China NFT Weekly: Web3 Investors Unfazed by Market Slide

Digestible news on the latest developments across the fields of Web3, NFTs, blockchain, and metaverse in China and beyond, compiled for you every week by Pandaily.

This week: NFT-based ‘move-to-earn’ game STEPN to block users in China due to domestic crypto regulations, Chinese stock photo licensing website Visual Culture Group to launch NFT platform overseas, Hong Kong-based crypto lender Babel Finance secures $80 million in latest funding round, bringing valuation to $2 billion, and more.

NFT-Based ‘Move-to-Earn’ Game STEPN to Block Users in China Due to Crypto Regulations

Popular NFT game STEPN announced Thursday that users in China would effectively be barred from using the app starting July 15, in order to comply with the country’s regulatory policies. Blomberg and SCMP first reported this story.

  • Built on the Solana blockchain, STEPN allows users to collect and trade virtual sneakers in the form of NFTs by running or walking outdoors. They can then convert in-app earnings converted into cryptocurrencies or cash.
  • The company tweeted that it will start “checking and clearing out” users in mainland China, and that it will stop providing GPS and IP geolocation services to them.
  • “STEPN has always attached great importance to compliance obligations and always strictly abides by the relevant requirements of local regulatory agencies,” the company tweeted in Chinese.
  • The news sent GST, STEPN’s native token, plunging over 10% immediately after its release. GMT, another crypto tied to the app fell over 30%, according to Bloomberg, citing data from CoinGecko.
  • The Chinese government has officially declared all crypto mining and transactions illegal. China’s central bank and state media have repeatedly warned the public against the speculative risks of NFTs.
  • Since its start in December 2021, STEPN has garnered more than 580,000 users worldwide, according to Bloomberg, citing data from Dune Analytics.
  • In January, the company said that it raised $5 million from investors including Sequoia Capital and Alameda Research, a digital asset trading platform.
  • Find Satoshi Lab, an Australian fintech firm, developed STEPN. Jerry Huang and Yawn Rong are the co-founders of Solana (SOL)-based STEPN (GMT). (SCMP, Bloomberg)

READ MORE:  STEPN Closing Services in Mainland China

Chinese Stock Image Licensing Website Visual China to Launch NFT Platform Overseas

Visual China Group (VCG), China’s largest provider of stock images and videos, announced on Thursday the launch of an overseas NFT platform that supports cryptocurrencies. SCMP and Forkast first reported this news.

  • “Vault by 500px,” a beta version of the platform went live on May 25. The company said in a filing to the Shenzhen Stock Exchange that the platform uses blockchain technology to empower content creators and protect “digital copy rights.”
  • The news sent VCG shares soaring to 14.34 yuan ($2.15) minutes after its announcement.
  • 500px, a photography website which VCG acquired in 2018, put together a group of 15 NFT artworks, which users can purchase using ether, a token native to the Ethereum blockchain.
  • Vault’s highest priced NFTs were listed for 0.71 ETH ($1246.8) at the time of writing.
  • 500px has around 500,000 contracted artists and over 20 million users globally.
  • VCG was founded in 2000 as China’s the first image licensing company. Since 2006, it has also been the exclusive distributor for stock image supplier Getty Image, which announced the launch of its own NFT marketplace on the Ethereum Virtual Machine-based Palm sidechain last week. (SCMP, Forkast)

READ MORE:  Visual China Group Launched Blockchain-Based Digital Collecitble Marketplace

Singapore-Based Metaverse App BUD Closes $36.8M Series B

The metaverse startup announced last week that it had raised $36.8 million in a Series B round of financing led by Sequoia Capital India. ClearVue Partners, NetEase and Northern Light Venture Capital also participated in this round. TechCrunch and Forbes first reported the story.

  • The news came three months after BUD completed a $15 million Series A+. The fresh capital brought the startup’s total financing to over $60 million.
  • BUD is a metaverse social platform featuring 3D user-generated content. Users can roam around in the virtual world in cartoon avatars reminiscent of characters in Animal Crossing.
  • After its official launch in November 2021, the app quickly skyrocketed to the list of top 10 social apps in more than 38 countries around the world, including North America, Southeast Asia and South America, according to Crunchbase.
  • “The metaverse is the latest in a succession of medium shifts,” co-founder Risa Feng told Forbes, “the web started with text, moved to images, and then to video – and now we’re making the next move.” Feng and Shawn Lin co-founded the company in 2019, prior to which they both worked as engineers at the social media giant Snap.
  • “We want to democratise the medium of 3D,” Feng added. “Using our platform, everyone can produce the kind of content they want to create, even if they lack the professional skills to do so.”
  • BUD is backed by several prominent China-focused investors, including GGV Capital, Qiming Venture Partners, and SourceCode Capital. (TechCrunch, Forbes)

Hong Kong-Based Crypto Lender Babel Finance Secures $80M, Valuation Reaches $2B

Hong Kong-based crypto lender and digital asset manager Babel Finance announced last week that it had raised $80 million in a new funding round that valued the cryptocurrency lender and asset manager at $2 billion. Forbes and Reuters first reported the story.

  • Investors who participated in the Series B financing round include Jeneration Capital, a Chinese-tech focused fund, 10T Holdings, a US crypto private equity firm, and existing backers such as BAI Capital, the Asian investment arm of German media conglomerate Bertelsmann. A number of family offices in the Asia-Pacific regions also participated in the round, according to Babel.
  • The news came a year after Babel Finance closed a $40 million Series A.
  • Babel said it will use the proceeds to fund its global expansion, in addition to bolstering compliance and securing regulatory approval in the jurisdictions where it operates. According to Forbes, Babel Finance has applied for licenses in Hong Kong, Luxembourg, and the UK.
  • Babels’ main businesses include crypto lending and trading, and limits itself to bitcoin, ethereum and stablecoins. The firm has a clientele of 500 customers and ended last year with $3 billion of loan balances on its balance sheet, according to Reuters.
  • “The crypto financial market is full of opportunities and hidden risks,” co-founder and Chief Executive Officer Del Wang said in a statement, “The retail market and altcoins may have higher profit margins, but we pay more attention to the long-term development of the industry and aim to lead in institutional financial services and innovation.”
  • Babel’s latest capital raise follows a crypto market crash, wiping out close to $60 billion from the portfolio of the wealthiest people who invest in the space. However, investors seem to be undeterred by the market rout. Leading venture capital firm Andreessen Horowitze recently raised $4.5 billion for its fourth crypto fund, which it planned to invest in Web3 projects. (Forbes, Reuters)

Roblox Partners with FDA-Approved Video Game Akili Interactive

Digital therapeutics company Akili Interactive has agreed on a deal with Roblox that could bring the former’s gamified therapy for attention-deficit hyperactivity disorder (ADHD) to the online gaming storefront’s 55 million users, according to Axios.

  • Akili’s EndeavorRx is the first FDA and EMA-approved digital therapeutic (DTx) for ADHD. It is designed to activate neural systems and improve cognitive functioning by providing sensory stimuli and motor challenges.
  • “Roblox brings together tens of millions of people every day to connect, create, and express themselves, and we’re proud to be working with Akili to leverage that passion and enjoyment in connection with their first-in-class digital treatment,” said Craig Donato, Chief Business Officer of Roblox, in a press release.
  • “Akili has captured our imagination with its prescription treatment for children with ADHD delivered through an action video game experience and shares our vision and enthusiasm for what’s possible through interactive, digital experiences. We’re proud to help them as they lead the effort to realize new potential in the field of medicine,” he added.
  • EndeavorRx is indicated to improve attention function as measured by computer-based testing in children ages 8 to 12 years old with primarily inattentive or combined-type ADHD, who have a demonstrated attention issue, according to the press release.
  • Roblox was founded in 2004 in San Mateo, California by Erik Cassel and David Baszucki, according to Crunchbase. (Axios)

OpenSea Changes Website Design Amid Sales Slump

Leading NFT market place OpenSea announced last Thursday that it has redesigned its profile and collections pages to enhance the user-friendliness of the website. The Verge first covered the story.

  • “Our goal is to make it easier to highlight your favorite content, find new stuff from creators you love and discover more NFTs,” the company tweeted.
  • The announcement came at a time when the world’s largest NFT marketplace saw its average selling price, trading and sales volume decrease amidst a broader industry decline.
  • According to DappRadar, the global NFT market trading volume decreased 9.39% in the past 24 hours to $23.32 million. The average price is $322.49, down 14.95% from 24 hours ago. Meanwhile, OpenSea saw a 4.51% decrease in its user numbers in the last 24 hours, currently at 30,320. Its transaction volume has declined 14.06% to $20.62 million. (The Verge)

That’s it for this week’s newsletter – thanks for reading! As always, I welcome any feedback on how to make this newsletter better. My email is See you again next week!