Galaxy Ventures investor is banking on the blockspace business model

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Blockspace opportunity may be bigger than the crypto market realizes

There’s a lot of fluff in the crypto industry — and a lot of bets being made in one area or another every day. But one sector that’s rarely talked about, is one that Galaxy Ventures is banking on: blockspace.

Last month, Will Nuelle, general partner at Galaxy Ventures, penned a follow-up post on the “Business of Block Space,” after his initial piece on the topic in November 2023.

Nuelle expects blockspace to become the market segment that generates the “the 2nd most Gross Profit after exchanges.” Blockspace is one of the four largest areas (alongside software-as-a-service, exchanges, stablecoins and lending) for product-market fit in crypto today, he said.

Blockspace is created by a number of entities, ranging from businesses and companies to decentralized networks and public blockchains like Bitcoin or Ethereum. In general, blockspace is being sold to consumers every 12 seconds, Nuelle noted.

In 2023, users paid about $3 billion to consume blockspace, Nuelle said on the Talking Tokens podcast. “That’s a real business model.”

 (Listen in on Spotify, Apple Podcasts or YouTube.)

Ethereum makes up about 90% of annual market share for blockspace, with the other 10% coming from chains like Binance, Polygon, Avalanche, Arbitrum and Optimism, Nuelle noted in his report.

Blockspace is “the third most important thing people are buying in our market today and people don’t really talk about some of the dynamics that are involved with that business model,” Nuelle said on Talking Tokens. “It’s a worthwhile effort to look under the hood and understand how it really operates.”

Check out the next section for more details and the full episode.

The latest Talking Tokens podcast 🎙️

For this week’s Tuesday episode, I sat down with Will Nuelle, general partner at Galaxy Ventures.

We discuss the firm’s current investment strategy, what he looks for in startups, the importance of block space and how he’s viewing crypto payments, among other topics.

Talking Tokens episodes are released on Spotify and Apple Podcasts at 6AM EST or YouTube at 10AM EST every Tuesday and Thursday. Listen in!

Make sure to subscribe to keep up with the latest episodes. Feel free to leave a review and tell us your thoughts.

Monitoring blockchains

Looking at some of the biggest developments onchain.

• The Open Platform (TOP) invested in a gaming company, Akedo Games, to expand the Telegram-based TON blockchain web3 gaming ecosystem

• Speaking of TON… Here’s why TON Applications Chain is creating an L2 with Polygon CDK matters

• Aptos Labs launched its keyless wallet application Aptos Connect to simplify user onboarding

Taking on the tokens 

The total crypto market cap increased 1.74% in the past 24-hours to $2.34 trillion. It is up 10.9% over a 7-day period.

As for the largest cryptocurrencies by market cap…

These metrics were taken prior to publication Tuesday morning EST.

Other numbers we’re eyeing…

• $10.6 trillion — that’s BlackRock’s asset under management during Q2, a new high that some credit its spot bitcoin ETF playing a big role in

Money and people moves

Latest updates on crypto startups that secured funding and industry players who are starting something new.

1. Paul Brigner joins Coinbase as its head of Coinbase Institute

2. Tether hires former Chainalysis Chief Economist Philip Gradwell as its new head of economics

3. Bitcoin mining firm Ionic Digital announces John Penver as its new chief financial officer to help drive its IPO

4. Mason Nystrom departs Variant Fund to join Pantera Capital’s investment team

5. Blockchain payment network Partior raises $60m in Series B round (DL News)

Talking points for the road 

Here’s some headlines and topics that you can talk about at your next dinner party, crypto event or on a first date to look smart (results may vary.) 

1. BlackRock CEO Larry Fink: I believe bitcoin is a legit financial instrument (CNBC)

2. Trump Picks J.D. Vance for VP—As Predicted by Crypto Bettors (Decrypt)

3. Trump’s Speech at Bitcoin Conference Will Mark a Pivotal Moment for Crypto (CoinDesk)

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Please note that this content is for informational and entertainment purposes only. Any views shared should not be considered financial advice, nor should it be used to make investment decisions. Cryptocurrencies are high risk and you should consult a financial professional before making any financial decisions. Make sure you do your own research. We may have a direct or indirect financial interest in content mentioned in this newsletter.