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GM. This is the Milk Road, the 'Google Maps of crypto.' (We help you find your way).

Here’s what we got for you today:

SONY IS LAUNCHING ITS OWN L2 🎮

Legacy companies getting into the blockchain space can feel, err…gimmicky.

And on the surface, Sony’s recent announcement of its very own Ethereum L2 (‘Soneium’) is flashing all sorts of warning signals…

Check out this quote from the opening line of the press release, where they describe the L2 as:

“[A] next-generation blockchain ecosystem designed to invoke emotion and empower creativity.”

But as we continued to read, we came across the ‘Values’ they’re looking to build upon – the third of which was this:

“Go Mainstream – Creating a world where everyone uses web3 technologies…”

That piqued our interest, because Sony is very well positioned to do that through its gaming division.

So we did some digging… ⛏️

And now that we have a bigger picture, we think there could be more to this than just hype – here’s why:

1/ The early warning signs

ICYMI: Japan is all in on web3. The country’s Prime Minister, Fumio Kishida, spoke at a web3 conference last year, stating: 

“A major Japanese company will announce an ambitious large-scale project that will create a valuable economic zone in the metaverse.”

Take that → pair it with Sony’s NFT patents → add the recent news of their standalone L2 (now on testnet) → the $100k grants being offered by Soneium, and the breadcrumbs not only lead in Sony’s direction, but suggest they’re taking this march into web3 seriously.

(Hell, you know a company means business when they get the Prime Minister involved).

2/ Secondary sales = Console makers’ white whale

For whatever reason, console makers have never been able to break into the secondary market – but it’s not for lack of trying! 

In 2013, it was reported that Microsoft was going to lock the use of physical discs to player accounts so it could get a cut of secondary sales, which nearly tanked the release of the Xbox One. 

(And rightly so, that’s a crappy deal).

Instead of trying to break into an existing secondary market (where someone has to lose in order for them to win), Sony has the opportunity to create a new one (where everyone benefits). 🆕

By letting players collect in-game items for free (as per usual), while adding the option to sell them on a Sony-operated blockchain, players can take the lion's share of secondary sales revenue, while Sony makes it up on overall volume / network fees.

(Win / win).

3/ Network effects = Moat

XBox had a 4 year lead on Sony in the online-play space (2002 vs. 2006), helping them to break into the market and sustain a presence with a much smaller game library.

By establishing a large network of games that support play-to-earn features, Sony could carve out a similar edge against its competitors. 🎯

…the big sticking point with this whole theory is, mainstream gaming companies have struggled to add web3 functionality to their platforms without infuriating their player-base.

So what can Sony do to avoid the pitfalls of other gaming companies?

Short answer: Keep it quiet.

Long answer: Don’t say “crypto,” don’t say “web3” – and whatever you do, don’t say “NFTs.”

This is an infrastructure play, and all great tech infrastructure is designed to be invisible! 

Everyone uses AWS, Azure, and Google Cloud infrastructure just by browsing the internet – but very few are aware of it. 🧐

Blockchain infrastructure within Sony’s gaming and entertainment ecosystem should do the same.

(Unless getting yelled at by nerds is your thing, @sony?).

🥛 Milk Road take: It's awesome that Sony has decided to build in crypto! 

…but then again, so did Instagram, Twitter, and Starbucks – and none of those initiatives survived.

There is a very high chance that this goes absolutely nowhere, and exists simply because a blockchain company (in this case, Optimism) has paid them to do so, like many other web2 companies before them.

That said – we hope we’re wrong!

$TON’S OUTAGE (AND ITS NEW OPPORTUNITIES) ⛔

They say bad news comes in threes, which suggests Telegram and its associated $TON blockchain could be in the clear from here on out…

Over the past week:

Now, we know that when the sh*t is hitting the fan, the last thing anyone wants to hear is “hey bud, chin up – think of this as an opportunity to grow.”

…but we’re going to be those guys. 🤩

Cause – annoying or not – it’s true. Unseen problems are always going to arise when building new technologies, and now that these problems are known, they can be solved.

Don’t believe us?

Look at Solana – they’ve been dragged into court by government bodies, had all sorts of memecoin-driven TPS stress tests, alongside a series of major outages.

And they’ve not only been able to survive, but grow and improve throughout it – lowering their outages over time:

Plus: Solana has engaged Jump Crypto to develop a new/faster validator to (hopefully) stop these outages all together. ⚡

Now, it’s worth acknowledging that all of this is much easier said than done, and this process will be measured in years, not months (or, say, the time it takes to lay it out in a newsletter).

But with solid execution, and a bit of luck, we’re hoping $TON can follow a similar path.

CRYPTO SECTORS TO WATCH IN THE BANANA ZONE 🍌

Kyle Reidhead joins us on today’s episode of The Milk Road Show, as we dig in to the crypto sectors best set up to surge in the approaching ‘Banana Zone.’

(Are they in your portfolio?) 🤔

PLUS:

Enticing, no? Click below to stream it on your favorite platform! 👇

YouTube | Spotify | Apple Podcasts

BITE-SIZED COOKIES FOR THE ROAD 🍪

DAppscout offers a fast and secure way to explore and interact with top apps on your favorite blockchains. Whether you’re swapping tokens, bridging assets, or diving into DeFi, DAppscout makes it simple and safe. *

Donald Trump has launched a new series of NFTs priced at $99 each. This follows a previous release that saw significant sales, with each NFT granting holders access to unique experiences such as virtual meet-and-greets and other Trump-themed perks.

Hamster Kombat, a popular Telegram-based game, has announced that its first token airdrop will take place on September 26. The airdrop will distribute 60% of its tokens to players, marking a significant step in the game's ongoing development​.

OpenSea's CEO has confirmed that the company has received a Wells notice from the SEC, signaling potential enforcement action. The notice is part of the SEC's ongoing scrutiny of the NFT marketplace and its operations.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.