GameStop seeks to diversify its meme cash

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GameStop seeks to diversify its meme cash

Welcome back to Chain reaction

We looked at web3 last week without web2’s winners. We’re going to be looking at a crossover episode on meme investing.

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Power to the pumpers

Weekly dispatch from TechCrunch’s crypto editor Lucas Matney:

What happens when meme stocks and meme asset classes collide? Investors hope for a tsunami of very real money.

GameStop launched an NFT marketplace this week. Although the reception was not overwhelming, the marketplace reported a sales volume of approximately $2 million which corresponds to $50k in transaction fees revenue. Despite daily volumes trending downward over the following days, it’s still a great launch considering the failures of competing marketplaces like Coinbase NFT.

GameStop hopes to find a revenue-generating segment that reduces its dependence on brick-and mortar sales. Although the timing is not ideal for the company, NFT dollar volumes have dropped as crypto prices have taken a beating. However, this vision has been recognized by the company’s unique investor profile. GameStop stock is now up about 50% from November’s highs, but it is still down 40%.

It will not be easy to take down OpenSea, the market leader. However, it doesn’t seem like GameStop is trying to copy other features and instead is trying to add something to the ecosystem.

GameStop launched their marketplace on Ethereum layer-2. This is an alternative network to the Ethereum mainnet Ethereum that handles the majority of the computation, but relies on it for data storage.

Although this is the vision of modular blockchains, Vitalkik Buterin, Ethereum’s creator, strongly supports it. However it complicates matters because it forces crypto investors and others to support a new network since there are so many layer-2 options. GameStop currently uses a loopup network called Loopring for bundled transactions. However, GameStop can only transact with NFTs that were created on Loopring. This means that you cannot buy popular collections like CryptoPunks and Bored Apes from GameStop’s shopfront.

GameStop is still hesitant about this move. They will likely support other chains in the future, but the current situation leaves them on a different track than the vast majority of NFT dollars currently spent. This seems to indicate that the option is more forward-looking than one might think. If this were a cash grab, they could have seized the cash more efficiently by playing straight. Also Read

Pure-hearted intentions can only get you so far in crypto. GameStop’s success here is a vertical climb. But, meme stock buyers have seen more difficult odds over time so their appetite to take on risk continues to be high.

Follow the money

Where the startup money is going in crypto-world:

  1. Crypto-focused API startup change has raised a seed round of $5 million, co-led jointly by Freestyle and NEA.
  2. Farcaster raised $30 Million led by a16z to Merkle Manufactory’s decentralized social network protocol.
  3. Animoca Brands raised over $75 million from investors, including Liberty City Ventures (Kingsway Capital) and Kingsway Capital, to build the open universe in an extension of a financing round it had in January.
  4. Digital asset management platform Secure was successful in raising $100 million from 1kx, with participation by investors such as Tiger Global and Digital Currency Group.
  5. In a seed round, DeFi lending platform MorphoLabs was co-led jointly by Variant Fund and a16z.
  6. DEX aggregation protocol Li.FI was awarded a strategic round of $5.5 million from investors 1kx Capital and Dragonfly Capital.
  7. The Series A of EUR7.5 Million was closed by Bitfinex, Bitstamp, and other crypto derivatives trading platform Thalex.
  8. Tenderize was a liquid staking platform that raised $3 million in seed funding from Eden Block Ventures.
  9. Bravo Royale raised $3 million in seed financing from Solana Ventures and 6th Man Ventures for its NFT-based battle Royale video game.
  10. MetaOasis, a metaverse developer of real estate, received $1.5 million in seed financing from KuCoin Ventures.
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