Unicorner - 🦄 XMTP: Enabling crypto communication

🦄 Unicorner Startup of the Week: XMTP

✍️ Notes From The Editors

This week, we're excited to feature a startup focused on emerging tech: specifically, web3. Be sure to check out our contributor's work on his substack. Every 2 weeks, Aqil curates and shares summaries of the best tweets, reads, and listens around startups and emerging technology. He’s recently been covering primarily crypto and biotech, but often returns to his AWS roots in cloud computing!

If you're interested in learning more about crypto and web3, take a peek at this week's bonus content to get some more context.

- Arek and Ethan 🦄

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Enabling crypto communication

XMTP is enabling communication between existing crypto wallets with its own independent protocol and decentralized network. This means crypto wallets can “talk to each other” over a network managed by a set of distributed, unrelated individuals. In doing so, XMTP could become the base communications layer for the next generation of the web: web3.

Fundamentally, web3 is an immersive evolution of today’s internet where individuals retain more ownership, transparency, and economic incentives. It’s a complete redesign of today’s internet, with economic incentives baked right in. That’s why it’ll need a communications layer like XMTP—it will enable the next generation of communities, creators, and users to connect and coordinate in building web3’s future. Ultimately, XMTP will be a permissionless, crypto-native communications protocol powering web3.

🔗 Check them out: xmtp.com

💰 Business Model

While XMTP is currently pre-revenue, we have some speculations on its future plans. As a crypto-native startup, XMTP’s business model could evolve in a multitude of ways. It’ll likely revolve around token economics. By issuing a unique token (ex. an XMTP coin) that provides usage benefits to owners (ex. only being able to use XMTP if you own the coin), XMTP can generate value in two core ways: native token value increasing with usage and community-determined transaction payments to the core team. For example, as wallets enable XMTP offerings such as spam blockers, inter-wallet communications, and authenticated messaging, the team and network could receive value each time those transactions are completed.

📈 Traction and Fundraising

Raised $20 million Series A round led by a16z with participation from strategic funds, companies, and angels like Atelier Capital, Not Boring Capital, Coinbase Ventures, Alexis Ohanian, and Ric Burton

👫 Founder(s)

Matt Galligan, CEO: Previously CEO & Co-Founder @ Interchange (acquired by Kraken), Co-Founder & CEO @ Circa News, Co-Founder & CEO @ SimpleGeo, International Business @ Illinois College
Shane Mac, President: Currently Founder & Managing Partner @ Logos Labs; Previously Co-Founder & CEO @ Assist, Finance and Economics @ Western Illinois University

💼 Opportunities

🔮 Our Analysis

Web3 is the evolution of the internet that’s designed to give individuals more ownership and transparency. Its rapid growth is inevitably unveiling the need for critical building blocks. Most of web3’s innovation has revolved around financial building blocks, but there hasn’t yet been a base layer for communication. XMTP is tackling this by upending the state of messaging today. Instead of fragmented platforms with no interoperability (the ability to exchange data between tools), XMTP is launching a messaging protocol that is fully permissionless, open-source, interoperable, and controlled by users instead of organizations. XMTP achieves this by enabling communications between wallets, the atomic unit of web3. In doing so, XMTP could be the core layer that enables communities, creators, and novelties like Decentralized Autonomous Organizations (DAOs) in the web3 economy by introducing communication and coordination. Building blocks are particularly interesting in nascent spaces like web3 because they’ll unlock many forms of innovation; the tools that will be built on top of them will not only help us do what we already do better, but unlock all sorts of new behaviors we’re yet to imagine!

📚 Further Reading

Investing in XMTP [a16z Crypto, from Twitter]
Announcing our Series A led by a16z Crypto [XMTP Blog]

Written by Aqil Pasha

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🎁 Bonus Content!

It can be tricky to keep up with innovations in a rapidly evolving tech scene like web3. Interested in learning more, but not sure where to look? Start with this web3 reading list from Gaby Goldberg, an investor at TCG Crypto.

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Unicorner - 🦄 XMTP: Enabling crypto communication

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