Japanese startups can soon raise with tokens
Japanese startups who issued a token often incorporated their companies in Singapore because this would allow them to fundraise using native tokens instead of equity. While IEOs had already been permitted as a mechanism to support web3 innovation financing in the country, this change will enable national startups to raise funds directly.
VCs will also be impacted by the change. Typically, VCs will set up limited partnerships to pool capital with other companies to invest, capping their exposure. However, Japan had strict restrictions in place limiting the assets they could invest in and requiring that half the money be invested domestically.
In addition to these changes, the government is considering making changes to the way cryptocurrencies are taxed, including removing the need to tax paper gains & losses.
Takeaway: The government is following its path of creating an environment that fosters the domestic web3 startup scene while allowing them to fully participate in the global innovation landscape. Overall, this move is cohesive with the goal of web3 as a national agenda.
Square Enix invests in DMTP.
Square Enix, the game developer behind the well-known Final Fantasy series has started branching out, investing in web3. On September 20, the team at Highpen, a Singapore-based company known for their product “DMTP,” announced that they successfully closed a fundraising round with a contribution from Square Enix.
DMTP is a communication protocol that allows sending messages between wallets. In addition to basic messaging, it offers a reward system for users to earn tokens based on their activity. The protocol is complemented by CHat NFT stickers that enhance the user experience to be more fun and engaging.
Square Enix’s Director of BD explained their investment with the belief that marketing and communication in Web3 require different approaches, and wallet-to-wallet communication was an innovative approach to web3 marketing.
Takeaway: The idea of messaging between wallets isn’t new. Nevertheless, no one protocol has so far reached major adoption. The closest competitor to DMTP in the West is XMTP, the messaging standard integrated into Lens, Coinbase Wallet, and other web3 dapps. My bet is, ultimately, there will be one dominant protocol - because no one wants to handle a variety of protocols just to facilitate messaging.
Astar expands to Polygon with zkEVM.
Astar Network, the go-to-market chain in Japan, has unveiled plans to develop an Ethereum rollup using Polygon’s Chain Development Kit. In collaboration with Polygon, the team aims to further drive enterprise adoption in Japan, focusing on gaming and entertainment.
Rollups are a scaling technology that increases an underlying chain’s scalability by taking transactions off the main chain, processing them together, and only reporting the results back to the main chain.
The Astar zkEVM will inherit Ethereum’s security, and fee revenues earned from operating the layer-2 solution will go toward enhancing the value of the native Astar token. This move is part of a bigger roadmap that positions Astar’s Tech Stack as the technology powering corporate web3 adoption in Japan and beyond.
Takeaway: Layer-2s have been gaining steam all throughout 2023 as people realized that Ethereum’s scale isn’t sufficient to support millions of users. Polygon’s zk tech is regarded as the most advanced in the space, making it a logical choice.
In other news 📰
- Shibuya 109 issues Avatars in The Sandbox
- Gundam Metaverse opens for a limited time
- Orix Bank distributes NFTs
Events 📅
- 23. Sept Building communities with DAOs and NFTs
- 23. Sept: Do you have Real internet Privacy by Web3 Tokyo
- 25. Sept15th Bitcoin Hackers meetup with insights on BTCPay Server and using Angular for PWA
- 03. Oct: She is DAO discussing the changes Web3 enables
Japan Fact🗾
While Japan was a very cash-oriented country for most of its recent history, the COVID pandemic led to a surge in cashless options that suggests the space is overcompensating. Every Konbini has it’s own payment app now. Nevertheless, the most popular app remains PayPay a QR-code-based payment app used by 49% of users, followed by the Rakuten card.
