Web3, crypto gaming or DeFi — Which is the hottest crypto sector in 2023?

Hello and welcome from cointelegraph Research terminal I'll be your host Michael tabone senior Economist with Coin Telegraph research today's panel Will be discussing the crypto verse of 2022 it's kind of a year in review from Venture capital investment perspective As well as what may be on the horizon For 2023 and Beyond it's me at belridi From keychain Ventures quick fire Question on a scale from 1 to 10 one Being bearish 10 being bullish how would You rate your feelings on the market Going into 2023 Yeah I guess to Um to give you a number I would say Three Um I guess you know uh 2023 will still Be driven by microtrans Um you know rate inflation geopolitical Situation energy uh all the same stuff That uh you know uh we've seen at the End of 2022 more specifically I guess About crypto uh we still have also some Headwind from uh and and second waves From Ripple effects coming from FTX and Other situations we've seen at the end Of 2022. uh Robert Young the CEO of Anamoco Brands how would you rate the State of crypto So I would say um it depends on which Side of the table you're on Um so I think if I put my investor hat On then I'd say we're at a seven or an

Eight right now because I think it's a Fantastic time to be deploying Capital Um but I think if you're in fundraising Mode then definitely you know there are A lot of headwinds and it's challenging Because you know it's it's a buyer's Market at this point in time so you Really have to be able to stand out you Have to have you know solid metrics and Performance and really be able to Demonstrate that you're going to be in It for the long haul and able to Withstand a reasonable amount of Market Turbulence for the next year year and a Half Cheyenne Hasley director of aquify Studios your number on the market Sediment Yes I would say A4 Um I do agree like on a Metro Perspective Um things are not really um looking Bully like when it comes to Inflation but I think there is lots of Clarity that needs to be also um taken To Constitution when it comes to uh Regulatory framework for people to gain Combat confidence But Um at the same time I think it's it's a Great time when it comes to uh focusing On customer adoption or as end user Adoption Um there is a couple of good Trends Right now that I'm seeing going forwards

And that's kind of the bullish part Which I'm saying makes me Um more optimistic at least on that side Very very interesting if I averaged Everybody out we're like just below a Five so we're we're a little bit on the Bearish side and I get that I believe me I love hearing these different takes 2022 was a roller coaster ride for Venture capital investment on the Blockchain industry in 2021 the entire Year we saw just over 30 billion dollars And in the first two quarters of 2022 we Saw just under that 30 billion dollars In capital inflows the problem is since April there's been just about a downward Downward Trend the entire 2022 year Um so we're just over uh 36 billion Dollars for the entire year last year so The roller coaster it seems has just Begun you know just been plunging down So I'd like to go to uh Robert Young in 2022 Anna mocha was on a tear buying Buying all different types of companies Um was one of the leading ones um Eden Games dare why uh dare wise tiny app Grease Monkey Games a host of others it Seems animoka is all overall bullish on This Market specifically metaverse and Gaming and what is your take on the Current state of these crypto sectors So I think Um we remain very bullish I mean this is What we do obviously we've been a game

Developer for for 15 years and so the Acquisitions that you mentioned are all Game studios so that's actually just Continuing to expand our traditional Business however we have been focused on Web 3 games specifically for the last Five years and that's that's all we do At this point in time I think we still Feel very bullish I think that one thing Though that remains Constant in the web 3 Industry is the Fact that it changes all the time if That makes sense so I think that one of The things that we're doing at the Moment is we're like always we're Constantly reevaluating what business Models and approaches and product types And marketing approaches Etc work best Because I think that the market changes So quickly and you know For Better or For Worse I mean it's just volatile that You need to keep innovative rating you Need to stay on top of Trends you need To understand your consumers and you Need to be very agile and that actually Is not that different I mean that Agility has been a necessary skill I Think in this market for years and will Continue to do to be that way you know One thousand percent I'm I'm part of a Couple nft communities that if I take a Weekend off and don't show up for a Conversation it's like what happened did You die you know you know what happened

Like it's been two days you know Um that's me it you're the founding Partner of keychain Ventures and Investment platform aiming to provide Institutional investors exposure to the Blockchain and web 3 ecosystems through Funds and co-investment opportunities do The funds and institutions have an Interest in metaverse and blockchain Gaming Yes I think uh definitely I mean in Terms of like funds obviously they are More faster adopters and more you know More willing to to test the edges so We've seen a number of funds aminanimoka Definitely is a leader in this place in Terms of like being an investor into This space there have been other funds That have dedicated you know vehicles or Strategies to to gaming on the Institutional side or corporate side Obviously it takes a little bit longer To develop that's momentum and Conviction but I think despite what We've seen at the end of 2022 there's Been still some you know announcements I Think notably we've seen Disney for Instance uh come out with you know Strategy to use metaverse for uh you Know their experiences with users and Stuff like that and you know Nike have Been With night land have been uh as well at The Forefront of that adoption so and I

Think that Trend uh definitely Um you know is is continuing and uh and We will see more of that uh despite the The turbulence uh giant Ashley can you Walk us through the open bridge between Web 2 and web3 which is aquify Yes well you know what we're focusing on Is what I call building the service Layer to enable those brand and Corporate and the end user like the Artists as well um to enter the space And so if if you right now if you look At the space there is a whole range of Um interesting applications that are Being built but as an end user if you're A brand or an artist using those it's Very complex to have it like good gasp Of understanding all all the different Chains all the different Um applications mod contract Environments and given that everything Is open source it creates even more Fragmentation because you can always Have a better more optimized version of Something and so what we're enabling is Think about an environment where as an End user you have access to a template Where you can just click um deploy that Use case in a simple UI or just with Some API I think that you're familiar With all that in an environment that is Decentralized itself So that's going to be the nutshell uh What we're building and to come up just

Maybe to continue based on about the Space Um what we're thinking about like the Brands right now Um I think the next at least the Bold Case for for that space would be really Driven by Um consumer front-facing application Like if you can really completely Abstract away all the complexity all the Jargons around nft blockchain Particularly but really thinking about User value like application people can Use uh without even maybe knowing that They are like interacting with a Blockchain in their protocol Um that's really uh that's that's strong Absolutely and you bring up a great Point and thank you because a great Transition into Ravi so my question is What do you think could be the spark to Bring traction more into the blockchain Gaming uh world into the web 3 gaming Sector Sure I think it's very simple it we just Need to have more products I mean you Know when you think about Um how ecosystems game ecosystems have Grown a lot of that is driven by people Just having the right hardware and Access to the platform of distribution Etc and so if I look back at the last Sort of generation of evolution of games Which was mobile

Um you know that took several years Before there was enough of a critical Mass of handsets and more importantly Games in the App Stores for people who Add handsets to actually be interested That there was going to be fun stuff There to play so I think that you know The blockchain game Space is still so Nascent relative to the amount of time It takes to make a good game you know it Even a mobile game takes six months you Know to make a decent mobile game but When you're talking about web console Grade PC grades um you know it can take Years so In fairness you know to have an To have an availability of dozens or Hundreds of games takes a long time to Start building that ecosystem so I think It's just a matter of time we've seen You know in 2022 we started to see some Of these titles coming out into the Market And so I think that we can see that the Quality and enjoyability and playability Of games in web 3 is absolutely there It's just that there aren't enough Choices yet for people uh to me it Um I know that you are working with Firms It is an international Endeavor as Blockchain really has no borders what Are some of the hot spots for firms you Work with and do you see any Trends or Changes over the past few years

Yeah interesting question uh very Dynamic environment and Um and I would just uh say that my Answer is not specific to metaverse Companies Or gaming space but like in general I Mean regulation remain a big uh a big Concern uh and and all the projects in The firms are trying to optimize and you Know find uh find a good jurisdiction Where they could you know operate and Run their business lately more lately Um you know jurisdictions like the UAE Have proven to be let's say more crypto Friendly attracted exchanges in part in Particular and some other projects as Well to be based based in that Jurisdiction right regulation regulation Regulations the thing hanging over the Head and where does aquify see itself in The short to medium term in 2023 and Beyond as we as we move into the next Year yeah I think you know right now Giving that we're in a better Market Um for as as an early startup I think Our is what I think is important is to Really focus on Um shorting this first of all these kind Of cell cycle but also thinking about of What are what are actually the unique Feature or small sets of feature where We can Um basically offer to the clients and Really focus on that so you know as in a

SAS business usually you may have a Different range of of offering and it's Not only driven by market but sometimes About creating new markets Um whereas here giving that we're in a Bear Market but I think this is very Important is thinking about what the Client really wants in terms of maybe a Unique feature that you can offer them And be the best at it in a way that Nobody else can actually be comparable Or you could provide a better service Than yourself so for us it's really Focusing on where we have really an edge What we can really Um provide value to the clients and Become the best at it and and you know Um costs can cause down costs on that Front and later on use that let's say Just access that resource into expanding Into New Market awesome excellent So as we all know crypto winner they can Can last for a long time be very brutal So I just wanted to open up to you guys What makes you right now in the short Medium term 2023 2000 you know what what Gives you the that the the the signs of The thaw or hope Okay Um sure I'll I'll jump in Um I'm actually uh not very pessimistic At all to be honest um and and I think That that's Partially due to the fact that I suppose

We've we've been in the space for quite A while Um I mean as as we like to say if this Is a crypto winter then 2018 was in Ice Age Um so I think that it's all relative Um I think one of the things that For me is the most exciting thing about You know the kind of frenetic pace of The last two years is that you know Michael you you quoted those investment Statistics about funds coming into the Sector over the last two years and I Think that those have been Transformational in resulting in one key Metric which is the amount of talent That I've observed coming into the space Meaning people who made the decision That web3 was now mature enough that They were going to leave a very good Position at a very established business To say I'm going to do something Different and I'm going to do something Because I think a web 3 way of doing This is going to be more interesting Than what I'm doing now and you know the People voting with their careers is Often a bigger decision than making a Financial investment and so when you see That kind of Exodus of talent moving Into a space I think that's the best Validation you can get because that's What's going to drive Innovation a Thousand percent yeah I don't feel

Pessimistic either because uh as you Mentioned the statistics I mentioned Before the the lowest Um you know the lowest uh income Venture Capital inflows that we saw 2022 we're Still higher than than what we saw in 2020 and 2021 you know what I mean so We're still it's still at a higher Pace It's just lower than it was the year Before but Focus started to shift away From web3 it seems and back into defy so Defy was the king for a lot of VC Investment for a very long period of Time and then it shifted to kind of web Three web three is Anna mocha's um Wheelhouse that's in web 3 is game five And metaverse and all that stuff so it's Only one data point it's not a trend but I'm very interested to see what happens In this next In this next quarter Um why do you think you know D5 would Start heating up again all of a sudden In the last quarter when we're in the Bear market right why would that be why Do you guys do you have any any insights Into why that might have might it might Have happened I mean I can volunteer my view on those Numbers Um I will not uh say that defy has Heated back up I would just say Relatively speaking web free compared to Defy uh have seen more uh you know

Reduction into investment or inflow of Capital into web 3 compared to D5 but Both of them I think if we double click On the numbers you will see that the Trend is both trending down I think also it's interesting to note That you know Um the web 3 Community is much and I use That as a general term for all things Blockchain Um I I think that it's become a much More diverse Community with people now Enjoying different silos of Interest Whether you're more in the fintech side Of things or you're more in the content Side of things Etc And one thing that I think gives me a Lot of Um you know encouragement is that if you Look at over the last quarter there were A lot of new projects coming out you Know tokenized projects on behalf of big Consumer Brands you know whether it's Starbucks or Reddit or you name it and Including Adidas and Nike and stuff and These projects continued on their road Maps and continued to launch with Consumers despite the fact that FTX blew Up in the most spectacular way right in The middle of all of those projects But for companies that are planning you Know two-year product development cycles And marketing plans they launch when the Product is ready for customers they

Don't care about what the market Information is because that's not part Of how they serve customers because They're sort of USP is different right It's not related to the prices of crypto Or things like that so I think that We've seen effectively in 2022 kind of a Decoupling between what I would call the Content side of web3 and entertainment Web 3 where we spend a lot of our time And the financial services side of web3 It used to be the same 2019 it was all The same Yeah right yeah yeah absolutely I'd like To thank Everyone who joined us today on the Panel it's been extremely interesting Hearing the different takes from Everybody and from all of us at coin Telegraph research I'd like to thank you Thank you for watching we look forward To presenting you with another great Panel really soon Thank you bye Bitcoin Thank you everyone