Unstoppable Domains Raise $65M as NFT Market Falls to 12-Month Low
While the entire crypto market is still in deep bear territory, some companies are preparing for the next cycle. Among them is Unstoppable Domains, specialized in streamlining the NFT ecosystem, from URL domains to wallet payment addresses.
After the most recent funding round on Wednesday, finalizing $65 million Series A, Unstoppable Domains raised its valuation to $1 billion. As usual, venture capital (VC) firms made it happen, led by Pantera Capital, Polygon, Mayfield, Alchemy Ventures, and half a dozen others.
What is Unstoppable Domains?
Unstoppable Domains has been in the NFT game since 2018, two years before the ecosystem really heated up during 2020. Headed by Matthew Gould, the company has registered 2.5 million domains, helping NFT pioneers with shortening crypto wallet addresses, web3 website development, and web3 app integrations.
Thanks to zero renewal fees, Unstoppable Domains became the go-to service for both traders and developers alike. Interestingly, Unstoppable Domains is operating remotely in its entirety, as befits a company that aims to “unlock user-owned, private, and portable identities”. Marking the $1 billion valuation milestone, CEO Matthew Gould stated the following.
“As the digital economy becomes a larger part of our lives, it’s time for people to own their identity on the internet.”
Although we are in bearish times, it bears keeping in mind that large institutions recognized the potentially explosive growth of NFTs last year. Greyscale, Bank of America, Goldman Sachs, and JPMorgan issued their own reports and forecasts, with JPMorgan being exceptionally bullish.
“The metaverse will likely infiltrate every sector in some way in the coming years, with the market opportunity estimated at over $1 trillion in yearly revenues.”
However, given the market downturn, it seems that Unstoppable Domains will have to wait a while longer before the market activity restarts.
Present State of the NFT Market
Both cryptocurrencies and NFTs are speculative assets, their prices swayed by potential use cases, scarcity, and market cap levels. In a bear market, people flock to more established digital assets, as we’ve seen with rapidly rising Bitcoin dominance, as a percentage share of the entire crypto market.
The same safe haven dynamic applies to the NFT market as well. With the Fed-induced market contraction underway, blue-chip NFT collections remain the only ones with significant trading volume: BAYC, MAYC, BAKC, Doodles, Azuki, Otherdeed, CloneX, Punks, Moonbirds, CoolCats, Meebits, and VeeFriends.
Accordingly, the largest marketplace handling NFT trading, saw a traffic reset to last November when some of these NFT collections didn’t even emerge on the scene.
To put the market decline further into perspective, January saw a $5.86 billion volume peak, an all-time high. Fast forward to July, traffic decreased by -1,181%, to $457.9 million. As many institutional reports noted, NFTs will have to find many more use cases outside of PFPs (profile pictures).
Yuga Labs is the major player making this transition, moving from Bored Ape Yacht Club (BAYC) which grew its wealth, to a more dynamic play-to-earn (P2E) metaverse model with the upcoming Otherside, powered by ApeCoin (APE).
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Resistance to NFTs Still Strong
For Unstoppable Domains to become the AWS (Amazon Web Services) of NFTs, mainstream adoption will still have to overcome some obstacles. Case in point, last week, Mojang Studios issued NFT guidelines. They effectively prohibited any integration of blockchain technology into Minecraft, a massive ecosystem ideal for in-game tokenization.
The argument for doing so centered around the notion that digital scarcity creates an exclusionary game environment. This means that if people wanted to stand out from the crowd with unique in-game items, this would not be “safe and inclusive”.
However, microtransactions in free-to-play (F2P) games like Fortnite clearly show scarcity interest. In 2022, the microtransaction market size is forecasted to grow to $67.60 billion from 2021’s $59.49 billion. Not only does this “exclusionary” market already exist, but it is one that is inferior to the NFT model.
After all, those microtransaction assets are locked into gaming accounts. Because they are not tokenized, they are forever isolated and untradeable. In other words, Mojang argues that gamers are better off with centralized in-game stores than truly owning their in-game assets via NFTs.
Do you already have a stake in one of the fancy Web3 domains? Let us know in the comments below.