Newsletter: Brands in Web3 & Web3 in Brands #16

This week: Poldadot enters the sports sponsorship race with $2.1 million IndyCar deal, a 11,196-year sentence for Theodex founder Faruk Özer, Solana trolls Ethereum in hilarious attack ad, and composer Hans Zimmer creates an anthem for Tron.  

Web3 on Wheels: Polkadot sponsors Indy500 driver in $2.1 million deal

It was recently announced that IndyCar driver Conor Daly will be competing in the upcoming Indianapolis 500 in a Polkadot-branded car. Of course, this is not the first time that a Web3 brand has ventured into the world of sport. In a data blog we published earlier this year, we found that 14 of the 20 Premier League teams and five of the 10 F1 teams currently have at least one Web3 sponsor. What makes this one a bit different from most of the others, however, is the strong focus on decentralization and community governance. Rather than being financed by a company or individual, the $2.1 million needed to finance the sponsorship is being allocated directly from the Polkadot Treasury, with the budget for the deal needing to go through Polkadot’s OpenGov process and be ratified by a referendum of DOT holders.  

‍

‍

In pitching the idea on the Polkadot discussion board, the sponsorship was described as an opportunity to “make history and create a lot of media buzz (especially in North America) around being the first democratic and decentralized funded contract with NO one person or middle person being involved thus highlighting some of the benefits Polkadot (the network) provides.” This was a theme echoed in the sponsorship announcement video posted to Daly’s social media channels. Daly says that “Polkadot is like the Swiss-army knife for that new internet that allows anyone, anywhere to help build things and contribute to a freer, more open web”. But more than half of the 2:18 video is devoted to explaining the governance process that led to the deal being signed, with Daly exclaiming that “it was an amazing experience going through the OpenGov format” and that “it took about a month to get through the system”. The car itself features a wraparound banner on the aeroscreen above the cockpit that reads “Secured by DOT” and a decal reading “Fast Blockchain Innovation” along the side.

‍

‍

It’s a matter of taste, but I think the car looks quite cool and distinctive. The Pokadot logos are prominently placed and easily readable and the color really pops on both the car and Daly’s firesuit. However, I do find it odd to focus on the governance process that led to the deal rather than the advantages of Polkadot itself. If the goal is to appeal to a wider audience not so familiar with Web3, is governance really the most compelling opening argument?

‍

In terms of media coverage, so far the response has been relatively muted save for a handful of articles in a few US Indycar websites like Indystar and INDYCAR and crypto trade press websites like CryptoSlate and Decrypt. In this respect, the $2.1 million price tag for the agreement would seem like a relatively big outlay, but we will need to wait till after the race in May to have a better understanding of the full impact.  

11,196-year sentence for Theodex founder

In the United Kingdom, the average length of a life sentence is about 15 years, whereas in Germany it is closer to 20 years. In the Istanbul Superior Court earlier this month, Faruk Özer, the 30-year old founder of collapsed cryptocurrency exchange Theodex, was sentenced to a 11,196-year prison sentence. Charged with defrauding more than 2,027 investors out of approximately $43 million in assets, his sentence is roughly 448 times higher than the 25-year sentence Sam Bankman-Fried received following the collapse of FTX. We all know that tech millionaires are excited about advancements in the field of longevity, but I doubt it will be enough for Faruk.   

So why was the sentence so high? Incredibly long sentences have become a notable occurrence in Turkey since 2004, when the death penalty was abolished in an effort to gain accession to the EU. In addition, Turkey has had a complex relationship with Web3 in recent years. The country initially embraced Web3, announcing plans for national blockchain infrastructure in 2019 and piloting a central bank digital currency two years later in 2021. However President Erdogan was also concerned about the effect of cryptocurrency on the domestic fiat currency, the Lira. An unorthodox economic policy of keeping interest rates low in the face of rising prices gave rise to the type of hockey-stick graph that no economist or citizen wants to see, with inflation spiking to above 80% in 2022.

‍

‍

Years of inflation had seen the popularity of cryptocurrency explode in the country, as users flocked to them as a way to try to protect their assets and savings. In April 2021, Erdogan announced that he was “at war” with cryptocurrency and later that year in April, the Central Bank of Currency issued a law banning the use of crypto for payments, although it remained legal to hold them. 

Without making any assumptions about Özer’s case, the experience of Turkey shows that cryptocurrency adoption is sometimes a symptom of economic malaise in the traditional economy as citizens look for alternatives, and that simply banning the symptom, doesn’t solve the problems.

‍

Just what the doctor ordered: Solana community release hilarious Ethereum attack ad 

After a rocky period of outages, breaches and online speculation which had caused token value to crater, things are looking up for Solana again, with SOL up 431% over the past year. And in true crypto fashion, it wasn’t long before the gloating began, with Solana community members releasing a very polished troll video taking aim at the Big Daddy of the blockchain space, Ethereum.

‍

In the opening seconds, we are introduced to Dr. Fomo McMoon, a doctor examining a patient with a mysterious affliction known as “ETH-Maximysis”. Symptoms include an allergy to any wallet that isn’t Metamask, believing that whitepapers are fully functioning apps, and a constant need to wear extra layers of clothing. The cure? You guessed it: migration to Solana, where we are told that devs can create “actual consumer dApps and not just whitepapers”. 

Shared simultaneously online by a handful of Web3 personalities like Dan Held earlier this month, it is not entirely clear who is behind it, but you have to admire the execution. A concept that sounds a little forced and contrived on paper comes across brilliantly on screen, which is a testament to the quality of the script, the talent of the actors, and the skills of the editors. Whatever about the accuracy or otherwise of the claims made in the video, one of the funnest aspects of this industry is being able to understand and enjoy the in-jokes in this type of content.    

‍

Hans Zimmer composes Tron anthem for Justin Sun

If you are not a Hans Zimmer fan, you are not a movie fan. Responsible for some of the most iconic scores and music in Hollywood history on blockbusters like “Gladiator”, “Dune”, “The Lion King”, “Rainman” and “The Dark Knight”, he is quite rightly regarded as a titan of the industry. Which makes his decision to write an anthem for blockchain network Tron all the more bizarre. 

Described as a song for the Web3 generation and titled “The Tron Anthem”, the track comes in at just under 3 minutes in duration and has many of the hallmarks of a Zimmer composition, including wistful choral chanting, dramatic percussion, and a catchy, repeating signature melody. And this publicity stunt has all the telltale signs of Justin Sun, featuring a round of interviews comprising vague, verbose, aspirational quotes and little detail about financials. Besides writing a large cheque and hoping it didn’t bounce, it’s not clear what else Sun did to warrant receiving naming rights alongside Zimmer for the track, but as a former WTO ambassador to Grenada and aspiring cosmonaut, we all know he is multi-talented. 

‍

Sun did not publish the cost of commissioning Zimmer for the project or even confirm that he was paid at all for his work. Given that his past exploits include paying $4.57 million to have lunch with Warren Buffet and buying five tickets to space for $28 million, I think it would be safe to assume that there may have been some money involved. Describing the rationale behind the anthem, he explained that “Hans’ unparalleled creativity and influence make him a natural ally in our quest to harness the power of music to not only showcase who we are but also to attract diverse talents and capabilities to the Web3 ecosystem.” 

‍

For his part, Zimmer was also keeping it very general when explaining the collab. In a quote for CoinTelegraph, he stated: “Everything that the Western world certainly is built on is a legacy code of the Industrial Revolution. Our education systems are built around that, our government is built around that etc. And once the internet happened, I don’t think we really knew how to use it. I think we need to free ourselves from those philosophies and those restrictions.” 

‍

Well… that clears up everything then. Let’s be grateful he wasn’t asked to write any lyrics for this anthem. At least we know that he is fluent in the language of the cryptosphere, as this ponderous, socio-technical rhetoric attests.

‍

Sun remains embroiled in legal battles after being charged in March 2023 by the US regulator, the Securities and Exchange Commission (SEC), of violating securities laws by paying celebrities like Lindsay Lohan, Jake Paul and Soulja Boy to promote TRX without disclosure of their compensation, and for manipulating the price of the TRX token through “extensive wash trading”. Sun has denied the accusations, stating in an X post that they “lack merit”, and arguing that the SEC lacks the jurisdiction to prosecute foreign defendants.