GameStop’s NFT play is here. Now it has to go from memes to markets.
Good morning, and welcome to Protocol Fintech. This Thursday: GameStop makes its meme move, SoFi achieves a crucial milestone, and Binance warns against celebrity crypto ads in a celebrity crypto ad.
Off the chain
GameStop became a kind of financial celebrity last year when redditors bid up its shares in an attempt to prove, well, that they could. Now GameStop has to show it has as much potential as its new shareholders believe it does. But there’s more to GameStop’s NFT move than just dazzling Wall Street. Meanwhile, Binance is warning against the crypto celebrity-industrial complex … by fueling it. My only question: Are spokespeople fungible?
— Owen Thomas (email | twitter)
From meme to marketplace
GameStop is officially announcing a long-teased NFT marketplace today. It’s the latest move by the company that was at the center of the meme-stock craze to lean into its new brand.
GameStop, which is trying to escape a withering business selling packaged software games, has seen crypto as its future, or at least a potential one, for a while. The first glimmer came last May with its hiring of Web3 engineers. Now it’s taking the wraps off their work.
The GameStop marketplace will be based on Immutable X, a layer 2 protocol focused on NFTs. Immutable is promising zero transaction or “gas” fees for minting or trading NFTs, addressing a key complaint of buyers.
GameStop knows it has to move past fading retail storefronts. The company is trying to capitalize on its meme status to fuel its move away from retail.
- Reddit-borne energy fueled its stock rise, but now it has to justify its elevated valuation. Its shares have been volatile — they fell 11% Wednesday — as investors try to figure out how much potential GameStop really has.
- The NFT market is an obvious attraction because it’s a gold rush, as evidenced by the massive growth of OpenSea, which did nearly $5 billion in sales in January.
- But GameStop will need more than a well-known brand to convince users of other marketplaces to switch. First it needs developers to bring their top games, then it needs to convince players — many of whom don’t love the idea of mixing crypto and gaming.
NFTs for gaming are a hot market. The first NFTs to gain a mass following were pretty much art projects, but the idea of digital assets has long been present in gaming — a connection GameStop wants to capitalize on.
- GameStop and Immutable are announcing a $100 million fund to back NFT gaming.
- And the marketplace is designed for developers to create in-game NFTs, the companies said. This is a relatively new area for gaming that has brought strong growth for games such as Axie Infinity.
It’s not clear that NFTs will save GameStop. There are still many questions about the marketplace.
- GameStop will have to convince both gamers and developers to embrace its offering over a host of other choices, including large general-purpose NFT marketplaces like OpenSea and game-specific stores.
- Low fees will help, but other low-fee options are emerging. Developers looking for low fees could opt for a larger network like Solana, which has $250 million worth of funds dedicated to games on its network.
- And then there’s the hit-and-miss nature of games. Axie Infinity activity has dropped drastically since the summer’s peak.
NFTs are as good a place as any to be in gaming, with increasing momentum from developers and users. But Web3 is supposed to be about cutting out intermediaries, which puts GameStop in a precarious spot. Crypto turns everything into a financial transaction — so there will be a scramble over whether value accrues to new studios or established publishers, wealthy crypto investors or upstart protocol developers, and distributors or promoters. GameStop is an out-of-left-field contender. But maybe that’s what its memed-out shareholders are betting on.
A MESSAGE FROM APPIAN
Businesses need applications faster than ever before, and they need them to solve increasingly complex, sophisticated problems. This means IT teams need a more efficient way to quickly deliver powerful software and a better way to partner with their business counterparts. That’s where low-code comes in.
On the money
Google wants to apply Web3 and blockchain networks to its products. Alphabet CEO Sundar Pichai said that the tech giant intended to expand into blockchain tech at its fourth-quarter earnings call. This statement comes after the creation of a new Google Cloud digital assets team and Google Pay’s Coinbase card integration last year.
On Protocol: DeFi hackers stole more than $320 million in cryptocurrency by exploiting Wormhole, a blockchain bridge.
SoFi completed its Golden Pacific Bank deal. The Sacramento-based community bank, which has an estimated $150 million in assets, will be renamed SoFi Bank. This is another step in SoFi’s plan for a national bank charter, which was approved by the OCC and the Fed last month.
Wish is adding new merchants by invite only. In an effort to improve product quality and customer service, the mobile ecommerce marketplace is only selecting new merchants through a “multi-step qualification process.” Where will we get our “when you order from Wish” memes now?Grayscale collaborated with Bloomberg to launch its first ETF. The fund will track the investment performance of the Bloomberg Grayscale Future of Finance Index, which includes digital asset companies involved in mining and other crypto infrastructure. It reflects a trend in crypto-related ETFs: Funds with exposure to the sector can get approval, while funds that seek to invest directly in tokens don’t.
T.V. Somanathan, finance secretary for the Indian government, said the digital rupee will be the only digital currency that becomes legal tender in India. “You can buy gold, diamond, crypto, but that will have not the value authorization by government,” he said in a remarks quoted by Asian News International.
Binance’s celebrity crypto ad with athlete Jimmy Butler warns you not to trust celebrity crypto ads, except this one. “They don't know you or your finances. Only you do. Binance and I are here to tell you: Trust yourself and, of course, do your own research," Butler said in the commercial.
HitPiece minted music NFTs for sale without the artists’ permissions, then acted like it didn’t know artists would get offended. “Clearly we have struck a nerve and are very eager to create the ideal experience for music fans. To be clear, artists get paid when digital goods are sold on HitPiece, ” the NFT marketplace wrote on Twitter, where it promptly got ratio’d within an inch of its life.
Moves and hires
Crypto.com hired a former NSA analyst who worked for a controversial surveillance company — then apparently changed its mind. Dan Wolfford announced on LinkedIn that he would be the crypto exchange’s head of security operations, but the post has since been taken down, with Crypto.com saying he “was not onboarded.”
The Diem diaspora continues. Christian Catalini, co-creator and chief economist of the now-doomed crypto project, joined Chainlink Labs as a strategic adviser. He will be focusing on developing a new protocol for decentralized inter-blockchain messaging, data and token movements.
Shopify founder and CEO Tobias Lütke is joining Coinbase’s board of directors. The ecommerce pioneer is set to provide Coinbase with guidance on bringing crypto more into the retail world.
Habi appointed Marcos Kantt as its chief financial officer. The real estate tech company hired the financial services vet to expand its growth in major Latin American markets after growing its presence in the Mexican market last month through a startup acquisition.
The Crypto Council for Innovation appointed Sheila Warren, a former World Economic Forum exec, as its CEO. The crypto policy lobbying group, which seeks to influence digital asset policies, includes major firms like Fidelity, Coinbase, Block and Andreessen Horowitz.
Thanks for reading — see you tomorrow!