Zero Fees NFT Trading, How Will It Impact Crypto? 💱

GM, folks 👋🏻 - Happy Monday.

Crypto markets stayed relatively strong over the weekend. BTC and ETH remained above $24,700 and $1,700 respectively. They look like they want to squeeze up, but we might not have our results until tomorrow as the US is on holiday. Surprise surprise, the crypto markets are heavily correlated with macro and especially US markets.

Let's get into today's issue 👇

In Today's Email:

• What Matters: OpenSea reduces fees to zero ✂️

• Products: AlgoveraAI, a decentralized AI assistant 🤖

• Charts: 10.5M Reddit NFT holders, Bitcoin Ordinals NFT growth 📈

WHAT MATTERS

OpenSea Reduces Fees to Zero

State of play: OpenSea, one of the world's largest NFT marketplaces, has reduced its trading fees to zero and removed royalties on collections without contract-level enforcements.

• NFT marketplace Blur, which has zero trading fees, has been taking significant market share away from OpenSea in the past few months.

• With this change, the large majority of NFT marketplaces are now not enforcing royalties.

• NFT might need legal avenues to enforce royalties, in order to maintain one of its strongest features for creators, as royalties are not fully enforceable on-chain.

What’s next: NFT market dynamics will change significantly. New marketplaces with unique primitives like SudoSwap are turning NFT more "fungible", with a focus on trading experience, instead of collectors. This might make NFT less attractive for artists as it loses its number one benefit, royalty fees.

Our take: We've always said that building in crypto is a double-edged sword. You have no edge via Intellectual Property as everything is open-source. This often results in business models becoming a race to the bottom 📉

For builders: Make sure that your product has a proper moat and can't be simply undercut by others who fork your code, or make a slightly better product but with significantly lower fees. First and foremost, understand why people will pay for what you build.

For investors: When creating your investment theses, it's beneficial to think from a commercial mindset. We're no longer in a zero-interest rate environment. Your portfolio companies need to think like indie hackers. They need to be able to generate revenue from the get-go, by being obsessed with their business models and KPIs metrics 📊

Also, we’re launching a referral program! Receive our list of “Must Follow Up-and-Coming Crypto Twitter Accounts” 👩🏻‍💻 — scroll down to the end to check it out 👇

PRODUCTS OF THE WEEK

AlgoveraAI: A Decentralized AI Assistant

What is AlgoveraAI: AlgoveraAI is a decentralized AI assistant for organizations. By connecting personal data for web2 and web3 sources, Algovera’s AI model will create personalized AI assistants.

• These assistants can help with specific tasks such as community management, governance assistant, personal note management, and many more.

• The project is built with multiple existing technologies. This includes Ocean Protocol, IPFS, and OpenAI. It’s also supported by Kernel and Gitcoin.

• Grants program. AlgoveraAI will pay developers that build their AI workflow through AlgoveraAI. There’s a $10,000 equity-free grants per month, distributed evenly to 10 applicants ($1,000 each). AlgoveraAI charges $0.01 per credit or $10 per month for 1,500 credits and perks.

Other cool products:

• Alpha Drops, a tool to discover new crypto alphas.

• Shardible, a low code end to end NFT marketplace.

• OpenCover, a DeFi data aggregator.

• Chainstack, a platform connecting developers and web3 infrastructure.

• SCATR by Stabel, a smart contract security tool.

• CharmVerse, a platform for token communities to group, work, and build relationships.

• Web3Summary, a platform summarizing web3 contents using AI.

• ChainJet, a no-code tool to build on-chain and off-chain task automations.

• Pizza Wallet, an easy-to-use multichain crypto wallet

• Degenda, a web3 events and announcement tracking tool.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

CHARTS OF THE WEEK

Reddit-Polygon Avatar Growth: 10.5 Million Holders

Reddit avatar holders reached 10.5 million. The Super Bowl might have ended but Reddit and Polygon PoS, the blockchain its collectible avatars were built on, have broken new records. In the past few weeks leading up to the Super Bowl, more than 1.8 million Super Bowl avatars were minted 🤯

Our take: Polygon is defacto king in business development. The chain has been able to acquire many corporate partnerships, pushing crypto towards the masses. Polygon is able to focus on products, without having to remind the end users that what they’re interacting with is blockchain-crypto technology. This is key to adoption 📈

To watch: Great marketing and business development need to go together with technology and revenue. Polygon PoS hit $1.5M in revenue, which was an all-time high, last week. However, we need to see how the network performs post the partnership hype, and how it will compete with other up-and-coming Layer 1, with equally significant funding such as Sui and Aptos 💰

Bitcoin NFTs Growth

Bitcoin NFTs (Ordinals) growth continues. The first inscription happened on Dec 17th, but the explosive growth started on Jan 21st. In total, there are now ~140,000 Ordinals.

State of Play: Ordinals is the first successful implementation of NFTs on the Bitcoin blockchain. It inscribes data in the “witness section” of a Bitcoin transaction, which allows blocks with Ordinals to be significantly larger than usual. Post Ordinals, the average Bitcoin block size has grown from ~1.5 MB to 2.5-3 MB.

Our take: Bitcoin eventually needs to find other ways to receive fees. Although this isn’t an immediate concern, Bitcoiners have been discussing the future of the asset if halvings continue to decrease miners' revenue 🤔

• Some projects like Stacks aim to build smart contracts on top of the Bitcoin blockchain. The success of Ordinals is marked by many Bitcoiners as a milestone moment, signaling that Bitcoin might be able to support scalable decentralized applications.

QUICK BITES

• Nishad Singh pleads guilty, he’s the 3rd FTX former Exec to do so.

• OpenSea reduces fees to zero.

• Galois Capital shuts down as funds got stuck in FTX.

• Blockchain.com clarifies subsidiaries situation.

• Tencent slash its metaverse hardware plans.

• Jump revealed to be the unnamed ‘US trading firm’ in SEC vs Do Kwon.

• SEC warns celebrities over crypto promotion.

• OKX releases February Proof-of-Reserves report.

• Custodia Bank renews push for Fed ‘Master Account’.

• Filecoin soars due to interest in Filecoin Virtual Machine launch.

• Helium will fully migrate to Solana by March 27.

MEME & NOTEWORTHY READS

• Jon Charbonneau’s article on why Ethereum is not ultrasound money.

• @xavana0x’s thread on Ethereum shanghai upgrade and LSD tokens.

• Luca Prosperi’s article on Circle’s situation.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.