 Hello and welcome from Cointelegraph Research Terminal. I'll be your host, Michael Tabone, Senior Economist with Cointelegraph Research. Today's panel will be discussing the cryptoverse of 2022, it's kind of a year in review, from venture capital investment perspective, as well as what may be on the horizon for 2023 and beyond. It's me, at Bell Reedy, from Keychain Ventures, quick fire question on a scale from one to 10, one being bearish, 10 being bullish. How would you rate your feelings on the market going into 2023? Yeah, I guess to give you a number, I would say three. I guess 2023 will still be driven by micro trends, rate inflation, geopolitical situation, energy, all the same stuff that we've seen at the end of 2022. More specifically, I guess about crypto, we still have also some headwind and second waves from ripple effects coming from FTX and other situations we've seen at the end of 2022. Robert Young, CEO of Animoka Brands, how would you rate the state of crypto? So I would say it depends on which side of the table you're on. So I think if I put my investor hat on, then I'd say we're at a seven or an eight right now, because I think it's a fantastic time to be deploying capital. But I think if you're in fundraising mode, then definitely there are a lot of headwinds and it's challenging because it's a buyer's market at this point in time. So you really have to be able to stand out. You have to have solid metrics and performance and really be able to demonstrate that you're going to be in it for the long haul and able to withstand a reasonable amount of market turbulence for the next year, year and a half. Cheyenne Asli, director of Aquafi Studios, your number on the market sediment. Yes, I would say a four. I do agree like on a macro perspective, things are not really looking bullish yet, like when it comes to inflation, but I think there is lots of clarity that needs to be also taken into consideration when it comes to regulatory framework for people to gain back confidence. But at the same time, I think it's a great time when it comes to focusing on customer adoption or as end user adoption. There is a couple of good trends right now that I'm seeing going forward and that's kind of the bullish part which I'm seeing makes me more optimistic at least on that side. Very, very interesting. If I averaged everybody out, we're like just below a five. So we're a little bit on the bearer side and I get that, I believe me. I love hearing these different takes. 2022 was a roller coaster ride for venture capital investment on the blockchain industry. In 2021, the entire year, we saw just over $30 billion. And in the first two quarters of 2022, we saw just under that $30 billion in capital inflows. The problem is since April, there's been just but a downward trend the entire 2022 year. So we're just over $36 billion for the entire year last year. So the roller coaster, it seems, has just begun, just been plunging down. So I'd like to go to Robert Young in 2022. Anamoka was on a tear buying all different types of companies was one of the leading ones. Eden Games, Darewise, Tiny Tap, Grease Monkey Games, a host of others. It seems Anamoka is overall bullish on this market. Specifically metaverse in gaming. And what is your take on the current state of these crypto sectors? So I think we remain very bullish. I mean, this is what we do. Obviously we've been a game developer for 15 years. And so the acquisitions that you mentioned are all game studios. So that's actually just continuing to expand our traditional business. However, we have been focused on web three games specifically for the last five years. And that's all we do at this point in time. I think we still feel very bullish. I think that one thing, though, that remains constant in the web three industry is the fact that it changes all the time, if that makes sense. So I think that one of the things that we're doing at the moment is we're, like always, we're constantly reevaluating what business models and approaches and product types and marketing approaches, et cetera, work best. Because I think that the market changes so quickly and for better or for worse, I mean, it's just volatile that you need to keep innovating. You need to stay on top of trends. You need to understand your consumers and you need to be very agile. And that actually is not that different. I mean, that agility has been a necessary skill, I think, in this market for years and will continue to do to be that way, you know. 1,000%, I'm part of a couple of NFT communities that if I take a weekend off and don't show up for a conversation, it's like, what happened? Did you died? You know, what happened? Like it's been two days, you know. Smea, you're the founding partner of Keychain Ventures and Investment Platform, aiming to provide institutional investors exposure to the blockchain and web three ecosystems through funds and co-investment opportunities. Do the funds and institutions have an interest in metaverse and blockchain gaming? Yes, I think definitely. I mean, in terms of funds, obviously, they are more faster adopters and more willing to test the edges. So we've seen a number of funds. I mean, Animoca definitely is a leader in this space in terms of being an investor into this space. There have been other funds that have dedicated vehicles or strategies to gaming. On the institutional side or corporate side, obviously it takes a little bit longer to develop that momentum and conviction. But I think despite what we've seen at the end of 2022, there have been still some announcements. I think notably we've seen Disney, for instance, come out with strategy to use metaverse for their experiences with users and stuff like that. Nike have been with Nightland, have been as well at the forefront of that adoption. And I think that trend definitely is continuing and we will see more of that despite the turbulence. Chai and Asli, can you walk us through the open bridge between Web 2 and Web 3, which is Aquify? Yes, well, what we're focusing on is what I call building the service layer to enable those brand, the corporate and the end user, like the artist as well, to enter the space. And so if you right now, if you look at the space, there is a whole range of interesting applications that are being built, but as an end user, if you're a brand or an artist using those, it's very complex to have a good grasp of understanding all the different chains or the different applications, smart contract environments. And given that everything is open source, it creates even more fragmentation because you can always have a better, more optimized version of something. And so what we're enabling is thinking about an environment where as an end user, you have access to a template where you can just click, deploy that use case in a simple UI or just with some API, I think that you're familiar with, all that in an environment that is decentralized itself. So that's gonna be the nutshell of what we're building. And to come up, just maybe to continue based on about the space, what we're thinking about like the brands right now, I think the next, at least the bulk case for that space will be really driven by consumer from facing application. Like if you can really completely abstract away all the complexity, all the jargons around NFC, blockchain in particular, but really thinking about user value, like application people can use, without even maybe knowing that they are interacting with a blockchain protocol, that's really, that's strong. Absolutely, and you bring up a great point. Thank you, because it's a great transition into Ravi. So my question is, what do you think could be the spark to bring traction more into the blockchain gaming world, into the web three gaming sector? Sure, I think it's very simple. We just need to have more products. I mean, when you think about how ecosystems, game ecosystems have grown, a lot of that is driven by people just having the right hardware and access to the platform of distribution, et cetera. And so if I look back at the last sort of generation of evolution of games, which was mobile, that took several years before there was enough of a critical mass of handsets, and more importantly, games in the app stores for people who add handsets to actually be interested that there was gonna be fun stuff there to play. So I think that the blockchain game space is still so nascent, relative to the amount of time it takes to make a good game. Even a mobile game takes six months to make a decent mobile game. But when you're talking about web console grade, PC grades, it can take years. So in fairness, to have an availability of dozens or hundreds of games takes a long time to start building that ecosystem. So I think it's just a matter of time. We've seen, in 2022, we started to see some of these titles coming out into the market. And so I think that we can see that the quality and enjoyability and playability of games in Web 3 is absolutely there. It's just that there aren't enough choices yet for people. Smeet, I know that you are working with firms. It is an international endeavor, as blockchain really has no borders. What are some of the hotspots for firms you work with? And do you see any trends or changes over the past few years? Yeah, interesting question. Very dynamic environment. And I would just say that my answer is not specific to metaverse companies or gaming space, but in general, regulation remain a big concern. And all the projects and the firms are trying to optimize and find a good jurisdiction where they could operate and run their business. Lately, more lately, jurisdictions like the UAE have proven to be, let's say, more crypto-friendly, attracted exchanges in particular and some other projects as well to be based in that jurisdiction. Right, regulation, regulation, regulation's the thing hanging over the head. Shan, where does Aquify see itself in the short to medium term in 2023 and beyond as we move into the next year? Yeah, I think right now, given that we're in a better market, for as an early startup, I think what I think is important is to really focus on shorting this possible, this kind of cell cycle, but also thinking about what are actually the unique feature or small sets of feature where we can basically offer to the clients and really focus on that. So in a SaaS business, usually you may have a different range of offering and it's not only driven by market, but sometimes it's about creating new markets. Whereas here, given that we're in a better market, one of the things that's very important is thinking about what the client really want in terms of maybe a unique feature that you can offer them and be the best at it in a way that nobody else can actually be comparable or you can provide a better service than yourself. So for us, it's really focusing on where we have really an edge, where we can really provide value to the client and become the best at it and can cause down costs on that front. And later on use that, let's say, just access that resource into expanding into new market. Awesome, excellent. So as we all know, crypto winner, they can last for a long time, be very brutal. So I just wanted to open up to you guys, what makes you right now in the short, medium term 2023, what gives you the signs of the thaw or hope? Okay, sure, I'll jump in. I'm actually not very pessimistic at all, to be honest. And I think that that's partially due to the fact that I suppose we've been in this space for quite a while. I mean, as we like to say, if this is a crypto winter, then 2018 was an ice age. So I think that it's all relative. I think one of the things that for me is the most exciting thing about, the kind of frenetic pace of the last two years is that, Michael, you quoted those investment statistics about funds coming into the sector over the last two years. And I think that those have been transformational in resulting in one key metric, which is the amount of talent that I've observed coming into the space, meaning people who made the decision that Web 3 was now mature enough that they were going to leave a very good position at a very established business to say, I'm gonna do something different and I'm gonna do something because I think a Web 3 way of doing this is gonna be more interesting than what I'm doing now. And the people voting with their careers is often a bigger decision than making a financial investment. And so when you see that kind of exodus of talent moving into a space, I think that's the best validation you can get because that's what's gonna drive innovation. 1000%. Yeah, I don't feel pessimistic either because as you mentioned, the statistics I've mentioned before, the lowest income venture capital inflows that we saw in 2022 were still higher than what we saw in 2020 and 2021, you know what I mean? So it's still at a higher pace. It's just lower than it was the year before, but focus started to shift away from Web 3, it seems, and back into DeFi. So DeFi was the king for a lot of VC investment for a very long period of time and then it shifted to kind of Web 3. Web 3 is Anamoka's wheelhouse. In Web 3 is GameFi and Metaverse and all that stuff. So it's only one data point, it's not a trend, but I'm very interested to see what happens in this next quarter. Why do you think DeFi would start heating up again all of a sudden in the last quarter when we're in the bear market, right? Why would that be? Why do you guys, do you have any insights into why that might have happened? I mean, I can volunteer my view on those numbers. I will not say that DeFi has heated back up. I will just say, relatively speaking, Web 3 compared to DeFi have seen more reduction into investment or inflow of capital into Web 3 compared to DeFi, but both of them, I think if we double click on the numbers, you will see that the trend is both trending down. I think also it's interesting to note that, you know, the Web 3 community is much, and I use that as a general term for all things blockchain, I think that it's become a much more diverse community with people now enjoying different silos of interest, whether you're more in the fintech side of things or you're more in the content side of things, et cetera. And one thing that I think gives me a lot of, you know, encouragement is that if you look at over the last quarter, there were a lot of new projects coming out, you know, tokenized projects on behalf of big consumer brands, you know, whether it's Starbucks or Reddit or you name it, and including Adidas and Nike and stuff, and these projects continued on their roadmaps and continued to launch with consumers, despite the fact that FTX blew up in the most spectacular way, right in the middle of all of those projects. But for companies that are planning, you know, two-year product development cycles and marketing plans, they launch when the product is ready for customers. They don't care about what the market information is because that's not part of how they serve customers because their sort of USP is different, right? It's not related to the prices of crypto or things like that. So I think that we've seen effectively in 2022 kind of a decoupling between what I would call the content side of Web3 and entertainment Web3 where we spend a lot of our time and the financial services side of Web3. It used to be the same. 2019, it was all the same. Yeah, right, yeah, absolutely. I'd like to thank everyone who joined us today on the panel. It's been extremely interesting hearing the different takes from everybody and from all of us at Cointelegraph Research, I'd like to thank you, thank you for watching. We look forward to presenting you with another great panel really soon. Thank you. Bye, Bitcoin. See you all. Thank you, everyone.