Web3 Series: closed rounds and Louis Vuitton's soulbound tokens

Good morning all ?? Welcome to a newsletter covering top fundraising deals, industry trends and tech deep-dives in the crypto and blockchain space

?? Last week's closed deals

Hyperplay - gaming interoperability

??Raised $12 million (Series A)

Investors: Griffing Gaming Partners, Bitkraft and ConSensys

Blurb: HyperPlay is a game aggregator and launcher, meaning it launches its own games in addition to distributing others on its platform. It also acts as a wallet overlay for all of the games in its platform, enabling players to connect their wallets in each game

More info: Hyperplay was originally founded by MetaMask, a product launched by ConSensys, and Game7 DAO

Lens Protocol - decentralised social media

??Raised $15 million (Series A)

Investors: IDEO CoLab Ventures, General Catalyst, Variant and Blockchain Capital, Uniswap CEO Hayden Adams, OpenSea co-founder Alex Atallah, Sandbox co-founder Sébastien Borget and Polygon co-founder Sandeep Nailwal

Blurb: Lens is a social graph protocol whose goal is to be a standard upon which decentralised social networks are built. Their aim to change the way current social media platforms are locking-in user data

More info:

• A social graph is the data? that represents the relationship and interaction between users in a social network
• A protocol is not the final application or the blockchain itself, but a standard that would allow different social apps to better communicate with each other. Hence, Lens would not be compared to Instagram, but more like HTTP, as TechCrunch describes.
• Essentially, building a social app on top of Lens would make it easier to implement tokenization features, such as NFT-based profiles, governance structures and royalties mechanisms that are catered to the sector
• Lens Protocol is created by Aave Protocol and is built on Polygon

Wave BL - supply chain and trading document sharing

??Raised $26 million (Series B)

Investors: NewRoad Capital Partners, Reefnot Investments, ZIM, Contour Venture Partners, and Techstars

Blurb: WaveBL is directly solving the shipping industry’s reliance on paper for trading activities, including Bills of Lading, which is transferred several times between supply chain stakeholders. Bills of lading are the trade documents that record the goods carried into ships.

More info:

• Given the sector’s push to digitise trading documents, blockchain enables to trace their authenticity as well as history of ownership
• WaveBL is a point application ready-to-be used by shipping companies, and there are many solutions solving the same problem. Given the interconnectedness of the shipping industry, the high number of solutions is an issue because they are not interoperable with each other.?

?? Industry update: Louis Vuitton’s soulbound token program ‘VIA Treasure Trunk’

Louis Vuitton has leveraged blockchain for several use cases, such as product traceability to combat counterfeiting or engagement through gaming. In 2021, Louis Vuitton had launched their mini in-house game called Louis The Game, where players could earn NFTs as in-game rewards. These tokens do not seem to have provided much more than purely a badge of achievement or participation.

Louis Vuitton taking a longer-term view on NFTs

This time, the French luxury house is launching several hundreds of soulbound Non-Fungible Tokens (NFT), which come with a physical product. Soulbound tokens are a type of NFTs, but are non-tradable, which means that they cannot be taken away from someone’s wallet. Hence, they are usually associated with assets that can represent a user’s identity and personality like an identity card, degree certificate, employment history, etc. On a technical level, it means that their smart contract (ie. code) does not include a token distribution mechanism. The token comes with a physical trunk, Louis Vuitton’s heritage product. Louis Vuitton has set an individual price of €39,000 each. Indeed, not everyone can have a Louis Vuitton token that stays in your wallet forever.

Deep-dive into the structure of the engagement program:

There are various ways to start interacting with tokens and customers. After deciding the rationale and objectives for a company to launch a token, it needs to decide which token type and subtype is going to help them do that. If it is an engagement play, does the brand want to replace traditional loyalty points with on-chain fungible tokens (ERC-20), or does it want to represent more than just points, but for instance a membership, a product, a ticket, a piece of art or any other non-fungible asset (ERC-721, ERC-1155) ? In this case, Louis Vuitton wanted to represent a unique product, but enable the ownership of this physical product to represent the owner's identity and be non-transferable. Nevertheless, the initial soulbound token gives the possibility to purchase “keys”, which are themselves Non-Fungible Token and thus transferable on secondary market.

Then, one needs to decide how to distribute the tokens or how the customer actually gets a hold of the token. NFTs can be collected (minted) as a proof of experience, such as discovering a product online, purchasing a physical or digital good, following the brand’s social media, or just by directly purchasing the token (e.g. Starbucks or Porsche), or a mix of these (e.g. Starbucks). For the LVMH brand, consumers have to first register to be selected to purchase the token. The physical item just comes with it, as opposed to just buying a physical item on their e-commerce site and getting a token alongside it. Some businesses implement a fair distribution mechanism to ensure that the rewards distribution enables equal chance of earning rewards and easily on-boards and migrates a large scope of their community. Here, Louis Vuitton’s token price shows that the chances of entry depend on the customer’s net worth. It does make sense as the luxury House wants to guarantee that fans who interact with it through tokens are actual potential buyers.

The reward system also needs to be set: how will owners earn rewards once they have the token and assuming that the token provides utility? This can be accomplished through various means, such as engaging in gamified activities, attaining specific achievements like NFTs that possess a point value determined by their rarity, and merely possessing the token itself. For Louis Vuitton, it seems like one simply needs to purchase and own the token to get access to rewards, and this says a lot about the business luxury positioning.

Finally, the company decides the types of rewards given. Owners of Louis Vuitton’s tokens will get access to other token drops, which themselves unlock access to products, personalised products, brand experiences and an exclusive online space of its community of holders.

What do you think are some best practices to structure a tokenised engagement program?

?? Feel free to reach out if you have any feedback, ideas, any companies you'd like to share or concept like you'd like to hear more of.