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TLDR
Meta (formally Facebook) is pouring billions of dollars into the metaverse, will this be a positive for web3?
Atomic N°8 is a “branding slash venture studio specializing in strategy and identity with an emphasis on web3 and emerging technology”. We chat with the founder Alexa Lombardo.
The Chainforest community is strong and growing. Chainforest is hosting three IRL meetups for members this week in San Francisco, New York, and Austin.
Crypto In The News
Lonely Ape, the BAYC dating service was cancelled due to lack of women signing up for the service.
Terra LUNA 2.0 had their airdrop, with the token price dropping over 60% just hours after the airdrop.
Actor Seth Green had his BAYC NFT had his NFT stolen, putting doubts whether his TV show featuring the NFT will be able to proceed without control of the NFT.
Can Meta Contribute to a Web3 Friendly Metaverse?
In late 2021 the famous social media company Facebook changed its name to Meta. This name change came with the announcement that the newly named Meta would devote significant resources to making the ‘metaverse’ a reality. However, this name change sparked backlash, with many calling the rebranding effort a distraction from the harm that the company causes its users as outlined by whistleblower Frances Haugen. Despite this backlash, Meta remained true to their promise of building their version of the metaverse. Yahoo News reported that Meta spent $10 billion dollars and had 10,000 employees working on the metaverse, with the hope that they will hire 10,000 more employees in the future. Mark Zuckerberg announced that the project will likely continue to lose “significant” sums of money over the next 3-5 years. Meta has the resources, connections, and most importantly capital to make their project a reality, but will this look like the metaverse that people are expecting?
Taking a look at other current metaverse projects, such as Decentraland or the Sandbox, and anyone can see we are a long way away from the ‘Ready Player One’ metaverse that people so often expect. This makes sense, the metaverse is a relatively new concept being implemented and technology usually improves over time. However, this time needed for the metaverse to improve will mean projects will need to spend more and more money researching and improving their world. None these projects will be able to continually raise money from VCs, at some point investors will expect a profit or the company will fail. Meta on the other hand is the world’s 10th largest company by market cap with a value of over $545 billion.
Meta has used this economic standing to build out the most comprehensive version of the metaverse we have seen to date. Meta purchased the VR headset company Oculus in 2014 for $2 billion dollars, is developing AR/VR glasses and haptic gloves (gloves that recreate a realistic sense of touch for users), and has recently launched beta testing of Horizon Worlds (its VR workroom). Startups simply won’t have this kind of capital or runway to develop this kind of technology on its own and will have to rely on companies such as Meta or another one of the major competitors that have entered the space. In addition to Meta, Microsoft bought the gaming company Activision Blizzard, with plans to build out their own metaverse. Apple and Google have also begun to develop their own mixed-reality headgear.
Many will argue that a large, centralized company such as Meta cannot build a metaverse that isn’t based around gathering people’s information and pushing their products. This is likely true, as Meta isn’t building the product for fun, their investors demand a profit. However, if one truly expects a metaverse where one throws on a headset and experiences a realistic and entertaining virtual world that can rival the ‘real world’, large companies such as Meta, Google, and Apple are going to play a major role in that development. These large companies will likely inspire many smaller companies to build better metaverses, with more traditional web3 decentralized values.
It is difficult to say when the metaverse will see its true potential, as it is still in its infancy. It is fun to think that electricity is less than 150 years old, the first computer is less than 50 years old, and crypto currency is less than 15 years old. All of this is a blink in terms of human existence. With this amount of rapid technological advancement, it is very plausible that technology makes the concept of spending all day in a virtual world something we see come to fruition within our lifetimes.
Atomic N°8: Building Brands in Web3
Article Written By: David C R Feld (@DCHRISTRF)
Who is Alexa Lombardo?
I’m a brand builder turned venture builder collaborating with founders to concept, launch, test, learn & grow futureproofed brands, all with an emphasis on community, transparency & sustainability.
After a decade in beauty & CPG, I started Atomic N°8, a mission-driven venture studio based in Brooklyn. Our early clients were sustainably-minded founders in wellness (beauty, food, health) & lifestyle (travel, hospitality), now we’re navigating / building in web3, blockchain, DeFi, NFTs, DAOs, AI, AR / VR & the metaverse.
On Brands in Web3
In web3, a brand is only as strong as its community - and the community is the biggest determinant of how valuable a brand actually is. In this way, community trumps currency - or, community is currency. This marks a major shift in how brands engage their consumer base.
Simultaneously this shift is forcing brands to engage them in totally new ways that aren’t solely transactional. It’s not about a product for purchase, or a store where the product can be purchased. Brands need to build an entire ecosystem.
Another major shift is the growing sense of collaborative advantage over competitive advantage. Companies have to adapt from being protective and guarded to embracing collaboration and cross pollination — either between community members or between communities.
And finally, the crux of decentralization is decentralized ownership. The community actually has tangible ownership in the brand, and a say over what the brand does. This stake is not just based on respect or consideration, but based on your community actually holding a piece of your brand — an NFT or token — that gives them power through voting rights. This asset allows them to monetize their support for your brand, and thus create a cyclical loop of value. They can turn around and sell it, earning against their support in the short term, or stay and reap other potential benefits as it appreciates in the long term. That is a level of consumer involvement that has never existed before.
On the Role of NFTs in Building Brands
We continue to transition more and more into this “experience” economy. For a long time brands have attempted to create a sense of belonging that could cultivate loyalty. Blockchains make the process of creating loyalty “programs” exponentially easier, trendier, and seemingly ethical — (the ethos of decentralization being about individual ownership and value capture.)
Let’s take restaurant groups for example. Normally, each named restaurant, or each location, might need to have its own loyalty program. Blockchains allow these loyalty programs to be cross branded and cross geography. Wallets and DLT allow for so many new opportunities to actually reach consumers, create communities with them, alongside new incentive models.
Rather than a static Rewards Card or a points system, an NFT’s utility can continue to evolve, and the community can play a role in that evolution. Also, the way NFT communities are currently evolving - and the role they’re playing in shaping their own brands - makes me think that the next major brands will come out of NFT projects, not the other way around. These communities are breeding grounds for creativity and co-creation. And in this way, in the same way as “brand” delivers value to the community, the community delivers value to the brand. We weren’t really able to measure this value before - the value of loyalty has always been based on LTV of a user, but now that concept is being totally rewritten.
One more thing. This web3 ethos - the openness around value creation that’s rooted in what the community wants - is what’s really special. You don't actually need to have it be on the blockchain or need to have an NFT. But you can embrace the values and you can create a community around it. I think it's just more about actually delivering value to that community that is then empowered to create value in return, and financial assets like NFTs are simply one way of doing it.
The Place of DAOs
First, there is a role of brand in all DAOs. Brand can be informed or it can inform the overall vibe. It can inform content and partnerships. There are a lot of DAOs out there that have a brand even without knowing it or thinking to hard about it. I think that’ll change as more enter the space - we’ll have to be more intentional. (DAOs: call me if you need help with brand - visuals, messaging, etc). Also there’s something interesting happening with DAOa having loose enough guidelines that their community can know the guardrails but also interpret the brand themselves, and that’s where some cool creative brand visuals and content are emerging.
Aside from DAOs as brands, I’m starting to see more DAOs being created as a compliment to a company where the community lives. It makes sense since the structure of DAOs lend themselves towards initiatives like incubation, impact, or venture so well, rather than building products. This could be used to create incentive-rich environments which unlock the network, and all that network has to offer, of their consumer base while not slowing down scale or more immediate, product-oriented practices.
Let’s take Estee Lauder, for example. Using a DAO for incubating ideas could unlock the value of their network overall while being totally separate from their main business model and their current existing brands. While companies are definitely better structured to ship actual products, DAOs allow for this idea generation which is why we're seeing so many venture DAOs emerge.
I do think DAOs can be the place for incubation for those future brands, as well as playing the role of a company’s impact arm. DAOs are an alternative to the pitfalls of traditional nonprofit structures and nonprofits that make funding and investment ineffective. DAOs being vehicles to globally mobilize enormous amounts of capital quickly makes them better poised to solve a lot of these major challenges like global access to reproductive health care, contraception, or funding abortion rights. Obviously, the last one is very top of mind for me right now. I’m really curious to see how corporations and DAOs come to coexist and, hopefully, complement each other.
Those interested in learning more about Atomic N°8 should visit their website here.
Around the Fire: Community Updates
Chainforest member Nick van der Vink (@USA_pharoah) released a new episode of his podcast, Moonshot Research Podcast. Listen to episode two here: Episode #2 Crypto Sundays: Publius and Beanstalk Farms.
Chainforest members are hosting IRL meetups for members in New York, San Francisco (Graph Day), and Texas (Consensus) this week.