Morgan Chittum

<div id="highlights-block_62462ac77fea8" class="highlights">
 <ul>
 <li>Participants include Andreesen Horowitz, Solana Labs, Animoca and Coinbase</li>
 <li>Fractal currently has roughly 17 full-time employees</li>
 </ul>
 
</div>



Fractal, a gaming NFT marketplace founded by Twitch co-founder <a href="https://cms.blockworks.co/podcast-why-gaming-nfts-will-be-bigger-than-twitch-justin-kan/" target="_blank" rel="noreferrer noopener">Justin Kan</a>, announced a $35 million seed round on Friday. 



The fresh raise, Kan told Blockworks, will go toward staff expansion, specifically building out a partnerships team and making hires that are “engineering and product heavy.”



Kan has not disclosed the startup’s valuation yet. Fractal has roughly 17 full-time employees but does not have an exact headcount plan by year-end.



“Measuring your company by the size of headcount is like measuring your plane by its weight,” Kan said.



<blockquote class="wp-block-quote">“The main priorities are to build great products for the game partners, and then help them with launching their games. We see it as, if we make our partners successful, we’ll be successful.”</blockquote>



Fractal is a Solana-based marketplace for gamers to buy and sell in-game assets or <a href="https://cms.blockworks.co/?s=NFTs" target="_blank" rel="noreferrer noopener">NFTs</a> (non-fungible tokens).&nbsp;



“The thing that’s going to work in NFTs, just off the bat, I thought was gaming because there&#8217;s already a culture of buying digital assets and digital goods, right?” Kan said. “There’s people buying skins and in-game items, worth tens of billions of dollars each year. Putting it on the blockchain as the next evolution was very obvious to me.”



The startup, according to Kan, “helps gaming companies drop these assets and create a market around these assets with their players.”



Last December, a <a href="https://twitter.com/justinkan/status/1473363510935449600?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1473363510935449600%7Ctwgr%5E%7Ctwcon%5Es1_c10&amp;ref_url=https%3A%2F%2Fwww.coindesk.com%2Fbusiness%2F2021%2F12%2F30%2Fjustin-kans-gaming-nft-platform-goes-live-rebounding-from-150k-discord-exploit%2F" target="_blank" rel="noreferrer noopener">scammer briefly hacked</a> Fractal’s Discord server, stealing $150,000 worth of Solana from users. Kan reimbursed those affected by the incident with his own funds.



Other participants in the financing round include Andreesen Horowitz, Solana Labs, Animoca, Coinbase, Play Ventures, Crossover, Shrug Capital, Position Ventures, Zynga founder <a href="https://www.forbes.com/profile/mark-pincus/?sh=49a819bb7c8e" target="_blank" rel="noreferrer noopener">Mark Pincus</a>, TerraForm chief executive Do Kwon and podcaster Tim Ferriss.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.

Justin Kan’s Gaming NFT Marketplace Fractal Secures $35M Seed Funding

<div id="highlights-block_622a7d366e37d" class="highlights">
 <ul>
 <li>MetaMask, Trust Wallet and Math Wallet are the most commonly used wallets</li>
 <li>16% of respondents said their accounts on NFT platforms had been previously hacked</li>
 </ul>
 
</div>



From multi-million dollar rugpulls to user exploits on marketplaces, investing in NFTs can be fraught with risk.&nbsp;



New York gallery owner Todd Kramer, for example, had <a href="https://www.vice.com/en/article/y3v3ny/all-my-apes-gone-nft-theft-victims-beg-for-centralized-saviors" target="_blank" rel="noreferrer noopener">$2.2 million</a> of NFTs (non-fungible tokens) <a href="https://www.artnews.com/art-news/news/todd-kramer-nft-theft-1234614874/" target="_blank" rel="noreferrer noopener">stolen</a> in January through a phishing scam.



Half of NFT owners have lost access to at least one of their digital collectibles before, according to a March 8 <a href="https://privacyhq.com/news/nft-and-wallet-security/" target="_blank" rel="noreferrer noopener">report by research firm PrivacyHQ</a>.



The study, which polled over one thousand collectors, showed two out of three NFT investors “panic sold” one of their blockchain-based collectibles last year.&nbsp;



Justin Kan, co-founder of NFT gaming marketplace Fractal and streaming platform Twitch, told Blockworks users should follow precautions to safeguard their assets.



“There [are] a high level of rugpulls and scams [in NFTs],” Kan said. “[But] hopefully as the space matures, companies will be able to provide protocols that will be able to [offer] this kind of security for their users.”&nbsp;



“You should have a burner wallet when you&#8217;re minting, have a cold wallet for storage of your NFTs, and you should be aware of phishing attacks.”



Per the survey, 16% of respondents said their NFT platforms had been hacked, but roughly 90% said they were able to recoup losses in some capacity. 



MetaMask, Trust Wallet and MathWallet are the most popular NFT wallets — with MetaMask believed to be the safest.



“Don&#8217;t [click on] links,” Kan said. “We [recommend] typing out Fractal.is in your browser. Now, people in Web2 are going to [say], ‘That&#8217;s insane that you have to do all these protections.’ But I think it&#8217;s the cost of having true ownership of [something.] You kind of have to rebuild the space from the ground up.”



Security concerns, however, didn’t seem to slow the exponential growth of the industry last year. NFT sales reached $17.7 billion in 2021, up from $82.5 million in 2020, according to a <a href="https://nonfungible.com/reports/2021/yearly-nft-market-report-pro" target="_blank" rel="noreferrer noopener">Thursday report</a> from NonFungible.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.