Unbounded Capital’s 2022 year in review and 2023 predictions

Unbounded Capital recently published its 2022 year in review and some predictions for 2023.

I read the whole thing and was so impressed that I decided to write this recap for CoinGeek readers.

If you haven’t done so, read the Unbounded Capital 2022 review by Zach Resnick and David Mullen-Muhr.

The long-term value creation thesis is paying off

Unbounded begins by reiterating its stance that long-term value creation is the goal. It never bought into the zeitgeist of ‘crypto,’ and so, as the market collapsed in 2022 and the so-called blue chip players fell from grace, Unbounded Capital and its investors were largely shielded from the chaos.

Anyone who has listened to either Zach Resnick or anyone else from the company speak will already know they have the big picture firmly in mind. It’s all about micropayments, scaling, and creating real companies that deliver value. The token pump and dumps and broken tech that characterizes the industry are of no interest to these guys, and that’s already starting to pay dividends.

We understand that being contrarian in a money-grab environment is difficult. However, value is not created overnight. We are confident over the long term this approach will outperform.” – Unbounded Capital 2021 Year in Review

How are Unbounded Capitals’ BSV portfolio companies performing?

HandCash

The review cites the partnership with Circle to process USDC on Bitcoin SV (BSV) rails as the major development of the year. This has been successfully tested in a beta environment and will soon go live. Unbounded says this will be pivotal in bringing in the tens of millions of USDC users, making it much easier for BSV companies to onboard them.

The report also cites UX improvements and strides with ConnectSDK, making it easier for developers to build BSV applications. Unbounded expects many more developers to launch companies using the HandCash developer suite in 2023 and beyond.

Haste

2022 was a year of growth for Haste in terms of both its product offering and user base. It became a true Instant Leaderboard Payout arcade with new game offerings and third-party games built using its SDK.

Haste also introduced elements like Player Card and Game Collectible non-fungible tokens (NFTs) that can be bought, sold, and traded. On top of this, the firm experienced solid growth in its TakeIt NFT platform.

The review describes Haste founders Dan Wagner and Joe DePinto as “visionary entrepreneurs” and predicts an extremely bright future for the company. Unbounded Capital believes in Haste so much that it’s allocating funds from its Fund II to its latest seed round.

UNISOT

According to the latest news from both the EU and the U.S., UNISOT may be one of the few companies in the world with existing products in compliance with EU and U.S. regulations related to supply chains, including the FDA Food Safety Modernization Act.

With the efforts of nChain and the blockchain firm’s determination to showcase BSV companies and products to their extensive network of business leaders, the future looks bright for UNISOT as nChain has taken particular notice of them. 2023 could be a “turning point” for the firm, according to Unbounded’s report.

Xoken Labs

Xoken may not be a company BSV users have heard of, but it builds crucial tools and cutting-edge solutions essential to BSV’s scalability. Unbounded sees the tools eclipsing AWS scale and expects a surge in demand for them as the overall demand to use the BSV blockchain grows exponentially in the coming years.

One customer for Xoken’s tools could be nChain itself. Unbounded believes the tools will soon be recognized as key parts of the “ideal Bitcoin node software.” It describes Xoken as well-positioned to play a dominant role in the future.

RUN/Aldea

By most metrics, RUN became the most successful token protocol on BSV in 2022. By itself, it surpassed Ethereum’s transaction volume (400M+). However, that did not translate into significant revenue for the company.

As a result, RUN rebranded to Aldea and is launching a new layer one blockchain. It hasn’t launched yet but is scaling well in a test environment, thanks in no small part to utilizing elements of Bitcoins UTXO design.

The original RUN protocol remains open source and is available on BSV today.

DXS

Unbounded is so excited by DXS’s trading volume, which has already surpassed $4 billion, that it allocated new funds from its Fun II to the company.

The report describes DXS as operating “relatively under the radar” while improving its product. However, this will change when it launches USD-denominated trading in Q1 of 2023.

Unbounded expects trading volume to increase significantly in 2023 and sees huge potential for the company’s SaaS solution to help businesses, potentially including exchanges and settlement networks of all kinds, track and settle transactions.

Tokenized

Unbounded Fund II recently invested in the Tokenized seed round. The founders have a clear vision of what the world will look like a decade from now: most assets of value will be represented on a public database, and they intend to position Tokenized to take advantage of that.

In 2022, Tokenized won HandCash as a customer. Unbounded says it is certain there is no competitor in the same league as Tokenized. It’s excited to see some of the leading companies in asset tokenization become customers in 2023.

PngMe

PngMe made a wise decision to pivot and focus the bulk of its efforts on enterprise banks in Kenya and Nigeria. Given the macroeconomic environment, this move “proved prescient,” according to Resnick and Mullen-Muhr.

The firm is finishing its integration with African bank Asba and is using that to drive its enterprise pipeline. What does that pipeline look like? It includes 11 of the largest banks in Kenya for a start. Unbounded is “incredibly bullish” on this company.

SLictionary

SLictionary was a new investment for Unbounded Capital in 2022. While the product is live, the firm is in “full product development mode,” according to the report. Changes will include a switch from MoneyButton to HandCash. There’s also an iOS app in the works.

Unbounded describes the long-term opportunity for SLictionary as “underappreciated,” citing that Wikipedia is the 7th most visited site on the internet but has failed to capture any of that value. SLictionary can succeed where Wikipedia has failed.

Frobots

Unbounded invested in Frobots in 2022. For those who don’t know, it’s a modular NFT battle bot game that is best described as “e-sports for coding.” The product is live in beta and is now being marketed to product testers.

A public version of Frobots will go live in 2023. Unbounded says that, while the game is exciting, the firm’s larger opportunity is the ability to create a micropayment-powered market for code. This is a market with “enormous potential which would impact virtually every industry in the world.”

Unbounded Capitals’ predictions for 2023

The continued decline of ‘crypto’

Unbounded describes 2022 as “devastating” for the so-called crypto consensus. Collapses and criminal charges grabbed the headlines, and they’ll continue to disrupt the zero-sum game ‘crypto’ has become. However, Resnick and his team believe this will be a net positive for investors in the long term as the market will shift focus to utility and real value creation.

The report notes that some of the biggest names were caught up in the fraud and failures of 2022, including Sequoia Capital, BlackRock, Tiger Global, and others. While it has been challenging for Unbounded Capital to maintain its anti-consensus position amidst a feverish crash grab, it has done so and has emerged unscathed with zero exposure to the worst disasters such as FTX, FTT, DCG, or Genesis.

All of this will have knock-on effects, such as investors being skittish on anything linked to blockchain in the near-term future, but Unbounded remains excited about the future of blockchain technology and its transformative effects.

BSV ecosystem will grow, thanks to USDC user influx

With the increased awareness of BSV’s power, the rapid growth of newly founded BSV companies is likely to continue in 2023. Handcash’s integration of USDC will speed up this process, bringing in new entrepreneurs and developers who need to be able to denominate in USD. DXS and SLictionary will also release their USD solution and products pegged to other fiat currencies.

Combining the extreme speed, efficiency, and scalability of BSV with USDC payments will be a boon to the entire blockchain sector. More HandCash users, thanks to USDC integration, leads to more incentive to build apps, which leads to more users, creating a positive feedback loop in 2023 and beyond.

Promising developments at nChain and major marketing pushes

nChain is one of the largest and most capitalized companies in the BSV ecosystem. Its approach has already dramatically shifted, taking on a more involved, accessible, and supportive form. This will benefit many of Unbounded’s portfolio companies.

nChain has set out a vision to leverage its extensive IP portfolio and work with major consulting firms to plug companies worldwide into BSV solutions and applications.

nChain has already made significant moves with UNISOT, and since this is an Unbounded Capital portfolio company, they’re excited to see what comes of this in 2023.

With the reduced friction in onboarding users, HandCash’s USDC integration will bring, Unbounded also sees a large marketing push by its portfolio companies. Multiple companies are specifically waiting for this development before spending ad dollars. 2023 will be a year of significant growth because of this.

A BSV breakout application

Due to all of the above, Unbounded Capital predicts that 2023 will be the year we see a breakout BSV application. It could be an existing app, but it could also be something that hasn’t been developed yet.

Unbounded predicts that HandCash itself, or one of its connected apps, could be the breakout application so many have been hoping for. Naturally, this would be extremely bullish for the entire BSV ecosystem.

Watch: Unbounded Capital Summit 2022 highlights