Token2049 in Singapore has concluded. Steve Chiu, the founder of CGV, shared his thoughts and observations from participating in this summit: The overall landscape is undergoing changes, the mysterious Eastern forces are fading, India is rising, AI is gaining prominence, NFTs are no longer as prominent, exchanges are becoming more robust, and Japan plays a role that is half present, half absent…… The route from Tokyo to Singapore is incredibly busy, with over a dozen flights shuttling back and forth each day, most returning at full capacity. In September, amid the bustling and vibrant atmosphere of the Singapore Grand Prix, from Ginza to MBS — the locations change, but the busy crowds and unwavering faith remain constant. This was my third participation in the Token2049 conference over the six years since entering the crypto space. Each time, I come with questions and leave with even more. Industry conferences are never meant for providing answers; instead, they offer a constant stream of evolving narratives, forward-thinking concepts, waves of unforeseen black swan events, and a multitude of ever-changing policies and regulations. The previously established is overturned without explanation, and hot topics emerge — seemingly out of nowhere. The key is to keep moving forward, never looking back. In short, change is substantial. Firstly, there’s a stark division between old and new circles, with a generation gap emerging. Perhaps marking the last bull market or using the pre and post-pandemic periods as a dividing line, seasoned players who have weathered several cycles are now in a period of dormancy, while most of the attendees are fresh faces. It’s heartening to see that trading platforms which stood the test of time appear even more robust, while the older generation projects have almost disappeared from sight. The NFT track was nowhere to be found. From large-scale posters, offline activities, souvenirs to talk topics within smaller circles, NFTs were conspicuously absent. When it comes to NFTs, project teams were actively explaining, trying to avoid the subject. In its place, there were a variety of AI-related protocols, games, platforms, and computing power. Of course, there was a new path outlined through discussions of Bitcoin Layer 2 and engravings. The Ethereum ecosystem and ZK series didn’t seem as popular, likely due to the saturated market — something we’ve grown accustomed to. Furthermore, the influence of Asian funds has waned, dispelling the notion of a mysterious Eastern force. Vitalik’s statement contradicts Hong Kong, where policy instability persists. In reality, Singapore has only harnessed its power as a hub for transit. What the Singaporean government desires is regulatory compliance in the crypto market, which is gradually moving further away from compliance. China’s nominal absence has left Asian projects in a state of limbo. Aside from becoming limited partners (like us…), Asian funds will find it difficult to achieve significant accomplishments. However, what’s remarkable is that Indian projects seem to be rising. With their powerful linguistic advantages and technological innovation capabilities, Indian teams and projects are gradually gaining prominence at conferences — from mobile internet to the Web3 encryption industry. Coupled with a vast population base and a weak sovereign currency, India’s teams and projects are beginning to make a name for themselves. Japan has always played a semi-attending, semi-absent role in the crypto industry. The Japanese government’s conservative approach to the crypto industry has successfully helped the Japanese people avoid many pitfalls from 2022 to 2023. Whether it’s Layer 2 networks, NFTs, or even STOs, Japan still leads in advanced technology and cutting-edge trends. Compared to the rest of the world, Japan boasts exceptional design capabilities, but fewer technical developers than China and the United States. Compared to Singapore, Hong Kong and Southeast Asia, Japan has a broader market and strong purchasing power. Since 2022, Japan has gradually eased its control over the listing of licensed trading platforms, and recently, it also opened up channels for crypto financing for startups. Regardless of bull or bear markets, Japan is independently accelerating towards the global crypto market. It will face a tremendous challenge ahead. CGV is an active Japanese crypto fund committed to promoting the construction and development of Japan’s crypto regulatory framework. We lead Japanese projects in going global and also assist global projects in entering Japan. Faced with such a significant challenge, after engaging in discussions at Token2049, I believe many share our thoughts. The crypto industry is still in a period of uncertainty, and revolutionary innovative applications have yet to emerge. Japanese players should approach the market rationally, gradually enter the scene, and patiently seize opportunities and ultimately, they will eventually see results. CGV FOF: Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment,” it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi Venture, Rocktree Capital, Cryptomeria Capital, etc.

Cryptogram Venture (CGV), a Japanese crypto and Web3 research institution, recently announced the “Web3 Shining Golden Pavilion” event, hosted by CGV and UneMeta, which will take place in Kyoto, Japan on June 28th. Since 2022, Japan has been actively promoting the development of the Web3 industry. It has established a Web3 Minister and special zones, released policies such as the “NFT White Paper” and “Proposal for Stablecoin Openness in Japanese Society”, and introduced the world’s first stablecoin legislation, the “Fund Settlement Act Amendment.” Japan’s NFT market has great potential due to its rich and high-quality artists, anime and gaming IPs, mature user market, and the new opportunities opened up by NFT applications for digital IP development and innovation. Steve Chiu, the founder of CGV, expressed the hope that through the Web3 Shining Golden Pavilion event, Japan can leverage its resource advantages in anime, IP, gaming, and other fields to actively explore the applications of NFTs, blockchain games, metaverses, and other Web3 businesses. They aim to discover and assist outstanding talents in the Web3 field in Japan and globally, providing them with resource support and exploring the vast development opportunities of Web3. Ann Yu, the founder of UneMeta, mentioned that the NFT industry is still in its early stages. As they delve deeper into the NFT field, they have observed the impact brought about by this technology. Many traditional players and high-quality content are highly interested but also cautious. The UneMeta team insists on collaborating with genuinely long-term and high-quality content and working alongside teams that are truly determined to contribute to the industry. They hope to provide continuous positive guidance for users and the industry. The event will take place from 7:00 PM to 9:00 PM (JST) on June 28th at Brooklyn Night Bazaar (6F, Enpaia Bld., 521 Kamiosaka-cho, Nakagyo-ku, Kyoto-shi, Kyoto, 604–8001, Japan). The agenda includes keynote speeches, offline networking, and other activities, aiming to provide a platform for Web3 startups to showcase and promote their projects, engage with the Japanese market, and attract potential investors. This event will be jointly organized by TWSH, Alibaba Cloud, Teamz, Star, Dracoo World, Farcana, KEKKAI, and others, providing comprehensive support for the event. Strategic partners such as CoinW labs, Flow, Sei, and others will also provide full support for the event. Simultaneously, the second edition of the “Tokyo Web3 Summer Hackathon” initiated by CGV is currently underway. CGV, Flow, and Sei have jointly established a dedicated fund. Since the launch ceremony and the first Demo Day event held in Tokyo on May 17th, the “Tokyo Web3 Summer Hackathon” has gained increasing attention and participation from crypto and Web3 institutions, developers, and projects. The hackathon is expected to continue until September 2023 to better nurture and assess the sustainability and development capabilities of the projects. Project registration link: https://www.web3hackathon.io/ For more event details, please follow CGV’s official Twitter account @CGVFOF and visit their official website (https://www.cgv.fund/) to get the latest updates and important information. — — — — — — — — — — — About Cryptogram Venture (CGV): Cryptogram Venture (CGV) is a Japan-based, fully compliant crypto industry research and investment institution. With a business orientation of “research-driven investment,” it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW. At the same time, CGV FoF is an LP for funds such as Huobi Venture, Rocktree Capital, and Cryptomeria Capital. It has established Web3 hackathons and industry summits as brand events under its umbrella. From July to October 2022, it initiated Japan’s first Web3 Hackathon (TWSH), which received joint support from the Japanese Ministry of Education, Culture, Sports, Science and Technology, Keio University, SONY, SoftBank, and other institutions and experts. CGV has branches in Singapore, Canada, and Hong Kong. CGV Official: https://www.cgv.fund/ Twitter: https://twitter.com/CGVFOF TWSH: https://www.web3hackathon.io/ About UneMeta: UneMeta is Japan’s largest high-quality IP NFT incubator, trading and social finance platform, focusing on excellent IP services based on Japanese culture. So far, we have released the NFT “Second Dimension” in cooperation with the popular Japanese voice actress Hanazawa Kana, and the NFT of Mushi Production’s classic art IP “BELLADONNA OF SADNESS”. The UneMeta platform aims to attract many users by developing a unique point system and providing an NFT experience that blends with real life. In addition, we aim to be a bridge connecting Web2 and Web3, and are committed to bringing more high-quality Web2 IPs to Web3 to promote a sustainable NFT ecosystem. Website: https://www.unemeta.com/ Twitter: https://twitter.com/UNE_METAVERSE Discord: https://discord.com/invite/YzztkC6ENe

On April 28th, 2023, Cryptogram Venture (CGV) announced that the second Tokyo Web3 Spring Hackathon (TWSH), is initiated by CGV and jointly supported by experts from institutions such as Keio University, NTT DOCOMO, MetaFocus, TEAMZ, CoinW Labs, etc. The registration channel for (pre-)participation projects has now opened at https://www.web3hackathon.io/, and institutional cooperation and recruitment are underway. CGV FoF recently sponsored one of the most influential Web3 offline summits in Japan, the TEAMZ Web3 Summit 2023, and will organize the Tokyo Web3 Spring Hackathon (TWSH) Demo Day event at Toranomon Hills on the first day of the summit (May 17th) in Tokyo. Dozens of guests, including former Japanese Cabinet Secretary and current Ministry of Digital Society Promotion Minister Hiroshi Hirano, Tim Draper, the founder of Draper Associates, Satoshi Watanabe, the founder of Astar Network, Yuzo Kano, the CEO of BitFlyer, Jason Sai, a web3 special examiner for NTT DOCOMO, Amo Kensuke, the COO of Coincheck, David Gan, the founder of OP Crypto, Akio Tanaka, a founding partner of Infinity Ventures Crypto, Mable Jiang, the chief revenue officer of STEPN, Tony Gu, a partner of NGC Ventures, and Qi Liu, the co-founder of SevenX Ventures, will attend the event and give speeches. The choice of Japan as the birthplace of TWSH is in line with the Japanese government’s efforts to develop Web3. Recently, Japanese Prime Minister Fumio Kishida stated that the advent of the Web3 era could lead to economic growth in Japan. In the future, the Japanese government will carry out institutional reforms to create an environment that promotes the creation of new services, including Web3-related infrastructure. Japan has great development potential in the encryption and Web3 fields and may occupy an important position in the global Web3 market. The organizer CGV stated this hackathon activity differs from previous industry hackathon events in that it emphasizes the sustainability and development capabilities of projects in addition to development capabilities. Therefore, the contest is expected to last for up to six months. The construction and development of the Web3 ecosystem is not something that can be done overnight, and it is hoped that, with a more responsible examination and more patient support, outstanding talents and teams in the Web3 field can be discovered and assisted globally to jointly explore the enormous development space of Web3. The first Japan Web3 Hackathon, hosted by CGV, was held from July to October 2022, and was jointly launched by institutions such as the Ministry of Education, Culture, Sports, Science and Technology of Japan, Keio University, Sony, Softbank, and Cointelegraph Japan (CTJ). Dozens of well-known global blockchain industry institutions such as Metis, MetaEstate, Atom Capital, Binance, BAI Capital, Consensus Lab, Gate.io, IOSG Ventures, IPFS infinite Japan, NGC Ventures, OKX, Tokyo Tower, and Tokyo Esports Gate supported the event, with over 100 outstanding projects participating from Japan, the United States, Singapore, Dubai, Hong Kong and other regions. Ultimately, nine projects from different tracks stood out through selection and shared a $150,000 prize pool. Some of the favored projects also received investment from investment institutions and support from Japanese local resources. When it comes to the focus of the second Japan Web3 Hackathon, Steve Chiu, the founder of the organizer CGV, stated that the projects for this event not only cover popular Web3 tracks such as blockchain infrastructure, DeFi, GameFi, Metaverse, NFT and SocialFi, but also place emphasis on innovative trends such as Zero-knowledge Proof (ZK), encrypted AI fusion, innovative stablecoins, DePIN (decentralized physical infrastructure network), Soul Binding Tokens (SBT), completely on-chain games, and new social applications. Participating institutions will have the opportunity to have early contact with front-line projects, and communicate with global Web3 industry institutions and practitioners. As for participating projects, they will have the chance to obtain investments and entrepreneurial guidance from top global VC institutions, win the total prize pool of hundreds of thousands of dollars, and receive support from a multimillion-dollar incubation fund. According to the schedule of the competition, from April to June during the event, project registration, screening and review, Demo Day exhibitions (Tokyo Toramagashi), online preliminaries, and excellent project roadshows will be held sequentially, and the award ceremony will be held in Japan in September. As of now, more than 30 VC institutions from all over the world have registered to participate in the project selection and review, and more institutional cooperation is being confirmed. For institutional cooperation applications (event support, project selection and review, media cooperation, etc.): Yurinatyou@cgv.fund Registration channel for participating projects (pre-registration): https://www.web3hackathon.io/ About Cryptogram Venture (CGV): Cryptogram Venture (CGV) is a compliant crypto industry research and investment institution headquartered in Japan. With “research-driven investment” as its business orientation, it has participated in early investments in projects such as FTX, Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, Powerpool, and JPYW, a yen stablecoin regulated by the Japanese government. At the same time, CGV FoF is an LP of funds such as Huobi Venture, Rocktree Capital, and Kirin Fund. Currently, CGV has branches in Singapore, Canada, and Hong Kong, About Keio University: Keio University, is a world-renowned research-based comprehensive university and the first institution of higher education in Japanese history. Keio’s predecessor was the “Rangaku Juku” founded in 1858, a private school that spread Western natural sciences. Under the guidance and influence of its founder, Yukichi Fukuzawa, it continued to develop and played a pioneering leadership role in Japanese society. About NTT DOCOMO: The largest mobile communication operator in Japan, with over 60 million contracted users. It provides 3G network services throughout Japan and provided LTE commercial network services as early as 2010. In November 2022, NTT DOCOMO announced that it will invest up to 600 billion yen (US$4 billion) in developing next-generation Web3 internet technology. About MetaFocus: MetaFocus is an accelerator that focuses on incubating innovative projects in the fields of cryptocurrency and metaverse. Its headquarters are located in Singapore, and it has branches in Tokyo, Hong Kong, and other locations. Its business currently covers some countries and regions in North America, Asia, the Middle East, and Europe, with over 50 partnering organizations and nearly 100 industry mentors. MetaFocus provides matching support to the founding teams at every growth stage of their startup projects. With a top-notch team of mentors and rich experience in project localization, MetaFocus offers personalized and differentiated coaching and support in areas such as industry, operations, marketing, financing, and going public. About TEAMZ: TEAMZ is a digital creative team that provides business strategies and solutions for Web3-related companies seeking new opportunities. It supports customer needs in the Japanese Web3 market through one-stop services from planning and development to ongoing support for Web3 products and services such as NFT, DAO, GameFi, wallets, and Metaverse integration. About CoinW Labs Established in early 2022, CoinW Labs is committed to building a world-class distributed ecosystem incubation laboratory, providing industry-leading and highly professional global blockchain investment and incubation services to accelerate builders and achieve sustainable growth and success in the blockchain field. The business focuses on Gamefi, NFT, DeFi and other areas. Since its establishment, it has successfully discovered and incubated more than 300 projects, achieving a financial investment return of over 20 times overall, and has been highly recognized in the industry for its high coverage and efficiency of services.

Bitcoin Ordinals is completely written on the chain of Bitcoin, like a tattoo, and becomes part of Bitcoin. Crops can only grow well on fertile land. Bitcoin has been operating successfully for 14 years and is now the 10th largest asset in the world by market capitalization, just behind Nvidia. CGV argues that Bitcoin has changed many people, allowing us to view the world from a new perspective and making us think about “what is value?” Even if there are still people who doubt Bitcoin, it cannot hide the fact that Bitcoin has become a mature and widely recognized asset. Top Assets by Market Cap Data source: Global ranking, https://companiesmarketcap.com/ While Bitcoin is changing us, it is undergoing evolution. The innovative projects based on Bitcoin, such as Bitcoin Layer 2 solution, Ordinals protocol, BRC-20, and Nostr protocol, spring up like mushrooms after rain. These innovations provide faster and more convenient trading solutions for Bitcoin, as well as greater potential and imagination for Bitcoin. Some people may question these innovations, but doesn't Bitcoin thrive on skepticism? Let's put aside our stereotypes for a while and understand the new concepts centered on Bitcoin, which is also the original intention of this article. Let's repeat the first sentence of the opening paragraph, an investment philosophy worth thinking about: Crops can only grow well on fertile land. Note: When it comes to innovations regarding Bitcoin, we are well aware that there is still much to be done. We warmly welcome your comments and suggestions, and sincerely invite you to join us in the discussion. I. Ordinals protocol - The era of sats is approaching As Ethereum is designed to support smart contracts and decentralized applications, it has a natural advantage in the NFT field. Based on Ethereum's ERC-721, developers can easily create, issue, and trade NFTs. You may wonder, why does not Bitcoin, which has the strongest consensus, issue NFTs. The original intention of Bitcoin was to become a peer-to-peer digital currency. Therefore, its network focuses more on security, stability, and simplicity, which constrain its development of smart contracts and Dapps. It doesn't mean the Bitcoin network can't support NFTs, or even issue “tokens”. It brings us to the point of discussion: Ordinals, a protocol created by Casey Rodarmor, a former developer of Bitcoin. 1. Origin of Ordinals: Bitcoin NFT In January 2023, Casey Rodarmor, a core contributor to Bitcoin, released the Ordinals protocol. The emergence of the Ordinals protocol stimulated discussions over Bitcoin NFT. How does the Ordinals protocol make NFT possible on Bitcoin? The total supply of Bitcoin is 21 million, and its smallest denomination is sats. 1 BTC is equal to 100 million sats. The Ordinals protocol proposes an innovative design based on “sats”, which allows for embedding various information such as images, text, and videos (also known as inscriptions) in “sats”. The uploaded inscriptions are connected to specific “sats”, which is similar to the minting of Ethereum NFT. The ultimate product is a sats with inscriptions, also known as Bitcoin NFT. Each sats has a unique tag and code, the corresponding content is also unique, transforming sats from a pricing unit to an NFT unit. The number of Ordinals inscriptions has exceeded 1.6 million, data source: Dune Analytics As of April 23, 2023, the number of Ordinals inscriptions had exceeded 1.6 million. It means that the NFTs in the Bitcoin ecosystem are unlikely to disappear. What value does Ordinals NFT create? Permanent on-chain. Bitcoin Ordinals NFT is completely written on the chain of Bitcoin, like a tattoo, forever becoming a part of Bitcoin. It makes sense to keep your favorite things permanently on the Bitcoin chain; Never return to zero. Ordinals NFT will not return to zero, its base value is a sats; Historical value. The total supply of Bitcoin is limited, and the total number of inscriptions that can be inscribed is also limited. Over time, early inscriptions become precious due to their historical status. In the NFT world, uniqueness and scarcity endow works with high value. The early NFT inscriptions of Bitcoin may become more and more precious. Partial infrastructure of the Ordinals ecosystem, source: CGV The Ordinals protocol was created three months ago. Currently, it has already spawned many ecological projects built around its infrastructure, including wallets, trading markets, and tools. Leading exchanges such as OKX and Binance have joined in supporting Ordinals Ecosystem. Some interesting Ordinals NFTs 1）TwelveFold TwelveFold is a Bitcoin NFT project launched by Yuga Labs. It is a series of 300-piece generative art collections. 2）Bitcoin Punks Bitcoin Punks is the first project to successfully upload the original Ethereum CryptoPunks to the Bitcoin blockchain using Ordinals, and all assets have been minted for free by collectors. 3）Taproot Wizards Why has Taprot Wizards received so much attention? It is said to be the largest block in Bitcoin's history, with a staggering capacity of 4MB, four times higher than the usual 1MB limit. 4）Pixel pepes “Pepe the Frog” is one of the most viral memes on the Internet. Pixel Pepes was airdropped from Ordinals Wallet and is composed of some of the most active KOLs and eco-developers in the ecosystem. 2. Exploration of Ordinals: BRC-20 CGV holds that the composability of the digital world has brought many interesting experiments to the industry. Two months after the release of the Ordinals protocol, Twitter user @ domodata proposed a Token standard - BRC-20 - on the Ordinals protocol. Mint and transfer functions of BRC-20, source: https://domo-2.gitbook.io/brc-20-experiment/ BRC-20 utilizes 𝗢𝗿𝗱𝗶𝗻𝗮𝗹 𝗶𝗻𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻𝘀 of JSON to deploy token contracts, mint and transfer tokens. You can perceive BRC-20 as an NFT for Ordinals, which is similar to a check. BRC-20 does not have a smart contract. “Ordi” is the first BRC-20 token deployed by @domodata, source: https://domo-2.gitbook.io/brc-20-experiment/ More than 30,000 𝗢𝗿𝗱𝗶𝗻𝗮𝗹 𝗶𝗻𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻𝘀 were minted within 24 hours after the release of BRC-20. @domodata also deployed $ordi, the first token of BRC-20, with a total of 21 million. Everyone could mint it for free, and all $ordis were minted in less than 2 days. Some of BRC-20 tokens, source: https://brc-20.io/ Although @ domodata has repeatedly stated that BRC-20 and $ordi are for experiments only and have no value, some people are trading $ordi and minting more BRC-20 tokens. There have been 3,466 BRC-20 tokens, with a total market value of nearly US$20 million. The arrival of the era of pricing based on “sats” Is it necessary to issue cryptocurrency on Bitcoin ordinals? BRC-20 does not have a smart contract, and the inscription can be used as a ledger. However, it is difficult to establish an efficient and stable system with an immutable ledger. Moreover, the 'writing' on the Bitcoin blockchain takes up very valuable resources. It requires paying some sats as gas fees and spending time waiting for transaction confirmation. BRC-20 is created based on Ordinals, making it very fragile. As BRC-20 does not use Bitcoin UTXO, it is prone to problems in trading. Recently, after Unisat launched the BRC-20 trading marketplace, it was suspended due to related trading attacks. BRC-20 is still in the experimental stage, why do some people participate in it? Apart from the speculative nature of FOMO, if you deploy and mint some tokens, you will find that the release of tokens via BRC-20 seems to have achieved the original idea of the encryption industry. That is to say, everyone can easily issue tokens, and the biggest value is that it's on Bitcoin. It occupies a portion of sats, and these BRC-20 tokens are like incarnations of Bitcoin, which gives them value. Unisat's BRC-20 token trading market, source: Unisat More importantly, in CGV's view, the era of pricing based on "sats" has arrived, with all Ordinals NFT trading platforms starting to use Bitcoin for pricing. After Unisat launched BRC-20 related tokens, these tokens are directly priced using sats. It can be seen that the era of pricing based on "sats" has arrived Summary Regardless of the success or failure of the Ordinals protocol and BRC-20, their emergence has opened up new possibilities for Bitcoin, making the Bitcoin ecosystem more diverse and vibrant. Most importantly, they have transformed sats, the smallest denomination of Bitcoin, from a concept to a practical unit. II. Lightning network - Let sats flow Bitcoin has been plagued by issues such as slow transaction speed, high transaction fees, and difficulty in scalability, constraining its performance and application scenarios. How to solve these issues? Many developers are attempting to build so-called Layer 2 networks based on Bitcoin. The Layer 2 network is a technical solution built based on the Bitcoin mainnet (Layer 1). By running protocols or platforms on top of the basic layer, the Layer 2 network can fully utilize the security and decentralization characteristics of the Bitcoin mainnet while providing a more efficient trading experience. There are many Layer 2 solutions, among which the lightning network and side chain (such as the liquid network) are the mainstream, and the former is widely used. Next, let's talk about the lightning network. What is the lightning network? Lightning network is one of the Layer 2 solutions. It is mainly used in Bitcoin payment scenarios, helping users save costs and improve efficiency. Why could the lightning network complete peer-to-peer payments at a lower cost and faster speed? Because the lightning network places the transaction process off the chain, only the final transaction results are confirmed on the Bitcoin mainnet. Advantages of the lightning network -Smaller transactions are more convenient Through the lightning network, users can use sats, the smallest denomination of Bitcoin, to make payments, satisfying the needs of daily sporadic consumption. Bitcoin transaction fees, data source: https://bitinfocharts.com/comparison/bitcoin-transactionfees.html -Reduce transaction costs At present, the transaction fee for Bitcoin is approximately US$2. At the peak of the market in 2021, the fee exceeded US$60. With the lightning network, the fee is around 1 cent for US$100 transaction, which is quite cost-effective for daily small payments. -Accelerate transaction processing speed Currently, the Bitcoin network can process up to 7 transactions per second, and network congestion may cause the delay in transaction confirmation, affecting the user payment experience. Theoretically speaking, the lightning network can reach a processing speed of millions of transactions per second. Development of the lightning network As the technology of the lightning network gradually matures, the payment and social giants are driving its popularization. As of April 25, 2023, the lightning network has a total of 16,000 nodes and nearly 75,000 payment channels, with channel funds of approximately 5,379 Bitcoins (nearly US$152 million). Real-Time Lightning Network Statistics, source: 1ML Let's take a look at the current usage scenarios of the lightning network: Social platform payments and tips Many people use the lightning network because of the Nostr protocol and the Damus built on top of it. They support payments and tips via the lightning network. Cross-border remittance In January 2023, digital payments platform Strike announced a partnership with Send Globally to enable remittances via the lightning network between users in the U.S. and the Philippines. With Send Globally, the US dollar can be converted into Bitcoin, which is sent via the lightning network to a third-party partner in the recipient's country, and then converted into local currency and directly transferred to the recipient's account. Merchant payment Strike collaborated with Shopify, Blackhawk Network, and NCR to establish a Bitcoin payment system that allows merchants to quickly receive US dollars after clients make payments using cryptocurrency. At present, the merchants that support the payment system include McDonald's Corporation, CVS, Walgreens, Whole Foods, and Walmart. The lightning network has been trying to realize the original intention of Bitcoin - to become a point-to-point electronic cash system. In addition to large transactions, sats in small transactions can flow very easily through the lightning network. Although the lightning network faces many challenges on its way to popularity, as the technology matures and usage scenarios continue to enrich, it will definitely become a powerful assistant to Bitcoin. Final thoughts CGV deems that whether you are a developer or a speculator, as long as you involve in Bitcoin, you promote the prosperity and development of Bitcoin and its community. Whether it is the Ordinals protocol, BRC-20 experiment, or Layer 2 solution such as the lightning network, they have expanded the application range of the Bitcoin network, allowing for the use of “sats” and the pricing based on “sats”, thus reducing the psychological pressure and lowering the threshold for entry. There is nothing wrong with the open development and multifaceted attempts of the Bitcoin network. With the accumulation of wealth effect and the increase in the number of users, the competition among ecological products will gradually promote overall improvement. ​At present, many projects centered on Bitcoin are still in a state of chaos, with varying levels of quality. The only thing you need to pay attention to is to protect your Bitcoin. ｜Disclaimer: The information and materials presented herein are from public sources and the Company makes no warranty as to their accuracy or completeness. Any descriptions or projections of future conditions are forward-looking statements, any recommendations and opinions are for reference only and do not constitute investment advice or implication to anyone. The strategies that the Company may adopt may be the same, opposite, or unrelated to those that readers speculate based on this report. About Cryptogram Venture (CGV): Cryptogram Venture (CGV) is a Japan-based, fully compliant crypto industry research and investment institution. With a business orientation of “research-driven investment,” it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW. At the same time, CGV FoF is an LP for funds such as Huobi Venture, Rocktree Capital, and Kirin Fund. It has established Web3 hackathons and industry summits as brand events under its umbrella. From July to October 2022, it initiated Japan’s first Web3 Hackathon (TWSH), which received joint support from the Japanese Ministry of Education, Culture, Sports, Science and Technology, Keio University, SONY, SoftBank, and other institutions and experts. CGV has branches in Singapore, Canada, and Hong Kong.

Display: CGV Research Author: Cynic Nowadays, Ethereum occupies half of the infrastructure of the blockchain industry, but its dominant position in the mainnet is being challenged by many latecomers. One of the industry consensuses is that multiple chains will coexist in the future, and cross-chain or even full-chain will be the most critical link in the multi-chain ecology. However, cross-chain bridges connecting various blockchain networks are plagued with security issues, and the cross-chain ecosystem seems to be in jeopardy. The emergence of ZK Bridge (a cross-chain bridge using zero-knowledge proof) will effectively solve various defects of the current cross-chain solutions and realize the interconnection of all chains. Heimdallr guards Rainbow Bridge Image source: Klugh, Maria Tales from the Far North (Chicago, IL: A. Flanagan Company, 1909) In Nordic mythology, Heimdall is a mysterious and important god who guards Bifröst, the Rainbow Bridge connecting Asgard to Midgard. If we compare the Rainbow Bridge connecting Asgard and Midgard to the cross-chain bridge, can zero-knowledge proof shoulder the responsibility of guarding cross-chain security and serve a role like the invincible Heimdallr on the Rainbow Bridge? This report presents the comprehensive analysis of the ZK Bridge by the Investment & Research Team of CGV Research, and strives to explore the development potential of zero-knowledge proof in solving cross-chain security issues and removing high-performance bottlenecks. TL; DR — What is ZK Bridge? ZK Bridge is a cross-chain bridge using zero-knowledge proof, with zero-trust, license-free, scalable, and efficient features. — Why do we need ZK Bridge? The current centralization and trust assumption of cross-chain bridges lead to poor security, frequent vulnerabilities, and serious losses; while cross-chain bridges that emphasize security are low in efficiency and high in cost. ZK Bridge can simultaneously maintain security, decentralization, and efficiency. — How to implement ZK Bridge? A light node solution based on ZK-SNARK — Related project introduction: Succinct Labs, zkIBC by Electron Labs, zkBridge by BerkleyRDI. What is a cross-chain bridge? Cross-chain bridge is a technological solution that allows for the transmission of value and information between different blockchain networks. By using a series of crypto and protocol techniques, the cross-chain bridge has realized the safe, verifiable, and trust-free transfer of assets and data, thus promoting interoperability between blockchain networks. Generally speaking, we divide cross-chain bridges into direct asset cross-chain bridges and universal message cross-chain bridges. Why has cross-chain bridge become a target of criticism? As a centralized pool of huge funds, the cross-chain bridge is naturally attractive to hackers — the benefits brought by successful attacks are huge. Besides, security assumptions may differ between chains, the code of assets across chains is more complex and code audits cannot identify all vulnerabilities, thus providing opportunities for hackers who are driven by huge incentives. The specific attack schemes are divided into the following types: Centralized attacks: Some cross-chain bridges rely on centralized relays or validators to transmit and validate transactions. This kind of design may lead to a single point of failure, and attackers can destroy the entire cross-chain system by attacking these centralized components. Economic incentive attacks: Cross-chain bridges usually require setting appropriate economic incentives to ensure the honest acts of validators and relays. However, it is not easy to design appropriate incentive mechanisms, and insufficient or imbalanced incentive designs may cause malicious behaviors or collusive attacks. Double-spend attack: In some cases, attackers may attempt to spend the same asset on the source and target chains, resulting in double spending of the asset. It is necessary to design effective preventive measures for cross-chain bridges to prevent double-spend attacks. Replay attack: Attackers may attempt to replay transactions on the target chain that has already taken place on the source chain to obtain improper benefits. It is necessary to implement transaction validation and anti-replay mechanisms for cross-chain bridges to prevent such attacks. Off-chain coordination attacks: Some implementations of cross-chain bridges rely on off-chain coordination, such as state channels or side chains. Attackers may disrupt the normal operation of cross-chain bridges by disrupting or attacking off-chain coordination. Inter-chain consensus attack: As the cross-chain bridges involve multiple blockchain networks, different networks may adopt different consensus algorithms. Attackers may exploit the weaknesses of inter-chain consensus to launch attacks, such as implementing a 51% attack on a single chain to affect the correctness of cross-chain bridges. Overview of current mainstream cross-chain bridge solutions There are no solutions. There are only trade-offs. — — Thomas Sowell Thomas Sowell (a representative of the Chicago School of Economics) The core cross-chain issue is how to verify the reliability of messages from another chain. Different solutions have been proposed to address this issue, including different levels of trust assumptions. Trust graph of cross-chain bridges Comparison of technical parameters of current mainstream cross-chain solutions The combination of light nodes and relays is the earliest cross-chain solution, represented by BTC Relay, which aims to use Ethereum services by paying Bitcoin. However, due to a large amount of on-chain computing and storage, it is expensive to run on-chain light clients. Moreover, due to the heterogeneity of consensus algorithms and signature algorithms between different chains, the cross-chain solution is not scalable. Therefore, it is necessary to implement the light client and relay for each pair of two specific chains. So far, only IBC on the Cosmos application chain has achieved large-scale on-chain light clients. The success lies in the extremely high-level standardization of Cosmos application chain, and each application chain needs to run the Tendermint consensus and comply with IBC standards. In a multi-chain world with various consensus mechanisms, signature schemes, and virtual machines, it is difficult to verify on-chain light clients. Current mainstream cross-chain projects shift the verification process off-chain to avoid the high cost of on-chain light nodes, causing different levels of trust assumptions and potential fraud risks. The Investment & Research Team of CGV Reserach introduces some of the key solutions according to the level of trust, from high to low. Cross-chain solution 1: Multiple signatures without pledges Typical projects include Multichain, Wormhole, and Ronin Bridge. These all require the implementation of multi-signature and MPC, which require entity verification of transactions and verification (i.e., signature) of their validity. After passing the threshold (often 2/3), the transaction is considered to be validated. In this solution, each entity needs to run the entire node for verification. There is no cost for lies without pledges, but reputational damage caused by dishonesty may lead to greater potential costs. Hence, the verification of nodes is often associated with fixed off-chain identities to increase the cost of doing evil. Multichain’s message verification is guaranteed by the SMPC network, which consists of 24 nodes. Messages signed by more than 2/3 of nodes are considered to pass verification, and SMPC nodes do not need to pledge and are relatively fixed. AnyCall’s security is based on the trust assumptions of SMPC nodes. The trust layer of Wormhole is constructed using the PoA mechanism, with a set of trusted Guardians responsible for verifying inter-chain messages. Guardians are specific entities endorsed by capital and reputation. Currently, Wormhole has 19 Guardians, including well-known large companies such as FTX, Everstake, and Chorus One. Cross-chain solution 2: Oracle and relayer A typical project is LayerZero, which ensures cross-chain security by separating the delivery of messages and proof of message from verifying the delivery transaction of relayer. The core design idea of LayerZero is the separation of oracle and relayer. In LayerZero, relayer is responsible for delivering messages and proof of message, while oracle is responsible for obtaining block headers from the source chain as needed according to the block where the messages are located, and then the terminal on the target chain verifies the transactions delivered by relayer according to the block headers obtained by oracle. As long as the two do not collude, cross-chain security can be guaranteed. It is worth noting that although Layerzero calls its technical solution as Ultra Light Node, the solution is fundamentally different from light client. LayerZero verifies the proof of transaction provided by relayer through the block header provided by oracle. The verification occurs at the end of the target chain and is the native validation. However, the verification of the block header is completed by a third-party oracle network as an external validator, and the verification process occurs off the chain. Cross-chain solution 3: Multiple signatures with pledges On the basis of MPC, a layer of proof of equity has been added. Typical projects include Celer, Axellar, deBridge, Hyperlane, and Thorchain. If evil is committed, the validator’s pledge will be significantly reduced, effectively increasing the validator’s cost of deception in economic terms. A problem that PoS Bridge faces is the imbalance of validators. To alleviate this problem, Axellar adopts the quadratic voting scheme, where the signature weight will be proportional to the square root of the $AXS pledged by the validator; while Hyperlane adopts the “verifiable fraud proof” scheme, where the validators’ joint wrongdoing will be immediately detected and Slash will be executed; pNetwork and Bool Network directly require all nodes to pledge the same number of tokens. Cross-chain solution 4: Optimistic validation The knowledge of game theory is used to increase the risk of users’ evil through the game scenarios between users. Typical projects include Nomad and Synapse. The basic logic of optimistic verification is to set up a group of challengers and a challenge window period based on external verification to challenge incorrect verifications. The validator needs to pledge, and when the behavior is inappropriate, the challenger will challenge and provide proof of fraud. If the challenge is successful, the validator’s pledge will become the challenger’s reward. Nomad has a challenge window period of 30 minutes. In terms of optimistic verification, it requires that at least one challenger is honest and there are economic incentives to challenge. Compared to external verification, this is a smaller trust assumption, under which attackers cannot guarantee the success of attacks, no matter how much economic cost they pay. All traditional cross-chain solutions are mentioned above, but the development of ZKP has brought new solutions to address the dilemma of the safety and efficiency of cross-chain bridges. What is ZK Bridge? ZK Bridge is a cross-chain bridge that employs the zero-knowledge proof, without introducing trust assumptions. It adapts to multiple isomorphic/heterogeneous chains, generates zero-knowledge proof off the chain, and is only responsible for verification on the chain, thus greatly reducing the cost of computing and storage on the chain. It has zero-trust, license-free, scalable, and efficient features. Let’s first provide a basic overview of the principles of light clients. Light clients, also known as light nodes, are often presented in the form of light smart contracts on the chain. The basic principle of the light client is to deploy the light node contract of the source chain on the target chain to verify messages from the source chain. If we want to achieve bidirectional cross-chain, we need to deploy the light node contract of the other chain on both chains. Compared to full nodes, light nodes do not store sequences of complete blocks and only store sequences of block heads. Despite its small size, the block header contains a cryptographic summary of the complete data in the block. When a light node needs to know whether a transaction is included in the chain, it can perform simplified payment verification (SPV) on the transaction through the block header of the block where the transaction is located and the Merkle path of the transaction. In the following figure, the collection of green squares is the Merkle path of blue squares. To maintain the light nodes of the source chain deployed on the target chain, it is necessary for the off-chain agent to continuously synchronize block heads of the source chain with the target chain. The light node contract has no trust assumption for the off-chain agent, which is responsible for synchronizing block heads. Given that the light node performs validation on its synchronized block headers, the off-chain agent cannot deceive the light node. The logic of the light node’s validation of block head is no different from that of the full node and mining node. It is divided into two parts, namely effectiveness validation and finality validation. The Investment & Research Team of CGV Research argues that for the PoW chain, verification of effectiveness mainly refers to verifying the proof-of-work of the block, and the verification of finality is to check whether effective blocks are appended behind the block header (in BTC chains, an append of 6 blocks is generally considered to confirm the finality of a block, while in Ether, an append of 25 blocks is generally considered to confirm the finality of a block). For PoS chains, verification of effectiveness refers to verifying whether a block has been generated by randomly selected blockers, while verification of finality refers to whether the block has been signed by validators with voting weights of more than 2/3. There is no need to perform the verification of the effectiveness of the light nodes of PoS, but it is necessary to verify their finality. Because in the PoS chain, the final block must be valid, while in the PoW chain, it may not be valid. The implementation of ZK Bridge follows almost the same process as the light node and relay solution, with slight changes. In ZK Bridge, the relay off the chain is still required to monitor the source chain and forward the block information of the source chain to the target chain. It not only forwards the block header, but also the proof of validity generated using the ZK-SNARK algorithm. On the target chain, light nodes do not directly verify the effectiveness of transactions based on block headers, but rather verify them on the chain based on proof of validity, thus lowering the computational burden. The implementation roadmap of ZK Bridge Why is ZK Bridge expected to end the cross-chain war? Among the cross-chain bridges that have been deployed and put into use, many of them have suffered serious security attacks, with a huge amount of money stolen, causing large-scale panic at the time. Today, people still hold a skeptical attitude toward the safety of major cross-chain bridges. There is an increasing need for a secure, zero-trust, decentralized cross-chain bridge to lay a solid foundation for a full-chain ecology. Statistics of funds lost and funds returned of some cross-chain protocols in 2022-Image source: DeField（https://defiyield.info/ ) The Investment & Research Team of CGV Research deems that ZK Bridge has brought new solutions to address the dilemma of safety and efficiency of cross-chain bridges. Specifically, by generating a zero-knowledge proof for the block header off the chain, the correctness of the source chain’s block header is verified by the proof generated by the ZK-SNARK algorithm. In this way, no external trust assumptions are added, and the only thing we trust is mathematics. Moreover, the verification process of zero-knowledge proof on the chain significantly lowers the computing and storage costs compared with the original light node verification. Introduction to some projects of ZK Bridge Succinct by Succinct Labs Gnosis Chain Omnibridge is a cross-chain bridge between Ethereum and Gnosis, using the mainstream solution of MPC. Team members of Gnosis want to explore cross-chain designs that do not rely on centralized entities, and Succinct Labs and Gnosis collaborate on this, with Gnosis DAO providing R&D grants. The verification process of Ethereum mainly includes the verification of Merkle proof of block headers; Merkle proof of validators in the sync committee; and the correct rotation of the BLS signatures of the sync committee. The core idea is to use zk-SNARK (Groth16) to generate a proof of validity with constant size, which can be efficiently verified on Gnosis on the chain. Illustration of Succinct cross-chain solution- Image source: Succinct’s official website（ https://www.succinct.xyz/ ) Succinct Labs’ cross-chain solution is capable of transmitting any message between any two Ethereum-compatible PoS chains. Currently, a cross-chain demo has been implemented between Ethereum and Gnosis, and a bridge deposit contract has been deployed on Ethereum to allow users to deposit. The bridge deposit passes a message to the ambient message bridge (AMB), which stores the message in the contract. The operator is responsible for obtaining proof from the sync committee, generating SNARK proof for valid BLS signature verification, and submitting updates to the light clients of Gnosis Chain. On Gnosis Chain, the Ethereum block where the deposit transaction is located is confirmed (usually 2 epochs, about 12 minutes). After the light client is updated to a height higher than or equal to that block, the relayer will automatically submit an executeMessage transaction to Gnosis AMB. The executeMessage transaction contains Merkle storage proof for the updated slot of the light client. During executeMessage, AMB uses the light client to obtain the Ethereum state root of the requested_slot and verify the Merkle storage proof to show that the message has been sent on the other side of AMB. Then, AMB uses the calldata specified in the message to receive the smart contract. Given the maturity of the tech stack and the overhead of on-chain verification, the team chose to use the most mature Circom and the cheapest Groth16 proof system for on-chain verification to generate ZK-SNARKs instead of using the newer and faster PLONK, KZG, or FRI. It is worth noting that although the project has been tested on the testnet, its usability is poor. According to the test by the author, the number of Successs tokens on the Goerli testnet has been reduced after passing through bridges, but the Gnosis network has not received tokens, and the dashboard on the website has no bridge records. It is also important to note that the cross-chain becomes unidirectional. In other words, it can only go from Goerli to Gnosis, not the other way around. zkBridge by BerkleyRDI zkBridge proves the correctness of the block headers of remote blockchains through ZK-SNARKs, therefore it does not introduce any external trust assumptions. In fact, zkBridge is secure as long as the connected blockchains and basic light client protocols are safe, and there is at least one honest node in the block header relay network. Of course, it is worth noting that although one honest node can guarantee security, too many dishonest nodes will significantly reduce the availability of the cross-chain bridge, and the light client will frequently reject the proof and fail to obtain real information. Illustration of zkBridge cross-chain solution-Image source: https://rdi.berkeley.edu/zkp/zkBridge/zkBridge.html Specifically, zkBridge mainly consists of the block header relay network and updater contract. In the block head relay network, the relay retrieves the block head from the sender blockchain C1, generates a block head validity proof, and sends the block head and proof to the updater contract set on the receiver blockchain C2. For the updater contract, once the relevant proof is verified, the corresponding block header of C1 will be stored. Additionally, the updater contract maintains a light client state. Once a new block header is added, the contract updates the light client state just like other light clients on C1, and updates C1’s current main chain. The updater contract also exposes a feature to the application, through which the application on C2 can obtain block headers of a given height on C1. After obtaining the information regarding block header, the application can perform more validations (such as specific transactions) and build its applications. To make the underlying zk-SNARK system compatible with on-chain usage, it is necessary to quickly generate proof and reduce the cost of on-chain proof verification. The main innovations of zkBridge include: DeVirgo: It adopts the distributed method to generate ZK-SNARK without trust assumptions. Besides, it significantly increases the time for generating ZK-SNARK off the chain by splitting the computational work and allocating it to more devices. Recursive proof: To reduce on-chain costs, zkBridge uses recursive proof to compress the volume of ZK-SNARK to around 131 bytes through two iterations. The first step is to generate the deVirgo proof, and the second step is to use the Groth16 proof generator for compression. The Groth16 validator generates and executes a proof of integrity for the deVirgo circuit. Batch processing: zkBridge implements an update contract for block headers, which takes block height as input and returns the corresponding block header. But zkBridge does not call the update contract when the new block is generated. The prover can first collect N block headers to generate a single proof. The N value can be set. The larger the N value is, the longer the user waits, but the lower the system operating cost. At present, zkBridge has implemented an instance of Cosmos Client on Ethereum using Solidity. According to testing, it can generate a ZK-SNARK of Cosmos Zone block header within 2 minutes. Then, on the Ethereum side, the verification cost is a constant of 230k gas per hour. By comparison, if ZK-SNARK is not used, the cost will be 64 million gas. It should be noted that relay network computing will suffer from the same communication complexity as MPC, which will seriously affect the time for proof. The communication complexity of the GKR multi-layer sum-check protocol is O (N log2 (number of signatures), where N machines are in the relay network. Even if there are 32 machines in the relay network with 32 signatures, it may cause numerous communicating sequential processes in the network, which damages the performance of distributed computing. zkIBC by Electron Labs Specifically, zkIBC hopes to simulate the trustless communication protocol — Inter Blockchain Communication Protocol (IBC) used in Cosmos, and expand its use to Ethereum. ZkIBC uses ZK-SNARKs to verify the light client state, quickly prove transactions on Ethereum, and keep up with the block generation time of the Tendermint. The main difficulty is that the Tendermint light client used in the Cosmos SDK runs on the Ed25519 curve, which is not supported by Ethereum. Besides, it is expensive and inefficient to verify Ed25519 signatures on Ethereum’s BN254 curve. The project roadmap is divided into five stages: research — implementation of ed25519 signature scheme — testnet — implementation of recursive Snark to reduce redundancy — mainnet. On February 2, 2023, the Positron testnet was officially launched to the public, supporting the cross-chain communication between Near and Ethereum. The current testnet requires approximately 20–30 minutes to achieve finality, including Goerli network finality (15–20 minutes), ZK Proof generation (5–8 minutes), and Near chain casting (10–20 seconds). The project claims to be completely open source, tested, smooth to use across chains, well-designed UI/UX, and supports bidirectional cross-chain. Reflections At a certain stage of development, blockchain technology usually evolves into a philosophy of trade-offs. The public chain suffers from the trilemma in terms of security, scalability, and decentralization; the cross-chain communication faces the dilemma of security and efficiency: the pursuit of efficiency leads to the introduction of third-party trust assumptions, resulting in security damage; while the pursuit of security by using the completely light node and relay causes high on-chain overhead. But, from the point of view of system design, even the unpledged MPC with the highest degree of trust can ensure the security of cross-chain bridges in most cases. The reason why many cross-chain bridges were stolen is due to the pursuit of transparency and open source code. The hidden vulnerabilities in complex code provide hackers with opportunities to exploit them. CGV Research holds that with the continuous progress of technology, the usability of ZK solution gradually increases, ZK Rollup is expected to be put into large-scale use in the second half of 2023, and ZK Bridge is also in the ascendant. We hope that the maturity of ZK Bridge can break the dilemma of security and efficiency faced by cross-chains, to realize the interconnection of all chains. References: 1. zkBridge: Trustless Cross-chain Bridges Made Practical（https://rdi.berkeley.edu/zkp/zkBridge/zkBridge.html） 2. Bridging the Multichain Universe with Zero Knowledge Proofs（https://medium.com/@ingonyama/bridging-the-multichain-universe-with-zero-knowledge-proofs-6157464fbc86） 3. Exploring ZK Bridges（https://zkvalidator.com/exploring-zk-bridges/） 4. Overall Comparison Between Multiple Blockchains（https://dune.com/springzhang/cross-blockchain-comparison-overview） Disclaimer: The information and materials presented herein are from public sources and the Company makes no warranty as to their accuracy or completeness. Any descriptions or projections of future conditions are forward-looking statements, any recommendations and opinions are for reference only and do not constitute investment advice or implication to anyone. The strategies that the Company may adopt may be the same, opposite, or unrelated to those that readers speculate based on this report. About Cryptogram Venture (CGV): Cryptogram Venture (CGV) is a Japan-based, fully compliant crypto industry research and investment institution. With a business orientation of “research-driven investment,” it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW. At the same time, CGV FoF is an LP for funds such as Huobi Venture, Rocktree Capital, and Kirin Fund. It has established Web3 hackathons and industry summits as brand events under its umbrella. From July to October 2022, it initiated Japan’s first Web3 Hackathon (TWSH), which received joint support from the Japanese Ministry of Education, Culture, Sports, Science and Technology, Keio University, SONY, SoftBank, and other institutions and experts. CGV has branches in Singapore, Canada, and Hong Kong.

From last week’s investment and financing data (13 projects in total), the main investment directions include Web3 infrastructure (6), Game (4), DeFi (2), NFT (1), and Metaverse (1). Among them, Web3 infrastructure projects are favored by crypto-investors, with investments from well-known companies such as PayPal Ventures, Galaxy Digital, Coinbase, Uniswap, etc.; game projects are also in the spotlight, such as Azra Games and Kratos, both of which have received investments from well-known VCs. Finance, which addresses impairment losses in liquidity provision and offers diversification and yield; the NFT project NeoSwap AI and the Metaverse project Worldwide Webb, which have also received investments, respectively. CGV summarizes a week of significant investment and funding information in the crypto market, from February 20, 2023, to February 26, 2023, in the global crypto market. [Infrastructure] 1. Chaos Labs | Seed round financing of $20 million | Led by Galaxy Digital On February 21, Chaos Labs, a blockchain security agency, announced the closing of a $20 million seed round led by PayPal Ventures and Galaxy Digital, with participation from Coinbase, Uniswap, Lightspeed, Bessemer, and angel investors including Balaji Srinivasan and Naval Ravikant, among other angel investors. 2. Intu | Pre-Seed round financing of $2 million | Participated by Fantom Foundation, etc. On February 21, Intu, the Web3 decentralized account management protocol, announced the closing of a $2 million Pre-Seed round with participation from CoinFund, Metaweb Ventures, Fantom Foundation and others. 3. iBLOXX | Financing of $5 million | Led by PrimeXM On February 23rd, iBLOXX, a Web3 incubator and market maker, announced the closing of a $5 million funding round led by PrimeXM, which will be used to expand the company’s game development division, iBLOXX Studios, bringing the post-investment valuation of its game division to $30 million. 4. Chain Reaction | Financing of $70 million | Led by Morgan Creek Digital On February 23rd, Chain Reaction, an Israeli blockchain chip startup, closed a $70 million funding round led by Morgan Creek Digital. 5. OneKey | A+ round financing of $85 million | Led by IOSG Ventures On February 23, OneKey, a hardware wallet company, announced the closing of its Series A+ funding round at a valuation of $85 million, led by IOSG Ventures. [Game] 6. Azra Games | Seed round financing of $10 million | Led by a16z On February 21, Azra Games, a gaming company, announced closing an additional $10 million seed round led by a16z through its $600 million gaming fund, GAMES FUND ONE, with participation from NFX, Coinbase Ventures, Play Ventures, and Franklin Templeton. 7. Kratos | Seed round financing of $20 million | Led by Accel On February 23rd, Kratos, an Indian Web3 game company, closed a $20 million seed round led by Accel, with participation from Prosus Ventures, Courtside Ventures, Nexus Venture Partners, and Nazara Technologies, at a valuation of $150 million. And Nazara Technologies. [DeFi] 8. Affine | Financing of $5.1 million | Led by Jump Crypto On February 23rd, Affine Protocol, a DeFi yield protocol, closed $5.1 million in funding led by Jump Crypto and Hack VC, with participation from Circle Ventures and Coinbase Ventures. 9. Tsunami.Finance | Pre-seed round financing of $1.3 million | Led by Big Brain Holdings On Feb. 24, Aptos ecosystem derivative protocol Tsunami. Finance completed a $1.3 million Pre-seed round of financing, led by Big Brain Holdings and Mirana, with participation from Zeta Markets, Hedge Labs, Pontem, Brilliance Ventures, BuilderVC, Marin Digital Ventures, Soju, Switchboardxyz, Coral DeFi, RNR Capital, Aptos Monkeys, and Time Research. 10. Huma Finance | Seed round financing of $8.3 million | Participated by Race Capital, etc. On February 24, Huma Finance, a DeFi project, announced the closing of an $8.3 million seed round with participation from Race Capital, Distributed Global, ParaFi, Circle Ventures and Folius Ventures, and launch partners including Circle, Request Network and Superfluid. [NFT] 11. NeoSwap AI | Financing of $2 million | Led by DACM and AngelHub On February 25, NeoSwap AI, an NFT trading platform, closed a $2 million Pre-Seed round of funding at a valuation of $15 million, led by DACM and AngelHub, with participation from Gossamer Capital, Cavalry Asset Management, Stacks Ventures, Dhuna Ventures, and several angel investors. [Metaverse] 12. Worldwide Webb | A round financing of $10 million | Invested by Pantera Capital On Feb. 23, pixelated metaverse Worldwide Webb completed a $10 million A round of financing, with Pantera Capital as its only investor. The funds will be used to enhance Worldwide Webb’s influence, expand its team, and integrate other chains besides Ethereum. [Web3 Applications] 13. Towns | A round financing of $25.5 million | Led by a16z On February 23, Towns, a Web3 social app, closed a $25.5 million funding round led by a16z with participation from Benchmark, Framework Ventures and others. towns takes the town square idea and combines community, NFT, and gaming. About Cryptogram Venture (CGV): CGVCGV FoFCryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment,” it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. From July to October 2022, it launched the first TWSH in Japan, which was jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. Currently, CGV has branches in Singapore, Canada, and Hongkong.

2022 is a highly unusual year for the crypto industry. With the collapse of Luna/UST as the starting point, prominent institutional participants such as 3AC and FTX have taken a heavy toll one after another and coupled with the severe macro-financial environment “deleveraging” impact. The crypto industry has suffered a long cold winter. However, many investment institutions are still unswervingly optimistic about the application prospects of crypto and Web3. With a long-term vision, they actively carry out business layouts “countercyclically.” As a research and investment institution in the crypto and Web3 industry with compliance qualifications approved by Japan, Cryptogram Venture (CGV) has always adhered to the research-driven investment” business orientation. Since its inception, CGV has taken advantage of its location and business hub in Japan to explore and help more innovative crypto projects across the world by actively participating in extensive research in the primary crypto market, organizing the first Web3 hackathon in Japan (web3hackathon.io), and delivering high-quality industry research reports (cgv.fund/blog). Since 2020, we have witnessed the rise of DeFi, the emergence of NFTs, the popularity of GameFi, the nationwide pursuit of Metaverse, the implementation of Layer 2, the madness of the new public chain, etc. These narratives in different fields facilitate the national quest for encryption. According to Steve Chiu, founder of CGV, “It is crucial for crypto practitioners to discover and anticipate the new narrative of the future to make response and layout in advance.” It is precisely based on the professional trend research and accurate cycle prediction of the encryption industry that CGV has successfully participated in the early stages of projects such as Republic, CasperLabs, AlchemyPay, The Graph, Bitkeep, Pocket, and Powerpool, as well as the yen stable currency JPYW under the supervision of the Japanese government. Invest and get rich investment returns. In 2022, CGV invested in dozens of crypto projects and made extensive layouts in critical fields such as Metaverse, games, and NFT. Typical projects include: Metaverse field l SkyArk Chronicles: a multi-Metaverse inspired by Japanese anime. It develops the story around the fantasy world created by Satoshi Nakamoto. It has monsters and heroes in fantasy and urban areas to immerse players in the fantasy game world, such as Legends Arise, House of Heroes, and Re: SkyArkVerse. l SecondLive: it builds a center for Metaverse residents, where more than 1 million users gather to express their views, give full play to their creativity, build a parallel universe in their dreams, and establish a Web3 open Metaverse that serves 1 billion people with the content generated by UGC and AI. l HALO: it cooperates with 3D artist communities to realize the value exchange with the natural world through the original economic system and brand effect. In HALO, characters are static images and avatars of ourselves in the virtual world, connecting the virtual world with the real one. Game field l Avalon: an MMORPG Metaverse game involving P2E (play to earn) economic model and content creation tools. l PIAS: an agriculture-based simulation game with the theme of the human renaissance. It integrates digital and physical elements and can exchange the in-game items (NFT) obtained by players through the game for crops in the real world. l Bedlam: an electronic sports game center, a platform for creating and hosting personal game identities (performance statistics and content) for Web3 games. Users can participate in leagues or tournaments and follow their favorite teams. l Orbler: a tower defense game driven by P2E (play-to-earn) model that requires clever thinking and planning to achieve victory. Players become Orblers, defend personal areas, and fight with enemies using orbs. l Mechaverse War: a mecha game from Japan. It is committed to building the world’s first real-time strategic mecha game platform. The cultural background of modern Japanese mecha anime and ancient samurai armor inspires the project. NFT field l UneMeta: a leading NFT incubation platform, trading market, and social space. It is committed to creating a safer, more convenient, and better NFT participant experience for NFT players, with numerous high-quality IP resources, mature NFT operation mode, and solid technology and community infrastructure. l BBC Protocol: a computing power service platform integrating Bitcoin computing power distribution and Bitcoin multiple financial derivatives. It aims to build the next computing power Metaverse with NFTs. It cooperates with many large Bitcoin mining pools, mining machine manufacturers, mining plants, and power suppliers worldwide to provide users with systematic BTC mining and financial derivatives value-added services. l Multiverse Play: a decentralized NFT post-investment management platform that connects users and assets of Web3, including players, NFT holders, guilds, and developers. Additionally, it provides them with intelligent matching, task scheduling, asset management, and high liquidity. Infrastructure field l Celestia: the first modular blockchain network with pluggable consensus and data availability layer. It enables anyone to quickly deploy a decentralized blockchain without the expense of bootstrapping a new consensus network. “After the shakeout in 2022, the future crypto digital asset market will gradually undergo the transition from ‘wild growth’ without the need for permits to ‘rational prosperity’ with regulatory compliance”, said Steve Chiu. In 2023, CGV will constantly explore popular Web3 fields such as Blockchain Infrastructure, Metaverse, NFT, DAO, SocialFi, GameFi, and DeFi. Additionally, CGV will pay constant attention to innovative trends such as wallet infrastructure, innovative stablecoins, Web3 mobile products, zero-knowledge proof, soulbound tokens, and fully on-chain games to help more outstanding projects have a smooth start and achieve sustainable growth and development. Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in the crypto industry. With the business philosophy of “research-driven investment,” it has participated in early investments in Republic, CasperLabs, AlchemyPay, the Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. From July to October 2022, it launched the first Tokyo Web3 Summer Hackathon (TWSH) in Japan, jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. CGV has branches in Singapore, Canada, and the Chinese mainland. Website: https://www.cgv.fund/ Twitter: https://twitter.com/CGVFOF Project contact: Yurinatyou@cgv.fund

Shigeru, CGV Research Nowadays, Web3 is no longer an armchair theory or an Internet buzzword. It is perceived by many people as the technological revolution that subverts the Internet. However, looking around the world, few Web3 applications have a host of users. Probably the only renowned Web3 application with the most users is Bitcoin. — Jack Dorsey, a former Web3 advocate and Twitter founder who converted the first tweet into NFT, claimed that “You don’t own web3. The VCs and their LPs (limited partners) do. It will never escape their incentives.”; — Moxie Marlinspike, founder of Signal, an encryption communication application, discovered that Web3 may be a false proposition, after developing two DApps; — PandaDAO, which raised 1900ETH, started the dissolution process less than one year after its founding, just because “the core work of the community is to vote, and there is no time to do other things”… Currently, it is fair to say that the world of Web2 is definitely better than that of Web1. Many people wonder if the world of Web3 is better than that of Web2. It makes no sense without users. The natural selection of users determines the prosperity of the Web3 world or not. In the Web2 world, Facebook has more than 3 billion global users, YouTube and WhatsApp have more than 2 billion users, and WeChat and Tik Tok have more than 1 billion users. According to the data of TripleA, a cryptocurrency payment company, there were more than 320 million users of cryptocurrency and Web3 worldwide in 2022, which was about 4.2% of the global population. If we compare the current user volume of Web3 with that of the Internet, we can find that the current development stage of Web3 is roughly equivalent to the Internet in the late 1990s. Andreessen Horowitz (a16z) predicted that Web3 might have 1 billion users in a short time. So, what are the areas in which applications will attract billion of Web3 users? Stay away from “pseudo-Web3 applications” dressed in Web3 Discard the false and retain the true. Not all so-called Web3 applications are authentic. In the field of GameFi, there are many “pseudo-Web3 applications”. Literally speaking, GameFi, consists of two parts, namely game, and finance. In a nutshell, it means that game players earn cryptocurrency by playing games. Famous GameFi games such as Axis Infinity, DeFi Kingdoms, etc., fail to impress 3 billion game players around the world, and gradually move towards a death spiral with the recession of the encryption market. Taking Axie Infinity as an example, since 2021, by allowing players to “Play-to-Earn”, it has been advocating that “blockchain games can promote a fairer global economy and provide people around the world with more opportunities”, which has been favored by the market. However, 14 months later, most people stopped playing the game. They generally felt angry, and anxious. Some even lost thousands of dollars. A healthy GameFi project has a well-established ecological mechanism of internal and external circulation, such as obtaining external benefits through commercial cooperation. As for the GameFi projects that rely on the Ponzi model for user growth, the income earned by early users comes from the principal invested by late users. If the income of the project cannot keep up with the growth rate of the debt, the collapse is only a matter of time. Similar problems exist in the field of NFT, which is dominated by avatars and profile pictures (PFP). In the past, PFP was almost synonymous with NFT. When mentioning NFT, you may think of the boring ape head that costs several million dollars a piece. However, without functional support, effective incentives, and healthy circulation of the creator economy, the vast majority of PFP projects have little value, and they only seek the recognition of a group of users to support their value. Compared with the market peak at the beginning of 2022, the overall transaction volume of the NFT market has dropped by more than 90%, the mainstream PFP projects have dropped by 60–70%, and other projects are even more miserable. The same is true of the once-popular Metaverse projects. Compared to Roblox’s 202M monthly active users, Minecraft’s 141M monthly active users, Sandbox and Decentraland only have 200k and 56k monthly active users, respectively. It seems that Decentraland and Sandbox are overvalued. It can be said that in addition to the above fields, there are a large number of “pseudo-Web3 applications” in DeFi, DID, DAO, Sociafi, and other fields. They may be the products of the capital bubble or the historical heritage of the technological growth cycle, which cover up the true value of Web3 applications. It’s time for us to seek the value essence of Web3 From the perspective of the first principles, let’s explore the essence of Web3 to gain insight into its next development direction. Web3 is generally regarded as the industry form closest to “value Internet”. In fact, Web3 is not a simple upgrade based on Web1 and Web2. Its core is to build a new network with decentralization, value co-creation, and distribution according to the contribution, thus giving users real data autonomy. So, how should we define “Web3 application”? Based on the views of the industry, CGV Research team reckons that the Web3 application is based on blockchain technology, takes Token as a tool or medium, and addresses users’ actual needs as the starting point to support users’ interactive operations, thus realizing the creation, distribution, and circulation of value. Obviously, the Web3 application is not a panacea for all issues, nor is it suitable for any scenario. If you develop a Web3 application to cater to the trend of Web3, it will be in vain. What are Web3 applications suitable for and not suitable for? This is a question that should be on the minds of anyone investing in Web3. I quite agree with Alex Xu of Mint Ventures that the underlying value of Web3 lies in its unlicensed and global nature, providing a free market with unprecedented scale and boundaries. The open source of code and the verifiability of data offer a lower cost of trust in this unprecedented and prosperous free market. Therefore, “liberty” and “trust” are the core advantages and essential values of Web3. In terms of Liberty, it includes the free combination and migration of assets, agreements, identities, product matrices, intellectual property, and other fields; with respect to trust, based on the tamper-proof, transparent and open characteristics of blockchain technology, Web3 has established a new trust relationship different from the traditional trust that relies on justice, violent authority, customs, and culture. If a Web3 application suitable for a business scenario is not well designed in terms of “Liberty” and “trust” and has no business planning, it will encounter major challenges in future operations. For example, projects that transfer real assets on the chain (such as synthetic assets, STO, etc.) do not get rid of the original credit system (based on the law, government’s asset identification), so it does work well in Web3 field; as for crypto native Web3 assets, their business flows can all be operated on the chain, which has the dual advantages of Liberty and trust. In addition to giving full play to Web3’s advantages of “Liberty” and “trust”, the ability to have basic business logic ensures the sustainable operation of Web3 projects. Looking back at StepN, a phenomenal Web3 application in 2022, although its attempts to solve various issues related to product growth, IPO fundraising and corporate governance with a set of X-to-earn economic models deserve some credit, it encountered a tremendous recession in the later stage. The biggest issue of StepN is similar to that of GameFi mentioned above, that is, the project’s business model is not sound and does not create much extra-ecological value. It turns forward debt (NFT sales revenue) into cash proceeds, weakening the value creation ability of the project. Therefore, the CGV Research team argues that the success of Web3 applications lies in the digital elements of “Liberty” and “trust”, and the verifiability of business logic, which are indispensable. In this regard, the team proposes the “Unicorn Growth Index” of Web3 applications: Six types of Web3 projects that have the potential to grow into “unicorns” 1.Mobile crypto digital wallet Liberty index: ☆☆☆☆ Trust index: ☆☆☆☆ Business model verifiable index: ☆☆☆☆☆ Web3 Unicorn growth index: ☆☆☆☆☆ The crypto digital wallet has two attributes, namely asset account, and identity symbol. The first step for users to access the Web3 world is to create a crypto digital wallet. Whether it is to create an account in a centralized exchange, register a decentralized wallet or purchase a hardware wallet, users need a wallet to access Web3. In 2009, Bitcoin enabled the existing asymmetric key pair technology to be used to write to the public database, thus creating the first “crypto wallet”; In 2016, MetaMask was officially launched, which opened the door to dApps. It is unlike previous wallets and platforms that focused on interacting with crypto assets such as Bitcoin. Number of global wallet users from November 2011 to July 11, 2022 (Unit: million) Data source: https://www.statista.com With the development of crypto assets, wallets have undergone changes in different stages: from single-asset wallets and single-chain wallets to multi-chain multi-asset wallets, from single transfer and collection to blockchain ecological aggregation service platform, which generates mobile wallets, public-chain ecological wallets, transaction platform wallets, asset custody wallets, hardware wallets, identity wallets, and other sub-tracks. In addition to the traditional business model of attracting users and developing the fund deposit function, crypto wallets provide value-added services (wealth management products, PoS mining, trading, asset aggregation, market information, etc.), as well as advertising and other ways to increase revenues. We are optimistic about the development of mobile crypto wallets and have the opportunity to become the data flow and distribution platform of Web3 applications, which will ultimately promote the paradigm shift of the entire Web3 track from “wealth creation effect” to “daily application”. Mobile crypto digital wallets worth attention include: Metamask: (@MetaMask) 30+ million monthly active users. Lightweight Ethereum open-source wallet is also a kind of APP wallet; It has the function of testing Ethereum smart contract and supporting the most complete Dapp; it can be compatible with hardware wallets such as Ledger and Trezor. TrustWallet: (@TrustWallet) an unmanaged mobile multi-chain crypto wallet that has more than 58 million users and supports more than 8 million tokens and various gateways to thousands of Web3 dApps. BitKeep: (@BitKeepOS) 8 million users worldwide, the largest Web3 multi-chain wallet in the Asian market, adopts various security mechanisms such as hot and cold separation, offline signature, and supports 80+ mainnets, one-click cross-chain transactions, and other functions. 2. “Play-and-Earn” game Liberty index: ☆☆☆☆ Trust index: ☆☆☆☆☆ Business model verifiable index: ☆☆☆☆☆ Web3 Unicorn growth index: ☆☆☆☆☆ Just like the importance of games to the Internet economy, crypto games have been regarded as the optimum driving force for the growth of users of the Web3 ecosystem. Although crypto games have a huge potential market, it is not interesting for most players. Currently, GameFi or P2E (Play-to-Earn) is the most common crypto game. Their biggest advantage is to offer players the opportunity to earn money. But the simple incentive to make money through play is not necessarily a sustainable model. If the cycle is extended to half a year or longer, you will find no successful practice project. To play Web3 games, we still have to respect the game attributes and pay attention to the fun, which is the real value. As the market fever wanes and user interest shifts, Web3 games have a new trend of Play-and-Earn. On the one hand, Web3 games draw on the Free-to-Earn model of traditional games, so that everyone can participate for free and some players can make money; On the other hand, Web3 games create complete on-chain games and autonomous worlds. The core logic of games is on the chain, and they will adopt the open architecture, autonomous existence, and combination in the future. Unfortunately, the typical representative of the “Play and Earn” game has not yet appeared. Who will be the next Axis Infinity and StepN needs to be tested by history. While games are still exploring how to strike a balance between the entertainment experience and the financial incentives, the capital is betting on the market. In May 2022, a16z launched a $600 million fund dedicated to investing in Web3 gaming startups, mainly in three areas: game studios, consumer applications that support the player community (take Discord for example), and game infrastructure providers. Superficially, the three fields are scattered, they only have one goal, to create real Web3 games. It is worth noting that the next generation of “Play-and-Earn” games, projects related to Web3 game industry, may be created by them: TreatureDAO: (@Treasure_DAO) a decentralized game platform and distribution platform that meets the needs of independent developers through perfect infrastructure and ecology, and forms an economy by accumulating players’ activity content. Currently, it is the №1 game and NFT ecosystem on Arbitrum, with more than 100,000 players. SkyArk Studio: (@SkyarkS) an AAA blockchain game studio, which launched on-chain and asset-only series of games such as SkyArk Chronicles, as well as the exclusively developed NFT game engine. The engine allows NFT to be interoperable, editable, and evolvable, and helps players use NFTs in different games with different gameplays. Bedlam: an electronic sports game center, a platform for creating and hosting personal game identities (performance statistics and content) for Web3 games. Users can participate in leagues or tournaments and follow their favorite teams. 3.Phydigital application Liberty index: ☆☆☆ Trust index: ☆☆☆☆ Business model verifiable index: ☆☆☆☆ Web3 Unicorn growth index: ☆☆☆☆ In terms of crypto native and Web2 brands in fashion and entertainment, Web3 offers opportunities to bring digital and real-world objects and experiences to their audiences. The new popular pairing of the physical world and the digital world has coined a new term “phydigital”. “Phydigital” (“Physical” plus “Digital”) integrates physical environment or physical objects and digital or online technology-driven experience. It was first proposed by Momentum, an Australian marketing agency, in 2013. We reckon that, in a broader sense, physical projects with digital performance and digital projects that affect the physical environment or physical objects can be taken as phydigital applications. They represent a broad category of Web3, enabling blockchain developers to figure out new approaches that combine the physical and digital worlds. In 2022, Tiffany, a luxury jewelry company, launched “NFTiffs” to the holders of CryptoPunks, with a physical version of the diamond pendant. 250 NFTiffs sold out within 20 minutes after their debut and created $12.5 million of revenue for the company. The creation of this “phygital” project is an innovative business attempt by luxury goods to Web3. In December 2021, NIKE announced the acquisition of RTFKT, a virtual fashion brand, and regarded it as the fourth largest independent brand in addition to Nike, Jordan, and Converse. It can be seen that Nike has raised NFT construction to the level of brand strategy. RTFKT is building a physical shoe, which employs Nike’s electronic shoelace Adapt technology. Consumers can exchange corresponding physical shoes after purchasing virtual ones. NBA Top Shot is a blockchain collection game jointly created by NBA, NBPA, and Dapper Labs. It aims to turn the highlight moments of NBA games into tradable digital game cards. In other words, the paper card exchange that fans used to need to do offline can take place anywhere, anytime online. In addition to the above FMCG and luxury goods, the physical card business of the financial category is trying to connect with Web3. Visa and Mastercard jointly develop cryptocurrency debit cards with different Web3 companies. For example, Blockchain.com will cooperate with Visa to launch a debit card, which is associated with the client’s crypto account. There are no fees for the transactions of this debit card and users can get 1% cryptocurrency cashback. By integrating the physical and the digital world, phydigital drops are no longer used to buy items for display, but to produce more things by combining various parts of the real world and the virtual world to create unique experiences. In the initial stage, phygital products integrate physical and virtual products. With the convenience of social sharing and DIY derived from virtual products, we can get a glimpse of the great potential generated by the combination of phygital and Web3. At present, the providers of phydigital application solutions that deserve attention include: RTFKT Studios: (@RTFKT) it adopts the latest game engine, NFT, blockchain certification, and augmented reality, and applies manufacturing expertise to create unique sneakers and digital artifacts. Dapper Labs:（@dapperlabs）it is the company behind the well-known projects CryptoKitties, NBA Top Shot, NFL All Day, UFC Strike, and Flow blockchain. It uses blockchain technology to develop NFT and new forms of digital engagement for fans around the world, paving the way for a more open and inclusive world that starts with games and entertainment. 4.Web3 growth stack application Liberty index: ☆☆☆ Trust index: ☆☆☆☆ Business model verifiable index: ☆☆☆☆☆ Web3 Unicorn growth index: ☆☆☆☆ Web2 embraces Web3, which will facilitate the breakthrough in Web3 and attract huge incremental users. According to statistics, 43 of the top 100 brands in the world, including Starbucks and others, are testing the alternative use cases of Web3 and NFTs. Major Brand Flagship NFT Collection Launches Source: Messari Shayon Sengupta of Multicoin Capital first proposed the concept of “Web3 Growth Stack”, that is, product managers and marketing personnel use Web3 technology to build tools to acquire, attract and retain clients. The great advantage of Web3 Growth Stack is the ability to tightly couple in-application events with on-chain payments. Web2 products cannot deliver value to users in real time, but Web3 products can and may even fundamentally expand the design space for growth tools and advertising models. Previously, Starbucks announced the launch of the Starbucks Odyssey, an NFT membership program. Consumers can participate in Odyssey series of travel activities, mainly including interactive games and fun challenges. After completion, consumers will receive a collectable Digital Journey Medal (NFT) as the reward. The Digital Journey Medal can be traded as NFTs, upgrading participate-to-ear to collect-to-earn and improving user stickiness and repurchase; Starbucks members have NFTs, which means that the data is uploaded on the chain. Other brands (cooperative or competitive brands) can perform various airdrops for these members, which has evolved into airdrop-to-ear. The more active the members are, the more NFTs they have, the more airdrops they will get, and the stickiness and repurchase of users will be improved. The essence behind the Starbucks NFT membership program is to follow the user-centered philosophy, where users take back data ownership and gain more value. Now, more commercial brands are paying close attention to how Starbucks develops and practices in the future; If it works, we will see the great enthusiasm of major brands for the release of the NFT reward points system. Starbucks has 27.4 million members, Nike has more than 300 million members, and Pizza Hut has more than 80 million members… These brands use the “Web3 Growth Stack” to transform Web3, which may be the fastest way to create Web3 applications with one billion users. “Web3 Growth Stack” applications that deserve special attention include: Blackbird: (@blackbird_xyz) a Web3 platform specially designed for the tourism and hotel catering industry. It is committed to establishing direct links between restaurants and guests through loyalty and membership services. It integrates loyalty and member-related products to provide rewards for dining frequency, consumption, etc. Layer Infinity: (@RensOriginal) a Web3 platform established by e-commerce brands. It helps traditional consumer brands easily migrate to Web3, and release NFTs compatible with the Metaverse, which can be bound with physical products. In addition to tracking the authenticity of products and exchanging physical objects, each NFT can be linked to various practical NFTs. 5.Web3 social application Liberty index: ☆☆☆ Trust index: ☆☆☆☆ Business model verifiable index: ☆☆☆☆☆ Web3 Unicorn growth index: ☆☆☆☆ The social platform has a large number of users, portraits, and behavior data, which contains the huge business value. The most valuable Internet products in the world of Web2 are best illustrated by the valuations of giants like Facebook, Twitter, TikTok, etc. According to Metcalfe’s law, the value of a social network is proportional to the square of the number of users. The more users, the greater the value of social platforms, and then the user growth curve explodes at a single point. Diagram of Metcalfe’s law Source: MicroFinTech: Expanding Financial Inclusion with Cost-Cutting Innovation Therefore, the pain point of innovation in social projects is that it is “easy to defend but difficult to attack”. Once a user network is established through a certain paradigm, it is impossible for the latecomers to surpass it. For the social platform in the Web3 era, the decentralized technology based on the blockchain makes the user’s creative content, social relationship data, identity, and reputation achieve decentralization and composability. People will have absolute control over their social data, thus forming a user-centered social network. However, the development of Web3 social applications is still at an infant stage. Web 3 products cannot support the billion-level daily user volume of Facebook, WeChat; Web 3.0 products have a higher threshold, but their product experience is poorer than Web2 products. Besides, most Web3 social products only meet the on-chain social and financial needs of crypto native users. Products that meet on-chain and off-chain social and financial needs may stand out in the future. After all, social is more than just online data interaction. It should be linked to video entertainment, games, music, fitness, and other aspects of our lives. CGV Research believes that the key characteristics of the next generation of Web3 social applications should include: 1) the cost acceptable to the user; 2) The product experience close to or better than Web 2, and lower threshold for use; 3) cost acceptable to the user data synchronization (both on-chain and off-chain can be integrated); 4) design continuous incentive mechanism through tokens or NFTs; 5) mature community vitality, high user activity, and stickiness. Overall, social applications are the most promising but the most difficult field for Web3 applications. How to expand infrastructure and implement a sustainable economic model is the current focus and pain point. For the Web3 social applications, we need to take a longer view. Web3 social applications worthy of attention include: Lens Protocol: (@LensProtocol) an open and composable Web3 social media protocol that allows anyone to create unmanaged social media materials and build new social media applications. Users are free to develop and own the content they create by owning the corresponding NFTs. Mask Network: (@realMaskNetwork) a portal that helps users transfer from Web 2.0 to Web 3.0. It integrates privacy and social networking, a cross-border payment network, decentralized file storage and sharing, decentralized finance, and governance (DAO). It allows users to encrypt their messages on social media platforms, such as Twitter and Facebook. Besides, it has the functions of sending and receiving cryptocurrency red packets, ITO, uploading, and saving decentralized files. Galxe: (@Galxe) a collaborative credential infrastructure that is designed to create user profiles based on the user’s blockchain behavior. Brands and projects can use these Web3 digital credentials for better promotion, such as gamifying their loyalty system, launching marketing campaigns, acquiring users, etc. 6. Creator economy application Liberty index: ☆☆☆☆☆ Trust index: ☆☆☆☆☆ Business model verifiable index: ☆☆☆☆ Web3 Unicorn growth index: ☆☆☆☆ For many people, the creator economy is a big concept. Its content includes texts, pictures, music, videos, and other forms, each with a different growth logic. From the perspective of the industry, CGV Research deems that the creator economy refers to the economic form in which independent content creators (such as bloggers, social media KOL, photographers, etc.) publish their original content through digital carriers such as texts, videos, audios, and other channels via platforms or communities, and gain profits. The creator economy has two key characteristics: first, creators can turn data flow into cash by acquiring fans and followers with unique contents; second, creators can build tools and infrastructure to create or manage content. According to the Influencer Marketing Hub, 50 million people worldwide participate in the creator economy. By the end of 2022, the market size of the global creator economy reached US$104.2 billion. However, the current creator economy system has serious income inequality, with a large portion of creators’ earnings being paid to third parties as service fees. On Spotify, each song played once by a paid account only generates a copyright fee of $0.004; only 0.33% of YouTube creators earn full-time income; and only the top 1% of authors on Amazon earn $1,000 in a month. In addition, problems such as the lack of content management rights and vicious competition are commonplace in the current creator economy system. Web3 is a new generation of Internet based on blockchain infrastructure, which has made the biggest difference between the creator economy and the previous ones. In addition to consumption and creation, users own and freely use the data content created by themselves. List of global creator economy startups Source: Speedinvest According to this logic, Web3 will bring three paradigm changes to the “creator economy”: 1) redistribute the value and rights of the platform to creators through independent mechanisms such as tokenization and smart contracts; 2) provide composable and trustable perspectives for people who want to start creating; 3) for the first time, users have the opportunity to gain rewards and own part of the Internet value. The application scenarios of Web3 creator economy projects include content creation, NFT issuance and trading, community building, fan motivation, and asset management. A complete value chain has been formed to help creators use content, NFT, and social tokens to closely connect with fans. Of course, it should be reminded that the starting point of the Web3 creator economy is not about grabbing data flow, but abandoning the competition for users’ attention and highlighting productivity. Only by providing better content, can higher revenue be achieved. Web3 creator economy applications worthy of attention: Mirror: (@viamirror) it combines content publishing with web3 technology, stores content in Arweave, and publishes it to fans by connecting wallets. Besides, all posts on Mirror are mintable, turning fans into collectors; Rally: (@rally_io) YouTube’s Web3 alternative. It is a platform for creators and their communities to build their independent digital economy. It prioritizes creators and allows them to promote interaction with the community around social tokens. Bill Gates once said: “most people overestimate what they can do in one or two years and underestimate what they can do in five or ten years.” Now it seems that the Web3 market with 1 billion users is still far away from us. But nothing is impossible, it is only a matter of time. As a Web3 practitioner, the only thing we can do is to provide better Web3 services to all corners of the world and all aspects of everyone’s life through the constant building, thus making this day come earlier. Note: This article is a CGV research paper and is for reference only. It does not constitute any investment proposal. About Cryptogram Venture (CGV): A Japan-based research and investment institution engaged in crypto. It has participated in early investments in Republic, CasperLabs, AlchemyPay Graph, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China. References: https://a16z.com/2020/12/07/social-strikes-back-fastest-growing-apps/ https://multicoin.capital/2023/01/11/the-web3-growth-stack/https://www.robinsloan.com/lab/notes-on-web3/ https://future.com/power-of-social-community/ https://medium.com/ixfi/SocialFi-what-is-it-and-how-does-it-affect-social-media-as-we-know-it-8c28c023a00d https://twitter.com/jolestar/status/1589830650659753986 https://coinyuppie.com/SocialFi-the-key-technology-changing-the-globalization-of-the-blockchain-industry/ https://medium.com/coinmonks/what-exactly-is-SocialFi-is-this-a-new-cryptocurrency-trend-1d2bf209dd99 https://blockcast.cc/news/an-overview-of-the-SocialFi-ecosystem-social-dao-and-governance-tools/

With the temporary recovery of the crypto market, Web3 funding and developers in all tracks are active. From last week’s statistics (10 projects in total), Web3 infrastructure projects (5) were the main direction of funding, while the number of funding for NFT (1), Metaverse (1), and Web3 application (3) projects started to pick up. CGV summarizes a week of noteworthy investment and funding information in the crypto market, as follows for January 23, 2023 to January 29, 2023 in the global crypto market. 【Infrastructure】 1. Tribes | Raised $3.3 million in pre-seed round｜Led by Kindred Ventures On January 23rd, Tribes, a Web3 social wallet, announced the closing of a $3.3 million pre-seed round led by Kindred Ventures, South Park Commons and Script Capita. Link to original article: https://www.coindesk.com/business/2023/01/23/web3-social-wallet-tribes-launches-with-33m-in-funding/ 2. QuickNode | Series B financing of $60 million｜Led by LLC On January 24, QuickNode, a blockchain development platform, announced the closing of a $60 million Series B funding round at a valuation of $800 million, led by 10T Holdings, LLC, with participation from Tiger Global, 776, Protocol Labs and QED. Link to original article: https://cointelegraph.com/press-releases/quicknode-raises-60m-series-b-round-to-further-fuel-blockchain-adoption 3. Asset Reality | Seed round funding of $4.91 million｜Led by Framework Ventures On January 25, Asset Reality, a digital asset recovery solution, announced the closing of a $4.91 million seed round led by Framework Ventures with participation from TechStars, SGH Capital and others. Link to original article: https://www.assetreality.com/post/asset-reality-raises-5m-in-recent-seed-funding 4. Ethos | Raised $4.2 million｜Mysten Labs participates On January 26th, Ethos closed a $4.2 million seed round led by Gumi Cryptos Capital and Boldstart Ventures, with participation from Tribe Capital, Matrix Port and AllianceDAO, as well as Sui network developer Mysten Labs. Link to original article: https://www.theblock.co/post/205795/sui-based-wallet-raises-4-2-million-led-by-gumi-cryptos-and-boldstart?utm_source=twitter&utm_medium=social 5. Tholos | Raised $1.5 million in pre-seed round｜Led by North Island Ventures On January 28th, Tholos, a money escrow platform, closed a $1.5 million Pre-seeded round led by North Island Ventures, Lattice Capital, Chainforest and Dispersion Capital, with participation from 369 Capital and others. Link to original article: https://mirror.xyz/tholos.eth/dwHnNWuOFLXJ6Bzju-OBE5h1GpLKtDmq49diOmGnsBM 【NFT】 6. EZswap | Pre-Seed round of funding of $1 million On January 26, EZswap, an NFT trading platform, announced that it closed a $1 million Pre-Seed round of funding in October 2022 at a $40 million Token valuation, and that the platform’s code has been audited by security firm Beosin and will go live at the end of January. Link to original article: https://twitter.com/EZ_swap/status/1618604379455750147 【Metaverse】 7. Emperia | Series A financing of $10 million｜Led by Base10 Partners On January 25, Emperia, a metaverse-as-a-service (MaaS) platform, announced the closing of a $10 million Series A round led by Base10 Partners, with participation from Sony Innovation Fund, Stanford Capital Partners, Daphi, Concept Ventures, Background Capital and others. Link to original article: https://wwd.com/business-news/technology/metaverse-emperia-retail-ecommerce-funding-1235496551/ 【Web3 Applications】 8. Bunzz | Seed round funding of $4.5 million｜gjmp and other participants On January 25, Bunzz, a Web3 decentralized application development platform, announced the closing of a $4.5 million seed round with participation from gjmp, DG Daiwa Ventures, Coincheck and Ceres. Link to original article: https://www.thebharatexpressnews.com/bunzz-raises-4-5m-to-expand-its-smart-contract-hub-for-dapp-development-tben/ 9. Spatial LABS | Raised $10 million in a seed round｜Led by Blockchain Capital On January 26th, Spatial LABS, a Polygon Chain-based Web3 wearable technology startup, announced the closing of a $10 million seed round led by Blockchain Capital with participation from Marcy Venture Partners, a venture capital firm co-founded by Jay-Z. Link to original article: https://techcrunch.com/2023/01/26/spatial-labs-a-web3-infrastructure-and-hardware-company-closes-10m-seed-round/ 10. StoryCo | Seed round financing of $6 million｜Led by Patron On January 26th, StoryCo, a Web3 content platform, announced the completion of a $6 million seed funding round led by Collab + Currency and Patron, with participation from Floodgate Ventures, Blockchange Ventures, Sfermion, Flamingo DAO, and others. Link to original article: https://www.businessinsider.com/pitch-deck-storyco-blockchain-immersive-storytelling-nft-raised-6-million-2023-1 About Cryptogram Venture (CGV): CGVCGV FoFCryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto.With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc.From July to October 2022, it launched the first TWSH in Japan, which was jointly supported by the Ministry of Education, Culture, Sports, Science and Technology (MEXT), Keio University, SONY, SoftBank, and other institutions and experts. Currently, CGV has branches in Singapore, Canada, and China. and China.

From last week’s statistics (11 projects in total), Web3 infrastructure projects (4) were the main direction of funding, while DeFi (3), NFT (1), Metaverse (1), and Game (1) projects also continued to have low funding numbers. CGV summarizes a week’s worth of noteworthy investment and funding information for the crypto market, as follows for January 16, 2023 to January 22, 2023 in the global crypto market. 【Infrastructure】 1. Cypher | Raised $4.3 million｜Led by Y Combinator On January 19, Cypher, a multi-chain Web3 wallet, announced the completion of a $4.3 million funding round led by Y Combinator with participation from OrangeDAO, Samsung Next and others. Link to original article: https://www.theblock.co/post/203711/y-combinator-multichain-wallet-cypher?utm_source=twitter&utm_medium=social 2. Nil Foundation | Raised $22 million｜Led by Polychain Capital On January 19, Nil Foundation, a developer of ZK technology, announced a $22 million funding round at a valuation of $220 million, led by Polychain Capital with participation from IOSG Ventures, Blockchain Capital, Starkware, and Mina Protocol. Link to original article: https://www.theblock.co/post/203411/zk-tech-developer-nil-foundation-raises-22-million-at-a-220-million-valuation?utm_source=twitter&utm_medium=social 3. Koinos Group | Raised $500,000｜Led by Blockchain Founders Fund On January 20th, Koinos Group, a developer of the public chain Koinos, closed a $500,000 seed round led by Blockchain Founders Fund with participation from Splinterlands. Link to original article: https://www.finsmes.com/2023/01/koinos-group-raises-500k-in-seed-funding.html 4. Jeff | Pre-A round of financing｜Joycity and others participated in the project On January 20, Jeff, a subsidiary of Korean payment company Danal’s Meta Universe, closed a Pre-A round of funding with participation from Singapore VC Xponential Ventures and gaming company Joycity for an undisclosed amount. Link to original article: https://www.coindeskkorea.com/news/articleView.html?idxno=82994 【DeFi】 5. Davos | Pre-seed round raises $500,000｜Polygon Ventures participates On January 18, DeFi startup Davos announced the closing of a $500,000 pre-seed round with participation from Polygon Ventures and Polygon co-founder Sandeep Nailwal. Link to original article: https://yourstory.com/the-decrypting-story/defi-startup-davos-funding-sandeep-nailwal-polygon 6. Elixir | Seed round funding of $2.1 million｜FalconX and others participated in the project On January 17, Elixir, a DeFi protocol, closed a $2.1 million seed round with participation from FalconX, Commonwealth, OP Crypto, ChapterOne and others. Link to original article: https://www.theblock.co/post/202510/falconx-bitmex-founder-hayes-invest-in-market-maker-elixir-amid-dearth-of-providers 7. Diva | Seed round funding of $3.5 million｜Led by A&T Capital On January 17, Diva, a decentralized liquidity pledge protocol, closed a $3.5 million seed round led by A&T Capital with participation from Gnosis, Bankless, OKX Blockdream Ventures, Metaweb, DCV Capital, Alphemy Capital and others. Link to original article: https://www.theblock.co/post/202690/diva-closes-3-5-million-seed-round-for-distributed-liquid-staking-protocol 【Game】 8. Intella X | Raised $12 million｜Animoca Brands and others participated in the project On January 18, Intella X, a Web3 gaming platform, announced the completion of a $12 million funding round with participation from Polygon, Animoca Brands, Magic Eden, Planetarium, Big Brain Holdings, Crit Ventures, JoyCity, Pearl Abyss, XL Games, Wemix, and Global Coin Research. Link to original article: https://www.theblock.co/post/202995/polygon-backed-web3-gaming-platform-intella-x-raises-12-million-ahead-of-q1-launch 【NFT】 9. Candy Digital | Series A1 financing of $38.5 million｜Led by Galaxy Digital On January 20, Candy Digital, a sports NFT company, closed its Series A1 funding round earlier this year for $38,449,997 led by Galaxy Digital and ConsenSys Mesh, with participation from 10T Holdings and ConsenSys, among others. Candy Digital will use the funding to continue to expand its platform and build new partnerships with other brands and organizations. Link to original article: https://www.coindesk.com/business/2023/01/19/sports-nft-firm-candy-digital-raised-over-38m-amid-founder-strife/?utm_source=twitter&utm_content=editorial&utm_medium=social&utm_term=organic&utm_campaign=coindesk_main 【Web3 Applications】 10. Plai Labs | Seed funding round of $32 million｜Led by a16z On January 20, Web3 social platform Plai Labs closed a $32 million seed round of funding led by a16z, with no other investors disclosed at this time. Link to original article: https://www.coindesk.com/web3/2023/01/19/tech-veteran-backed-web3-social-platform-plai-labs-raises-32m-in-seed-round/?utm_campaign=coindesk_main&utm_medium=social&utm_term=organic&utm_content=editorial&utm_source=twitter 【Metaverse】 11. Createra | Series A financing of $10 million｜Led by a16z On January 16, Createra, a metaverse project, closed a $10 million Series A round of funding led by a16z, which is dedicated to building a metaverse platform centered on Generation Z. Link to original article: https://finance.yahoo.com/news/createra-raises-10-million-led-230731410.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cudGhlYmxvY2tiZWF0cy5pbmZvLw&guce_referrer_sig=AQAAAKEn5bDbcxeqxq-UrTHadhEJvv7wjTb3OEITxD4Tafj65RjRDCbsg1nfjoGrjW1DJ8STi3xgJmcLt-hKeLrWZuGMv51orSsOtFhZYRawUEVTW8AdCiqA6e6ftRxauHxyEQukR2g3y7_nzoCoO_I_CI5EUJHG-i2rOrlrTsl_4m42 About Cryptogram Venture (CGV): A Japan-based research and investment institution engaged in crypto. It has participated in early investments in Republic, CasperLabs, AlchemyPay Graph, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China.

The crypto market as a whole saw a decline this week, with both BTC and ETH down 6%. Looking at this week’s statistics (9 projects in total), the pitch market started to recover for NFT (2), Game (3), and DeFi (3) projects, while the number of pitches for Web3 infrastructure projects (1) slowed down.CGV, in conjunction with CTC, has compiled a week’s worth of noteworthy investment and funding information from the global crypto market for August 29 — September 4, 2022, as follows. 【Infrastructure】 1. Sei Labs | Seed round funding of $5 million｜Led by Multicoin Capital On August 31, crypto startup Sei Labs closed a $5 million seed round led by Multicoin Capital, with participation from Coinbase Ventures, GSR, Flow Traders, Hudson River Trading, Delphi Digital, Tangent and others. Link to original article:https://www.bloomberg.com/news/articles/2022-08-31/ex-goldman-banker-s-crypto-startup-backed-by-key-market-makers 【DeFi】 2. GammaX | Raised $4 million｜Led by StarkWare On August 29th, GammaX, a Singapore-based company building a new high-performance hybrid crypto derivatives exchange, closed a $4 million round of funding led by StarkWare and Dexterity Capital, with participation from Alphanonce, Cobo, Genesis Trading, Kyber, Ledger Prime, Matrixport, Profluent, Uncorrelated, and 01Node. Link to original article:https://decrypt.co/108460/gammax-raises-4m-launch-crypto-derivatives-exchange-ethereum-layer-2-solution 3. Clockwork | Raised $4 million｜Led by Multicoin Capital On August 30th, Clockwork, a decentralized automation network for Solana, closed a $4 million seed round led by Multicoin Capital and Asymmetric, with participation from Solana Ventures and El Cap Ventures. The funding round will be used to expand the team, build community and support integration with partner projects. Link to original article:https://www.theblock.co/post/165953/solana-automation-network-clockwork-raises-4-million?utm_source=twitter&utm_medium=social 4. GoGoPool | Raised $5 million｜Led by Framework Ventures On August 31,GoGoPool, a decentralized staking protocol on Avalanche, announced a $5 million funding round led by Framework Ventures and Coinfund, with participation from Avalaunch, Republic Capital and Flow Traders. Link to original article:https://www.theblock.co/post/166498/gogopool-raises-5-million-to-provide-decentralized-staking-on-avalanche?utm_source=twitter&utm_medium=social 【Game】 5. Limit Break | Raised $200 million｜Led by Paradigm On August 29th, Limit Break raised $200 million in two rounds of funding led by Josh Buckley, Paradigm and Standard Crypto, with participation from FTX, Coinbase, Positive Sum, Shervinator and Anthos Capital. Link to original article:https://twitter.com/limitbreak/status/1564240941690798081?s=21&t=8jZochTqhoCKzRvvu4iz-A 6. Xterio | Raised $40 million｜Led by FTX Ventures On August 30, Xterio, a web3 game developer and publisher, announced a $40 million funding round co-led by video game developer FunPlus, venture capital firm Makers Fund, FTX Ventures and blockchain gaming platform XPLA, with participation from Animoca Brands, HashKey, Foresight Ventures, Infinity Ventures Crypto and Matrix Partners. Foresight Ventures, Infinity Ventures Crypto and Matrix Partners. Link to original article:https://www.theblock.co/post/166447/web3-game-developer-xterio-raises-40-million-in-saft-sale 7. Internet Game | Seed round funding of $7 million｜ParaFi Capital and others participated On September 3, Internet Game, a project that has described itself as ‘HQ Trivia meets NFTs,’ announced the closing of a $7 million seed funding round with participation from ParaFi Capital, Dragonfly Capital, Dephi Digital, Uniswap Ventures, Collab+Currency and others. Link to original article:https://www.theblock.co/post/167390/bankrupt-hq-trivias-nft-reinvention-scores-7-million-seed-round 【NFT】 8. Tokenproof | Raised $5 million｜Led by Penny Jar On August 30, Tokenproof, a token-gating platform, announced a $5 million funding round led by Penny Jar with participation from Corazon Capital, 6th Man Ventures, Canonical Crypto and others. Link to original article:https://www.coindesk.com/business/2022/08/30/nft-security-startup-tokenproof-raises-5m-to-keep-jpegs-safe-from-scammers/ 9. PROOF | Series A financing of $50 million｜Led by a16z On August 31, PROOF, the parent company of NFT project Moonbirds, announced the completion of a $50 million Series A funding round led by a16z with participation from Seven Seven Six, True Ventures, Collab+Currency, Flamingo DAO, SV Angel, Vayner Fund and others. Link to original article:https://docs.proof.xyz/future/press The first Tokyo Web3 Summer Hackathon, “TWSH”, was launched by Cryptogram Venture (CGV). TWSH welcomes the participation of traditional Internet developers and blockchain developers who are interested in Web3, developers, engineers, product managers and UI designers with innovative and creative abilities. Application for institutional cooperation (event support, project investment, media cooperation, etc.): Yurinatyou@cgv.fund Website for project registration: https://www.web3hackathon.io/ About Cryptogram Venture (CGV) Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment”, it has participated in early investments in FTX, Republic, CasperLabs, AlchemyPay, Graph, Bitkeep, Pocket, and Powerpool, as well as the Japanese government-regulated yen stablecoin JPYW, etc. Meanwhile, CGV FoF is the limited partner of Huobi venture, Rocktree capital, Kirin fund, etc. Currently, CGV has branches in Singapore, Canada, and China.

With the US Dollar Index nearing a 20-year high and the 10-year US Treasury yield reaching 3%undefined capital flowed out of risky assets and the Crypto market followed the US equity market in a sharp correction. From this week's statistics (7 projects in total)undefined the number of crypto market primary market pitches slowed downundefined with Web3 Infrastructure (2)undefined NFT (1)undefined Game (2)undefined and Metaverse (2) projects all seeing a decrease in the number of pitches and funding. CGVundefined in conjunction with CTCundefined has put together a roundup of the notable pitches and funding information from the global crypto market for the week of 2022undefined as follows The following is a summary of the global crypto market's notable pitches from August 22 - August 28undefined 2022. 【Infrastructure】 1. Hidden Road Partners | Series A financing of $50 million｜FTX Ventures and others participated On August 22ndundefined Hidden Road Partners recently announced the closing of a $50 million Series A round of financing led by Castle Island Ventures with participation from FTX Venturesundefined Citadel Securitiesundefined Uncorrelated Venturesundefined Greycroftundefined XBTOundefined Humla Venturesundefined Wintermuteundefined SLN Capitalundefined Profluent Tradingundefined Coinbase Ventures and Corner Capital. Humla Venturesundefined Wintermuteundefined SLN Capitalundefined Profluent Tradingundefined Coinbase Venturesundefined and Corner Capital. Link to original article:https://www.bloomberg.com/news/articles/2022-08-22/wall-street-crypto-giants-line-up-to-back-startup-prime-broker#xj4y7vzkg 2. Mural | Seed round funding of $5.6 million｜DCG and others participated On August 23rdundefined Muralundefined a crypto firm focused on decentralized autonomous organizations (DAOs) infrastructureundefined announced the closing of a $5.6 million seed round with participation from Mike Novogratz's Galaxy Venturesundefined Barry Silbert's Digital Currency Group (DCG)undefined Firstminute Capitalundefined 186 Ventures and others. Link to original article:https://techcrunch.com/2022/08/23/mural-raised-5-6m-to-help-brands-deploy-dao-treasury-funds/ 【Game】 3. Cricinshots | Seed Round Financing｜Led by Antler India On August 24undefined Web3 cricket game Cricinshots announced the completion of a seed funding round led by Antler India for an undisclosed amount. Link to original article:https://bwdisrupt.businessworld.in/article/Web3-Game-Cricinshots-Raises-Pre-Seed-Funding-Led-By-Antler-India/24-08-2022-443577/ 4. Animoca Brands Japan | Raised $45 million｜ MUFG and others participated On August 26undefined Animoca Brands Japan announced the closing of a $45 million financing round at a $500 million valuationundefined with participation from MUFG and Animoca Brandsundefined which will allow Animoca Brands Japan to use the new funding to continue to license popular intellectual propertyundefined develop internal capabilitiesundefined and facilitate the adoption of Web3 by multiple partners. Link to original article:https://www.animocabrands.com/animoca-brands-japan-raises-usd-45-million-from-mufg-and-animoca-brands-to-grow-web3-business 【Metaverse】 5. Ready Player Me | Series B financing of $56 million｜ Led by a16z On August 23rdundefined Ready Player Meundefined a metaverse identity platformundefined closed a $56 million funding round led by a16z with participation from Roblox co-founder David Baszuckiundefined Twitch co-founder Justin Kanundefined King Games co-founder Sebastian Knutsson and Riccardo Zacconiundefined sports and entertainment company Endeavourundefined Kevin Hart and Hartbeat Venturesundefined among others. Link to original article:https://techcrunch.com/2022/08/23/ready-player-me-a-platform-to-build-dynamic-cross-game-avatars-for-virtual-worlds-raises-56m-led-by-a16z/?tpcc=tcplustwitter 6. Com2uS | Raised $3 million｜SK Networks participates On August 23undefined Com2Verseundefined the metaverse subsidiary of game publisher Com2uSundefined announced the closing of a 4 billion won ($3 million) financing round with SK Networks participating to acquire outstanding shares. Link to original article:https://koreajoongangdaily.joins.com/2022/08/23/business/tech/Korea-game-metaverse/20220823152254430.html 【NFT】 7. NFT Genius | Series A financing of $10.5 million｜ Led by Dapper Labs and others On August 25undefined NFT Genius closed a $10.5 million Series A round of funding at a $150 million valuationundefined led by Dapper Labsundefined Spartan Labsundefined Commonwealth Asset Management (CWAM) and Fundamental Labsundefined with participation from Spartanundefined One Football and Unibancoundefined among others. Link to original article:https://www.nftgators.com/nft-genius-raises-10-5m-series-a-funding-at-150m-valuation-exclusive/ About Cryptogram Venture (CGV) : Cryptogram Venture (CGV) is a Japan-based research and investment institution engaged in crypto. With the business philosophy of “research-driven investment”undefined it has participated in early investments in FTXundefined Republicundefined CasperLabsundefined AlchemyPayundefined Graphundefined Bitkeepundefined Pocketundefined and Powerpoolundefined as well as the Japanese government-regulated yen stablecoin JPYWundefined etc. Meanwhileundefined CGV FoF is the limited partner of Huobi ventureundefined Rocktree capitalundefined Kirin fundundefined etc. Currentlyundefined CGV has branches in Singaporeundefined Canadaundefined and China.