Twitter founder Jack Dorsey said publicly: “Web3 VCs can wash and sleep.”
“Some investors have freedom of wealth when they speculate in coins.” Li Qiong told Financing China.
In the currency circle, there are a large number of investor believers. They have already made a fortune first by spotting opportunities early. In the industry, some investors put their entire net worth in Bitcoin, “almost as much as they earn.” Now, projects headed by the currency circle project StepN have also begun to “harvest” investors.
StenN, which uses “running and earning” as its gameplay, has become one of the most popular cryptocurrency projects in the first half of the year. In the industry, investors such as Zhu Xiaohu have also begun to play this game.
However, some investors do not agree with this model. A few days ago, Wu Xiaopeng of China Guoxin bluntly said, “At the farewell banquet of the US dollar fund, the concept of blockchain, Metaverse, and web3.0 was self-directed and performed. “The words just fell, as of the end of May, STEPN tokens fell by more than 70% in a single month.
When a group of investors have not yet figured out what Web3.0 is, Web5.0 was born recently. Twitter founder Jack Dorsey said publicly: “Web3 VCs can wash and sleep.”
The world’s top capital
All eyes on StepN
It took only half a year for StepN to become a unicorn with a valuation exceeding $1 billion.
The biggest selling point of this game is making money through sports. Users only need to buy shoes, complete the exercise outdoors, and get rewards. In the whole game process, the existence of shoes is extremely important. Due to different attributes such as comfort and durability, shoes with stronger attributes have higher sports income. In addition, shoes will also be worn out, which will cost tokens and reduce income. The number, style, and uniqueness of shoes can affect the profitability of users. The data shows that the return cycle of StepN players is stable, and the comprehensive ROI cycle is about 35 days.
The model of making money from sports has enabled StepN to gain 3 million monthly active users in a short period of time, making it the number one game on the Solana public chain.
Long before StepN became popular in the public chain, a game called Axie Infinity was popular in Philippine. The rules of this game are also very simple: players need to first buy three pets named “Axie” with virtual currency, and use the They reproduce and get new Axies. However, players do not buy pets from the official AxieInfinity, but directly from players.
Due to the nature of NFT (Non-Fungible Token) assets, each Axie is unique and entirely owned by the player. Therefore, Axie can be sold directly in exchange for virtual currency held by other players, which can be exchanged for real fiat currency.
This is the core process of the so-called “Play to Earn”.
The two founders of StepN once said bluntly that they decided to start a business in this direction by borrowing the model of this game. According to media reports, both of StepN’s entrepreneurs are from China. One of them, Jerry, was a serial entrepreneur who was running his own game company at the time. His neighbor car owner “Yawn Rong” grew up in Beijing and went to Australia to study in 2002. Since then, he has worked in various industries such as hotels, geological exploration, building materials, and catering. He officially entered the currency during the “ICO” boom in 2017. Circle, sold a house for currency speculation, and started the StepN project in August 2021.
StepN has become a well-deserved unicorn within half a year of its launch. According to StepN’s official website, StepN’s monthly income exceeds 700 million yuan, and its daily net profit from transaction fees reaches 33.42 million yuan.
The strong ability to attract money has also attracted the attention of the world’s top capital for StepN.
Including Sequoia Capital, Alameda Research, Folius Ventures, Solana Ventures, 6th Man Ventures, S fermion, etc. have become early investors of StepN.
In January this year, StepN completed financing led by Sequoia Capital India and Folius Ventures, and in April received strategic investment from Binance. According to media reports, there are currently more than 30 institutions that want to enter the game but have been rejected by the StepN team, only accepting 50 million investment from Zhao Changpeng.
After removing Chinese users
Zhu Xiaohu’s shoes want to pay back at least 9 months
The popularity of StepN has made investors from far away in China also begin to test the waters. Zhu Xiaohu posted on his Moments, “I earned 30 dollars on the first day of running, but the energy will be gone in a while, and it seems that the money from shoes will take 3 months to return. Ben. StepN’s economic model is well designed. If it has a chance to run through, it may not be Pond’s. It is worth experiencing and learning.” But he said, “Unfortunately, such a model has regulatory risks in China.”
On the day it announced the withdrawal of mainland Chinese users, StepN once fell by nearly 40%.
Regarding the project assets of users in mainland China, the STEPN project party stated that “if you expect to log in and use your account in the GPS or IP location in the region for a long time, we encourage you to make your own decision to deal with the assets in the app.”
Some market views believe that this move is due to data compliance issues. Currently, StepN’s user data includes personal information obtained by KYC; user GPS data, and user real-time geographic location. The Cybersecurity Law, the Data Security Law and the Personal Information Protection Law, as the three most effective laws in the field of data compliance, have established the basic framework of my country’s data security laws. Market entities cannot do whatever they want to collect, process, and flow data. Cross-border data also involves national security issues, and it is also restricted and regulated by laws and regulations.
Affected by this, the price of tokens has also fallen all the way recently. In May, the price of GST fell from $42 to $3. In June, the price of GST continued to fall, and the price was as low as $0.99. On June 2, 2022, the SOL price remained unchanged at around $40, the S-chain GST price dropped 17.5% on the day, and the S-GST price was $0.99. GMT is down 15.25% at $1.
GST and GMT prices fluctuate wildly, making the time for the return of shoes to lengthen. Taking the $2,700 shoes purchased by Zhu Xiaohu as an example, when the GST price is at the highest level of $42, earning 10 GST by running for a limited time every day is equivalent to $420, and it only takes one week of running to get back the money. However, the current GST price has dropped sharply. The 10GST earned by running every day is equivalent to 10 US dollars, and it takes 9 months of running to get back to this. If the coin price continues to fall, the return on capital will become a distant prospect.
Play to earn fire
But it may not work in China
Although US dollar funds are all lined up for Web3.0, some investors are not optimistic about this economic model and even associate it with the Ponzi scheme.
A typical Ponzi scheme is P2P—promising high returns, and then taking the money of the latecomers to reward the early entrants, and it will collapse quickly when there are not enough latecomers to join. The core is: unsustainability. So is there a similar correlation for StepN?
The first-class warehouse research report pointed out: From the perspective of the long-term development of the project, as a sports APP, it needs real users rather than speculators, but the money-making effect will inevitably attract gold studios or some speculative users to cheat through various kinds of Therefore, ensuring that the anti-cheating mechanism can be effective for a long time is a key factor for the development of the project. It depends on the development capabilities of the team. Judging from the feedback from the current online users, the anti-cheating mechanism still has room for improvement.
The real Ponzi scheme is simply a game of drumming and passing flowers. There must be latecomers to supply the first entrants, which means that StepN needs to constantly ensure the number and activity of users. What’s more worth mentioning is, as a game, can it always attract the attention and interest of users?
This Play-to-earn (P2E translated as “play while earning”) model also has followers in the Chinese market. In October 2019, the “Qubu” company and the “Qubu” project were investigated by the Economic Development Zone of Changsha Industry and Commerce Bureau for suspected online pyramid schemes, illegal fundraising, financial fraud and other illegal acts, and then stopped operations.
According to the game rules of Funbu: By walking for candy, at first, users only need to stick to it for 30 days and walk 3000 steps a day to get 11 candies. If you want to increase candy output, you need to rely on existing candy buying tasks or “pulling people” to increase activity. “Candy” can be used to exchange for goods, and it can also be exchanged for so-called GHT and then converted into cash. It can be said that Qubu Company has given the attribute of candy equivalent, so it can be defined as a kind of virtual currency.
Before Funbu, there is also Run. The content of the game is to collect “flower beans” by walking. After the “flower beans” reaches a certain amount, you can upgrade to higher tasks.
However, these projects have come to the edge of the high-voltage line one after another. According to media reports, players on the Yipao platform have lost tens of thousands of dollars, and even some of them have invested more than 100,000 yuan.
According to netizens, “When I first joined, I walked 4,000 steps a day, and the platform sent 11 flower beans a month.” Xiao Zhang said that another way is to buy it on the trading platform in the APP. When you get “flower beans”, you can exchange things in the mall on the platform, you can also upgrade, and then produce more “flower beans”, and then sell them on the platform. According to Xiao Zhang, before on Yirun, the price of “flower beans” was US$0.5 to US$1.5 each.
“A penny is a dime, and no one wants it at all.” Xiao Zhang mentioned that when the Spring Festival came, Yiran stopped the APP, and users couldn’t open it. Occasionally, an announcement would be issued. “I will make an announcement directly now, saying that it will be liquidated and cancelled.”
When Sequoia and a16z set up eb3.0 funds
Web5.0 is here again?
Last year, VC deals in the global crypto space reached $25 billion, five times the level in 2020.
A16z, one of the most famous VC firms in Silicon Valley, is also the largest web3 backer in Silicon Valley. It has invested in more than 60 startups, and at least 12 are valued at more than $1 billion.
After raising its first crypto fund in 2018, a16z has launched four crypto funds. At the end of May, a16z launched its fourth crypto fund, Crypto Fund 4, with a scale of $4.5 billion, of which about $1.5 billion will be used for seed investment and $3 billion will be used for venture capital, bringing the total amount of crypto funds it has raised to more than 76%. One hundred million U.S. dollars. According to reports, a16z will use the funds to invest in promising Web3 startups at each funding stage, currently investing in Web3 gaming, DeFi, decentralized social media, self-sovereign identity, Layer1 and Layer2 infrastructure, bridges, DAOs, and governance , NFT community, privacy, creator economy, renewable finance, new applications of ZK proofs, decentralized content and story creation, and many other areas are excited about developments.
And just recently, a16z has newly established a $600 million game fund “GAMES FUND ONE” focused on the Web3.0/blockchain field, further expanding its investment in the Web3.0 field.
Sequoia also heavily stocked web3.0.
Previously, according to media statistics, from January 1, 2022 to April 26, 2022, Sequoia Capital invested a total of 17 Web3 companies at a rate of one investment per week. Recently, Sequoia India and Southeast Asia, a subsidiary of Sequoia Capital, announced the launch of two new funds, namely the Sequoia Capital India Early Stage Venture and Growth Fund (approximately US$2 billion) and the Sequoia Capital Southeast Asia Exclusive Fund (approximately US$850 million). . It is reported that in addition to continuing to focus on SaaS and financial technology, the two funds will further expand their investment scope, including Web3 and other fields. Sequoia India and Southeast Asia have previously invested in Web3 startups such as CoinSwitch Kuber and Polygon.
It seems that apart from hard technology and medical care, there is no track to invest in China, and almost the top dollar funds are looking for Web3.0 projects overseas.
There are also many voices against Web3. For example, James Grimmelmann, a professor of law and technology at Cornell University, said: Web3 is a pseudo-concept, a product that has been announced but cannot be delivered.
Twitter founder Jack Dorsey (Jack Dorsey) publicly spoke out, accusing Web3 of being a tool of venture capital firms, pointing the finger at the well-known venture capital firm a16z. Later, Musk also joined, he bluntly said that Web3 seems to be just a marketing term at this stage, and even publicly mocked “Has anyone seen Web3? I didn’t find it.”
But what is interesting is that recently, Jack Dorsey, the founder of Twitter and a loyal Bitcoin believer, led TBD, the Bitcoin division of Block, to propose a new concept of Web5, and publicly stated that “VCs of Web3 can wash and sleep.” . Jack Dorsey also made it clear that there will not be any tokens available for investment on Web5. This means that the status quo of the token economy will end in Web5. The Web5 concept is an extension and innovation built on the Bitcoin network, so once it succeeds, any other cryptocurrency other than Bitcoin will be meaningless.
Some investors once said, “web3 that doesn’t issue currency is a fake web3.” So if web5 really comes, where will these current hot investments go?
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/that-pair-of-shoes-bought-by-zhu-xiaohu-has-dropped-by-70/
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