a16z is monopolizing NFTs

Andreessen Horowitz, also known as “a16z”, is a venture capital firm founded by well-known investor Marc Andreessen and his partners. Since its establishment, the company has successfully supported many technology giants such as IG and GitHub, and is also one of the most influential venture capitalists in Silicon Valley today. Not only that, under the leadership of Marc Andreessen, a16z has become a dominant player in the Web3 space, has launched 3 cryptocurrency funds, raised a total of more than 3 billion US dollars, and also holds shares in several valuable crypto companies, For example, OpenSea, which controls most of the transaction volume in the NFT market, and Yuga Labs, the company behind the “boring ape” BAYC.

However, Marc Andreessen’s ambition has been criticized by many industry insiders. He is considered to be using the Web3 concept to make investment and profit, and to take all the benefits brought by blockchain technology into his own pocket.

Invest in OpenSea and use pseudo-decentralization to control NFT transactions?

For crypto practitioners, the most familiar word may be “decentralization”, however, “decentralization” seems to be becoming an empty slogan, you will find that most of the cryptocurrency market is just wearing “go to A centralized blockchain platform under the guise of “centralization”. I have to admit that today’s NFT field has become more and more centralized, and the driving force behind it is likely to be a16z.

In July 2021, a16z led a $100 million Series B round in OpenSea, a NFT marketplace, and a16z general partner Kathryn Haun joined OpenSea’s board of directors. After a16z joined OpenSea, the platform saw a huge increase in transaction volume and crossed the $20 billion mark in February 2022, but is this “boom” really good? 

Frankly speaking, the performance of NFT centralized “monopoly” is mainly reflected in transactions. According to data from blockchain analysis firm DappRadar, the vast majority of NFT transactions are currently concentrated on these two platforms: OpenSea and LooksRare (another smug, claiming to be a better, community-based NFT trading platform).However, the LooksRare platform is full of a lot of wash trading (in order to get the platform’s token reward, traders buy NFTs they sell), so it is almost certain that the vast majority of real NFT transactions are on OpenSea completed above.

The “blood-sucking effect” of OpenSea in the NFT market is very obvious, and the data will not lie – compared to OpenSea with a current transaction volume of about 23.5 billion, the transaction volume of other NFT markets is very poor. For example, the NFT market Magic Eden transaction volume on the Solana chain has just More than $700 million, Rarible, which was founded almost at the same time as OpenSea, had a transaction volume of less than $300 million, and SuperRare’s transaction volume was just over 200 million.

From the current situation, it is no exaggeration to say that OpenSea has monopolized the NFT trading market, and a16z hidden behind the platform is obviously the biggest winner.

Deploy Yuga Labs in advance to monopolize the NFT content market? 

In early February 2022, it was reported that Yuga Labs, the founding team of “Boring Ape” BAYC, was negotiating financing with a16z, seeking to complete a new round of financing at a valuation of $5 billion. Although the two parties have not officially announced the specific financing results, a month later Yuga Labs announced the acquisition of the “brand, artistic copyright and other intellectual property rights” of the two NFT projects in Larva Labs’ hands, which has aroused great attention in the encryption industry. These are CryptoPunks (an explosive pixelated avatar NFT that brings NFTs into the public eye) and Meebit (a 3D character launched by Larva Labs).

Obviously, a16z seems to be no longer limited to the upstream “monopoly” of NFTs, but has begun to gradually extend its tentacles to the NFT content market.

It is worth mentioning that for most of 2021, CryptoPunks has maintained the record of the most valuable NFT in the world, until the appearance of “Boring Ape” BAYC broke the situation of CryptoPunks thriving. In fact, the acquisition by Yuga Labs is extraordinary. You know, the development team of Larva Labs is only John Watkinson and Matt Hall. They created the experimental CryptoPunks as early as 2017, but at the time, they did not expect this project to be released in 2020 and 2021. Crazy hype. Even after the massive success of the project, the pair chose to stay at the Google Creative Lab in Manhattan, rather than capitalizing on the cryptocurrency boom to build their fortunes and attracting venture capital to further explore NFTs. Instead, John Watkinson and Matt Hall continued to explore the possibilities of technology with their experimental creations, launching Meebits last May. It can be said that they never really thought about CryptoPunks as their own business.

Over time, however, CryptoPunk investors became very disappointed with the Buddhist practices of John Watkinson and Matt Hall. Through the successful business model of the “boring ape” BAYC, where the latecomers come first, investors have discovered that the original NFT collectibles can also be operated like an online social club: hold luxurious concerts for NFT holders, face-to-face gatherings , Create your own community through NFT derivative projects. Not only that, but Bored Ape holders have even signed deals with major labels and agencies.

For “Boring Ape” BAYC, “community” has always been the element they are most concerned about. “Come on, put on your hoodie and come to the party” is also the slogan that the project community often talks about. However, CryptoPunks are quite different. It is considered to be a pure NFT collectible, with no social features and no marketing campaigns to hype itself, which are the main reasons why it is difficult to increase its price. 

Although John Watkinson and Matt Hall are only interested in exploring technology, they are still finding ways to find a way out for their projects. Perhaps the price Yuga Labs offered was so enticing that it was difficult for Larva Labs not to sell them two of its most valuable NFT collectibles. 

In fact, Yuga Labs was a little-known company until the acquisition of CryptoPunks and Meebits. Until last month, the real identities of Yuga Labs’ core founders, who had been using pseudonyms, were not revealed by BuzzFeed News until last month. A discerning person can almost see that without the backing of a16z, it would be difficult for Yuga Labs to complete the acquisition of two leading NFT projects at the same time.

However, Larva Labs is still an independent company and still retains the ownership of another major NFT project “Autoglyphs”. Yuga Labs stated that they will not immediately copy the successful business model of “Boring Ape” BAYC to CryptoPunks, and a press release even teased that “Boring Ape” BAYC will become Yuga Labs’ “historic collection”.

However, not copying the business model does not mean that Yuga Labs really just uses CryptoPunks as its own collection, which actually hides a bigger game. Yuga Labs plans to inject “utility” into the CryptoPunks series. The meaning of the buzzword “utility” in the NFT field seems to be becoming more and more blurred, usually referring to the benefits that investors can obtain in the future; specifically, “utility” means that it can be obtained Access to private Discord channels; priority to mint other NFTs; or priority to develop 3D projects on the Metaverse platform. (It’s worth noting that “utility” can also bring some trouble, as some tokens can make NFTs look more like investment contracts, which can lead to regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC). .

From this point of view, in actual operation, the value of CryptoPunks and Meebits has actually been completely tied to Yuga Labs, which a16z “secretly” supports. Although Larva Labs is no longer a company where only two founders have the final say, it is still reluctant to use hype to increase the value of tokens, which seems to be in line with the “number go up” spirit believed in by the majority of the crypto community. Some inconsistencies. (Of course, this is not to say that the Larva Labs team’s idea is absolutely pure – their confusing operation of “V1 Punks” (the first version of the original contract) has attracted the dissatisfaction of the community.

As the leader of the NFT market, “Boring Ape” BAYC leads the trend of the entire NFT market with every move. And now, whether they like it or not, CryptoPunk and Meebits holders have been closely linked with the fate of “Boring Ape” BAYC holders – and a16z hidden behind these projects is undoubtedly monopolizing the NFT content market Biggest pusher.

Summarize

At the moment, the Web3 field is surging, and practitioners in the encryption industry all over the world are closely watching what Marc Andreessen and his a16z will do next. However, there is no anti-monopoly law in the field of encryption. Does a16z just want to monopolize the encryption market and become the biggest winner, or will it really use Web3 applications to change the world and create a new wave of Internet revolution? Let’s wait and see.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/a16z-is-monopolizing-nfts/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (1)
Donate Buy me a coffee Buy me a coffee
Previous 2022-03-22 09:48
Next 2022-03-22 09:49

Related articles