Shalini Nagarajan

Playboy Group was forced to write off nearly $5 million on ether that it accepted as payment for its NFTs.



In a Thursday <a href="https://www.sec.gov/Archives/edgar/data/1803914/000180391423000017/ply-20221231.htm" target="_blank" rel="noreferrer noopener">filing</a>, the media and lifestyle brand said it has held <a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a> received for sales of its Rabbitar NFTs, which were released in the fourth quarter of 2021.&nbsp;



Their value has gone down since then, however. As of the end of last year, the carrying value of Playboy’s digital assets fell to about $300,000, down 95% from $6.8 million at the end of the previous year, resulting in impairment charges on its balance sheet.



Overall, the company filed impairment charges worth $4.9 million on its crypto for the 2022 financial year, up from 2021’s $1 million paper losses.



Other companies to have recorded impairment charges on their crypto holdings include <a href="https://blockworks.co/tag/microstrategy" target="_blank" rel="noreferrer noopener">MicroStrategy</a> and Jack Dorsey&#8217;s fintech firm <a href="https://blockworks.co/tag/block" target="_blank" rel="noreferrer noopener">Block</a> (formerly Square).



Playboy released 11,953 unique 3D rabbit characters as NFTs as a tribute to its founding year 1953. Playboy said the NFTs were created by its Web3 innovation team, which partnered with Possible Studios and art studio WENEW.



OpenSea records 2,798 ETH ($4.9 million) in total volume with around 5,400 unique holders. The current floor price is 0.0703 ETH ($122).



Playboy said it accounts for digital assets as indefinite-lived intangible assets. This means Playboy must record their value as the lowest observable fair value within a reporting period.&nbsp;



“Therefore, negative swings in the market price of [ether] could have a material impact on our earnings and on the carrying value of our digital assets,” the firm said.&nbsp;



“Positive swings in the market price of Ethereum are not reflected in the carrying value of our digital assets and impact earnings only when the [ether] is sold at a gain.”



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Ether is down 38% in the last year, but is up nearly 44% in the year-to-date period, according to <a href="https://www.blockworksresearch.com/" target="_blank" rel="noreferrer noopener">Blockworks Research</a>.



Playboy separately warned in the filing that the long-term adoption of digital assets is unpredictable. But it expects to continue commercial activities that involve digital assets and cryptocurrencies.&nbsp;



“If we fail to explore and commercialize these new technologies and apply them innovatively to keep our products and services competitive, we may not experience significant growth of our business,“ Playboy said.



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Playboy Held All ETH Earned From NFTs — But It Cost Them $5M

Ornella Hernandez

<div id="highlights-block_62cf2cefbc39c" class="highlights">
 <ul>
 <li>Crypto Punk #4464 was the top NFT sale of the week, which sold on Tuesday for 2,500 ETH, or $2.6 million</li>
 <li>Ethereum Name Service domain names has the highest sales of any NFT collection in the past 24 hours</li>
 </ul>
 
</div>



A Playboy-themed immersive social and gaming experience is coming to The Sandbox metaverse. Playboy Land will be home to a MetaMansion, inspired by the magazine company’s LA-based Playboy Mansion.



This licensing collaboration plans to include NFT collectibles releases and exclusive events for Playboy’s Rabbitar community — holders of 3D avatar-based NFT collectibles first released in October 2021. Owners will get special access to experiences, quests and giveaways at the MetaMansion and can give input about the mansion’s future.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Anybunny home? 🐰👀🏘 We&#39;re teaming up with none other than&#8230;. <a href="https://twitter.com/Playboy?ref_src=twsrc%5Etfw">@playboy</a>! 👯‍♀️ Together, we will be creating a Playboy MetaMansion social game inside <a href="https://twitter.com/hashtag/TheSandbox?src=hash&amp;ref_src=twsrc%5Etfw">#TheSandbox</a> with <a href="https://twitter.com/hashtag/NFT?src=hash&amp;ref_src=twsrc%5Etfw">#NFT</a> collectibles &amp; special experiences for the Rabbitar <a href="https://twitter.com/PlayboyNFTS?ref_src=twsrc%5Etfw">@PlayboyNFTs</a> community! <a href="https://t.co/3l6Wq6ncvt">pic.twitter.com/3l6Wq6ncvt</a>&mdash; The Sandbox (@TheSandboxGame) <a href="https://twitter.com/TheSandboxGame/status/1546479658601938947?ref_src=twsrc%5Etfw">July 11, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In addition to hosting parties at the MetaMansion, The Sandbox intends to build the biggest virtual skatepark in the metaverse. Tony Hawk Land will be crafted in partnership with the project&#8217;s namesake and Tom Brady’s NFT marketplace Autograph.



Hawk wants to “bring [skate] culture into the virtual landscape,” the world champion skateboarder said in a statement.



Autograph plans to create avatar NFTs based on Hawk and his most iconic equipment and apparel, including the skateboard he used when he landed the first-ever 900 at the 1999 X Games.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Coming soon to The Sandbox: alongside <a href="https://twitter.com/Autograph?ref_src=twsrc%5Etfw">@Autograph</a>, I’m helping to create the biggest skatepark in the <a href="https://twitter.com/hashtag/metaverse?src=hash&amp;ref_src=twsrc%5Etfw">#metaverse</a>. Stay tuned for updates. <a href="https://t.co/0R2ODsR4qt">pic.twitter.com/0R2ODsR4qt</a>&mdash; Tony Hawk (@tonyhawk) <a href="https://twitter.com/tonyhawk/status/1547242461218877441?ref_src=twsrc%5Etfw">July 13, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h3 class="wp-block-heading">Web3 around the world</h3>



Web3 initiatives are heating up across the globe as governments and international companies look to get in on the emerging space.&nbsp;



Spain



Spain’s government <a href="https://cincodias.elpais.com/cincodias/2022/07/09/economia/1657358931_237839.html" target="_blank" rel="noreferrer noopener">announced</a> it will issue 4 million euros worth of grants and aid for metaverse-related developments. The country’s Ministry of Economic Affairs and Digital Transformation will first evaluate companies and individuals working on gaming and entertainment projects based in the European Union. Women must make up 25 percent of the membership of participating teams.



Additionally, Santander Bank, the largest bank in Spain, is <a href="https://www.santander.com/en/landing-pages/santander-x-global-challenge-blockchain-beyond#introduction" target="_blank" rel="noreferrer noopener">co-hosting</a> a global blockchain competition focused on startups and scaleups. The event will be streamed in Decentraland on July 14. 



Germany



Germany-based telecommunications company Deutsche Telekom is sponsoring an NFT social media campaign to promote volunteering.&nbsp;



The initiative, called WhatWeValue, invites youth volunteers throughout Europe to support existing organizations that Telekom works with or to propose activism and community service projects for a chance to receive funding from Europe’s largest telecommunications provider. Chosen projects will earn a “Value NFT” and added support from Telekom’s digital community.



Korea



South Korean imported car dealer Han Sung Motor digitized its customers’ digital documents and digital warranty, and minted them as NFTs. The metadata will contain pictures, videos and texts that certify ownership for secondhand cars purchased at the dealer. This move is part of the company’s environmental, social and governance (ESG) campaign, <a href="https://www.koreaherald.com/view.php?ud=20220708000445" target="_blank" rel="noreferrer noopener">according</a> to The Korea Herald, which reported that Han Sung Motor seeks to not only reduce the cost of paper but also attract millennials and Gen Z customers. 



<h3 class="wp-block-heading">GameStop NFT marketplace’s debut </h3>



GameStop launched its NFT marketplace on Monday, just days after the gaming retailer laid off hundreds of employees, including its chief financial officer. Forbes <a href="https://www.forbes.com/sites/paultassi/2022/07/08/gamestop-fires-game-informer-staff-as-it-doubles-down-on-nfts-and-the-blockchain/?sh=5803367f6ae7" target="_blank" rel="noreferrer noopener">reported</a> that the CEO claimed the changes were in pursuit of “new products that empower customers within the digital asset and Web3 gaming verticals.”



By Tuesday afternoon, Gamestop NFT had surpassed 1,028 ETH in volume, reaching at least $1 million, in its first 24 hours. Messari compared GameStop’s results to those of Coinbase’s NFT marketplace, which launched in April and has amassed around 1,699 ETH in volume since then.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">.<a href="https://twitter.com/GameStopNFT?ref_src=twsrc%5Etfw">@GameStopNFT</a> Marketplace volume surpassed 1028 ETH yesterday afternoon. <a href="https://twitter.com/Coinbase_NFT?ref_src=twsrc%5Etfw">@Coinbase_NFT</a> has amassed around 1,699 ETH in volume since its launch. Bullish <a href="https://twitter.com/GameStopNFT?ref_src=twsrc%5Etfw">@GameStopNFT</a> or bearish <a href="https://twitter.com/Coinbase_NFT?ref_src=twsrc%5Etfw">@Coinbase_NFT</a>? data via: <a href="https://t.co/wA9iElyK3R">https://t.co/wA9iElyK3R</a> &amp; <a href="https://twitter.com/CryptusChrist?ref_src=twsrc%5Etfw">@cryptuschrist</a>/<a href="https://twitter.com/DuneAnalytics?ref_src=twsrc%5Etfw">@DuneAnalytics</a> <a href="https://t.co/wqfIaXagiB">pic.twitter.com/wqfIaXagiB</a>&mdash; Messari (@MessariCrypto) <a href="https://twitter.com/MessariCrypto/status/1547174104628731908?ref_src=twsrc%5Etfw">July 13, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



@Thrown_eth, the owner of the MetaBoys collection, which is currently <a href="https://nft.gamestop.com/stats" target="_blank" rel="noreferrer noopener">trending</a> at the top of the charts for total volume, <a href="https://twitter.com/Thrown_eth/status/1546994061466226688?s=20&amp;t=-H8PmmsSfjqOTTf-CB6CSg" target="_blank" rel="noreferrer noopener">tweeted</a> about his GameStop marketplace experience. While the layer-2 bridging process was “easily the best” for him, and there was a “seamless ability to transfer NFT to L1 (ETH) and to sell on OpenSea,” the marketplace “obviously needs a lot of work.” 



Another user and “big NFT guy” @tropoFarmer also <a href="https://twitter.com/tropoFarmer/status/1547090368679874560?s=20&amp;t=orV3iqBSdxIgneKEyrJk7A" target="_blank" rel="noreferrer noopener">tweeted</a> that as long “as volume is there,” functionality will take a back seat. 



At the time of publication, no collection had a floor price over 1 ETH.



<h3 class="wp-block-heading">Magic Eden&#8217;s exploring Web3 gaming</h3>



Magic Eden, the largest Solana NFT marketplace, <a href="https://www.prnewswire.com/news-releases/magic-eden-launches-magic-ventures-with-focus-on-web3-gaming-301584577.html" target="_blank" rel="noreferrer noopener">launched</a> a new venture capital fund that will focus on investments in Web3 games as well as funding its own games. Dubbed Magic Ventures, it will operate under Eden Games, the company’s internal gaming division, which recently hired former Tencent executive Tony Zhao as head of gaming investments.



Blockworks conducted a Q&amp;A with Zhao and Zhuoxun Yin, Magic Eden’s chief operating officer, to learn more about Magic Ventures and the company’s expansion beyond its core profile picture NFT business.



Blockworks: What kinds of games or projects is Magic Ventures looking to invest in?



Zhao: In the first wave of Web3 games, we saw NFT gaming studios trying to directly compete with high-tier game IPs from the Web2 space. More recently, we have seen Web3 gaming projects gain significant market traction not by competing directly with traditional gaming studios to launch high-concept games, but by introducing innovative applications of real-life user interaction and blockchain technologies. Games like <a href="https://stepn.com/" target="_blank" rel="noreferrer noopener">Stepn</a> launched walk-to-earn mechanisms, and Mini Royale with Battle Pass minting have become cases of early NFT gaming innovation. Magic Ventures will be looking at games that demonstrate that same ability to deliver unique gaming experiences that are both immersive and seamless. 



Blockworks: What aspect of blockchain-based gaming is Magic Eden most excited about?



Yin: Games are a $180 billion market today, with 3 billion players worldwide. We are very excited to be exploring this new frontier with developers and partners to iterate on everything from marketplace infrastructure and tokenomics to games marketing and NFT gaming education for new users coming to the space.



For game developers, we will provide essential tooling and operational support. Unfortunately, games take a long time to develop, and there are many pain points that builders will need to contend with. For example, minting tech, in-game marketplace governance and user acquisition.



Blockworks: How does the metaverse tie into these plans?



Zhao: We believe that Web3 games will be an on-ramp for millions of users to blockchain, propelling it into the mainstream and for the technology to be widely adopted. But, gaming and metaverse projects remain at a nascent stage. The biggest challenge to Web3 gaming is simply that we need more amazing, playable, fun games — and that takes time to build.&nbsp;



Despite these challenges, we know that the case for gaming NFTs is strong. We also know that gaming user behavior overlaps with existing NFT communities, such as social, showcasing player status, and digital ownership. Blockchain technology will introduce innovative gameplay utilizing digital ownership through in-game NFT assets, to the benefit of all, including both players and game creators.&nbsp;



This interview was edited for length and clarity.



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Web3 Watch: GameStop Opens NFT Marketplace, Magic Eden Fund Focuses on Web3 Gaming

Ben Strack

<div id="highlights-block_61a902a23e70c" class="highlights">
 <ul>
 <li>The Defiance Digital Revolution ETF (NFTZ) trades on the New York Stock Exchange and has an expense ratio of 65 basis points</li>
 <li>New fund joins a crowding field of crypto- and blockchain-related equity offerings in the US as issuers await approval of spot bitcoin ETFs</li>
 </ul>
 
</div>



Defiance ETFs has added to the growing list of blockchain-related equity offerings that do not invest in crypto assets directly, though the firm intends for the fund to focus on NFTs a bit more than its competitors.



<a href="https://www.defianceetfs.com/NFTZ/" target="_blank" rel="noreferrer noopener">The Defiance Digital Revolution ETF (NFTZ)</a> launched on Thursday and trades on the New York Stock Exchange. The new product, which has an expense ratio of 65 basis points, offers investors exposure to the NFT, blockchain and cryptocurrency ecosystems by investing in NFT marketplaces and issuers.&nbsp;



NFTZ tracks the BITA NFT and Blockchain Select Index, which consists of the stock of companies that are building a platform or developing technology to use NFTs, trading platforms, mining or banking services in the crypto space, as well as blockchain-related technology. It may also include businesses that intend to become involved in these spaces.



The fund’s top five holdings are Silvergate, Cloudflare, Northern Data, Bitfarms and Playboy owner PLBY Group. The latter company unveiled an NFT collection — <a href="https://playboyrabbitars.com" target="_blank" rel="noreferrer noopener">Playboy Rabbitars</a> — in October.&nbsp;



Defiance currently has eight other ETFs trading in the US with combined assets of nearly $1.7 billion, according to ETF.com. Its largest is the $1.3 billion Defiance Next Gen Connectivity ETF (FIVG), which it launched in March 2019.



<h2 class="wp-block-heading">‘Bigger than the internet’</h2>



Sylvia Jablonski, Defiance’s co-founder and chief investment officer, told Blockworks that NFTs will be bigger than the internet.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“NFTs are special; they have created this cultural revolution,” she said. “They are the key to everything that is or will be the metaverse, [and] digital tokens will represent land ownership in the metaverse.”</blockquote>



NFTs reward creators of content, art and data and allow buyers to participate in a particular project, Jablonski explained. These tokens will represent fashion houses like Gucci and Nike, she noted, as well as tickets to events in the real world and metaverse.&nbsp;



Investors of stocks benefit when those stocks go up, and the company benefits in that they can use the funds it raises to take measures to boost the value of the stock, the CIO added.&nbsp;



“With NFTs, the value and direction of the asset is determined both by the creator and the investor,” Jablonski said. “People like to participate in something, and I think that special aspect is what will make this space essentially grow to be huge.”



<h3 class="wp-block-heading">Just another blockchain ETF?</h3>



NFTZ adds to the growing list of crypto or blockchain-related equity ETFs in the US as regulators <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">have not yet approved ETFs</a> that would invest in bitcoin and other crypto assets directly.&nbsp;



The largest crypto equity ETF in the US is Amplify Investments’ Transformational Data Sharing ETF (BLOK) which has grown to nearly $1.7 billion in assets under management since its January 2018 launch. 



A handful of similar products have launched this year, including the $130 million Bitwise Crypto Industry Innovators ETF (BITQ), the First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT), the Volt Crypto Industry Revolution and Tech ETF (BTCR) and the Invesco Alerian Galaxy Crypto Economy ETF (SATO).&nbsp;



The key difference of NFTZ to its competitors is that Defiance invests in stocks specifically involved in the issuance, creation and commercialization of NFTs, Jablonski said.



While some of the competing offerings are actively managed, the Defiance co-founder added that providing transparency for the investor is a main goal of the firm.



“We feel our investors should see what we hold, when and how we select holdings based on index rules,” she said. “It also helps keep efficient markets so that clients and market makers are able to trade or hedge with full transparency.”



Nathan Geraci, president of The ETF Store, said that due to the lack of pure-play companies offering exposure to the crypto space, a lot of the ETFs in the segment end up looking similar.



“Given the limited investment universe,” he told Blockworks, “I think NFTZ will have a difficult time differentiating itself from other blockchain ETFs at this early juncture.”



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