Written by: angelilu, Foresight News
In 2022, "Metaverse" ranked second in the Oxford Annual Vocabulary Nomination after removing the "bubble". The metaverse without the "bubble" attracted the attention of many venture capitalists, and concepts derived from the metaverse such as chain games, IP, and NFTs also gained popularity. Leading funds and traditional financial institutions responded quickly to this trend. In 2022, institutions such as Spartan Group, HSBC, and Schroders launched billion-dollar metaverse special funds. This trend continues, as in March of this year, game-focused venture capital firm Bitkraft also launched a token fund of about $220 million, investing in blockchain games and digital entertainment.
Born in the "First Year of the Metaverse"
Of course, newly established venture capital funds are actively positioning themselves. Arcane Ventures, founded in the "First Year of the Metaverse," is deeply involved in the Asian blockchain technology and cutting-edge technology fields. Its current fund management scale has reached $200 million, and the team's strength is also not to be underestimated. Its founding partner, Neil Su, previously served as the investment director of private equity firm Bond Capital Partners, while Arcane's other partner, Evans Huangfu, previously served as the head of strategic investment at Huobi Ventures, the youngest head in the history of Huobi Ventures.
For a young venture capital firm, Arcane Ventures' investment map is just beginning to emerge, but its investment strategy is already evident:
Layout in the "Web3 New Consumer" Field
After conducting in-depth analysis of the 31 projects invested in by Arcane Ventures, it can be seen that Arcane Ventures' investments mainly cover virtual IP, chain games/metaverse, infrastructure, DeFi, and community. Arcane does not adopt the "cast a wide net" strategy favored by most investment institutions, and from the distribution of investment quantity, it is not difficult to see that Arcane Ventures' investment focus is still on virtual IP, chain games/metaverse, and user-friendly infrastructure in the "Web3 New Consumer" field.
Arcane partner Evans Huangfu stated, "In recent years, the blockchain industry has gradually expanded from a finance industry dominated by engineers to a more consumer-friendly industry. We are committed to promoting the development of the blockchain industry in a more popular direction to ensure that more people can benefit from this innovative technology."
This investment strategy is not without reason. With the popularization of blockchain technology and the advancement of Web3's large-scale adoption, Web3 will become the new norm of the digital age, and the consumer entertainment industry plays a crucial role in this process. The combination of Web3 and the consumer entertainment industry has natural advantages, where NFTs and digital collectibles can become catalysts for product innovation, and the application of the metaverse and virtual IP overturns the traditional rules of brand marketing, elevating the brand's image from a single identifier to a vivid presence in virtual space. With the blessing of decentralized technology, native Web3 consumer entertainment can truly empower users with genuine digital ownership and control, placing users at the center and deepening the bond between platforms and users, and brands and consumers.
Emphasizing Synergy and Efficiency
While focusing on investing in the Web3 new consumer field, Arcane also emphasizes the synergy between investment projects. In other words, when Arcane invests, it does not just focus on the value of individual projects, but values their mutual cooperation in the overall business strategy. From its investment map, it can be seen that Arcane is still involved in many infrastructure projects. This is because they realize that no matter which type of project, they all need the "boost" of infrastructure projects. Here, Arcane plays an important role as a connector and intermediary, assisting upstream and downstream enterprises in establishing connections.
For example, as privacy protection becomes increasingly important in the process of Web3, Arcane has made early layouts by including Polyhedra in its investment map. This project focuses on zero-knowledge proof DID and can provide long-term privacy solutions for other Arcane investment projects, ensuring the security and commercialization of user data.
In addition, Arcane is building a complete ecosystem around the most valued Web3 new consumer field. To help more Web2 industry talents enter Web3, Arcane's investment map includes projects such as Particle Network and OpenFort, which can help developers reduce entry barriers.
Arcane partner Evans Huangfu stated, "Teams from Web2 can rely on Particle Network's authentication services for Web3 development, including social login, user interface customization, secure hosting, and fast transactions. Particle Network provides a bridge for these teams from Web2 to Web3. And OpenFort provides 'wallet-as-a-service' software products for other projects, customizing account abstraction solutions specifically for chain game products."
The game/entertainment projects invested in by Arcane can utilize Pass3's advertising network to expand in the Southeast Asian market. Another investment project, the blockchain game and game infrastructure layer Fusionist, can simultaneously focus on its own development and coordinated promotion. Fusionist's mainnet Endurance has accumulated over 1.5 million wallet addresses and maintains a daily active address count of over 100,000, so deploying Arcane's invested chain game projects on Endurance can greatly increase the speed of promotion.
Arcane also emphasizes the synergy between IP companies and chain games. For example, the IP acquired by Japan's IP company Kasagi Labo under Arcane's map can be integrated into Arcane's chain game projects, achieving maximum resource sharing and flow.
The following is a comprehensive list of the 31 investment projects disclosed by Arcane Ventures, delving deeper into its layout in the "Web3 New Consumer" era.
Investment Project Overview
IP & Creator Platforms
Animoca Brands
Animoca Brands is a blockchain-based game and digital collectible developer and publisher. Before entering the blockchain game industry in 2018, Animoca Brands was listed in Australia with traditional mobile game development as its core business. Since 2018, its star products include sandbox game The Sandbox and NFT project Mocaverse. In addition to chain game development, Animoca Brands is also an early investor in metaverse projects and chain game development studios such as Axie Infinity developer Sky Mavis, Decentraland, and Dapper Labs.
Yuga Labs
Yuga Labs is a blockchain technology company that develops NFTs and digital collectibles. Its first product is the popular Bored Ape Yacht Club (BAYC) NFT. In addition, Yuga Labs has acquired blue-chip NFT projects such as CryptoPunks and Meebits. Yuga Labs has also launched the cryptocurrency ApeCoin and developed metaverse projects Otherside and strategy game LoTM.
Outland NFT
Outland NFT is a platform for encrypted art, founded by the core executive team of art institutions, galleries, and museums. The website includes content such as reviews, collections, conversations, news, and recommendations, gathering criticism and dialogue about art, technology, and NFTs.
RepubliK
RepubliK is a Web3 creation platform that allows content creators to connect with their audience on the platform and use built-in smart contracts to handle the monetization process, enabling content creators to create, connect, and receive rewards. The protocol was launched in November 2022 and recently completed a $6 million seed round financing with a valuation of $75 million.
Kasagi Labo
Kasagi Labo is a publishing and licensing company focused on creating animation, comics, and television shows. It acquires intellectual property and transforms original IP into licensed anime products.
EMERGE Group
EMERGE Group is a marketing technology agency that specializes in providing the best commercialization solutions for content creators, intellectual property holders, advertising inventory, and brand development. In the Web3 field, it has established a strategic partnership with Web3 game publisher Immutable Games to conduct marketing activities.
Chain Games / Metaverse
Fusionist
Fusionist is a blockchain game and game infrastructure layer that currently supports Ethereum and BNB Chain. In January of this year, Fusionist launched the Fusionist mainnet Endurance. The game includes construction simulation, turn-based tactics, exploration and expansion, where players take on the role of mech commanders, manage their own planets, collect rare resources, upgrade technology, and engage in interstellar warfare through PvP and PvE battles.
Stella Fantasy
Stella Fantasy is a character collection NFT action RPG game. Its developer, Ring Games, was founded by former core developers of the popular game "King's Raid" in 2019, dedicated to developing new high-precision action games and other Web3 games.
Puffverse
Puffverse is a fantasy metaverse created with dreamy 3D cartoon characters, developed by Xiaomi and launched on the Xiaomi app store. The product includes Puff NFT, the online multiplayer game PuffGo, the metaverse and UGC platform PuffWorld, wallet integration, and the Web3 control panel PuffTown, as well as UGC PuffLand for game design. The economic model includes tokens PUFF and vePUFF, where PUFF is the circulating token and vePUFF is the governance token. Unlike other chain games, Puffverse aims to connect Web 3 and Web 2, and has released multiple Web2-only versions of PuffGo that do not involve tokens/NFTs to increase brand awareness.
Moonveil Entertainment
Moonveil Entertainment is a Web3 game studio, with a team from the gaming industry backgrounds of "League of Legends," "Teamfight Tactics," and "Minecraft."
TTT
TTT is a Web3 game incubated by blockchain game publisher Xterio. The game includes racing and shooting PVP game types and will integrate Web3 economics. It is currently under development.
Space Nation
Space Nation is an AAA-level space opera Web3 MMORPG co-founded by Hollywood director Roland Emmerich, former China operations head of "World of Warcraft" Jerome Wu, senior game producer Tony Tang, and media entrepreneur Marco Weber. The core project Space Nation Online has been in development for over 3 years, with a total investment of $50 million. It started alpha testing in August and is expected to officially launch in the second quarter of 2024. The economic model includes the governance token OIK, utility token CHR, and NFT.
Mythic Protocol
Mythic Protocol is a Web3 collaborative entertainment protocol aimed at creating an entertainment product ecosystem that combines blockchain technology, games, and creative media. It plans to release games and comics and gradually develop into a movie universe, with the first project being a rogue-lite ARPG using blockchain technology.
Gameta
Gameta is an NFT game ecosystem designed to bring Web2 users into the metaverse through features such as automatically creating on-chain addresses, low gas fees, and optional private key custody. Users who register their Gameta wallet can receive NFTs for free, and can earn GDO rewards while playing games, which can be exchanged for USDC.
MetaOne
MetaOne is a "guild as a service (SaaS)" platform dedicated to bringing large-scale games and guilds into blockchain games. It integrates into the game architecture, mines relevant data for guild analysis, provides guild management tools, offers asset management to help stakeholders generate income, and designs smart contracts for secure, transparent cross-chain investments.
Midnight Society
Midnight Society is a chain game studio that launched its first game, the vertical evacuation shooting game "Deadrop." The game combines level design from arena shooting games, the scale of battle royale games, and strategic gameplay from evacuation shooting games, with a focus on vertically designed maps. The game is currently open to its Tower Key and Founders Pass holders.
Infrastructure
Consensys
Consensys is a blockchain technology company that provides Ethereum-based software and solutions for enterprises, developers, and individuals. Its founder, Joseph Lubin, is also one of the co-founders of Ethereum. In addition to development and consulting services, its products include the MetaMask wallet, the Infura development suite, the Diligence smart contract auditing service, and the open-source blockchain Quorum.
Particle Network
Particle Network is a Web3 infrastructure aimed at introducing convenience, efficient interaction, data autonomy, and modular adaptability for users, protecting user privacy and enhancing interaction efficiency. Its V2 version will build an intent-centric, modular Web3 access layer, including zkWaaS (zero-knowledge proof wallet as a service) and the Intent Fusion Protocol, providing a range of modular components such as Confidential Login, Confidential Transaction, DApps Intent Framework, and Intent Solver Network.
OpenFort
OpenFort is an encrypted infrastructure service provider focused on developing "wallet as a service" software products for game developers and publishers, making the interaction of on-chain assets in games as simple and programmable as data interaction. It recently provided an account abstraction solution for the game subnet Beam, a collaboration between Merit Circle and Avalanche.
Polyhedra
Polyhedra provides efficient and trustless interoperability solutions for asset transfers, message passing, and data sharing between various Web2 and Web3 systems using zero-knowledge proofs. Its products include the cross-chain infrastructure zkBridge, the ZK client zkLightClient, the credential system ZK-DID, and the programmable NFT protocol ZK-NFT.
UXUY
UXUY is a decentralized multi-chain trading platform based on MPC wallets, reducing the barrier to entry by providing solutions with no mnemonic phrases and no gas fees, offering a trading experience similar to traditional CEX platforms. It currently supports 8 public chains, including Ethereum, BNB Chain, Tron, Arbitrum, Polygon, Avalanche, Fantom, and Optimism.
Pass3
Pass3 is a Web3 advertising company that aims to provide a value exchange system for advertisers, publishers, and users, offering in-game reward ad solutions (out-of-app). Its main product is the advertising placement Honorwall, where users can earn rewards by clicking on ads placed through Honorwall. In addition to Arcane investments, Pass3 has also received investments from Pantera, Sequoia, Coinbase, Jump, and Spartan.
Nest
Nest aims to solve the control issues of digital identities, assets, and transactions in the real world, providing blockchain functionality and infrastructure to support most distributed services and products.
Fabric Cryptography
Fabric Cryptography is a cryptographic hardware manufacturer focused on the design, development, and manufacturing of encryption chips. It has collaborated with the ZK technology developer Nil Foundation to launch a decentralized marketplace for encryption and outsourced proof generation, aiming to achieve faster, more scalable, and more privacy-preserving zero-knowledge proof computation.
DeFi
APY.Vision
APY.Vision is a data platform built for DeFi protocols and investors, allowing users to track their liquidity pool earnings and impermanent loss, monitor liquidity staking, and analyze historical profit and loss.
AlgoRai Finance
AlgoRai Finance is a decentralized finance platform that offers structured products and derivatives on the Algorand and Ethereum blockchains. It currently provides structured products for Algo, BTC, and ETH, generating income through strategies such as automatic hedged call options and put options.
First Digital
First Digital is a technology-driven financial institution that launched the reserve-backed stablecoin FDUSD in June 2023. FDUSD is live on Ethereum and BNB Chain.
BBOX
BBOX is a decentralized perpetual exchange that was selected for the sixth season of the Binance Labs Incubation Program. It aims to optimize the trading experience for liquidity providers through dynamic AMM, multi-asset signals, and OEV capture technology, providing more opportunities for yield.
BasedApp
BasedApp is a Web3 bank that allows users to spend, send, and invest in cryptocurrencies anytime, anywhere. Its features include a crypto Visa card, account abstraction support, and email or Google account login. Its services are initially provided on the Polygon network.
Community
Discord
Discord is a communication platform that combines text, voice, and video chat, primarily used by gamers but also utilized by the crypto community for real-time interaction.
Vega Idol
Vega Idol is a Web3 entertainment platform focused on Asian idol competitions, using decentralized reality show competition mechanisms during the selection process. Through token economic models and product design, it allows fan communities to participate in various stages of idol selection, formation, and promotion, enabling fans to grow and share profits with the new generation of idols.
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