Good morning, and welcome to Protocol Fintech. This Wednesday: why sports-driven NFTs are still in play, new Zelle and Venmo scams, and UBS and Wealthfront’s breakup.
Are fintech stocks oversold? The F-Prime Fintech Index is down another 15% for the month, compounding its losses for the year. Run through the list of index components, and you see company after company with strong revenue growth. At some point, the multiples get to the point where either the stock rises or buyers swoop in. It’s always difficult to predict stock movements, but it seems like simple arithmetic to say these stocks don’t have that much farther to fall.
A safe bet in NFTs
The crypto market has been rocky in recent months, and some NFTs have seen their prices crater, but digital tokens for sports are still scoring points with fans and investors. Several companies are working to bring mainstream sports into the world of NFTs, with the support of major blockchain protocols that are eager to show broader utility.
Sports NFTs have huge potential. The NFT sports collectible market alone could be worth $92 billion in a decade’s time, by one analysis. And while sports-related NFTs are now mostly used for collecting or playing fantasy sports, many expect NFTs to also serve as ways for fans to connect with their favorite teams or players.
- Sales of Dapper Labs’ NBA Top Shot NFTs, which feature collectible video “moments” that can be bought, sold and traded, have continued to grow and the company has expanded to UFC and NFL collectibles. Most recently Ticketmaster announced a deal to use the Flow blockchain, which Dapper Labs created, to attach NFTs to tickets.
- Sorare, which started with a fantasy NFT soccer game and added Major League Baseball this year, announced an expansion into NFT gaming with the NBA Wednesday. The basketball game, which is expected to launch early in the NBA season this year, will feature tournaments and a marketplace, but also have NBA-specific features.
- Since Sorare announced its MLB product in May, it has seen 250,000 new signups and $5 million in MLB trading volume so far.
It’s all about the fans, since that’s ultimately where the money comes from. Fans benefit when there are many different ways to interact with teams and leagues, said Jorge Urrutia del Pozo, vice president of football at Dapper Labs. (That’s football as in soccer.)
- Dapper is preparing to roll out a bilingual NFT collectibles product with the Spanish soccer league LaLiga, which has large fan bases in Spain, South America, Indonesia and the Middle East. The product will have access to 15 years of archives for its products, including stars like Lionel Messi and Cristiano Ronaldo.
- Technology can make sense of the growing number of touch points with fans, Urrutia del Pozo said. This is important if NFTs can be used as proof of attendance or provide rewards, he added.
- The protocol Algorand is working with FIFA, which is creating its FIFA+ Collect NFT marketplace. It will have digital moments from FIFA World Cup games and other art and images.
Sean Ford, interim CEO at Algorand, sees sports as well as games and music as key drivers of growth for blockchains. “Underlying all three are very passionate and deeply connected user bases,” he said. But the opportunities for NFTs in sports go far beyond just collectibles or fantasy games. Sports teams or leagues can use NFTs to sell fractional shares of teams, to sell seat licenses, to grant fans access to special areas in the stadium or special merchandise or to allow them to get unique digital moments of a game they attended. It’s a way to increase engagement, which is, after all, the goal.
— Tomio Geron (email | twitter)
A version of this story first appeared on Protocol.com. Read it here.
A MESSAGE FROM MODERN TREASURY
Building fintech products is hard, but it doesn’t have to be. This eBook walks through 3 examples—a digital wallet, an escrow product, and an invoice factoring service. Get step-by-step instructions for how to build these apps, including technical best practices and payment ops architecture.
On the money
Apple dodged a lawsuit over a fake crypto app. A federal judge ruled that Section 230 of the Communications Decency Act protects Apple from a proposed class action lawsuit over a fraudulent cryptocurrency wallet app available for download on its App Store.
Scammers are “accidentally” sending people money on Venmo and Zelle. The Los Angeles Times explains the risks of a popular scam: “A scammer sends you $500, but if the charge is reversed, that initial $500 is clawed back. The money you sent ‘back’ is a different $500. It’s your $500.” The Consumer Financial Protection Bureau, by the way, has promised new rules to address peer-to-peer payment scams.
The IMF says countries must coordinate on crypto regulation. Cryptocurrencies are no longer “niche products,” according to a new report from the agency, and regulators need to coordinate a meaningful global response.
One area for NFTs that is not slowing down: trademark filings. More than 5,800 NFT-related trademark applications have been filed in 2022, compared to 2,087 for all of 2021.
PayPal and Intuit have joined the Financial Technology Association. The industry group’s member list already includes Block, Klarna, Plaid and Stripe, among others.
Overheard
Bram Cohen thinks bitcoin’s biggest advocates might be their own worst enemies. “There’s a lot of good which can be done with crypto but maxis aren’t helping,” the BitTorrent founder tweeted in a thread about the effect of crypto adoption on remittance costs. “They’re also bad at PR. ‘We’re assholes’ is a positioning I will happily cede to them.”
Fintechs that compete with banks without the same regulatory burden are “getting away with murder,” Eugene Ludwig, a former comptroller under the Clinton administration, told an audience Tuesday at the Clearing House and Bank Policy Institute’s annual conference. Ludwig also thinks banks should be freed up to “play more aggressively in the crypto markets.”
Deal flow
Real estate marketing and analytics firm VTS raised $125 million in a series E funding round. CBRE led the round, which the Wall Street Journal characterized as a bet on workers returning to the office.
TimePayment, which specializes in sales financing for specialty equipment, has acquired ecommerce financing company QuickSpark Financial. More than 30 QuickSpark employees were hired to work at TimePayment.
UBS and Wealthfront called off their $1.4 billion deal after a mutual termination. The acquisition of the smaller robo-adviser was announced eight months ago, but has been plagued by regulatory concerns according to insiders who spoke with Axios. UBS will now invest $69.7 million in Wealthfront through a convertible note.
Alloy, an identity decisioning service for the financial sector, raised $52 million in an additional funding round co-led by Lightspeed Venture Partners and Avenir Growth. Canapi Ventures, Bessemer Venture Partners, Avid Ventures and Felicis Ventures also participated in the round, which brings the company to a $1.55 billion valuation.
Kevin Rose-founded NFT collective Proof raised $50 million in a series A funding round led by a16z. Seven Seven Six, True Ventures, Flamingo DAO, VaynerFund and SV Angel also participated in the round.
Embedded fintech company Solid raised $63 million in a series B round led by FTV Capital. The company, rebranded from Wise in 2021, has raised $80.7 million.
A MESSAGE FROM MODERN TREASURY
Moving funds and tracking balances at scale is challenging. And digital Wallets can become complicated quickly when dealing with many transactions. Learn how to scale them effortlessly, without sacrificing auditability, in our step-by-step ebook.
The crypto market has been rocky in recent months, and some NFTs have seen their prices crater, but digital tokens for sports are still scoring points with fans and investors. Several companies are working to bring mainstream sports into the world of NFTs, with the support of major blockchain protocols that are eager to show broader utility.
Sports NFTs have huge potential. The NFT sports collectible market alone could be worth $92 billion in a decade’s time, by one analysis. And while sports-related NFTs are now mostly used for collecting or playing fantasy sports, many expect NFTs to also serve as ways for fans to connect with their favorite teams or players.
It’s all about the fans, since that’s ultimately where the money comes from. Fans benefit when there are many different ways to interact with teams and leagues, said Jorge Urrutia del Pozo, vice president of football at Dapper Labs. (That’s football as in soccer.)
Sean Ford, interim CEO at Algorand, sees sports as well as games and music as key drivers of growth for blockchains. “Underlying all three are very passionate and deeply connected user bases,” he said. But the opportunities for NFTs in sports go far beyond just collectibles or fantasy games. Sports teams or leagues can use NFTs to sell fractional shares of teams, to sell seat licenses, to grant fans access to special areas in the stadium or special merchandise or to allow them to get unique digital moments of a game they attended. It’s a way to increase engagement, which is, after all, the goal.
— Tomio Geron (email | twitter)
Building fintech products is hard, but it doesn’t have to be. This eBook walks through 3 examples—a digital wallet, an escrow product, and an invoice factoring service. Get step-by-step instructions for how to build these apps, including technical best practices and payment ops architecture.
Learn more
Apple dodged a lawsuit over a fake crypto app. A federal judge ruled that Section 230 of the Communications Decency Act protects Apple from a proposed class action lawsuit over a fraudulent cryptocurrency wallet app available for download on its App Store.
Scammers are “accidentally” sending people money on Venmo and Zelle. The Los Angeles Times explains the risks of a popular scam: “A scammer sends you $500, but if the charge is reversed, that initial $500 is clawed back. The money you sent ‘back’ is a different $500. It’s your $500.” The Consumer Financial Protection Bureau, by the way, has promised new rules to address peer-to-peer payment scams.
The IMF says countries must coordinate on crypto regulation. Cryptocurrencies are no longer “niche products,” according to a new report from the agency, and regulators need to coordinate a meaningful global response.
One area for NFTs that is not slowing down: trademark filings. More than 5,800 NFT-related trademark applications have been filed in 2022, compared to 2,087 for all of 2021.
PayPal and Intuit have joined the Financial Technology Association. The industry group’s member list already includes Block, Klarna, Plaid and Stripe, among others.
Bram Cohen thinks bitcoin’s biggest advocates might be their own worst enemies. “There’s a lot of good which can be done with crypto but maxis aren’t helping,” the BitTorrent founder tweeted in a thread about the effect of crypto adoption on remittance costs. “They’re also bad at PR. ‘We’re assholes’ is a positioning I will happily cede to them.”
Fintechs that compete with banks without the same regulatory burden are “getting away with murder,” Eugene Ludwig, a former comptroller under the Clinton administration, told an audience Tuesday at the Clearing House and Bank Policy Institute’s annual conference. Ludwig also thinks banks should be freed up to “play more aggressively in the crypto markets.”
Real estate marketing and analytics firm VTS raised $125 million in a series E funding round. CBRE led the round, which the Wall Street Journal characterized as a bet on workers returning to the office.
TimePayment, which specializes in sales financing for specialty equipment, has acquired ecommerce financing company QuickSpark Financial. More than 30 QuickSpark employees were hired to work at TimePayment.
UBS and Wealthfront called off their $1.4 billion deal after a mutual termination. The acquisition of the smaller robo-adviser was announced eight months ago, but has been plagued by regulatory concerns according to insiders who spoke with Axios. UBS will now invest $69.7 million in Wealthfront through a convertible note.
Alloy, an identity decisioning service for the financial sector, raised $52 million in an additional funding round co-led by Lightspeed Venture Partners and Avenir Growth. Canapi Ventures, Bessemer Venture Partners, Avid Ventures and Felicis Ventures also participated in the round, which brings the company to a $1.55 billion valuation.
Kevin Rose-founded NFT collective Proof raised $50 million in a series A funding round led by a16z. Seven Seven Six, True Ventures, Flamingo DAO, VaynerFund and SV Angel also participated in the round.
Moving funds and tracking balances at scale is challenging. And digital Wallets can become complicated quickly when dealing with many transactions. Learn how to scale them effortlessly, without sacrificing auditability, in our step-by-step ebook.
Learn more
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