Context

Since 2020, we witness a huge number of new web 3 entrepreneurs that are building on-chain businesses.

Those new businesses are decentralized applications built on top of decentralized protocols like the Ethereum Network.

Like Chris Dixon said : Blockchains are the new app store.

From play to earn games to NFT marketplaces to Defi apps, Dapps keep popping up each and every day.

• The number of daily unique active wallets connected to dapps increased 7 times, reaching an all-time high of 2.7 million at the end of 2021.
• The NFT business is already a $40bn dollar market.

And as new dapps emerge, we also see numerous creators and brands building businesses & careers on top of those decentralized applications.

We are seeing the same type of emergence as web 2 where brands and creators are building on top of centralized platforms like Youtube and Facebook.

Actually, this creator economy tops now at a 100b$ market.

As of today, the web 3 creator economy is made of :

1. Web 2 entrepreneurs/influenceurs/artists that leverage web 3 to launch new revenue lines (Snoop Dog, 3LAU..) by building verticalized dapps (Ex Royal, Sorare).
2. Web 3 Independent entrepreneurs & creators that create careers on top of dapps. For instance artists launching collections on Opensea and Rarible, artists that create artworks on SuperRare and Foundations, axie players that live off their game sessions, traders that buy and sell virtual lands on Sandbox…

But where are we heading ?

Statement 1 : The emergence of Shopify type of dapps (as open platforms) will facilitate the access to web 3 opportunities lowering the entry barriers for creators & brands by allowing them to build on top of them.

Examples :

• Microsoft invests in NFT platform Palm Studio that empowers strong IP brands
• A16z invest in Manifold.xyz that empowers web 3 creators
• thirdweb.com empowers NFT marketplace developers

Statement 2 : Financial bridges are the last important piece of infrastructure needed to scale the web3 creator economy.

NFTs have drastically changed market dynamics because it brought culture to crypto.

We went from complex defi products built by degens to NFT drops from big companies like Adidas.

And it creates a gap with new needs.

The reason is quite simple : blockchain networks are economies where every transaction happens in crypto-currencies.

But, web 3 businesses are now built by brands, entrepreneurs and artists coming from web 2 with a financial structure based on fiat only (accounting, compliance, expenses, suppliers, banks…).

Pains

This raises questions like :

1. How do I convert my incomes into dollars/euro in the most efficient way to pay for my expenses?
2. How do I hedge myself against volatility ?
3. How do I keep track of all my streams of inflows and outflows ?
4. How do I handle my accounting ?
5. How do i report taxes ?
6. How do I stay compliant with my bank and prove the origin of funds ?

Solution

This is why we created Nilos.

Today, Nilos is a financial platform for web 2 businesses that want to enter the web 3 space.

To some extent, we are building the web 3 version of Stripe to bridge web 2 and web 3.

The product

The product is composed of two core components :

1. A smart wallet (wallet where you can define smart rules on top of it)
2. An in house off ramp flow

So businesses can :

1. Cash out seamlessly part of their crypto earnings directly in fiat to their current bank account
2. Build automation pipelines (auto-swaps, auto-splits...) on top of their revenues
3. Monitor & analyze their financial performance
4. Extract detailed accounting & compliance reports

We combined different technologies to make sur the whole flow is covered.

Who are our customers ?

Today, big brands and content platforms want to leverage their network pushing NFTs offers. They are the ones holding relationships with relevant IPs and are not only incentivized to create new experiences for them but kind of forced to as web 3 is turning relationships between creators and fans upside down letting them own part of the IP in exchange of financial investments.

They need to offer better experiences to their creators/artists.

So the first natural market to target are :

1. Strong B2C brands (Retail, Luxury, Art)
2. Studios (Universal, Warner), content driven platforms (Jellysmack, Youtube, Spotify) and distributors/aggregators (Sothebys, UTA)

How ?

Today, most of brands see NFTs as part of their marketing strategy (and studios don’t have the technical expertise (handling wallets, minting smart contracts, handling cryptos) to create NFT experiences.

So they hire NFT studios or ask their advertising agencies to com up with creative solutions or partner with native web 3 brands in collaboration.

1. NFT agencies (Rarecubes, NFTstudios, UNXD, Newteam, Inrift, 22...)
2. Advertising agencies offering NFT services (Publicis, WWP, Havas, BETC...)
3. Big brands launching NFT projects with native web 3 brands to leverage their community of fans (Adidas x Bored Ape, Alexander Mcqueen x The Dematerialized)

Those agencies/studios tend to handle all the web 2 brands’ wallets (therefore the private keys of their clients) and handle, track, report incomes manually. (yes, it’s the farwest ;))

We will distribute Nilos via those agencies/studios as it is both a selling argument for their clients and a huge value prop for them.

This is phase 1 : Nilos is the proxy wallet you need to enter the market.

We believe that as the market get structured and more companies join the space, we will see more abstraction and less complexity with :

• NFT agencies that scale as shopify/verticialzed dapps (Arkania, Mojito)
• NFT widgets that help brands build engagement layers (discord communities, redeem experiences etc..)
• Advertising agencies buying NFT studios or using existing platforms to launch projects
• Verticalized metaverses

And this is when things become really interesting.

We believe it will unlock the web 3 creator economy : brands/creators/freelancers building businesses and careers on top of web 3 platforms (dapps) using their wallets as financial bank accounts. (Nice article about it by JP at Felix)

• Agents/solo agencies/consultants onboarding their network launching on dapps
• Web 2 small & medium brands that launch web 3 offers (Think about DNVBs in web 2)
• New web 3 native virtual brands/entrepreneurs (RTFKT, The Fabricant, Satoshi Studio…)
• Independent artists/creators building on top of metaverses (virtual real estate designers, virtual artists, virtual influenceurs…)
• Web 2 freelancers/service creators that will shift to address new needs coming from web 3 businesses (discord moderators, NFT drop strategists, specialized crypto lawyers..)

This is phase 2 : Nilos becomes a neobank for web 3 entrepreneurs.

If you’re a studio/communication/advertising agency working with brands/creators/artists helping them entering the metaverse, please reach out, would love to learn more.

Eytan Messika, Co-Founder at Nilos