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Twitch co-founder Justin Kan’s Fractal has raised $35 million to build out its marketplace for non-fungible gaming tokens (NFTs).
San Francisco-based Fractal has opened a marketplace for video game players to discover, buy and sell gaming NFTs. Fractal recently released Fractal Launchpad, a new product that helps game companies sell their first NFT collections to the public.
Paradigm and Multicoin Capital led the round with participation from Andreessen Horowitz, Solana Labs, Animoca, Coinbase, Play Ventures, Position Ventures, Zynga founder Mark Pincus, Crossover, Shrug Capital, TerraForm CEO Do Kwon and Tim Ferriss.
Matt Huang of Paradigm will join the company’s board of directors. This funding round comes two months after Fractal’s launch to the public on December 30, 2021. The new funds will be used to hire more engineers, recruit and support game developers, and grow a vibrant ecosystem of GameFi participants. .
Fractal quality checks web 3 games and only accepts 5% of applications for Fractal Launchpad, Kan said. Games launched on the Fractal launch pad include real-time strategy games (House of Sparta), multi-mode games (Tiny Colony), racing games (Yaku), and massively multiplayer online role-playing games (Cinder and Nekoverse).
“I wanted to collaborate with the coolest games out there,” Kan said. “We build great experiences.”
Fractal is Justin Kan’s latest startup: an NFT marketplace for games.
One of the reasons for being selective is that NFTs have met with resistance from some hardcore gamers and game developers. Ubisoft found this out when fans reacted badly to the NFTs for Ghost Recon: Breakpoint in December, and others like Troy Baker, Team17, GSC Game World and more have met resistance.
Fractal also suffered a security breach in December. A scammer hacked into the announcement bot for the startup’s Discord community, which then sent a fraudulent link to thousands of users. It asked them to pay for a new NFT. Fractal had to pay $150,000 to cover the losses. The crypto world can be a scary place, as Sky Mavis discovered this week when hackers stole $624 million in Ethereum cryptocurrency and US dollars from the Ronin Network that supports the popular Axie Infinity game.
Justin Kan is president of Fractal, an NFT marketplace for games.
Part of the key is communicating with players, and Fractal has done just that with its Discord community, Kan said.
“While the NFT world is rife with scams and carpet pulls, our goal is to build Fractal into the trusted market for the best blockchain games and triple-A titles coming out,” Kan said. “What we’ve learned is that the best gaming companies want to be in a market that’s dedicated to serving their needs.”
The market is open in February. Every game launched with Fractal has sold out their NFT collection, with Tiny Colony raising over $2 million from their initial sale. Peak traffic hit more than 33,000 buyers for the release of a single-game NFT collection, Kan said. The community has more than 100,000 members.
Kan said the unwelcome mat for NFTs is like the reaction to free-to-play games 15 years ago. Games like FarmVille really annoyed hardcore gamers, who denounced the games as scams with poor gameplay.
“Fifteen years later we have League of Legends, Free Fire, Fortnite. Almost every major game is free to play,” Kan said. “That’s a dominant model because it turns out that players will pay. With blockchain, people are saying the same things. It’s a scam. The games suck. But we haven’t had the time to bring really good games to the market. Behind the scenes there are all these guys from the traditional game industry making really incredible games.”
He said that in 10 years we will see blockchain games as a better model for games.
“The reason I think it’s going to win is because it’s better for the game as well as for the game developer and for the players. And for the game developer, the reason it is when you basically make an economy from a closed economy to an open economy. And if you create an open economy, I think it’s going to be proven to be just a lot more robust,” Kan said. “The more people build on it, you know, while other people build games on top of your entities, the better it gets.”
And he thinks the creators of user-generated content will come if they have a stake in the game through things like NFTs.
“For the game companies, there is a sacrifice of control in exchange for creating an open ecosystem that is ultimately much more robust in the long run and then they will collect. They get a percentage of all these NFT transactions. That’s potentially much more valuable to them,” Kan said. can sell them instead of just buying them.”
Fractal Launchpad is a place where you can get new NFTs for games.
Players will be more excited when they see they own them, he said. It’s like using skis to ski on every mountain, rather than renting them for use on just one mountain, he said. As for the terrible games, he said players should give it time and embrace some experimentation.
“Fractal builds a trust layer in the web 3 gaming ecosystem,” says Kan. “NFT marketplaces are still the wild west right now, with many teams breaking their promises. We partner with the best triple-A gaming studios with large communities to bring players the coolest gaming experiences. The move to blockchain assets is a new business model for gaming, and in 10 years there will be an even bigger shift in the gaming world than Twitch was. Fractal hopes to get the next 100 million crypto users on board through blockchain games.”
Selling digital, in-game assets has become a huge industry in recent years as blockbusters like FIFA and Fortnite have brought in tens of billions from selling digital items. Today, more and more games are listing their virtual items on public blockchains, giving players complete control over those assets and allowing them to own and resell them later. Gaming NFTs are the fastest growing category of NFTs, recently surpassing one million active crypto wallets with gaming NFTs. Blockchain games generated more than $5 billion in revenue in 2021.
“Game companies want to list in a marketplace that targets and empowers the gaming community,” Bill Karamouzis, CEO of Addicting Games, the gaming studio behind blockchain game ev.io, said in a statement. “The Fractal team has been a great partner to us as we headed toward our first launch.”
That’s a small payback, as Kan said he can remember times when he was addicted to Addicting Games.
Come of the ground
The seed funding comes two months after the company came out of stealth in December and a month after its launch to the public. Games looking to list their NFTs on Fractal can now apply through the company’s website. Goat Capital led Fractal’s seed round earlier in January.
“We are in the midst of a generational shift in crypto-driven gaming, with players expecting a greater degree of ownership and control over their digital assets,” said Huang, co-founder and managing partner at Paradigm, in a statement. “Justin and the Fractal team understand this shift like no other, and we are excited to invest in their vision to better serve players.”
The seed of Fractal came from a brainstorming session with Kan co-founders David Wurtz (CEO of Fractal) and Robin Chan.
“We were all loaded with crypto and looking for opportunities to build,” Kan said. “David was excited about NFTs and the ways in which that value would evolve as NFTs became more useful. For us, the obvious next step was gaming: as a gamer, I’d spent real money on digital assets for years. It was clear that putting them on a blockchain to certify real ownership would happen.
“The Fractal team supports games that create truly open, decentralized economies,” said Mable Jiang, partner at Multicoin Capital. “Just as free-to-play games launched a new gaming business model over a decade ago, we believe blockchain will enable a paradigm shift to the gaming models of the future.”
Kan said it’s better for game studios because as game studios will find out, when they make their economies and assets open and programmable by putting them on the blockchain, they will create ecosystems in which other people are much more willing to invest with their time and money.
He said we’ll see the biggest games become open economies that support other developers to build on top of them. Kan predicted that the business model of mining digital assets, building a massive ecosystem and taking royalties on those assets as they trade will prove to be a very lucrative business model in the coming years.
“It’s better for game players, because real ownership of digital assets on a blockchain will enable players to participate in the game’s success, and make the decision to trade in a game’s assets if they go somewhere.” want to go different,” said Kan.
Kan’s company employs about a dozen people and plans to hire more.
The Fractal Marketplace is like a secondary market where players can sell things they bought in games. But the Fractal Launchpad is a place where people can buy NFTs for the first time. The launchpad helps major game companies make their first NFT drops.
“We do that for them, full-stack,” Kan said.
Fractal now works with the Solana blockchain, which has low transaction costs, low environmental costs and high transaction speeds. Kan wants the games launched to be great gaming experiences.
“We’ll use the money to build the team and do marketing for our game partners,” Kan said. “We’re trying to help them have the greatest possible impact or the largest possible audience.”
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This post Justin Kan’s Fractal Raises $35 Million for Game-Focused NFT Market
was original published at “https://venturebeat.com/2022/04/01/justin-kans-fractal-raises-35m-for-game-focused-nft-marketplace/”