Ornella Hernandez

<div id="highlights-block_629f8b1ccca63" class="highlights">
 <ul>
 <li>$2.5 billion worth of investments poured into blockchain games during the first quarter of 2022</li>
 <li>Current market conditions will not kill Web3, Animoca Brands executive says</li>
 </ul>
 
</div>



Blockchain-based gaming is proving to be surprisingly resistant to the broad-based crypto market turndown of late.&nbsp;



The number of daily unique active wallets of game decentralized apps (dapps) and those of game transactions have been at all-time highs since April, according to digital assets data provider DappRadar. And venture capitalists have taken note of — and written checks for — the strong and engaged metaverse game player base, even as activity has trailed off in decentralized finance (DeFi) and NFTs this year. 



When it comes to gaming investment, DappRadar and the Blockchain Game Alliance recently <a href="https://dappradar.com/blog/dappradar-x-bga-games-report-q1-2022" target="_blank" rel="noreferrer noopener">reported</a> $2.5 billion poured into blockchain games in the first quarter of 2022 alone. In 2021, venture capitalists invested a total of $4 billion in blockchain games. The firms predict investments throughout the rest of the year will increase about 150% from 2021. 



Case in point: Gaming investment giant Animoca Brands <a href="https://www.animocabrands.com/animoca-brands-investor-update-for-the-period-ended-on-30-april-2022" target="_blank" rel="noreferrer noopener">recorded</a> earnings that value its portfolio at $1.5 billion across over 340 investments.



The company also reported income from token and NFT (non-fungible token) sales, contributing to $573 million in net gains over the first quarter. 



Subsidiaries, such as The Sandbox metaverse and partnerships with Yuga Labs and ApeCoin DAO, are just some of the company’s most profitable ventures, especially when it comes to virtual land sales.&nbsp;



Animoca invested $450 million in Bored Ape Yacht Club’s Otherside metaverse game, and the group’s Otherdeed NFT land sale set the record for the largest NFT mint ever conducted.



In a <a href="https://www.animocabrands.com/glimpsing-the-future-through-the-lens-of-days-past" target="_blank" rel="noreferrer noopener">message</a> to shareholders, Animoca co-founder and executive chair Yat Siu wrote that “current market conditions will not kill Web3, the open metaverse, NFTs or cryptocurrencies.”



In his “sanguine view,” he described the leaders of the shift to Web3 as the companies and projects that are building the open metaverse and encouraged readers to “keep their eyes on the strong growth of the Web3 market.”



Venture capital firm Andreesen Horowitz, meanwhile, recently <a href="https://a16z.com/2022/05/18/games-fund-one-building-the-future-of-games/" target="_blank" rel="noreferrer noopener">launched</a> the $600 million Games Fund One, dedicated to investing in game studios and transforming the Web3 gaming ecosystem.



A16z also <a href="https://cms.blockworks.co/andreessen-horowitz-launches-largest-crypto-fund-ever/" target="_blank" rel="noreferrer noopener">raised</a> the largest-ever crypto venture fund at $4.5 billion, which brought the firm’s total crypto and Web3 holdings to $7.6 billion.



While the traditional gaming industry is currently worth $300 billion, the crypto gaming space is on track to bring the economic potential of the metaverse market to <a href="https://cms.blockworks.co/morgan-stanley-sees-8-trillion-metaverse-market-eventually/" target="_blank" rel="noreferrer noopener">at least $8 trillion</a>.



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Crypto Markets Have Tanked, but Not Blockchain-based Gaming

Morgan Chittum

<div id="highlights-block_62320be691e2d" class="highlights">
 <ul>
 <li>”The metaverse is how people will experience Web3 [and] the next generation of the Internet,” HSBC’s Suresh Balaji said</li>
 <li>Rival megabank JPMorgan unveiled a virtual lounge last month in blockchain-based world Decentraland</li>
 </ul>
 
</div>



Financial services provider HSBC said Wednesday it will acquire a piece of virtual real estate in The Sandbox metaverse.



The purchase is a part of a larger partnership with The Sandbox to engage with sports, esports and gaming fans, according to the bank’s <a href="https://sandboxgame.medium.com/hsbc-to-become-the-first-global-financial-services-provider-to-enter-the-sandbox-c066e4f48163" target="_blank" rel="noreferrer noopener">announcement</a>.



“The metaverse is how people will experience Web3, the next generation of the Internet — using immersive technologies like augmented reality, virtual reality and extended reality,” Suresh Balaji, chief marketing officer at HSBC Asia-Pacific, said in a statement. Further details on the plot were not disclosed.



HSBC joins a laundry list of big-name brands and companies that have partnered with the blockchain gaming firm, including Warner Music Group, Gucci and Adidas.&nbsp;



“We&#8217;re pleased to see large, trusted institutions such as HSBC join The Sandbox open metaverse and embrace the culture of Web3, connecting with users through entertainment, gaming and user-generated content,” Sebastien Borget, chief operating officer and co-founder of The Sandbox, said in a statement. 



The partnership, The Sandbox US CEO Mathieu Nouzareth said, signals the “rapid maturation” of the metaverse, and other financial institutions will likely follow suit.



“As metaverse adoption expands further into the mainstream, we’re only going to see a broader spectrum of brands investing in the metaverse to create digital-first experiences that engage both new and existing customers,” Nouzareth told Blockworks.



Last month, megabank JPMorgan <a href="https://cms.blockworks.co/jpmorgan-enters-the-metaverse-with-virtual-decentraland-lounge/" target="_blank" rel="noreferrer noopener">unveiled</a> a virtual lounge in blockchain-based world Decentraland.&nbsp;



“When you think about the economics of the metaverse — or metanomics — there are opportunities in almost every market area.” the bank wrote in a note. “We are not here to suggest the metaverse, as we know it today, will take over all human interactions, but rather, to explore the many exciting opportunities it presents for consumers and brands alike.”



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HSBC Buys Virtual Real Estate in Sandbox Metaverse

Jacquelyn Melinek

<div id="highlights-block_620a848d47e60" class="highlights">
 <ul>
 <li>A Guild Accelerator Program will provide up to $500,000 for each early-stage startup selected</li>
 <li>Crypto-focused gaming grew exponentially over the last 12 months, and market players expect it to continue this year and further crypto adoption</li>
 </ul>
 
</div>



The Sandbox’s parent company, Animoca Brands, has partnered with venture accelerator Brinc to launch its Guild Accelerator Program and expand the global play-to-earn ecosystem.



The two companies will provide a total investment of up to $30 million over the next two years in increments of $500,000 or less for each early-stage group accepted into its <a href="https://www.brinc.io/guild/" target="_blank" rel="noreferrer noopener">program</a>.



The program aims to help millions of people globally generate income by participating in the play-to-earn (P2E) gaming world through crypto gaming.



Priority will go to applicants committed to sustainability, including projects that “support and give back to player/scholar communities, place emphasis on energy-efficient proof-of-stake protocols and side chains, and have lower overall physical footprints,” according to the announcement.



Brinc closed a <a href="https://www.prnewswire.com/news-releases/brinc-closes-us130m-funding-led-by-animoca-brands-to-launch-web-3-0-focused-accelerators-and-fuel-global-expansion-301444835.html" target="_blank" rel="noreferrer noopener">$130 million funding raise</a> led by Animoca Brands two months ago, aiming to focus on expanding its accelerator programs.



“Web3-enabled guilds provide an on-ramp for the future of earning in a way that Web2 and traditional industries never could,” Manav Gupta, founder and CEO of Brinc, said in the release. “Guilds can help transform education, skill development, agriculture, R&amp;D and almost any industry where access to tools and assets historically prevented anyone with time to innovate, up-skill and thus earn a living.”



Animoca incubates and backs NFT, blockchain gaming and metaverse projects as well as supports development on blockchains including Flow and Polygon. It has previously backed over 150 NFT- and metaverse-related companies, including OpenSea, Dapper Labs, Axie Infinity and Yield Guild Games. Last month, the firm raised <a href="https://cms.blockworks.co/the-sandbox-parent-animoca-brands-raises-359m-to-build-out-open-metaverse/" target="_blank" rel="noreferrer noopener">$358 million</a> to build out the open metaverse.



“As the world enters a new era of work and play, the play-to-earn guilds space has enormous potential for growth,” Yat Siu, the co-founder and chairman of Animoca Brands, said in a statement.&nbsp;



<blockquote class="wp-block-quote">“The management of digital assets in games and in the open metaverse represents a significant source of income for hundreds of millions of people,” Siu commented.</blockquote>



In general, crypto-focused gaming grew exponentially over the last 12 months, and market players expect it to continue this year and <a href="https://cms.blockworks.co/2022-prediction-gaming-will-lead-to-further-crypto-adoption/" target="_blank" rel="noreferrer noopener">further crypto adoption</a>.



The popular P2E game Axie Infinity initially anticipated an “aggressive target” of 250,000 users by the end of the year but finished 2021 over 1,000% higher at 2.9 million community members, Blockworks previously <a href="https://cms.blockworks.co/axie-infinity-program-lead-2022-will-be-all-about-gameplay/" target="_blank" rel="noreferrer noopener">reported</a>. By the end of 2021, the game’s total revenue reached about $1.3 billion, compared to $18.8 million six months earlier.



Separately, capital flowed into the P2E gaming space over the past few months with initiatives like Mechanism Capital’s <a href="https://cms.blockworks.co/mechanism-capital-launches-100m-fund-focused-on-p2e-gaming/" target="_blank" rel="noreferrer noopener">$100 million fund</a> and a joint fund, also <a href="https://cms.blockworks.co/?s=gaming#:~:text=GameStop%2C%20Immutable%20to%20Launch%20%24100M%20Joint%20Fund%20for%20Gaming%20NFTs" target="_blank" rel="noreferrer noopener">$100 million</a>, announced by GameStop and Immutable for gaming NFTs (non-fungible tokens).



Animoca Brands and Brinc were not available for comment Monday.



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Animoca Brands and Brinc To Invest up to $30M in Play-to-Earn Ecosystem

Ben Strack

<div id="highlights-block_62054c5fec1ea" class="highlights">
 <ul>
 <li>Firm expects further growth of Decentraland and the broader metaverse sector as it predicts that users will continue to distrust Facebook</li>
 <li>21Shares CEO Hany Rashwan previously said the firm looks to launch ETPs, supporting what it considers to be the top 50 cryptocurrencies by the end of 2022</li>
 </ul>
 
</div>



21Shares continues its product launching spree by bringing to market the first exchange-traded products (ETPs) focused on Decentraland (MANA) and FTX Token (FTT).



The products were set to begin trading on Thursday in Switzerland.



“Adding the world&#8217;s first NFT &amp; single Metaverse ETP and one of the world&#8217;s leading crypto exchanges to our product suite is a key milestone for us in making crypto accessible for everyone,” 21Shares CEO Hany Rashwan said in a statement.



Decentraland is the first decentralized and user-owned virtual reality platform that allows users to create, experience and monetize content and applications.



MANA’s market capitalization is about $5.1 billion, according to CoinGecko. Its price of $3.35 was up 31% from seven days ago, as of noon ET on Thursday.



By launching a product with exposure to MANA, the firm is offering its clients access to the latest Web3 use case, a 21Shares spokesperson told Blockworks.



21Shares noted in its <a href="https://fs.hubspotusercontent00.net/hubfs/5994002/State-of-Crypto-issue5-by21Shares.pdf?hsCtaTracking=f488c39b-ed17-4ba1-9f9b-9262eee45a67%7C1dae7f2e-2373-46bf-8b38-5956c8da79d2" target="_blank" rel="noreferrer noopener">State of Crypto report</a> published this week that the global augmented reality, virtual reality and mixed reality market is expected to reach roughly $300 billion by 2024, according to Statista.



The report adds that Ethereum-based virtual games Sandbox (SAND) and Decentraland rose by about 156,000% and 39,000% respectively in 2021.



“We anticipate that Decentraland and the metaverse sector is going to keep up with this adoption rate and awareness as users continue to distrust Facebook.”



Facebook parent Meta <a href="https://cms.blockworks.co/zuckerberg-still-confident-in-metaverse-plans-despite-stocks-20-slide/" target="_blank" rel="noreferrer noopener">reported a loss of more than $10 billion</a> from the company’s first forays into the metaverse during its latest earnings call.



Meanwhile, the 21Shares FTX Token ETP will invest in the token of crypto derivatives exchange FTX, which allows users to stake FTT, get trading fee discounts and participate in the community government voting.



“FTX Token is an attractive investment case, as it offers exposure to the third-largest crypto exchange in the world with over $2.5 billion in daily trading volume,” a 21Shares representative explained.



21Shares manages roughly $2 billion across 28 crypto ETPs and more than 100 listings.



The company <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">most recently launched</a> ETPs that have Aave (AAVE), Chainlink (LINK) and Uniswap (UNI) as underlying assets, also in Switzerland. Rashwan told Blockworks at the time that the firm aims to support what it considers to be the top 50 cryptocurrencies by the end of the year.



The firm evaluates new listings based on its trading metrics, team, investors, community and social reach, among other factors.



21Shares is also looking to build its presence in the US.



The firm hired Kayle Watson as its head of US sales in November, according to Watson’s LinkedIn page. Prior to joining 21Shares, he had spent about eight years at BlackRock, the world’s largest asset manager, serving as the director of its iShares institutional asset manager and hedge fund sales group.



“21Shares is looking to provide investors with the most innovative, physically-backed crypto ETPs and index solutions,” a spokesperson said. “Just as we have in Europe, where we’ve assembled the world’s largest product suite.”



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