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Hey Guys,

How is the OpenSea treating you bro?

How quickly the magic sours in crypto is super worrisome, especially as Bitcoin goes down, it’s as if the magic is on pause.

For NFT platforms, I don’t know quite what to make of it?

According to the likes of Bloomberg and TechCrunch, the market for nonfungible tokens -- such as artwork of bored apes and pudgy penguins -- has been spiraling downward after sales sank sharply and the prices of popular NFTs plummeted over the last few weeks. 

NFTs are a sector that’s just gambling and playing with billions of dollars. Even as mainstream brands and BigTech tries to embed NFTs into their platforms. Some VCs like a16z have bet big on NFT platforms themselves. But who is going to bail them out if it doesn’t come to pass?

How bad is it going to get in the Crypto winter? The crypto niche is on course to record its first month with under $1 billion in sales since June 2021, according to data tracker DappRadar. On the world’s biggest NFT marketplace, OpenSea, sales volume has fallen 75% since May, and looks set to scrape the lowest levels since July 2021, Dune data shows. 

OpenSea’s former valuation just makes no sense and all its peers are breaking down. Between November and February, video game giants, from Ubisoft and Sega to Square Enix, all signaled their intention to cash in on the NFT craze. But all NFT plans are on halt now that the doom has begun.

The NFT auction marketplace OpenSea had a blockbuster 2021 and as a result is seeing its private valuation grow more quickly than almost any other startup. Just six months later and it almost feels like a sunken ship.

NFT prices are plummeting even as demand for cryptocurrencies dry up. The shiny trend now looks pretty pathetic. The prices of top-selling NFTs have also slipped. Some Otherdeed NFTs, which were in such high demand at their May launch that they clogged up the Ethereum network, have seen their price floors fall by about 30% in the last 30 days, while the price floor on Bored Ape Yacht Club’s (BAYC’s) blue-chip NFT collection has also fallen nearly 33% in the same time, data from NFT Price Floor shows. 

This is the calm before the storm with Bitcoin maintaining a 20k level.

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