Bessie Liu

<div id="highlights-block_630e583189826" class="highlights">
 <ul>
 <li>The latest fund, Kryptós, will launch in October this year</li>
 <li>Investments will likely be in early-stage Web3 companies and cryptocurrency tokens</li>
 </ul>
 
</div>



A digital assets-focused venture capital firm led by Reddit’s co-founder is reportedly planning on raising $177.6 million for a new fund that will likely invest in early-stage Web3 startups, plus related cryptocurrencies.&nbsp;



Seven Seven Six (776), run by Alexis Ohanian, started fundraising relatively recently, according to <a href="https://www.theinformation.com/articles/alexis-ohanians-seven-seven-six-targets-177-6-million-for-crypto-token-fund?rc=8jqr2h" target="_blank" rel="noreferrer noopener">The Information</a>.



Following the likes of Sequoia and Bessemer Venture Partners, 776 has registered as an investment adviser with the SEC. The new fund, Kryptós, plans to commence operations in October.



The latest fund charges investors a 2.5% management fee — above the industry average of 2% or so.&nbsp;



The venture capital firm currently has <a href="https://sevensevensix.com/portfolio/" target="_blank" rel="noreferrer noopener">56</a> portfolio companies, including Yuga Labs — the creators behind the exclusive non-fungible token (NFT) collection Bored Ape Yacht Club and QuickNode, blockchain API and node infrastructure startup. It currently has <a href="https://www.theinformation.com/articles/alexis-ohanians-seven-seven-six-targets-177-6-million-for-crypto-token-fund?rc=8jqr2h" target="_blank" rel="noreferrer noopener">$904</a> million of gross assets, according to regulatory filings. 



Cryptocurrency prices and blockchain startup valuations have plummeted since the collapse of TerraUSD in May. Crunchbase <a href="https://news.crunchbase.com/fintech-ecommerce/crypto-funding-falls-h1-2022/?utm_source=cb_daily&amp;utm_medium=email&amp;utm_campaign=20220715&amp;utm_content=intro&amp;utm_term=content&amp;utm_source=cb_daily&amp;utm_medium=email&amp;utm_campaign=20220715" target="_blank" rel="noreferrer noopener">data reveals</a> crypto investments dropped from $6.1 billion in Q4 2021 to $5.1 billion in Q1 2022 and $4.2 billion in Q2 2022, but 776 partner Katelin Holloway remains optimistic. 



“This is the best time to buy if you’re really long on the industry,” Holloway told <a href="https://www.theinformation.com/articles/alexis-ohanians-seven-seven-six-targets-177-6-million-for-crypto-token-fund?rc=8jqr2h" target="_blank" rel="noreferrer noopener">The Information</a>. “It’s on sale. Everything is on sale.”



776 is not the only venture capitalist appearing to buy the dip. Earlier today, Animoca Brands — Asia’s largest blockchain investment firm — received $100 million from Temasek, a Singaporean state-owned investment company, <a href="https://cms.blockworks.co/singapores-temasek-aims-100m-at-metaverse-giant-animoca/" target="_blank" rel="noreferrer noopener">Bloomberg reported.</a>



Other venture capital firms pouring money into the space this past month include Brevan Howard Asset Management — which raised <a href="https://cms.blockworks.co/brevan-howard-scores-largest-crypto-hedge-fund-launch-ever/" target="_blank" rel="noreferrer noopener">$1 billion</a> from institutional investors to launch the largest crypto hedge fund ever, digital assets investment firm CoinFund, which raised <a href="https://cms.blockworks.co/coinfund-on-the-lookout-for-promising-web3-companies-after-300m-raise/" target="_blank" rel="noreferrer noopener">$300 million</a> to focus on investing in early-stage Web3 startups and Shima Capital, which put aside <a href="https://cms.blockworks.co/venture-capitalist-launches-200m-crypto-fund-as-web3s-missing-layer/" target="_blank" rel="noreferrer noopener">$200 million</a> to bet on early-stage private crypto companies.



776 did not immediately respond to a request for comment.



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Seven Seven Six To Launch $177M Crypto Fund

Morgan Chittum

<div id="highlights-block_61bcd9ff02dfb" class="highlights">
 <ul>
 <li>Morgan Stanley sees the metaverse as an $8 trillion market</li>
 <li>Goldman Sachs said blockchain is one of the most “disruptive technologies” since the 1990s</li>
 </ul>
 
</div>



Morgan Stanley, the Wall Street giant that manages<a href="https://www.investmentnews.com/morgan-stanley-will-reach-10-trillion-in-aum-gorman-205368" target="_blank" rel="noreferrer noopener"> $6.4 trillion</a> in assets, said the metaverse will be “the next big investment theme” in a note to clients last month. On Tuesday, Goldman Sachs then described blockchain as being key to Web3 development in a report.&nbsp;



More and more behemoth financial institutions are addressing the metaverse to clients and investors.&nbsp;



&#8220;[The metaverse] can fundamentally change the medium through which we socialize with others,&#8221; Edward Stanley, an Equity strategist at Morgan Stanley, said.&nbsp;



Stanley added that certain stocks in gaming and tech sectors such as Roblox and Meta (formerly Facebook), along with those concentrated on augmented reality like Alphabet Inc., can benefit from growing adoption of the concept as well.&nbsp;



Goldman Sachs sees blockchain as one of the most “disruptive technologies” in the past several decades, including the advent of the internet.&nbsp;



&#8220;We believe that the metaverse is likely to be an amalgamation of different 3D spaces and that users will move between these regularly,&#8221; Rod Hall, an analyst for Goldman Sachs, said. &#8220;If any virtual goods or services are unable to move from one space to another with the user, we believe their value is likely to be more limited.&#8221;



Atomic Form co-founder Garrette David described the banks’ reports as “a huge positive,” adding it signals further adoption by institutions who have been historically skeptical of cryptocurrency as an asset class at all.



“Given the speed at which they&#8217;re reporting it, I would say we are definitely mainstream. It took banks years to publicly sell interests in, or comment on, economics behind public networks and blockchains,” David said, who runs a startup that develops non-fungible token displays and a Web3 platform.



According to Goldman, it will take “many years” and &#8220;cross-company collaboration” to seamlessly onboard millions of users into the virtual augmented world.&nbsp;



“Investment implications are hard to predict at this juncture, but companies who are dependent on centralized control of user identity will likely find their business models challenged by the adoption of blockchain,” Goldman said.



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How Megabanks Goldman Sachs, Morgan Stanley Are Talking About the Metaverse

Jacquelyn Melinek

<div id="highlights-block_61bcd9ff02dfb" class="highlights">
 <ul>
 <li>&#8220;We are still in the early days of Web3 and the most obvious opportunities right now are in gaming and social,&#8221; said Alexis Ohanian, general partner and founder of Seven Seven Six</li>
 <li>Earlier this month, Polygon acquired a zero knowledge startup Mir in a $400 million deal to scale Ethereum and bring more users to Web3</li>
 </ul>
 
</div>



Polygon and Seven Seven Six partnered to launch a $200 million initiative to support social media projects on Web3, the companies shared on Friday.&nbsp;



Over the past few years, there has been a realization that social media businesses have a profound impact on society, Sandeep Nailwal, co-founder &amp; chief operations officer at Polygon said in a statement. “With Web3, users create the value, control the network and reap the rewards. This is not just a different way to share lolcats online, though we love those. We are inventing new high-fidelity means of transmitting culture itself,” Nailwal said.



&#8220;We are still in the early days of Web3 and the most obvious opportunities right now are in gaming and social,&#8221; Alexis Ohanian, general partner and founder of Seven Seven Six, said in a statement. &#8220;This initiative will do just that, with a focus on gaming properties and social media platforms built on Polygon&#8217;s scalable infrastructure,” Ohanian added.&nbsp;



Polygon and Seven Seven Six were not available for additional comment when requested by Blockworks on Friday.&nbsp;



<h3 class="wp-block-heading">Playing the long game</h3>



Ohanian co-founded Reddit in 2005 and Initialized Capital in 2010. While at his first venture firm, he was a seed investor in Coinbase, Instacart, Patreon and other major businesses. Ohanian founded Seven Seven Six in 2020 and has formed a portfolio of 35 companies, including the makers of <a href="https://cms.blockworks.co/axie-infinity-developer-scores-152m-in-series-b-funding-nearing-3b-valuation/" target="_blank" rel="noreferrer noopener">Axie Infinity</a>, Sky Mavis. 



Polygon has an Ethereum-based proof-of-stake sidechain network that scales and powers some of the biggest DeFi and NFT projects including Aave, SushiSwap and OpenSea. The number of decentralized applications, or dApps, on the platform rose 9,900% from 30 in November 2020 to 3,000 in November 2021, Nailwal previously told Blockworks.



“We’ve already seen some of the best product founders in our portfolio start building on Polygon, and I’m excited for Seven Seven Six and Polygon to play a big role in shaping what the new internet looks like,” Ohanian said.&nbsp;



Polygon is also developing multiple alternative scaling solutions for Ethereum using zero-knowledge proof technology.



Earlier this month, Polygon acquired a zero knowledge startup Mir in a <a href="https://cms.blockworks.co/polygon-acquires-mir-in-400m-deal-to-scale-ethereum-and-web3/" target="_blank" rel="noreferrer noopener">$400 million deal</a> to scale Ethereum and bring more users to Web3. At the time, Nailwal said to Blockworks, “We want to be the AWS of [the] Web3 platform for developers to build on by providing a spectrum of solutions.”



Separately, last month, Seven Seven Six joined Solana Ventures in a $100 million initiative to help fuel decentralized social media platforms on Solana’s blockchain, Blockworks previously <a href="https://cms.blockworks.co/solana-and-seven-seven-six-double-initiative-to-100m-to-build-decentralized-social-media/" target="_blank" rel="noreferrer noopener">reported</a>. 



“The baggage of Web2 infrastructure and Web2 precedent is that you know you’re ultimately just harvested for an advertiser and that factors into product decisions and that factors into design decisions,” Ohanian said at the Solana <a href="https://cms.blockworks.co/the-solana-summer-never-ends/" target="_blank" rel="noreferrer noopener">Breakpoint</a> conference. 



“What’s really exciting is there’s a whole new slew of founders who have a chance to jump into a very energized community and start building something with a very different business model in mind…that’s compelling. We could see new platforms emerge very fast,” Ohanian added at the time.



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Polygon and Seven Seven Six Launch $200M Social Media Web3 Initiative

<div id="highlights-block_618a9873b32cc" class="highlights">
 <ul>
 <li>“We will be living in the metaverse faster than anyone thinks, it’s going to happen,” Solana Co-Founder Raj Gokal said </li>
 <li>What’s really exciting is there’s a whole new slew of founders who have a chance to jump into a very energized community and start building something with a very different business model in mind&#8230;that’s compelling,” Reddit Co-founder and Seven Seven Six Founder Alexis Ohanian said</li>
 </ul>
 
</div>



Solana Ventures and Seven Seven Six will create a $100 million initiative to build decentralized social media platforms on Solana’s blockchain.&nbsp;



Solana Co-Founder Raj Gokal and <a href="https://cms.blockworks.co/wallstreetbets-founder-predicts-bitcoin-hits-100k-by-year-end/" target="_blank" rel="noreferrer noopener">Reddit</a> Co-founder and Seven Seven Six Founder Alexis Ohanian shared the news during the Solana <a href="https://cms.blockworks.co/the-solana-summer-never-ends/" target="_blank" rel="noreferrer noopener">Breakpoint</a> conference on Tuesday.&nbsp;



Originally, the pair said that the investment was $50 million, but doubled the amount shortly after to $100 million while still on stage at the event. “I realized $50 million is not that much&#8230;so we’re gonna increase it to $100 million,” Gokal said.



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="400" height="267" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg" alt="" class="wp-image-10826" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg?w=400 400w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg?w=385 385w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg?w=391 391w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg?w=328 328w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/VRXH3704.jpg?w=80 80w" sizes="(max-width: 400px) 100vw, 400px" /><figcaption><meta charset="utf-8">Solana Co-Founder Raj Gokal (left) and Reddit Co-founder and Seven Seven Six Founder Alexis Ohanian at Breakpoint in Lisbon, Portugal; Source: Solana</figcaption></figure></div>



The initiative will focus on fueling decentralized social media projects on <a href="https://cms.blockworks.co/solana-ignition-hackathon-to-focus-on-defi-web3-gaming-and-nfts/">Web3</a> so that users and creators can have ownership and creation differing from traditional Web2 platforms like <a href="https://cms.blockworks.co/zuckerberg-says-facebooks-new-name-will-be-meta/" target="_blank" rel="noreferrer noopener">Meta</a>, formerly known as Facebook.



“The baggage of Web2 infrastructure and Web2 precedent is that you know you’re ultimately just harvested for an advertiser and that factors into product decisions and that factors into design decisions,” Ohanian said. “What’s really exciting is there’s a whole new slew of founders who have a chance to jump into a very energized community and start building something with a very different business model in mind&#8230;that’s compelling. We could see new platforms emerge very fast,” Ohanian added.



The news follows Gokal having his account suspended from Twitter on Monday for jokingly responding “i’ll kill you” to a <a href="https://twitter.com/lessin/status/1457736507263836167?s=20" target="_blank" rel="noreferrer noopener">tweet</a> by Sam Lessin, a general partner at Slow Ventures, Gokal said. Twitter reactivated Gokal&#8217;s account as of this morning.



“But this wasn’t me threatening Sam, right? I’ve known him for 10 years, we trust each other,” Gokal said. The tweet was in reference to when the co-founder of Costco <a href="https://www.snopes.com/fact-check/costco-founder-kill-hotdogs/" target="_blank" rel="noreferrer noopener">said</a>, &#8220;If you raise the effing hot dog, I will kill you. Figure it out,” to the Costco CEO, who wanted to raise the prices on its $1.50 hot dog combo back in September.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“All these little features, the nuances with how we connect with one another and how we trust each other and how we have relationships should be reflected in social but right now there’s only little pieces. And it’s the pieces that happen because one platform that becomes monolithic decides which features it&#8217;s going to differentiate on,” he added.</blockquote>



Gokal said it was the first time he hasn’t been on Twitter for 24 hours in years, “it was kind of actually amazing,” he said.&nbsp;



But this nuance in social media helped spark the idea that some things are sacred, positive and inherently good like a cheap hot dog at Costco is a part of their belief system while “gm” a crypto trend of saying “good morning” abbreviated to gm to other users on Twitter is a part of the crypto industry’s belief system, Gokal said.&nbsp;



“There&#8217;s an opportunity to build from all directions. It doesn’t have to be the old social platforms we can build new ones and it doesn’t have to be competition and it doesn’t have to be winners takes all,” Gokal said. “There will be hundreds of successful social media companies that are protocols and clients of those protocols. Choices will be made in programmable module ways, just like subreddits do that, but it will be much more fluid,” he added.



We haven’t even seen what happens when people build this way, Ohanian noted. But the cycles are getting faster in the crypto industry, Gokal added.&nbsp;



“I think it’ll happen in waves. Applications and protocols will quickly saturate to a billion, four billion users in rapid succession because it doesn’t have to be a competition&#8230;it’s just ideas and changes and protocol shifts and forks that can propagate very quickly,” Gokal said. “I think this future will happen very quickly and it’s all connected, right? This is why we wanted Solana to be one giant global state machine. A lot of people call it monolithic, yeah it’s monolithic, that’s the point it’s all one computer we can build all this together on,” he commented.



“We will be living in the <a href="https://cms.blockworks.co/facebook-ceo-metaverse-will-be-holy-grail-of-social-experiences/" target="_blank" rel="noreferrer noopener">metaverse</a> faster than anyone thinks, it’s going to happen,” Gokal said.&nbsp;



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