Web3 Ventures: A Reflection on 2023

Published in

Inception Capital

5 min readJan 30, 2024

Looking ahead to 2024, we’re energized by the new additions to our portfolio last year. These companies represent the cutting edge of web3 innovation, and we anticipate developments and collaborations with these key players this year.

Our 2023 investments:

Consumer Infra

Innovations in consumer infrastructure stand at the forefront of transforming web3 UX for the better. We see innovations like those below as pivotal in making blockchain technology seamless and more accessible to the everyday consumer.

Virtual Labs — Pioneering ZK state channels to streamline web3 UX. The Virtual Engine allows for zero-gas transactions and zero-latency bridging, making contract interactions smoother and more efficient.

MegaETH — Gigabrains dedicated to Ethereum development. Building the fastest possible EVM-compatible execution environment for L2/L3s and coprocessors.

Modular

Being bullish on Celestia means we are bullish on scalability, flexibility, and interoperability. There’s been no better protocol to demonstrate this so far than Celestia.

Celestia — The modular data availability network, separating consensus from execution in blockchain architecture. Any blockchain can become a Celestium by easily integrating Celestia’s DA layer. Being bullish on Celestia means we are bullish on scalability, flexibility, and interoperability.

Innovative DeFi

DeFi 3.0 is emerging, and with it, we will see a resurgence in DeFi activity. It will be propelled by innovative protocols making DEX UX competitive with CEX UX, and DeFi as convenient or more convenient than CeFi. Our portcos below are at the forefront of this shift.

Elixir — The modular DPoS network already powering orderbook liquidity on 20+ exchanges. Their off-chain DPoS consensus network will power liquidity across @bluefinapp, the leading DEX on @SuiNetwork.

Fyde — Introduces the liquid vault as a solution to the complicated treasury and asset management process. Simply deposit various tokens to receive $TRSY, a 1:1 backed vault token that delivers diversified crypto market exposure. Retain governance rights on governance tokens like $UNI. Diversified, compounded returns in one go.

Account Abstraction (AA)

AA is making significant progress in making web3 interactions more simple and flexible by blending user accounts with smart contracts, enabling easier access and management while enhancing security and functionality. One of our 2023 portcos is rapidly developing AA infrastructure.

Particle Network — The “Intent-Centric Access Layer of Web3.” Core product is Wallet-as-a-Service (WaaS) first based on MPC-TSS, then MPC-AA (Account Abstraction) after ERC-4337 was introduced. Now with V2, they are introducing ZKPs on top of MPC-AA to provide confidential logins and transactions. Already the largest AA infrastructure provider and the first AA protocol on #Bitcoin.

Consumer Apps & Gaming

New trends in consumer apps and gaming point towards more engaging and innovative digital experiences enabled by permissionless smart contracts and NFTs that imbue digital objects with scarcity, value, and ownability.

Sleepagotchi — Gamify the experience of developing healthy sleep habits. It encourages users to meet their sleep goals by offering daily rewards. As users consistently achieve their sleep targets, they earn various achievements to transform their virtual Sleepagotchi room. Make mornings more engaging and fun every day.

Moonbounce — A browser extension that makes internet browsing a more social and interactive experience. Users can engage with friends and other internet users on various websites, transforming regular online activities into shared experiences. Users can take on web-wide adventures together, collecting loot for crafting, and discover treasures that can be used for both digital and real-world assets.

Surf — The first permissionless derivative exchange, offering trading and listing of any asset. The wide selection makes it a one-stop platform for accessing a diverse range of assets for trading, and providing a liquidity hub for long tail assets.

AI + Blockchain

Our investments in 2023 demonstrate our excitement about the integration of advanced AI techniques with blockchain technology to enhance data privacy, predictive analytics, and decentralized application development.

ChainML — ChainML specializes in creating customized generative AI applications using an open-source platform called Council. This platform allows for robust deployment and monitoring of AI models, ensuring they operate with accuracy and confidence. ChainML works with clients on ideation, education, adoption, and implementation; from an AI product idea to a scalable, affordable, and Web3 enabled deployment.

Flock.io — Flock.io uses a federated learning approach to allow users to train machine learning (ML) models collaboratively without sharing their source data.

Onaji — Where AI meets blockchain data. It provides a variety of tools including web3 intelligence dashboards, capital flow visualizations, alternative price signals, predictive on-chain behavior analytics, digital asset discovery tools, and batched wallet tracking management.

MyShell — Recently selected into Binance Labs Incubation Season 6, MyShell is a decentralized platform focusing on AI-native app development, creation, and staking. It aims to democratize and decentralize the AI-native app ecosystem, providing a comprehensive environment for both AI developers and creators. MyShell’s vision is centered around fostering an open AI ecosystem.

DePIN

In 2023, DePIN witnessed substantial growth and real use cases. Hundreds of projects have emerged spanning various subsectors including compute, AI, wireless, sensors, energy, and services. In particular, coinciding with the rise of generative AI, we’re ready to make big bets on projects harnessing DePIN for long-tail decentralized compute resources.

Lumino — Lumino AI is a decentralized platform that offers a cost-effective solution for training machine learning models. The platform can reduce ML training costs by over 50% by leveraging an extensive network of compute providers. Lumino operates as an open marketplace, allowing anyone with GPU resources to support AI model training.

Disclaimer: This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice, or investment recommendations. This post reflects the current opinions of the authors and is not made on behalf of Inception Capital or its affiliates and does not necessarily reflect the opinions of Inception Capital, its affiliates, or individuals associated with Inception Capital. The opinions reflected herein are subject to change without being updated.