Startups race to build a crypto-native, consumer-friendly messaging platform for web3 – TechCrunch

by Arthur · July 14, 2022

There is no shortage of headlines about the beginnings of “crypto winter.” In the midst of a growing pile of bankruptcies, one of the busiest startups in the industry, the NFT marketplace OpenSea, announced a major layoff just today.

But behind the scenes, many founders and VCs are doubling the promise of largely decentralized, blockchain-based outfits, and towards that goal, one of the “more interesting parts of crypto right now” is at the “intersection of social.” messages and web3, says renowned entrepreneur and investor Elad Gil. In short, he believes today’s messaging tools do not cut it, and that there will be new opportunities for crypto-native startups to get it right.

Gil has already invested early, leading a $ 4 million seed round in Lines, a startup whose three co-founders studied philosophy at Harvard and whose CEO, Sahil Handaboasts that the budding company will be “web3’s messaging platform”, even as he and his former classmates continue to develop the technology.

That there is still work going on is apparently perfectly fine with Line’s supporters, which also include renowned angel investors Naval Ravikant, Balaji Srinivasan, Gokul Rajaram. What they support 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 treasuries,” explains Handa. “But every time someone tries to communicate with another person on this network, there is no way to know if they are talking to the right person or not.”

Lines, meanwhile, is trying to enable users to send messages from wallet to wallet and join group chats based on token ownership. In fact, Handa paints a picture of a communication layer that is both ambivalent about the underlying blockchains and the special crypto wallet a person uses, and which as a result empowers users in a number of ways. They can find the owner of a particular NFT they want to buy, for example, or discover like-minded people based on tokens they have acquired, or reach out to potential new contributors to a DAO (a kind of “group” chat with a bank account », as DAOs have been called).

Sure, Gil thinks the timing is right as more people are organizing and shopping as a group online. In earlier days, he notes, “Your bitcoin or crypto assets and mine were identical, so I would have less reason to ping an anonymous user via their wallet. But with DAO, there is a need to coordinate with different members beyond just using Discord. » In the web3 world, he says, users “want to be able to identify and interact with people for management, to reward contributions, to make airdrops, and so on.” With NFTs and other collectibles, “I might could ping you to buy or sell or exchange, so there are other incentives for a communications team to be useful, “he adds.

The question is whether enough people agree that Lines offers the right solution. As with any messaging app ever, the value will largely be determined by how many people use it. And how many people use it will determine if the startup is able to partner with platforms like OpenSea that it needs on its side.

In the meantime, Handa and the co-founders – who have not yet decided on a business model – will soon compete with other messaging apps trying to take on Twitter, Telegram or Discord, where most web3 conversations live today and where, because it is almost impossible To verify that people are who they say they are, phishing attempts and other scams are widespread.

Gil himself says that he is already aware of “various teams that work with identity, social teams and communication at the top of web3.”

Most of these are still flying under the radar, but some are starting to appear in public. Last month, for example, a cryptanalysis platform called Nansen rolled out a messaging app that it says allows users to sign in with a crypto wallet and then connect to groups based on their crypto inventory and the NFTs they demonstrably own. Like Lines, the company describes the app as a “crypto-native communication center” for web3 communities.

An NFT marketplace, Rarible, separately announced a wallet-based messenger feature last year.

Of course, Lines argues that it has an advantage over others. Namely, says Handa, while he and his friends build for web3, they have enough distance from it to build an app that both crypto-natives understand, but which people who are newer to web3 can easily understand and use as well.

“We are really focused on the client cases on the client side, rather than how decentralized the messaging protocol itself is,” says Handa, who is still two credits away from graduating and very much planning to take her diploma. (“My dissertation is about identity and web3 communication, so it’s not really a distraction at this point,” he says.)

He says he “thinks it helps that we have not been in the crypto space for 10 years” and thus “are not super ideological about the way we build the platform. We really only do it based on what makes sense from a consumer perspective and a societal perspective. So many cryptocurrencies are not conceived from a consumer perspective, he continues, “so we try to find the first use case, create a compelling product, and then finally, if other platforms want to integrate [with us]they can. “