Welcome back to Chain reaction.
Earlier this week, Pudgy Penguins, an NFT collection that doubles as a web3 IP company, raised $9 million for its seed round.
Why is this important?
Pudgy Penguins isn’t the first NFT-focused company or collection to raise money. However, the seed round is another indication of the growing digital asset subsector and how projects that can seemingly be interpreted as just a collection of profile photos (PFPs) can be turned into something more.
For context: last September, Doodles raised $54 million at a valuation of $704 million in a round led by Reddit co-founder Alexis Ohanian’s VC firm Seven Seven Six. And in March 2022, Yuga Labs, the company behind three blue-chip NFT collections, raised $450 million at a valuation of $4 billion.
Chubby penguins, those reminds me of Club Penguinwas launched in 2021 and acquired by a Los Angeles based entrepreneur and web3 enthusiast Luke Netz in April 2022. It has since expanded from 8,888 NFTs to a range of real-life products and experiences that provide collection owners with live events, physical merchandise, and licensing opportunities.
The round of the collection was led by 1kx, an early-stage investment company, and saw participation from Big Brain Holdings, Kronos Research, the founders of LayerZero Labs, Old Fashion Research, and CRIT Ventures. The money will be used to increase his intellectual property and team, and improve offerings for his community.
As it stands, Pudgy Penguins ranks 21st by total NFT sales volume across all chains. The collection has more than $252 million in lifetime sales and in the past 30 days it had $4.2 million in sales, up 102% over that period, according to data from CryptoSlam.
Of the 8,888 NFTs, only 566 or 6.4% are for sale, according to the website. The floor price, or lowest selling price, for a Pudgy Penguin is about 4.18 ether, or $7,700, at current prices. The most expensive is currently listed for 900 ether, or $1.6 million, although it sold for 0.009 eth, or about $16, two years ago.
Going forward, Pudgy Penguins and other major NFT collections could serve as leaders paving the way for larger subsector intellectual property movements. These projects not only make money through sales, but also through investors. And with that, there could be a snowball effect (no pun intended).
This week in web3
Tensor climbs to the top of the Solana NFT marketplace totem pole (TC+)
Just two months ago, NFT trading platform Tensor raised $3 million in a launch round. Fast forward to today and it is poised to regain its position as the largest Solana based NFT marketplace based on market share. The platform launched a private beta in June 2022 and opened to the public the following month. In March, it had more than 30,000 monthly active users, and by April its MAU was up about 317% to more than 125,000, co-founder Ilja Moisejevs said.
Crypto needs a global view to build better regulatory models (TC+)
The crypto industry is increasingly concerned that US regulators are getting too hard on the space. It is predictable that companies in the space will look out to regions with clearer guidelines as a result, and it appears that industry and regulators around the world can learn lessons by looking beyond their borders.
Former FTX CEO Sam Bankman-Fried is trying to dismiss most of the US charges against him
Former FTX CEO and founder Sam Bankman-Fried has filed a preliminary ruling to dismiss 10 of the 13 charges against him, according to court documents. In Monday’s filing, Bankman-Fried’s lawyers of law firm Cohen & Gresser seek to dismiss the conspiracy to commit bank fraud and bank fraud allegations. The lawyers are also trying to dismiss some other charges, including allegations of bribery and political contributions. However, his lawyers did not appeal three charges: conspiracy to commit securities fraud, securities fraud, and conspiracy to commit money laundering.
Arbitrum co-founder sees DAO voter drama resolution as ‘proof of decentralization’ (TC+)
It has been a little over a month since the Arbitrum Foundation drama, where the foundation transferred money from Arbitrum DAO without the approval of the community, which caused an uproar. But if you ask Steven Goldfeder, CEO and co-founder of Offchain Labs, that gaffe was just one of the first steps towards decentralization.
Mastercard, PayPal and Robinhood are diving deeper into crypto as the industry shows ‘promise’ (TC+)
As the crypto market works its way through a recession, more incoming money and users can help weather the storm. But at the moment it is sometimes challenging for the layman to get into crypto. Understanding gas costs and purses isn’t intuitive, and the perceived miasma of complications currently surrounding the space isn’t helping either. To promote user adoption and the resulting capital inflow, web3 needs smoother on and off ramps to make it easier to source and interact with blockchains. Trusted providers with existing regular audiences are betting they can help fill that gap.
Investors cheer as Coinbase beats Q1 expectations (TC+)
Coinbase reported its financial results for the first quarter of 2023 and far exceeded expectations. In the first three months of the year, the US cryptocurrency exchange generated net sales of $736 million, net loss of $79 million and adjusted EBITDA of $284 million. Analysts had expected much lower revenue of $655 million and a larger loss for the company in the first quarter. In after-hours trading, Coinbase shares are up just over 7%. To be sure, Coinbase’s results are a welcome dataset for both crypto bulls and investors in the business.
The latest pod
This week we have a bonus episode of fireside chat Jaquelyn did with Nadia Tolokonnikovathe creator of the protest art collective Pussy riotson NFT NYC in April.
Tolokonnikova was sentenced to two years in prison in 2012 after being found guilty of “hooliganism motivated by religious hatred”, but was released early under an amnesty.
Fast forward to 2023 and Tolokonnikova has continued to use the name Pussy Riot to fight for the rights of women and LGBTQ people and against Russia’s control under President Vladimir Putin. As of March, Tolokonnikova was added to the list of Russia’s most wanted criminals.
Tolokonnikova has also spoken before the US Congress, UK Parliament, European Parliament and has appeared on TV shows such as House of Cards.
We dived into a deep conversation about Tolokonnikova’s mission, how she uses NFTs as a form of activism, and how she got into space.
We also discussed:
- How others can use NFTs for activism
- Future visions for NFT utility
- Advice for space projects
ICYMI: In last week’s episode, Jaquelyn interviewed Jake Chervinsky, the chief policy officer at Blockchain Association, a non-profit organization focused on promoting a “pro-innovation” policy for the digital asset world. He is also a board member of the DeFi education fund and an advisor for a web3 seed stage fund Variant.
Prior to working with the Blockchain Association, Chervinsky began his career as an attorney in private practice with a focus on anti-money laundering and anti-corruption compliance and investigations, financial services litigation, and government defense. He spends a lot of time in DC and testifies at hearings to bring clarity to the crypto industry in hopes of guiding it in the right direction.
We talked about all things regulatory, from how Chervinsky sees the current regulatory landscape to whether or not we are in what people call a “crackdown” era.
We also discussed:
- The views of regulators are changing
- US crypto companies
- Are cryptocurrencies commodities or securities
- Stablecoin Law
- Future legal frameworks and guidelines
Subscribe Chain reaction on apple podcasts, Spotify or your favorite pod platform to stay up to date with the latest episodes, and leave us a review if you like what you hear!
Follow the money
- Crypto media platform Blockworks raised $12 million at a valuation of $135 million
- Odsy Network, the decentralized crypto wallet provider, has raised $7.5 million
- Webb Protocol raised $7 million to expand cross-chain privacy
- Multichain NFT ecosystem-focused Artifact Labs raised $3.25 million
- Siphon Lab, a DeFi platform on Sui Network, raised $1.2 million in a launch round
This list was compiled using information from Messari and MinRegion’s own reporting.
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