Published on: 09/06/2022

Solana invests $100M in South Korean web3 startups to foster crypto, NFT businesses

Following the collapse of Terra (LUNA) ecosystem last month, Solana Ventures and Solana Foundation made an investment of $100 million in South Korean web3 startups in an attempt to enter the crypto game developer sector.

The fund aims to support the goal of creating a blockchain that is suitable for gaming, non-fungible tokens (NFT), and decentralized finance (DeFi) projects. This is similar to the $100 million gaming fund Solana Ventures launched last November with cryptocurrency exchange FTX and Lightspeed Ventures.

Solana Labs General Manager of Games Johnny B. Lee also said that Solana would also support Terra-based platforms, which were abandoned after Terra’s sudden crash.

Solana competing for South Korea’s $1.6B Web3 business

Netmarble, NCSoft, and Nexon are some of the world’s largest gaming companies in South Korea. The country is also a major trading market for cryptocurrencies, with exchanges such as Bithumb and Upbit handling billions of dollars in daily trading volume.

The $100 million investment fund from Solana will be used to develop NFT, gaming, and DeFi projects on the network. With this initiative, the blockchain project is expected to compete with several other major protocols that are already present in the South Korean market.

“A big portion of Korea’s gaming industry is moving into web3,” Lee said. “We want to be flexible; there’s a wide range of project sizes, team sizes, so some of [our investments] will be venture-sized checks.”

Solana Foundation Head of Communications Austin Federa also added that “the fund will be backed by capital from the treasury of the Solana community”.

For example, Solana, which announced a $100 million investment this week, is competing with Polygon (MATIC), Avalanche (AVAX), and other smart contract platforms to hire Korea’s orphaned crypto engineers. Due to Terra’s bankruptcy in May, which erased billions of dollars in assets, it is unclear how many people will return to Terra’s ecosystem.

Currently, Open Sea NFT is the largest NFT marketplace in the world in terms of transaction volume. Solana claimed that it was set to surpass Open Sea NFT soon. This initiative came as the blockchain sought to become a major player in the fast-growing NFT market.

Crypto gaming in South Korea

South Korea’s gaming sector was worth more than $15 billion in 2021. There are already several South Korean platforms that feature NFTs or DeFi, including Klaytn layer-1 blockchain and Upbit exchange. With organizations seeking grants, the Solana Foundation said it expected interest in crypto gaming and decentralized finance to grow in the country. Developers of blockchain games in Korea will receive substantial assistance from Solana with the investment fund.

Lee predicted that in the second half of 2022 more “high-quality and fun games” would launch on the Solana blockchain. He asserted that these games might change the perceptions that play-to-earn games are not enjoyable.

NFT trading and DeFi transactions by Solana have increased significantly in recent months. DappRadar, a decentralized app (Dapp) tracker, reported that Solana’s top NFT marketplace, Magic Eden, was the world’s second-largest NFT market with 35,526 daily traders and $7.31 million in daily trading volume.