China NFT Weekly: NFTs as Status Symbols

Digestible news about the latest developments across the fields of NFT, blockchain and metaverse in China, delivered to you every week.

This week: Chinese label Modern Sky debuts first virtual musician, The Sandbox to launch metaverse incubator program, Chinese government rejects metaverse trademark applications, and more.

Chinese label Modern Sky debuts first virtual musician

Chinese record label Modern Sky announced plans to accelerate its virtual businesses this year as metaverse business ventures gain traction in China and elsewhere.

• Shen Lihui, founder of the independent record label, said last week that the company’s strategy for 2022 included developing virtual musicians, organizing virtual music festivals, and selling original digital works in the form of NFTs.
• Modern Sky also released its first virtual musician, Miro (a combination of the words mirror and miracle) over a year after launching its first virtual artist label.
• Virtual idols have been thriving in China over the years, with its market value reaching 3.46 billion yuan ($543.51 million) in 2020, up 70.3% from the previous year, according consulting firm iiMedia. The metaverse hype was expected to push its market value to nearly 107.49 billion yuan ($16.84 billion) in 2021.
• According to iiMedia CEO Zhang Yi, music platforms are drawn to the concepts of virtual concerts and idols because “celebrities can pose massive risks to music companies” – a veiled reference to a series of celebrity scandals in China over the past year – and that “a (more digital) focus can cater to the young audience’s needs, improve popularity of platforms and accumulate more virtual idol IPs, which is beneficial to platforms’ short-term publicity, revenue, and long-term development.”
• Despite the growing popularity of virtual idols, experts have raised concerns over the concept, saying the country lacks regulatory requirements or documents to guide companies interested in the space. (Sixth Tone)

SEE ALSO: Tencent music launches China’s first virtual music festival TMELAND

Huobi Trust’s assets under custody to reach $4 billion

In the fourth quarter of 2021, Huobi Trust, a subsidiary of Huobi Technology Holdings, has approached $4 billion assets in custody.

• Huobi Trust provides custodial services for around 20 institutional clients, including minters, investment institutions, quantitative funds, market makers and other types of clients in the industry.
• Huobi Trust has a Trust or Company Service Provider Licence (TCSP) in Hong Kong and a U.S. Nevada Retail Trust Company License. It provides compliant virtual assets custody services for clients who require secure custody of assets or risk isolation needs.
• Huobi said in a PR release that it seeks to diversify and strengthen its product functions by consolidating basic custody functions, improving wallet capabilities, supporting customized accounts, and more. In addition, it also aims at developing value-added functions, such as exchange asset custody and DeFi-linked products.
• Huobi Tech Holdings Limited is an investment holding company principally engaged in the manufacture and sale of energy-related and electronic products. Along with subsidiaries, the company operates its business through three segments:
• The Contract Manufacturing segment is engaged in contract manufacturing of energy-related and electronic products on the basis of manufacturing services.
• The Provision of Technology Solution Services segment is engaged in the provision of data centers and cloud-related services.
• The Virtual Asset Ecosystem segment is engaged in the provision of asset management services and investment solutions, as well as engaging in the trust and custodian business. (Yahoo, Reuters)

The Sandbox looks to boost metaverse startups with $50 million incubator program

The Animoca Brands-owned mobile gaming company has committed to invest $250,000 in up to 40 metaverse projects each year over the next three years.

•  The Sandbox is launching the metaverse incubator program in partnership with venture accelerator Brinc.
• Top performers of the program will also be awarded up to $150,000 in SAND and LAND token grants.
• The program’s first cohort will be announced sometime in early Q2. The program runs three months in duration, with applications currently open.
• Animoca Brands is a Hong Kong-based game software and venture capital company. It raised $360 million in a fundraising round earlier in January, and is currently valued at $5.5 billion. (CoinDesk)

Chinese government rejects metaverse trademark applications

China’s government has started rejecting trademark applications related to metaverse projects amidst metaverse and NFT frenzy.

• Trademark applications containing yuán yǔzhòu (元宇宙) – Mandarin for “metaverse” – have been denied registration by China’s National Intellectual Property Administration, according to data from domestic business and trademark registration tracking firm Tianyancha.
• Those rejected include applications by NetEase, iQiyi and Xiaohongshu, while applications by the country’s tech giants including Tencent and Alibaba are still pending review.
• The action has been attributed to an attempt to combat a rush of such applications which could cause trademark squatting – a situation where someone other than the original brand owner obtains a trademark – and misunderstanding among consumers.
• The action is also viewed by experts as the government’s attempt to mitigate the hype around the metaverse in the tech industry. (Coindesk, SCMP)

SEE ALSO: China NFT Weekly: China’s First Virtual College Campus

The race for NFT status symbols?

Twitter embraces NFTs with new hexagonal profile picture feature

Twitter will start allowing some users to use NFTs as their profile pictures. The initiative marks the company’s biggest push thus far into NFTs.

• NFT-backed avatars will show up on Twitter in hexagonal form to differentiate them from ordinary profile pictures, and clicking on them will pull up a page that displays the NFT’s blockchain address and creator’s identity.
• For Twitter, it’s also a way to sell subscriptions to its new premium service: for now, the new feature is only available to Twitter Blue subscribers using Apple Inc. iOS devices.
• In addition to the NFT profile-picture feature, Twitter Blue offers users subscription features such as the ability to undo a tweet or customize the Twitter app icon on their mobile device.
• The subscription fee is $2.99 per month in the U.S., and the service is limited to users in the U.S., Canada, New Zealand and Australia.
• By launching NFT profile pictures, Twitter is positioning itself as the social network for discourse around NFT and blockchain technology, according to Esther Crawford, the company’s product lead for the effort.
• Twitter is joined by companies such as Coinbase Global Inc. and OpenSea to support the NFT profile-picture feature.
• The backlash on Twitter was instant as pranksters began photoshopping facsimiles of NFT avatars, while the more tech-savvy users noticed that Twitter’s feature does not clearly distinguish between NFTs that are part of a verified collection on a marketplace like OpenSea, which tend to be valuable and exclusive, and NFT copies of those valuable images, which anyone could cheaply mint on a blockchain themselves. (WSJ, The Washington Post)

Reddit is (also) testing out NFT profile pics

A week or so after Twitter implemented its NFT profile-picture feature, Reddit announced that it is now testing out NFT profile pictures on its platform.

• The social media platform is reportedly working on an NFT profile picture implementation that will enable users to set their profile picture to any NFT with an attached image.
• Reddit explained this particular NFT test is in very early stages and hasn’t been made available to public users on the site. However, earlier in the week, an app developer posted a banner from Reddit promoting the feature, suggesting the tests are already well advanced.
• Reddit has been experimenting with various initiatives around NFTs for some time, having even set up a dedicated page for NFT-related activities at nft.reddit.com. The page primarily focuses on the CryptoSnoos (the “Snoo” part of the word references Reddit’s alien mascot), which are Reddit’s own digital collectibles. So far, only four variations of CryptoSnoos have been released.
• In May 2020, the company introduced cryptocurrency tokens for its r/Cryptocurrency and r/Fortnite communities. Those tokens were called MOON and BRICK and are based on Ethereum standards. (Cointelegraph, TechCrunch)

Things you shouldn’t do on the Chinese New Year:

In the spirit of the Chinese New Year, which officially starts on February 1, 2022, here are some funny CNY traditions and superstitions to help you and your family start the year rich and healthy:

• Don’t eat porridge! It is considered that only poor people have porridge for breakfast, and people don’t want to start the year “poor” as this is a bad omen.
• Don’t sweep out garbage! The act of sweeping on this day is associated with sweeping wealth away. Taking out garbage symbolizes dumping out the good luck or good fortune from the house.
• Don’t cut your hair during the first month of the Chinese New Year, unless you want to bring bad luck to your uncles…What? 

That’s it for this week’s newsletter – thanks for reading! As always, I welcome any feedback on how to make this newsletter better. My email is [email protected]. Happy Chinese New Year, and see you next week!