Metapunk VC: An NFT Venture Fund Litepaper
ANZ NFT projects have become widely recognised. From Maxon Bollocks to Pisspunks to Dead Fellaz to BadBunnies to Wilder World, we are creating instantly recognisable, global NFT brands that are contributing to an evolving ecosystem and creating immediately profitable launches, platforms and products.
In this rich ecosystem, we are seeing a convergence of ANZ technology employees who have built up layers of experience working in an exploding Web2 startup vertical, alongside our celebrated homegrown art, music and film industries, creating a once in a lifetime opportunity to build and fund teams with the potential to have a lasting cultural impact.
In this space, there is a lack of traditional VC funding for NFT projects; while DeFi applications and platforms may be gaining investment at a growing rate – Immutable X being a key example – NFT collections and projects themselves are not attracting investment, despite being hugely profitable startups in their own right.
There is a lack of native Web3 insight and understanding in existing VC funds, where some partners may be interested in backing NFT projects, but NFTs as a vertical are not a core focus and may not be seen as a serious investment.
Our goal is to raise a proof-of-concept venture capital fund that will directly invest in and support NFT artists, teams and projects at a pre-launch phase, becoming long-term partners in their growth and their work, while providing immediate profits and returns to investors through a share in funds raised through token sales, and a share in secondary market residuals.
Metapunk VC is an initiative to support the development of local, ANZ based NFT projects. Our initial micro-fund will specialise in NFTs and blockchain games, designed to directly fund and support artists and grow tokenized communities around their work.
Why Localisation Matters
Our hypothesis: building a localised community around Web3 has deeper social power and deeper cultural connection than attempting to create a fully abstracted ecosystem.
The metaverse isn’t bound by geography but artistic and creative communities still are; and as we onboard into the space, tapping into ANZ creators to build in the metaverse takes advantage of a rich cultural space here.
There's an advantage to physical community in terms of richness & depth of social interaction that is not and will not be entirely matched by the metaverse.
People living, eating, and engaging in physical events together will always form a more tactile connection than that brought together by digital networks alone. The richness of in-person interactions and collaborations within the metaverse space has been demonstrated through events such as BAYC NYC, Art Basel and FWB.
Local artistic community vernacular acts as an extremely strong binding glue for its members. There are many pockets of creative energy ready to be tapped into and we’re looking forward to sparking new collaborations.
A Cross-Chain Web3 / NFT Investment Fund
The future of crypto investing will be defined by its ability to build vital community-led initiatives that are transparent, accountable, and empowering.
We are starting to see the concept of open-source Venture Capital becoming a tangible reality. More and more venture investors are aligning their interests with those of founders and their communities at this time. This mutually beneficial connection benefits everyone involved.
The role of Venture Capital will evolve to fit into decentralized financial ecosystems alongside other players in a world where community managers, makers, builders, and engineers hold as much sway as investors with straight financial skills.
But more than that, investment funds will become communities more than hierarchical organizations, where token holders replace Limited Partners. In the future, we may not see as much Venture Capital and instead more of a hybrid approach where VCs are community leaders and rallying points, where DAO voting rights hold more sway and more weight in the investment decision-making process than individual paradigms.
The ability of venture capital to funnel large sums of money from investors to protocol, community, technology, and DAO projects will continue to play a significant role in determining the future of Web3. This may help bridge the gap in adoption until more entrepreneurs become comfortable with DeFi funding choices.
Our investments will be cross chain. We don’t believe that there will be one single dominant chain, and we don’t believe there should be. We want to create a thriving, multi-chain ecosystem that is open, accessible and truly decentralised. Initially, we will be seeking to focus on Fantom, Solana and XTZ as our core chains. These communities and technologies are environmentally friendly, require potential users to pay less in gas fees, and while they are further from mainstream adoption than Mainnet ETH, that early stage can allow early mover advantages for teams and creators willing to build on them.
Our investments will be made via USDT as a default, but can be made in FTM, SOL and XTZ depending on the specific needs of the team / project.
The Metapunk PFP
We will launch a 3k PFP NFT that will show involvement in the fund itself. The Metapunk PFP will be released at 2 levels. The investor level token will become a signal that its user/holder is an early investor in Web3 and NFTs, and will accompany a minimum investment into the fund. The supporter level token will act as fund merch.
1k Investor PFPs
2k Supporter PFPs
The initial funds raised from the Metapunk PFP will be dedicated to the fund’s administration, marketing, growth and portfolio management and support.
Each of our funds will be structured to include both Tradfi and Degens. This will happen through the Metapunk DAO. DAO membership will be granted to all investors in Metapunk, who will be assigned voting rights based on the size of their investment.
The DAO will function to vote on NFT projects to invest in, with scouting, analysis, diligence etc. being provided by the Metapunk investment team.
The core mechanic behind the fund will be the $PUNK tokens, allowing non-sophisticated investors to join with tradfi VCs, family offices, technology companies, angels and accelerators in becoming a part of the Metapunk fund. As a part of the Metapunk roadmap, we will aim to begin a secondary Metapunk fund investing in projects from a DAO treasury of $PUNK tokens.
Voting rights are assigned based on an individual or organisation’s $PUNK tokens. This means that the more Metapunk ($PUNK) tokens you hold, the more weight you carry in decisions made by the DAO. The Metapunk investment team will hold veto rights over any investment opportunities. The chance to propose NFT projects for investment will be a part of the Metapunk roadmap.
A decentralized network of economically incentivized scouts will select potential artists for the fund, at a pre-seed stage; IE, before their proposed project has launched.
Metapunk will offer stability to new projects and creators, with a mitigated risk factor for new investors.
We want the creators behind these projects to see Metapunk as a partner DAO, rather than a buying group.
Metapunk will take shares in each of the NFT projects in which we invest. In addition to that, we will take a percentage of funds raised from each token drop, as well as a small percentage from secondary market sales.
In exchange, we will provide seed funding of $100-500k per project, covering artist and development costs, alongside gas fees for deployment and infrastructure.
In a three-player situation, one of whom is purchasing an NFT, another is holding, and the third is considering a sale, each player must evaluate their set of strategies and ultimately choose based on game theory. Each person's optimal action is determined by their best interest.
In an NFT community, there is a clear benefit in the community achieving gains as a whole. For buyers, holders, and sellers, the communal rise in value and the rise in the social status of a token contribute to all members' net worth. In Metapunk, we have created a DAO that will operate within the 3-player mechanics of NFT trading, in order to find, fund, grow, and moonshot creative works.
Investors who buy into the fund at a Collector level, by paying additional fees towards the operational costs of the fund/DAO, will gain immediate whitelist access to all NFT projects that are funded, with individual incentives for growing the collector community itself, HODLing their assets rather than flipping them.
A key part of Metapunk will be to onboard investors into Web3.
With our unique approach of investing directly into NFT projects, we can provide an opportunity for anyone who wants to get involved with this new technology without having any technical knowledge about it or understanding how blockchain works.
Investors at both the fund and DAO level will have access to documentation and instructional videos, as well as a support contact they may use to communicate with us by email, social media, or other means.
We feel this is an important feature of our project, as it widens access to crypto wealth for those who need assistance, and benefits all investors and creators by providing a network of support around them.
Once an artist has been invested in by the community they are given voting rights on future investment opportunities, and their network and community knowledge enables them to assist in scouting early access to other artists of similar quality.
Our community is built from the ground up with a focus on safe investments, transparency, and self-governing collaboration. We believe that our strength lies in our decentralized nature and an ethos of cooperation, with a passionate belief in providing newcomers to cryptocurrency a way to get involved without having any prior knowledge.
Forming a symbiotic network of NFT projects enables Metapunk to provide immediate liquidity for rising stars, which means that an artist's primary goal will be the creation of work, rather than the worry over what might happen if their pieces are not sold.
Each of our $PUNK funds will operate within the Metapunk DAO, which itself is representative of an individual member's interest in the growth and stability of Metapunk itself.
Our initial fund will be raised with a target of $2.5m, and will aim to invest in 4-5 NFT projects. We will begin at a level of $100-500k per project, with an additional $100k invested into promoting the projects themselves. We will aim to raise our first fund in Q1, 2022. Our second fund will be raised in Q4, 2022.
Metapunk aims to provide new entry points for newcomers interested in cryptocurrency trading, as well as provide an ethical route for those within the NFT community who wish to invest their money in something both creative and worthwhile.
As a community-driven project, Metapunk will rely on the goodwill of our investors to succeed in funding projects that are both artistic and profitable. We believe in growing the space together, rather than fighting over immediate gains or making short term bets. Our aim is for everyone to win, contributors included.