Thread by @atareh

While ETH is taking a dump, let's remember that builders are what move the space forward. Let's talk about that.

@opensea recently acquired @Dharma_HQ - a DeFi application.

Let's breakdown what that means for Opensea and where NFTs are headed in 2022 and beyond

👇 🧵

1/ First, this acquisition was an "acquihire" rather than an outright purchase of the @Dharma_HQ app and its IP (an example of the latter is when Facebook bought Instagram).

2/ Generally, the main motivation behind an acquihire is to acquire key talent and expertise that a startup or company has.

It's why OpenSea founders are taking on leadership roles at @opensea (more on that later)

3/ Big acquihires of the past includes: Apple buying Beats in 2014, or Google buying Waze in 2013 both still have their product on the market today.

To note: in both those cases, the product wasn't deprecated like it is with Dharma

4/ Back to Dharma and Opensea.

Why does this acquihire make sense for Opensea? and what are they hoping to do with the new talent?

Well, you can hear it straight from their new CTO @NadavAHollander - Scalability.

https://twitter.com/NadavAHollander/status/1483488575538618368?s=20

5/ It's clear that Opensea has a lot of issues staying up, especially when traffic is high

https://twitter.com/reylarsdam/status/1484191064504377354?s=20

6/ And I don't blame them. I don't even they could have anticipated this kind of volume

7/ While, 2021 was the "year of NFTs", Opensea volume didn't reach absurd heights all the way till August 2021.

Let's take a closer look

8/ In July, the overall volume on Opensea was $328M USD

Their biggest month to date! That's cause for celebration

9/ But if they did celebrate, it didn't last long, because scalability was about to be a huge issue

Enter, August 2021 volume: $3.4 Billion

10/ That's right, billion with a B. In one month, their volume 10x. Over the full year, that's close to 1000x

11/ @NadavAHollander (their new CTO) wasn't exaggerating when he said:

https://twitter.com/NadavAHollander/status/1483488573454110722?s=20

12/ So, a seasoned CTO is coming over to fix Opensea's scalability. Hopefully no more Opensea down memes moving forward.

But... is that it? Is that why buying Dharma made sense for Opensea? I don't think so

13/ While Nadav will focus on addressing their scalability, that's only the beginning.

What comes next gets interesting for Opensea.

🚨Fair warning: there will be some speculation here on my end.

14/ First, let's talk about the airdrop, or token.

They've got me asking: Will they, won't they? Like it's a a romcom

But I think we finally have some answers

15/ If you remember, early in December, Opensea hired @BKRoberts as their new CFO - his previous gig was that for @lyft

Around then, rumours started swirling around twitter that Opensea hired him because they're going public (IPO)

16/ NFT twitter didn't like that too much.

https://twitter.com/basedkarbon/status/1467961835970301955?s=20

17/ and the rumours weren't totally unfounded...

Quoting @BKRoberts from Bloomberg:

"When you have a company growing as fast as this one, you'd be foolish to not think about going public"

18/ Now, whether that was Brian speaking broadly, or actually Opensea's initial plans, we'll never know - because they walked it back pretty quickly

https://twitter.com/BKRoberts/status/1468399263336083458

19/ Fast forward to last week, and their new CTO had this to say about "wen token":

https://twitter.com/NadavAHollander/status/1483488578977943556?s=20

20/ "rewarding Opensea users with crypto primitives" sounds a lot like: airdrop.

So we can say it: Opensea will be airdropping a token. That's coming.

and it would be crazy not to when you have alternate marketplaces like @LooksRareNFT rewarding users from day 1

21/ But, scalability and token can't be the only reason to acquihire Dharma.

Let's go further down the speculation rabbit hole...🐰🕳️

22/ If 2021 NFTs were just "jpegs". 2022 is a totally different animal.

NFTs are evolving - they're now bonafide yield generating assets moving forward

23/ In 2022, play-to-earn (P2E) is set to become the next big wave in web3 - that started a year back, in 2021 with @AxieInfinity

Quick detour: a brief primer on Axie

24/ The core premise of Axie is that players buy and breed Axies to fight against each other to earn in-game currency - Small Love Potions (SLP)

25/ and you trade SLP for ETH, which you can trade for fiat

To start earning, you first need to purchase 3 Axie NFTs (~300 USD each)

26/ Now, instead of playing to earn yourself, many Axie NFT holders lend them to to players where the cost of living is considerably lower - like the Philippines.

27/ A lower cost of living means players can earn a full months wage in a fraction of the time

28/ These factors, plus the pandemic, which put most people inside their homes accelerated the growth of Axie in 2021

29/ and In October, they airdropped nearly $60M worth of AXS (their governance token) to its early users.

30/ The growth of Axie has spurred and inspired many projects to launch tokens and start experimenting with the play to earn model.

Cyberkongz can earn #bananas, Supducks can earn $volt, and wolfgame participants earn $wool

31/ Lets not forget @BoredApeYC . They are set to airdrop their token to holders early 2022, and have partnered with the giga brains at Animoca labs to launch their own P2E game later this year

32/ So, where am I going with this? Well... pure speculation ahead, but lets connect the dots:

1) Opensea is the premiere marketplace to buy NFTs
2) Most NFTs projects are creating P2E games
3) Dharma lets you swap tokens, and exchange for fiat

33/ To me, it looks like Opensea is getting ready for the NFT token wave and will offer people a one stop shop to buy NFTs, swap tokens (via Uniswap), and let users withdraw to fiat

34/ The P2E space will explode this year, and NFTs are leading the charge. Why wouldn't the largest NFT marketplace want a piece of the token action?

35/ There's also fierce competition in the wings for Opensea, @Coinbase_NFT is launching later this year

36/ Coinbase already has exchange capabilities, and already list the Axie governance token AXS

37/ Now, one big caveat is: NFTs which generate tokens can be considered securities under US law.

In response, Opensea does ban projects that outright say "earn $$$ with NFTs"

38/ To get around that, projects now say: "our token has no monetary value, and should not be used as speculation. It is an in-game currency and/or a governance token"

39/ in short: it gets complicated with US securities law. I'll leave a longer explanation for lawyers that are much better at understanding that

40/ But I don't see Opensea acquihiring the Dharma team - who build fiat to crypto rails in their defi app, simply for scaling or launching their token.

again - this is speculation on my end, but there's more a foot.

P2E is set to make a splash in 2022...

41/ anyways, back to the #mutantsvsapes game