A glance at what areas 1kx’s crypto consumer application investment landscape will focus on in the future

Author: Peter 'pet3rpan', 1KX; Translation: Golden Finance cryptonitive

Two years ago, we at 1kx began expanding our focus into the crypto consumer application investment space.

While infrastructure investment is our core business, it's clear that the infrastructure stack is maturing and the path to a mass-market viable product will only become clearer.

Investment landscape to date

Since then, we have made over 30 investments, 13 of which we led, spanning all categories of crypto consumer applications, including virtual worlds, games, creators, community orchestration, social, payments and knowledge property.

Here’s a brief overview of our crypto consumer application investments to date:

1kx Crypto Consumer Application Portfolio Overview (as of 2023 September )

What to focus on next?

While we are open to investing in crypto consumer applications, we are actively seeking and willing to work with founders in the following areas:

Social and Attention Economy

As the number of applications, content, and creators on the chain continues to grow, we believe that the need for a shared social space has never been more urgent for end users. We're particularly excited about the following ideas:

1. Provide end-users with an activity feed of targeted content based on the social graph they hold or are connected to on-chain. We’re excited about on-chain activity feeds becoming the emerging discovery layer for content, creators, and social. The number of non-financial collectible NFTs is only increasing, and we believe this is an exciting but under-attracted opportunity.

2. Create new social games with collection and ownership as the core game loop, both for crypto-native users with existing on-chain content, and for mass-market users and their corresponding off-chain content. We believe that digital property rights enable new social expressions, regardless of the ultimate audience. Really looking forward to the team building products for photo sharing, tokenization and collection.

Creator Platforms, Tools and Marketplaces

We remain very excited about how NFTs and digital property rights can empower creators to monetize and build stronger communities, specifically:

1. Vertical creator platform and market, focusing on introducing new categories of creators on the chain and building communities. We've been loving how SuperRare/KnownOrigin (art), Artblocks/fxhash (generative art), Sound/Catalog (music), and the theme platform (Metalabel) are driving adoption in their respective categories.

2. Dynamic NFT infrastructure enables terminal holders to obtain a deeper and more meaningful experience, and turns on-chain assets into repeated attention channels instead of the current meta.

3. General tools and infrastructure to help creators better complete tasks on the chain, such as better helping to manage the issuance of assets on the chain, their communities, their royalties, etc. We are excited about NFT stores, minting engines, community coordination tools, capital formation, and creator tools that allow for more multi-person collaboration.

Intellectual Property and Composable Narratives

We believe we can use on-chain primitives to create new intellectual property and tell better stories. We considered the following design space:

1. Intellectual property owned by the community, which closely involves community members in the earliest process of creation. While the first wave of first-generation crypto-native IP has largely failed to live up to expectations, we believe the next meta is under construction.

2. Platforms and creator tools that allow for easier creation of composable content on top of existing intellectual property that already exists as NFTs. We're excited about IP that already has end-user and community resonance and can serve as a starting point for new content.

Virtual world and NPC

We are excited about space and 3D as new media in how end consumers will interact with ownership-based virtual experiences, specifically:

1. Highly interoperable spatial 3D worlds (infrastructure supporting GLB/GLTF, VRMs, wallet indexing) that content creators can create effortlessly, regardless of technical skills. To date, many projects in this space have focused too much on a scarcity model that limits creator participation - we'd like to see projects that remove this barrier to entry while building novel experiences or gameplay loops that guide initial attention. We took a lot of inspiration from Jin and the M3.

2. Interactive NPCs and artificial intelligence agents that leverage digital property rights to create deeper relationships between virtual entities and end users.

Autonomous world and on-chain games

We are very excited about bringing new worlds and on-chain power experiences that would otherwise be impossible:

1. On-chain games turn the player results of the traditional non-financial casual game cycle into financial ones. We really like projects like Words3.

2. Commit to building your own world as a developer or creator platform from day one, as a playground for permissionless extensibility.

Other areas of interest and research:

1. Mass market consumer experiences and merchandise (we were inspired by Kiki’s work in female grooming and Pudgy Penguin’s toy launches)

2. Luxury goods and consumer experience (we’re excited about Trame’s work translating generative art into physical objects)