Crypto winter doesn't appear to be scaring away investors in the burgeoning NFT and blockchain gaming space. According to a new report from investment bank Drake Star Partners, crypto-related gaming companies accounted for roughly half of the last quarter's private financing, or about $1.2 billion.

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So far this year, investors have poured more than $3.4 billion into NFT and blockchain gaming companies. That's remained steady for the past nine months, despite around $2 trillion of value disappearing from the crypto market since its November 2021 high.

"While the Crypto market continued to be under pressure, investors continued to show strong interest in blockchain gaming companies," the company wrote. "Half of the total amount raised and 40% of all financing rounds for private gaming companies were investments in blockchain gaming."

The blockchain gaming sector, which includes both collectible NFT projects and also games built entirely around blockchain technologies and cryptocurrency, continues to grow as Web3 hopefuls ride a wave of hype created around the metaverse. But so far, very few of these games have attracted more than a few thousand players, and the mainstream adoption and popularity of these technologies remains very much in question.

Earlier this month, crypto app platform DappRadar said it recorded fewer than 40 people interacting with proto-metaverse platform Decentraland's smart contracts, after which Decentraland's parent company clarified that about 8,000 people log in every day but mostly do not do anything blockchain-related. On the other end of the spectrum is Meta, the most high-profile company to plunge headfirst into Web3 with plans to build an interoperable, immersive metaverse. Yet even Horizon Worlds, Meta's flagship social platform, has seen declining monthly users from 300,000 people per month in February to less than 200,000 this month.

As for NFTs, trading volume for the digital tokens has fallen 97% from its record high in January of this year, according to Bloomberg. NFT projects have also faced vocal backlash from the broader game community, a trend that does not appear to be abating any time soon even as more companies try to dip their feet into the market.

Sony this month launched a new loyalty program called PlayStation Stars in which players can earn digital collectibles for buying and playing games on the platform. When asked whether the program would be selling or offering NFTs, a PlayStation representative was emphatic in stressing to The Washington Post that it was not entering the crypto space: “It’s definitely not NFTs. Definitely not. You can’t trade them or sell them. It is not leveraging any blockchain technologies and definitely not NFTs."

Good morning! Tax credits for medium- and heavy-duty electric trucks could help address climate change and reduce carbon emissions. Maybe it’s time to give them a shot.

Is it time to electrify your truck fleet?

The Inflation Reduction Act’s tax credits for electric passenger vehicles have garnered intense scrutiny. But the tax credits available to electrify medium- and heavy-duty transport could be an even bigger deal, Protocol’s Brian Kahn writes.

Commercial EV tax credits are different from the ones for passenger vehicles. The IRA includes tax credits of up to $7,500 for light- and medium-duty vehicles and $40,000 for heavy-duty trucks.

• Those credits don’t come with any requirements for where battery components and minerals can be sourced from or how much vehicles cost, both of which are facets for the passenger EV tax credits.

The effect on electric truck sales could be huge. The law’s tax credits could double or even triple the share of electrified trucks and vans used in fleets by 2030 compared to business as usual, according to a new report from policy modeling shop Energy Innovation that was shared exclusively with Protocol.

• That would pay huge dividends by cleaning up what is one of the dirtiest segments of the transportation sector in terms of carbon and air pollution that disproportionately affects disadvantaged communities.

Infrastructure is also getting a boost. Billions of dollars are being put toward unblocking a major barrier in widespread EV adoption: range anxiety. That’s particularly important for long-haul trucks and delivery vehicles that have schedules to keep, and could help companies already looking at electrifying their fleets speed up the process.

• Some major businesses have already made major pledges to electrify their fleets. Amazon, for example, put in an order for 100,000 electric vans from Rivian and installed some of its own charging stations.

Regulation could also speed things up. The Environmental Protection Agency is considering new emissions standards for medium- and heavy-duty trucks, and setting more-stringent ones could act as a stick to the IRA’s carrots.

Read more: The Inflation Reduction Act is a “game changer” for electric trucks

Playing the crypto long game

Mastercard rolled out a new service this week to help consumers buy and sell crypto through their banks. It shows the payments giant is playing the crypto long game. More and more banks will want to dabble in this market, but they’ll want to do it in a way that doesn’t get them in trouble, Protocol’s Ben Pimentel writes.

Crypto crash or no crypto crash, big banks want in. The market slide wiped out $2 trillion in value from crypto, but interest remains strong, especially among major financial institutions.

• Payments giants, led by Mastercard, Visa, and AmEx, have been building their crypto capabilities for years. “Our commitment is simple,” Jorn Lambert, Mastercard’s chief digital officer, said. Mastercard will “explore” crypto technology and come up with ways to support “customer choice in payments.”

The payments behemoths aren’t going away, despite the view that crypto threatens their existence, a view that was underlined by investor Chamath Palihapitiya’s prediction that they would be the “biggest business loser for 2022.” (Last we checked, Visa and Mastercard were collectively worth $675 billion.)

• On the contrary: It’s becoming clearer that payments giants will likely play a key role in crypto’s growth.
• Walter Hessert, head of strategy at Paxos, Mastercard’s partner for the new crypto services, cited the company’s “powerful network of financial institutions around the world,” which offer traditional financial companies “the fastest and most trusted way to offer safe, reliable crypto access for their consumers.”

In fact, crypto may need the old guard. One would expect that this crypto winter would “keep legacy institutions away,” but “it's likely that volatility is what will drive consumers to feel safer with established financial institutions,” Melody Brue of Moor Insights & Strategy told Protocol Fintech reporter Benjamin Pimentel.

Read more: A longer version of this story appeared in the Protocol Fintech newsletter. Sign up here.

​Meredith Whittaker’s big challenge at Signal

Meredith Whittaker had only been the FTC’s senior AI adviser for less than a year when she decided to leave her government role. Last month, she announced her new position as the president of encrypted messaging app Signal.

How did Whittaker decide to make the move? She’s known Signal founder Moxie Marlinspike for a decade, and was using the platform before it was even called Signal, she told Protocol’s Lizzy Lawrence. Now felt like the right moment to act on previous conversations she’d had with Marlinspike about joining as president.

• As someone who joined Google when it was still a young startup, Whittaker said she “had a very close view of the surveillance business model’s ascent.”

• Now, that model has “calcified,” she told Lizzy, and a handful of big tech companies control major digital infrastructure and constantly gather data.
• “You have a service like Signal, which I believe is existentially important for a livable future.”

Her big challenge: making Signal’s business sustainable. Operating a platform like Signal is expensive, and growing it without compromising its ethos of security is a daunting task. It’s doubly challenging as companies like Meta and Apple offer free products with the “shifty trade-off” of monetizing user data, she said.

• Though Signal is still mulling over its monetization plans, Whittaker is looking into a small donation model.
• But she knows she wants Signal to remain free, telling Lizzy that private communication “shouldn’t be something that is a luxury only for the people who can afford it.”

Read more: How I decided to leave the FTC to run Signal

A MESSAGE FROM CIRCLE

USD Coin (USDC) is the institutional grade stablecoin. Monthly attestations show exactly what reserves back USDC, and businesses all over the world are using USDC to build the next generation of financial services and global payment applications.

Learn why institutions trust USDC at Circle’s Transparency & Stability Hub

People are talking

Terraform Labs’ Do Kwon said he’s not actually on the run:

• "There's no reason why any government official would believe we fled to Singapore.”

Netflix's Mike Verdu is pleased that Chacko Sonny left Blizzard for the streaming platform:

• "You don’t get people like that coming to your organization to build the next big thing in gaming unless there’s a sense that we’re really in it for the long haul.”

AN EVENT FROM eMARKETER

Webinar: Holiday shopping predictions unwrapped

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Register now

Making moves

Starboard Value revealed a stake in Salesforce. Shares jumped over 7% in early trading yesterday.

Namkoong Whon resigned from Kakao as CEO after a fire at a data center caused a huge outage. Whon also apologized for the incident.

Michael Brown left the Defense Department for Shield Capital, where he'll invest in startups creating tech for warfare and conflict.

Katie Obi joined Beamery as chief people officer. She last held a similar role at Rizing.

AI company Cresta has new leaders: Scott Kolman joined as head of marketing, and Adam Walton is the new VP of business development.

Germany suspended its minister of cybersecurity, Arne Schoenbohm, due to alleged ties with Russian intelligence.

In other news

Craft Venture's David Sacks is quietly growing in popularity across right-wing politics. He's not yet a household name like Elon Musk, but he continues to use money and his online presence to bring conservatives together.

Oracle poured another $400 million into Ampere, an Arm server chip design startup. It’s now put in $850 million since Ampere’s inception in 2017, according to SEC filings.

Meta must sell Giphy, the U.K.’s competition regulator ordered. Meta said it’s disappointed by the ruling but will unwind the deal.

Netflix confirmed that it’s looking into cloud gaming. It has 35 games in its mobile catalog and 55 more in production.

Climate nonprofit Terraset exited stealth mode. The organization wants to channel private philanthropy into the nascent field of carbon dioxide removal.

Apple announced an upgraded iPad yesterday. It’s the last of the newer models to ditch Lightning for USB-C.

What’s going on between Meta and The Wire? Meta has repeatedly called evidence underpinning The Wire’s reporting on the company fabricated. Now, The Wire’s doing an internal review.

Amazon workers overwhelmingly rejected a union vote at a facility near Albany, New York. This was the third time that the Amazon Labor Union tried to unionize an Amazon warehouse after having successfully unionized workers in Staten Island.

Be your own handyman

Do you feel like you could fix your washing machine, fridge, or dryer on your own? The FTC wants to know. The agency is planning to ask the public if energy-efficiency labels on home appliances should also include information on how to fix the machines. The move could be a win for climate and repair rights advocates, who have said that keeping devices from getting wheezy and ending up in a landfill is an environmental win. Now the Maytag repairman could really be out of a job.

A MESSAGE FROM CIRCLE

USD Coin (USDC) is the institutional grade stablecoin. Monthly attestations show exactly what reserves back USDC, and businesses all over the world are using USDC to build the next generation of financial services and global payment applications.

Learn why institutions trust USDC at Circle’s Transparency & Stability Hub

Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.

Almost a year ago, Meredith Whittaker announced she was heading to the Federal Trade Commission as a senior AI adviser. But the outspoken tech worker activist and AI researcher knew she wasn’t interested in government long term. Last month, Whittaker announced her new role as the president of encrypted messaging app Signal.

Signal has become an incredibly important app for activists, cybersecurity experts, and other folks committed to private, encrypted communications. Brian Acton, co-founder of both WhatsApp and the nonprofit behind Signal, is interim CEO; the organization is still on the hunt for a permanent CEO, Whittaker said. As president, Whittaker will be in charge of Signal’s policies, image, and strategy. Her priority is building a sustainable business model for Signal without compromising its ethos of privacy and security. Signal doesn’t have solid plans yet, though Whittaker is looking into a small donation model. “This could help create a template for models of building tech that aren’t based on the surveillance business model,” Whittaker told Protocol.

It’s always a hefty battle convincing users to start paying for something they’ve taken for granted as free, especially when competing against the likes of Meta and Apple.

“One thing that is important to make really clear as widely as possible is how expensive it is to create and maintain these systems,” Whittaker said.

Whittaker has had a varied and storied career, first coming into the public eye via her protests as a Google employee against the company for building AI technology for drones, among other things. She co-founded the AI Now Institute at New York University to study the social impacts of AI, leaving Google eventually to run it. In 2020, she joined Signal’s board of directors. She describes the move to step up as president as slow-moving and organic. In some ways, she’s been “accidentally training for the role” her whole career, she told Protocol in an interview about her decision.

Whittaker’s story, as told to Protocol, has been edited for clarity and brevity.

We could draw this back a decade at this point. I have known [co-founder and former Signal CEO] Moxie [Marlinspike] for almost a decade. I was using Signal before it was called Signal, when it was still RedPhone and TextSecure. I’ve been deeply invested in Signal and an unequivocal champion of what Signal does and the necessity of Signal existing and thriving.

My joining Signal as president was a conversation we had a handful of times over many years. For me, there’s an element of, “you know it when you know it.” And I just knew this was the right moment.

The decision was very well informed, probably more well informed than any other career decision I’ve made. I had such a privilege to have real insight into the organization, the issues specific to Signal, and the project of developing a truly private communications infrastructure. I had co-founded and led AI Now for five years at this point. I did a term as a senior adviser to Lina Khan at the FTC. I’d been at Google and had a long run and a lot of experience with the brass tacks of product development. What are the actual practices inside a tech company? What are the dependencies and issues that you run into? I was in academia for half a decade and did a lot of work looking particularly at the political economy of tech and the tech business model.

It seemed like the right time. We’re at a moment where the surveillance business model has calcified. We have a handful of big tech companies. They control the infrastructure, they have the capacity to continually gather data constantly. You have a service like Signal, which I believe is existentially important for a livable future. We need to be able to communicate privately. We need to be able to experiment with ideas. We need to be able to discuss a health problem without fear that our employer is going to surveil that discussion and cut us off of health insurance.

The stakes vary from the very mundane to the geopolitical. Nonetheless, you have to be able to communicate privately or you basically live in a world where the power relationships that exist are cemented and immovable.

We need to be able to communicate privately. We need to be able to experiment with ideas. We need to be able to discuss a health problem without fear that our employer is going to surveil that discussion and cut us off of health insurance.”

I saw this industry metastasize from the inside. I’ve been in the tech industry for 17 years. I started at Google in 2006. Yahoo was a bigger site by monthly active users than Google when I joined. Google still used Outlook internally as its email client because Gmail was in beta. It was a very different time. The iPhone didn’t exist, we didn’t have [Google] Maps. I had to print out MapQuest directions to get to my Google interview. I had a very close view of the surveillance business model’s ascent.

One of the key things that I am looking at is sustainability. How do we build robust, always available global communications infrastructure without participating in the surveillance business model? We’ve had a couple of decades now of “free” products that were not actually free. They were monetizing data behind the scenes. There was a sort of shifty trade-off, and now we have a world that is interpolated by mass surveillance at almost every turn.

Signal is a free product because we believe everyone should be able to have private communications. It shouldn’t be something that is a luxury only for the people who can afford it. That’s not how friendships work. That’s not how relationships work. We want to make sure anyone who wants to talk to anyone privately can pick up their device, install Signal, and do that.

However, just because we reject the surveillance business model doesn’t mean it’s any cheaper for us to develop high-availability, always-on software globally. It costs us tens of millions of dollars a year, and that’s a really lean budget compared to a lot of the alternatives. Signal is in total 40 people. Those tens of millions of dollars a year are going to hosting, registration, the basic costs of just keeping a service like Signal alive.

We’re really lucky at Signal because we have a long runway to experiment and really get the sustainability model right because we have the generous contribution from Brian. But we’re still looking at tens of millions of dollars a year and we need something that can meet that need.

Without much fanfare, Oracle has now poured roughly $850 million into Arm server chip design startup Ampere since its inception in 2017, according to SEC filings.

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Oracle’s stake in Ampere appeared to grow by more than $400 million earlier this year, after Oracle disclosed that it had invested $300 million in convertible debt issued by Ampere in fiscal 2022 and acquired more Ampere stock from an undisclosed investor for $127.8 million, according to the company’s proxy statement filed with the SEC.

Last year, Macom Technology Solutions, which divested its Arm chip business that became Ampere, said that it had sold its equity interest in Ampere to a buyer affiliated with Oracle for $127.7 million.

Ampere declined and Oracle did not respond to a request for comment.

The size of Oracle’s bet on Ampere became clear in March after Oracle blamed a wider-than-expected operating loss, in part, on Ampere, Protocol reported earlier this year. At the time, SEC filings revealed that Oracle had invested $426 million in the company, and including Ampere in its operating losses implied a stake of 20% to 50%, according to accounting rules.

Part of Oracle’s earlier investment in Ampere included another $300 million payment in an equity fundraising round in March of 2021, and an agreement to purchase tens of millions of dollars worth of server chips designed by Ampere. The most recent proxy statement indicates Oracle has purchased $50.9 million worth of Ampere chips in fiscal 2022, including a $21.6 million against a $25 million prepayment Oracle made in fiscal 2020.

Ampere’s founder and CEO, Renee James, also sits on Oracle’s board. Oracle has been quietly investing in Ampere since 2017, and prior to the investment James, who has served on Oracle's board since 2015, was considered an independent board member. James was formerly president of Intel.

Ampere designs chips based on Arm technology and has made slow inroads into the data center CPU market, which is dominated by Intel and AMD. This market has long been dominated by Intel, but over the last few years it experienced manufacturing and other difficulties that led to delays launching new products, allowing AMD to pick up a bigger chunk of server chip sales and creating room for new entrants.

According to Jefferies, Ampere holds roughly 0.6% of cloud CPU instances, while AMD commands 17%, and Intel has 77.2% share. Graviton, Amazon’s in-house server CPU, has 4.2% share, though the company doesn't sell its custom chips to other cloud vendors.

Netflix wants to extend its nascent gaming efforts to PCs and TVs, and it's looking to launch its own cloud gaming service to do so, VP of game development Mike Verdu confirmed at TechCrunch Disrupt on Tuesday. "We’re very seriously exploring a cloud gaming offering," Verdu said.

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"We'll approach this the same way as we did with mobile — start small, be humble, be thoughtful — but it is a step we think we should take," Verdu added. "The extension into the cloud is really about reaching the other devices where people experience Netflix."

Netflix's cloud gaming ambitions don't come as much of a surprise: The company has been looking to hire multiple staffers to build its own cloud gaming infrastructure, as Protocol was first to report in August.

Verdu didn't share many additional details, but suggested the company was looking to launch more than just casual games on TVs. He declined to say whether Netflix would build its own game controllers like Google has done for its failed Stadia service, but he said the titles wouldn't rely on TV remotes for input.

Netflix has released 35 games for mobile devices thus far, and the company said Tuesday as part of its earnings release that it had an additional 55 games in its pipeline. Fourteen of those games are being built by Netflix's own studios, Verdu said, adding that the company was going to launch an additional studio in Southern California soon. The studio will be led by Chacko Sonny, who previously served as executive producer for Activision Blizzard's Overwatch franchise, according to a Netflix spokesperson.

Verdu called Netflix's expansion into gaming a pivotal moment for the company, but admitted that it was a slow and deliberate multiyear effort. However, the company may already be seeing some rewards from those efforts. "We’re seeing some encouraging signs of gameplay leading to higher retention," the company wrote in its letter to investors Tuesday.

Update: This post was updated on Oct .18, 2022, with additional details on Netflix's new Southern California studio.

Note: Protocol is owned by Axel Springer, whose CEO, Mathias Döpfner, is on the board of Netflix.