Will the first large scale crypto consumer app come from Asia?

Will the first large scale crypto consumer app come from Asia?

When investing in blockchain technology, we believe it’s key to map out not only what technical ecosystems and application areas are relevant, but also what is happening across different geographies.

As a generalization, it is fair to say for instance, that builders in the US focus more on deep technical infrastructure. This is rooted in strong academic research and cryptography (e.g. MIT, and Stanford), venture capital focused on frontier tech, and a strong ethos of building open-source protocols and infrastructure. In Asia on the other hand, there is more of a tradition of building high-scale consumer applications with many Web3 founders coming from the well-established Web2 consumer companies like Tencent and Alibaba. They are looking to harness the potential of blockchain to build the new generation of consumer applications, games, and super-apps. It is here where we saw the origin of some of the biggest exchanges like Binance, OKX and Bybit and where we saw some of the initial break-out consumer crypto applications like Axie Infinity and Stepn.

If we add a generational overlay, you can see why Asia is an exciting place for crypto applications. Co-founder of China-based Panga Capital, Greg van den Bergh, put it like this at our conference last year when he stated that “Gen alpha (born after 2010 and the largest generation globally, making up almost a quarter of the world's population, and strongly overrepresented in Asia) doesn’t care about traditional ownership in the way that previous generations did. They don’t want to (or can’t) buy houses or cars, they want to own digital assets”. He went on to predict that “A Web3-native consumer brand will be bigger than Nike or Gucci in the next decade”.

Jason Kam, founder of Asian Folius Ventures, added in his outlook that he sees blockchain entering a golden age in Asia: “While we don’t believe China will loosen its crypto policy anytime soon, we feel that a green light from the West will greatly encourage the engineers with the means to jump into the industry one way or another. While the unwillingness to leave the country or launch tokens persists (for obvious onshore regulatory reasons), we suspect that a handful of entities that enjoy both Trump policy tailwinds and Eastern access will be in a significantly advantaged position to capture the Western valuation/capital formation surplus and the Eastern talent surplus”.

It is quite possible that the first large scale consumer app powered by blockchain technology will come out of Asia. To get more insight and read the panel summary, see The Satellite View here and the full recording of the panel here.

Also this week

• Federal Reserve withdraws crypto rules for banks, ending 'Choke Point' practices
• House prepares second stab at a crypto market structure bill
• Crypto trading surge helps Revolut secure record annual profit of $1.4 billion
• PayPal to offer U.S. users 3.7% yield on PYUSD stablecoin starting this summer
• Vitalik Buterin Proposes Replacing Ethereum’s EVM With RISC-V
• Cantor prepares $3 billion crypto firm with Tether

Relevant financial updates

• Zora*, an NFT marketplace that also provides tools and resources allowing users to create NFT collections, had its TGE and is currently trading at a $242mln FDV
• Initia*, a Layer-1 network on Cosmos that enables developers to launch application-specific Layer-2s, had its TGE and is currently trading at a $875mln FDV
• Theo*, a decentralized trading infrastructure platform that enables users to access cross-chain margin trading and yield strategies, has raised $20mln in a funding round with investments from Mirana Ventures, Amber Group, Hack VC, Manifold Trading, Anthos Capital and 2 others
• Hyperlane*, an interoperability layer that allows blockchain networks to connect without permission, launched its token which is now trading at a $207mln FDV after announcing they had previously raised an undisclosed amount in a Series A round led by Hack VC
• Symbiotic*, a shared security system enabling decentralized networks to build sovereign ecosystems, has raised $29mln in a Series A funding round with investments from Coinbase Ventures and Pantera Capital
• Inco*, a blockchain platform that integrates Fully Homomorphic Encryption to offer a universal confidentiality layer, has raised $5mln in a Strategic funding round with investments from Coinbase Ventures, Orange DAO, 1kx, Crypto Startup School (CSX), South Park Commons and 1 other
• Arch Network*, a Bitcoin-native platform that enhances the Bitcoin blockchain with smart contract programmability and trustless interoperability, has raised $13mln in a Series A funding round at a $200mln post-money valuation, with investments from Pantera Capital and Multicoin Capital.
• StakeStone*, an omni-chain Liquid Staking Token (LST) protocol that enhances native staking yields and liquidity across Layer 2 networks, has raised an undisclosed amount in a funding round with investments from Animoca Brands
• Tally*, a platform that provides tools and infrastructure for creating and managing onchain DAOs, has raised $8mln in a Series A funding round with investments from Blockchain Capital, AppWorks Ventures and BitGo.
• Sol Strategies*, a publicly traded company offering exposure to Solana staking, has secured up to $500mln convertible note facility to expand SOL holdings with ATW Partners
• Bitdeer, a blockchain and high-performance computing platform providing cloud-based GPU instances and data center management services, has raised $179mln in a Post-IPO Debt funding round with investments from Matrixport Ventures

*Underlying TBV portfolio position | Prices as per 25/04

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