Digestible updates on what’s new in China’s world of Web3, NFTs, metaverse and beyond, compiled for you weekly by Pandaily.
This week: Blockchain startup CyberConnect raised $15 million in series-A financing to restore data ownership, Web3-focused branding firm Gusto Collective closed an $11 million seed round, bitcoin mining rebounds in China despite Beijing’s crypto ban, and more.
Blockchain Startup CyberConnect Raised $15M Series A to Restore Data Ownership
Social graph protocol startup CyberConnect said on Tuesday that it has closed a $15m series-A financing round. TechCrunch and CoinDesk first reported the story.
- Animoca Brands, a Hong Kong-based venture capital and gaming software firm, and Sky9 Capital, a Shanghai-based venture capital firm, co-led the round.
- CyberConnect will use the proceeds to build the protocol, expand the team, and take on new Web3 projects, CyberConnect CEO Wilson Wei told CoinDesk.
- “In Web2, companies with the largest social network own users’ social graphs and build walls around them to stem competition and advance corporate interests,” said Wei in comments to TechCrunch.
- Cyberconnect’s goal, therefore, is to create a social graph protocol allowing data to be shared freely among computers without a centralized agent like Facebook.
- Cyberconnect’s solution has two components. It offers a software development kit (SDK) for developers to create custom apps to help end users manage their social graph, and a “social data network” that aggregates and monitors users’ Web3-related activities.
- Cyberconnect operates with a team of 27 across China, North America, and Europe. (CoinDesk, TechCrunch)
Web3-Focused Branding Firm Gusto Collective Closed $11M Seed Round
Hong Kong-based Gusto Collective, a content production service for brands, has raised $11 million in seed round financing, bringing the firm’s total valuation to $23 million, reported Tech In Asia.
- Animoca Brands and Gaw Capital, a Hong Kong-based private equity fund management company focusing on APAC’s real estate markets, co-led the round.
- BlackPine, YCI Limited, and several existing shareholders including ClearVue Partners also participated in the round, according to an official press release.
- Gusto Collective will use the proceeds to “move more aggressively into Web3 tech services,” expand internationally, and ramp up product development efforts, Lau said in an interview with Tech In Asia.
- This round marks Animoca’s latest investment in Web3, after recently leading gaming firm Untamed Studio’s $24.3 million fundraising. It also co-led the $7.5 million round of Our Happy Company, John Legend’s music NFT firm.
- As a digital marketing firm, Gusto Collective merges storytelling, data science, and Web3-related technology such as VR and AR to create interactive content for marketing purposes. It targets augmented reality, metaverse, and NFT innovations to improve customer experiences.
- Founded in January 202 by technology and marketing veteran Aaron Lau, Gusto Collective now operates with a team of around 200 full-time employees across Hong Kong, Shanghai, and London, according to the company’s LinkedIn page. (Tech In Asia)
READ MORE: Check out Animoca Brands’ other Web3 moves!
Bitcoin Mining Rebounds in China Despite Crypto Ban
Despite Beijing’s fresh crackdown on crypto in July last year, China’s bitcoin mining activity has quickly rebounded, reported CNBC, citing data from the Cambridge Centre for Alternative Finance.
- Prior to Beijing’s stringent crackdown on crypto, China accounted for up to 75 percent of the total hash rate, or processing power, of the world’s bitcoin network. After the ban, that number quickly plummeted to zero in July and August 2021.
- Since the Chinese government abolished crypto mining, many miners fled to the US, Russia, and neighboring Kazakhstan.
- Meanwhile, underground mining operations started to emerge in China. Data from the Cambridge Centre for Alternative Finance shows that in September 2021, China made up just over 22 percent of the world’s bitcoin mining market. This makes China one of the top players in the sector, second only to the US.
- One of the potential problems with the research is that it relies on the aggregate geolocation from huge bitcoin mining pools to determine where the mining activities are concentrated, and the results may be susceptible to “deliberate obfuscation” by bitcoin miners using a virtual private network (VPN) to hide their locations, according to the researchers. (CNBC)
Understanding China’s Blockchain-Based Service Network (BSN)
In a speech in 2019, Chinese President Xi Jinping declared the need for China to embrace blockchain technology. The country has since been building a blockchain platform aiming to deploy blockchain technology for enterprises. CNBC reported this story last Sunday.
- The Chinese President said three years ago that blockchain was an “important breakthrough in independent innovation of core technologies.” Since then, blockchain was elevated to a national priority, among the ranks of quantum computing and semiconductors.
- The blockchain platform, called blockchain-based service network (BSN), targets companies operating public and private cloud computing infrastructure.
- BSN’s solution addresses several problems faced by companies operating in the blockchain space. First, the network bills itself as a “one-stop shop” to deploy blockchain applications in the cloud, a process that could be costly and time-consuming.
- The network also tries to solve the problem of interoperability, the ability of different computerized products or systems (and in this case, different blockchains) to connect and exchange information. The end goal for BSN is to allow governments and enterprises to deploy user-friendly, cost-efficient blockchain applications.
- Since China has banned crypto last July, the BSN might emerge as a meaningful non-crypto use case for companies that do not want to be exposed to the risky nature of digital currencies.
- Red Date Technology, a Hong Kong-headquartered startup, is one of the founding companies behind the BSN. Other backers of the technology include the National Development and Reform Commission (NDRC), a state agency under the State Council that oversees the planning of the country’s economy, and China Mobile, a state-owned telecommunications company.
- BSN has ambitions to go global, but its centralized nature and ties with the Chinese government may subject it to heavy scrutiny abroad. (CNBC)
READ MORE: Check out our previous stories on the BSN!
Aave Founder Builds Blockchain-Based Social Network to Rival Twitter After Account Is Suspended
Decentralized money market Aave announced on Wednesday the launch of Lens Protocol, a decentralized social graph, after founder Stani Kulechov was temporarily suspended from Twitter for proclaiming himself “interim CEO of Twitter.” Bloomberg and CoinDesk first reported the story.
- Lens Protocol allows developers to build Web3 social media platforms that run on the Polygon network, a Layer 2 network running on the Ethereum blockchain.
- Layer 2 is an add-on layer that does not alternate the structure of the original blockchain layer.
- “All [Web3] innovation has been driven by the idea of ownership,” said Kulechov via Telegram. “Web3 social ensures that users are in control of their content which makes the applications and algorithms compete on bringing the best experience layer to the users.”
- Social graph protocols are emerging across the blockchain space in response to growing concerns about data ownership. Lens Protocol distinguishes itself from competitors in its focus on NFTs: each piece of content is associated with an NFT, giving the creator ownership over their posts, according to Kulechov.
- Built on the Ethereum blockcahin, Aave is a decentralized finance (DeFi) tool and a system of smart contracts that allows users to lend, borrow, and earn interest on crypto assets. Aave currently allows users to lend or borrow up to 17 types of cryptocurrencies. (Bloomberg, CoinDesk)
GameFi Developer Azra Games Raised $15M Seed Round
Azra Games, a blockchain-based developer of collectible combat role-playing games (RPG) for core gamers, has raised $15m in seed funding led by Andreessen Horowitz, according to VentureBeat.
- The game developer will use the funds to build out its first game, Project Arcanas, a sci-fi fantasy epic with mass combat and RPG elements. The game will also feature virtual collectibles.
- The Sacramento-based company was founded in January 2022 by gaming industry veteran Mark Otero, who spearheaded the popular video game Star Wars: Galaxy of Heroes.
- Andreessen Horowitz is an American venture capital firm, founded in 2009 by Marc Andreessen and Ben Horowitz. It targets both early-stage startups and established growth companies, and is a leading investor in the emerging Web3 space.
- The firm recently launched Games Fund One, a vertical fund focused on the gaming industry, led by general partners Andrew Chen, Jon Lai and James Gwertzman.
- “With [Games Fund One], we will continue to add more functions and develop deeper networks that are tailored to the games ecosystem so we can help our portfolio companies with everything from building digital communities, to managing their virtual economies, to IP licensing best practices, to helping build their development teams,” a blog post announcing the fund’s formation reads. (VentureBeat, The Block)
That’s it for this week’s newsletter – thanks for reading! As always, I welcome any feedback on how to make this newsletter better. My email is [email protected]. See you again next week!
