📝 Field Notes #53: Penguin Business

Pudgy's new business model. Ledger hack. FIFA & Donald Trump drop NFTs. Bitcoin NFT boom. Coinbase on-chain asset management. Accounting rules: Bitcoin for companies. Top charts & more.

Hey, it’s Marc. Welcome to my weekly, obsessively curated field notes on Web3 & crypto to help you filter out the noise. ✌️ Follow me on LinkedIn.

⏱️ Reading time: 4 min

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"People are disturbed not by things, but by the view they take of them." — Epictetus

Boson Protocol – Real Web3 Commerce, with Web2 UX

As the next bull market emerges, so does a new crypto-rich, Web3-savvy demographic, who are demanding authentic Web3 commerce experiences. Uniquely, with Boson, you can sell physical things as NFTs, with a slick Web2 experience while running on a fully decentralized Web3 backend. No more Web3 washing required!

📚 Top 5 Reads

  • Wallet Infrastructure: Empowering the Next Generation of Dapps. By Nichanan Kesonpat, 1kx. Link

  • New signs of life for NFTs. By Dan Roberts, Variant. Link

  • Tokenization Of RWAs: Beyond The Hype. By Jasper De Maere, Outlier Ventures. Link

  • DappRadar Web3 Industry Report, Nov 23. Link

  • The Inscriptions Craze. By William Peaster. Link

🚨 Top Stories That Caught My Eye

✨ Web3 + NFTs

  • Pudgy Penguins revealed a 3D, free-to-play Pudgy World game at their Pudgy Art Basel Miami event, set to launch in Q1 2024. Link

  • The open-world, on-chain1 storytelling experience will connect to the physical Pudgy toys sold in Walmart and other retail stores.

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Stepping back: Blue-chip NFT collections are seeking new revenue streams by building IP brands, moving away from royalties and mints.

Setting the benchmark: Pudgy Penguins, almost doubling in value this month, has built over 1m followers on Instagram and launched Pudgy toys in Walmart and Smyths Toys earlier this year.

  • Each toy comes with a simple wallet onboarding experience and is linked to a non-transferable NFT.2 This will create a digi-physical experience between the toys and the Pudgy World game.

The big picture: Pudgy does more than brand building. It creates a Web3-native business model.

  • In June this year, Pudgy announced its licensing platform Overpass, aiming to streamline license payments by using blockchain. Link

  • In 2024, Pudgy will start licensing Penguins from their community by featuring community-owned Penguins in products, animations, branded experiences.

Pudgy toys are the first mass-market NFT IP product licensed directly from the community.

Punchline: Pudgy shifts its focus from creating virtual assets out of “thin air” to generating real-world revenue by licensing mass-market, digi-physical experiences and products. A blueprint for community-led brands?

NFT Hype Train🖼️

  • FIFA drops NFTs that offer chance at World Cup final tickets, moves to Polygon. Link

  • Donald Trump is launching a new edition of his Trump Cards NFT collection. Link

  • Thrash-metal band Megadeth launches NFT collection and metaverse community. Link

Zoom out: NFTs have celebrated a comeback in November.

By the numbers: NFT trading volume surged by 125% MoM last month to almost $1bn with top NFT project floors rising to a 7-month high. And the rate of people minting NFTs is increasing. Link

Meanwhile, Bitcoin NFTs, known as "ordinals," are booming. To date, Bitcoin has facilitated over 46 million inscriptions, with users spending more than $105 million in fees.

Punchline: The fundamentals are improving, but avoid boarding the hype train just yet. The future of brand NFTs will be about storytelling, content, and long-term utility, not simple drops.

More on Web3:

  • 🚨 Ledger got hacked, compromising dApps across the ecosystem. Link

  • Decrypt and Rug Radio merge to create a Web3 publishing company. Link

🌎 Crypto & Macro

Bitcoin Accounting 📈

  • The Financial Accounting Standards Board has officially adopted Fair Value Accounting for Bitcoin for fiscal years beginning after Dec 15, 2024.

Why it matters: The rules now allow crypto-holding companies to report their paper gains, not just losses.

Zoom out: Michael Saylor’s MicroStrategy was the first publicly traded company to buy Bitcoin as a treasury asset in 2020. MicroStrategy now holds 58,400 BTC (about $2.5bn!) on its books – about a third of its market cap.

Be smart: MicroStrategy, in a risky bet, became a vehicle for offering investors indirect exposure to Bitcoin (BTC).

The big picture: This will facilitate the adoption of BTC as a treasury reserve asset by firms worldwide.

More from crypto:

  • Coinbase announced “Project Diamond”, a smart contract-powered platform for institutions to create, buy, and sell digitally native assets. Link

  • Swiss-based Rulematch goes live with spot trading venue for banks. Link

🧠AI

  • Mistral, French AI start-up, has raised $415m in its series A. Link

⚡️Get in front of 7,500+ of Web3 leaders 👀

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💰 Money Moves

  • Andalusia Labs: Digital asset infrastructure start-up $48m Series A led by Lightspeed, becomes a unicorn. Link

  • Dynamic: Web3 onboarding platform secures $13.5m round led by A16z. Link

  • LINE NEXT: Secures $140m Web3 Fund from Consortium led by private equity firm Crescendo partners to expand Web3 ecosystem. Link

  • Gacha Monsters: Gaming studio secures $3m seed round led by Animoca Brands. Link

That’s all for now, folks. Thank you for being part of the journey. Talk soon,

– Marc

PS: Follow me on LinkedIn for shorter insights.

📈 Top 2 Charts to Share with Friends

Artwork: Refik Anadol, Bosphorus: Data Sculpture

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