There is no shortage of headlines about the arrival of “crypto winter”. Among the growing a bunch of bankruptciesone of the busiest startups in the business, NFT marketplace OpenSea, has announced major layoff only today.
Behind the scenes, however, many founders and VCs are doubling down on the promise of largely decentralized, blockchain-based companies, and to that end, one of the “most exciting parts of crypto right now” is at the “social media intersection.” messaging and web3,” says renowned entrepreneur and investor Elad Gil. In short, he believes that today’s messaging tools are not suitable, and that there will be new opportunities for crypto startups to do it right.
Gil has already made an early bet by leading a $4 million seed round for Lines, a startup whose three co-founders studied philosophy at Harvard and whose CEO Sahil Khandabrags that the nascent company will be a “web3 messaging platform”, although he and his former classmates are still developing its technology.
The fact that this is still a work in progress seems to suit Lines’ supporters, who also include well-known angel investors Naval Ravikant, Balaji Srinivasan, Gokul Rajaram. What they stand for is a vision. “There is a rapidly growing number of people using crypto pseudonyms to buy digital currency, exchange NFTs, vote on proposals, and manage the treasury,” Khanda explains. “But whenever someone tries to communicate with another person on this network, there is no way to know if they are talking to the right person.”
In the meantime, Lines aims to provide users with the ability to send wallet-to-wallet messages and join group chats based on token ownership. Indeed, Handa paints a picture of a communication layer that is ambiguous about both the underlying blockchains and the specific crypto wallet that a person uses, and which, as a result, empowers users in a wide variety of ways. For example, they can find the owner of a particular NFT they would like to buy, or find like-minded people based on the tokens they have purchased, or contact potential new members of the DAO (kind of “group chat with bank account”, as the DAO is called).
Of course, Gil thinks now is the right time, as more people are grouping up and transacting online. He notes: “In the old days, your bitcoin or crypto asset and mine were identical, so there would be less reason for me to ping an anonymous user through their wallet. But with the DAO, you need to coordinate with the various actors beyond using Discord.” In the web3 world, he says, users “want to be able to identify people and interact with them to manage, reward contributions, make airdrops, and so on.” With NFTs and other collectibles, “I might want to be able to ping you to buy, sell or trade, so there are other incentives for the communication layer to be useful,” he adds.
The question is whether enough people will agree that Lines offers exactly the right solution. As with any messaging app, its value will largely be determined by how many people use it. And how many people use it will determine whether a startup can partner with platforms like OpenSea that it needs.
Meanwhile, Handa and the co-founders, who have yet to decide on a business model, will soon be competing with other messaging apps that are trying to compete with Twitter, Telegram or Discord, where most conversations on the Internet today take place and where, because it is almost impossible to check that people are who they say they are, phishing attempts and other scams rampant.
Gil himself says that he is already aware of “different teams working on identity, social layers and communications on top of web3.”
Most of them are still out of the public eye, but some of them are starting to appear in public. Last month, for example, a cryptanalytics platform called Nansen deployed messaging app which he says allows users to log in with a crypto wallet and then connect to groups based on their crypto holdings and NFTs which they truly own. Like Lines, the firm describes the app as a “cryptographic communications hub” for web3 communities.
The NFT marketplace, Rarible, has separately announced wallet-based messenger feature last year.
Naturally, Lines claims to have an advantage over others. Namely, says Handa, while he and his friends are working on web3, they are far enough away from it to create an application that both crypto-natives can understand, but that people who are not familiar with web3 can easily understand and use.
“We’re really focused on client-side use cases, not how decentralized the messaging protocol itself is,” says Handa, who still has two credits to go before graduation and is very much looking forward to graduating. (“My dissertation is about identity and web communications, so it doesn’t distract me at the moment,” he suggests.)
He says he “thinks it helps us that we haven’t been in the crypto space for 10-15 years” and therefore “isn’t too ideological about how we build the platform. We’re really just doing it based on what makes sense from a consumer standpoint and from a community standpoint. So many crypto products are not thought out from a consumer perspective,” he continues, “so we try to find that first use case, make an attractive product, and then eventually, if other platforms want to integrate [with us]they can.”
Other investors in Lines’ seed round include Scalar Capital, Volt Capital, Caffeinated Capital, Consensys Mesh, Hash3, Mischief and many others, including Figma CEO and co-founder Dylan Field and entrepreneur-investor Scott Belsky. Handa says Lines is using capital to hire and that she is looking for three more engineers right now.
Credit: techcrunch.com /