Korean Web3 Enabler Participates in NFT.NYC 2023

Beijing-headquartered crypto mining equipment manufacturer Canaan recently revealed its financial results for the fourth quarter of 2023, demonstrating that it continues to struggle with profitability despite positive numbers relative to revenues and growth.Photo by Sasun Bughdaryan on UnsplashIncreased revenues and salesAccording to the company’s filing, during the last quarter of 2023 Canaan reported a surge of 45.7% in total computing power sold compared to the preceding quarter, reaching 5.5 million Thash/s. This ascent, which reflects a 191.9% increase from the same period in 2022, signifies not just a recovery but a robust resurgence in demand and operational ability. The company's dispatch of 19.6 million Thash/s throughout the year, marking a 29.6% leap from 2022, aligns with the rebound in bitcoin prices observed in Q4 2023, a pivotal factor shaping Canaan's operational revitalization. 47% growth on previous quarterA closer examination of the financials reveals not only surpassing total revenues but also a notable 47.3% quarter-over-quarter growth. Canaan's foray into international markets, bolstered by securing substantial orders from esteemed public company clients, underscores a buoyant sales performance and a positive outlook for the computing sector. Despite the buoyant sales and revenue figures particularly in the mining machine market, the sector has faced ongoing regulatory uncertainties and market fluctuations. Nonetheless, the company's strategic initiatives, alongside the positive market effects of the approval and listing of spot bitcoin exchange-traded funds (ETFs), have been positive. Moreover, Canaan's investments in wafer supply capabilities and strategic financial maneuvers garnered approximately US$136 million through at-the-market (ATM) programs and preferred shares. Recording a lossYet, the company’s journey in 2023 was not without its hurdles. Q4 2023 witnessed a significant increase in product revenues from the previous quarter but a decline from Q4 2022, attributed to dwindling sales prices as the halving event loomed, underscoring the volatility inherent in the cryptocurrency market. Results published last year are indicative of the company’s difficulty. In Q2 2023, revenues were strong, yet the company wasn’t turning a profit.With Q4 results, it’s now clear that the firm lost $421 million in 2023. In Q4, Canaan recorded a net loss of $139 million. That compares with a loss of $91 million in Q4, 2022. The company also expects tough market conditions in 2024. In its forward-looking outlook, it stated:”For the first quarter of 2024, and the second quarter of 2024, the Company expects total revenues to be approximately US$33 million and US$70 million, respectively, considering the challenging market conditions across the industry. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.” The crypto mining sector remains a very challenging market. With the upcoming Bitcoin halving event set to occur in April, it’s expected that as much as 20% of mining capacity could be forced offline, as some equipment would simply fail to mine on a profitable basis. Indicative of the challenges within the sector, crypto miner Core Scientific was forced into bankruptcy due to market difficulties in December 2022. It has only recently exited that bankruptcy process and now expects to generate revenues of $600 million in 2024. Another Bitcoin miner, Riot Platforms, has warned that profitability may be difficult to achieve in 2024 due to chip shortages.   

Hivemind Capital Partners expands into Hong Kong marketHivemind Capital Partners, a prominent player in the world of Web3 and digital asset investment, has officially unveiled its plans for expanding its operations to Hong Kong.Photo by Chromatograph on UnsplashNew Head of Asia appointmentIn a press release published by the New York-headquartered firm on Tuesday, Hivemind outlined that alongside this significant Asian expansion, the company has appointed Stanley Huo as Head of Asia. Huo is a seasoned investment banker with over 15 years of experience at prestigious institutions like China Renaissance, UBS, Citi and BAML across Asia and Europe.Huo expressed his excitement, stating: “I’m thrilled to be joining Hivemind at such a transformative period. The intersection of traditional finance and burgeoning digital asset technologies in Hong Kong presents unmatched opportunities and I’m looking forward to leading our initiatives in this vibrant ecosystem.”Identifying an opportunityHivemind Capital Partners had nothing but praise for Hong Kong as a significant crypto hub. The company highlighted the distinct advantages that come with operating in the city-state, including a well-established ecosystem that facilitates access to traditional financial infrastructure, capital-raising opportunities and the exploration of blockchain-related innovations.Huo told The Block: “It was very interesting to see that the Hong Kong government welcomes all the Web3 capital and talents… They want to build up a Web3 center.”Matt Zhang, Founder and Managing Partner of Hivemind, is equally enthusiastic about the Hong Kong expansion, stating:“Our expansion into Hong Kong not only represents our firm’s growth, but our commitment to being at the center of financial innovation and technology. With Stanley leading our business in Asia, we are positioned to significantly contribute to, and influence, the evolving narrative of blockchain technology and digital assets in the region.”Zhang is a speaker at Hong Kong Fintech Week later this week, where he will participate in a panel discussion titled “The Future of Stablecoins: Exploring Virtual Asset Payment Infrastructure and the Rise of Non-USD Stablecoin Frameworks.” He founded Hivemind in November 2021, with a view towards deploying capital within verticals such as crypto infrastructure, virtual worlds, programmable money and blockchain protocols.Hivemind has been on a significant growth trajectory, as evidenced by its recent launch of a $1.5 billion investment vehicle, with available funds still waiting to be deployed. Additionally, the company introduced the Liquid Opportunity Fund, a $300 million crypto fund, earlier in the year, securing $60 million for the fund in June.Following a regional trendThe company’s move to Hong Kong aligns with the broader trend of cryptocurrency firms recognizing the region’s potential and considering it for their expansion plans. Notably, Zodia Custody, a digital asset custodian backed by Standard Chartered, recently announced its launch in Hong Kong.While Hong Kong has actively positioned itself as a hub for Web3 companies, boasting recent developments like the introduction of retail trading for licensed crypto exchanges in August, it has also faced challenges. The city recently witnessed the largest Ponzi scheme in its history, involving the embezzlement of approximately $166 million from JPEX crypto exchange users. The investigation into this incident is still ongoing.

McDonald’s Enters the Metaverse with McNuggets LandMcDonald’s, the global fast food giant, has ventured into the metaverse realm to commemorate the 40th anniversary of its beloved Chicken McNuggets, with McDonald’s Hong Kong spearheading the immersive experience.McNuggets Land, a virtual world situated within the metaverse platform The Sandbox, now welcomes enthusiastic players to embark on a quirky adventure filled with pixelated McNugget characters like “Coach McNugget” and his trusty sidekick, “Assistant Coach McNugget.” The project team behind The Sandbox laid out the details of the initiative via a blog post published on Medium on Thursday.In this novel virtual landscape, players are tasked with the mission of locating four McDonald’s signs, sparking excitement for the rewards that await. Among the enticing incentives are a shared prize pool of 100,000 SAND (approximately $44,000) and enigmatic “mystery boxes.” SAND is the native token of The Sandbox virtual world.Photo by Jas Rolyn on UnsplashCustomer engagement challengesThe CEO of The Sandbox, Sebastien Borget, expressed enthusiasm for collaborating with global brands like McDonald’s to drive mass adoption of the metaverse. The Sandbox has already witnessed the presence of several prominent brands like Adidas, Atari, and Gucci within its virtual world. Comparatively, it might be challenging for McNuggets Land to carve out a distinctive niche to capture enduring user engagement.Numerous brands have attempted whimsical activations within metaverses over the years, from Snapple’s virtual bodega to Taco Bell’s metaverse wedding. However, the fundamental question arises when virtual food or drink experiences are introduced — what’s the point when you can’t taste or smell in the metaverse?Bear market & regulatory setbacksMoreover, the timing of brands entering the Web3 space may be subject to scrutiny. With venture capital money flowing toward AI and Disney closing its metaverse ventures, the Web3 landscape faces a more challenging environment in 2023. The ongoing crypto winter and Securities and Exchange Commission (SEC) crackdowns have somewhat dampened the allure of these activations, making it imperative for brands like McDonald’s to offer a compelling “why” for their Web3 endeavors.Starbucks has been experimenting with its Web3 loyalty program called “Odyssey,” which ties in seamlessly with its customers’ real-world coffee purchases. This strategic approach aligns virtual rewards and digital collectibles with existing behaviors, giving added value to their regular activities. In doing so, Starbucks fosters a sense of community and gains valuable feedback for future improvements, ensuring a more sustainable and purposeful presence in the Web3 space.Formative developmentWhile McDonald’s McNuggets Land in the metaverse may excite some players with its whimsical charm, the bigger question remains: What value does it truly bring to the participants, and how does it ensure a lasting impact? In a rapidly evolving Web3 landscape, success lies in offering meaningful experiences that align with users’ existing behaviors and aspirations, fostering genuine engagement and community-building.We are still at a stage where consideration of the metaverse in terms of what it is, what it represents, and what experience users can or should glean from it is still formative. It remains to be seen as to the extent to which Mcdonald's will be successful in this instance, but it is encouraging that they’re brave enough to get involved with the innovation.