Blockchain technology has already made a lasting impact in numerous areas within the media and entertainment industry. With the sector often struggling with IP infringement, navigating a wealth of data, and royalty payments, the entertainment sector has been searching for ways to integrate Web3 technologies to create more efficiency and transparency.
However, due to the often complicated nature of blockchain and difficulties with mainstream adoption, entertainment companies have struggled to embrace Web3. A company looking to bridge the gap between entertainment industries and blockchain solutions is Morningstar Venture’s portfolio company, Ethernity – a builder-friendly Layer 2, enabling global entertainment franchises to bring their intellectual property (IP) on-chain.
This month's review will cover Ethernity, its recent mainnet launch, various product features, fundraising, and more. The review will also end with an analysis of the project and outline its strengths and challenges.
What is Ethernity?
Initially launched as an NFT marketplace, Ethernity has evolved into a comprehensive ETH Layer 2 platform featuring enhanced AI-driven security. This allows global entertainment franchises to integrate their IP on-chain. As part of the Optimism Superchain, Ethernity uses Optimism’s OP Stack to provide enterprise partners and consumers with an efficient, cost-effective, and secure experience.
The platform's infrastructure is enhanced by Ethernity Intelligence, an AI-driven security protocol that ensures protection for digital assets on the chain. By merging scalability with AI security, Ethernity offers a solution to facilitate the entertainment industry’s transition to decentralized technology.
By leveraging its infrastructure, Ethernity positions itself as the premier choice for global brands to transition their franchises onto the blockchain. The project has already collaborated with famous names like Lionel Messi, Shaquille O'Neal, and the Muhammad Ali brand and now continues to work with notable names within the wider entertainment industry.
Since its launch, the project has gained significant traction, boasting a community of over 500K followers across its social channels and reaching 635K testnet transactions in the last 14 days.
Products
Mainnet Launch
The Ethernity Mainnet launched on October 29th, with Phase 1 involving the rollout of a Permissioned Mainnet for early development partners and flagship applications. This phase allows selected users to deploy products on Ethernity, supported by an AI-powered security layer known as Ethernity Intelligence to protect digital assets.
Several projects across various sectors, including real-world asset tokenization, decentralized finance, and Web3 ticketing, are ready to launch during this stage. Participants in Phase 1 will benefit from advanced security features and a scalable Layer 2 infrastructure for efficient and cost-effective transactions. Interested developers can apply for access, explore documentation, and join the community to get involved.
AI-Powered Copyright Protection
Ethernity Intelligence is Ethernity’s AI-driven Digital Rights Management (DRM) Protocol, developed to protect brands' intellectual property. Designed to secure copyrights and prevent infringement, this protocol leverages AI to analyze and detect unauthorized usage of IP on-chain, offering a robust solution for safeguarding brands and licensed content.
Through similarity scoring and proactive monitoring, Ethernity Intelligence ensures that brands can bring their assets to the blockchain, knowing they are protected.
NFT Marketplace & Farmers Market
The Ethernity NFT Marketplace platform offers authenticated, licensed digital collectibles from top brands, athletes, and artists worldwide. Within the Marketplace, the Farmers Market is a unique reward protocol where users can engage in exclusive experiences, earning access to digital collectibles and real-world assets (RWAs).
The Farmers Market bridges digital ownership with physical rewards through mystery box drops, limited-edition releases, and special promotions, giving the Ethernity community tangible value alongside their digital assets.
Arcbound
Arcbound is an upcoming comic series developed with contributions from Tom Hardy, Scott Snyder, and Frank Tieri. Snyder, known for his work on Batman and Tieri, who is experienced in the Marvel Universe, will provide narrative expertise. At the same time, artists Ryan Ottley, Dan Panosian, and Ryan Smallman will handle the illustrations.
Arcbound Issue #1 will launch in comic book stores across the US in November 2024.
Fanable by Ethernal Labs
Fanable is a platform that digitizes physical collectibles and utilizes blockchain technology to ensure secure ownership. It aims to address issues like authenticity and security in the collectibles market by providing a process for tokenizing items. With a focus on mobile accessibility, Fanable allows users to trade and manage their collections and offers features such as collectible loans and exclusive drops.
The team is already running community campaigns on the Fanable X page and plans to launch the app in Q4 2024.
OxLoans
0xLoans is a peer-to-peer lending platform that operates on both Ethereum and Ethernity, allowing users to borrow and lend digital assets. The platform enables asset owners to use their holdings as loan collateral while lenders can earn interest. By facilitating direct transactions, 0xLoans aims to improve liquidity in the digital asset market and provides a decentralized option for asset utilization, catering to various users in the digital asset ecosystem.
The team is currently working towards the platform launch - also set for Q4 2024.
Token Economy - $ERN
The $ERN token is essential to the Ethernity ecosystem, supporting various platform activities. It is considered the privilege token for Ethernity's digital asset collections, allowing users to interact with products built on Ethernity Layer 2 with reduced fees.
$ERNs features include:
- Fixed Staking: Users can lock $ERN tokens for a set period to earn rewards, which supports the network and provides additional $ERN to stakers.
- Liquidity Pool Staking: $ERN can be used in liquidity pools on decentralized exchanges. Liquidity providers earn a share of transaction fees, enhancing the liquidity and stability of the $ERN ecosystem.
- Stones Farming: Users can engage in stones farming to earn rewards through specific strategies using $ERN within the DeFi space.
Governance through DAO Voting
$ERN holders can participate in governance through a DAO, allowing them to propose and vote on decisions shaping the future of the Ethernity ecosystem. This fosters a decentralized and community-driven approach.
Team and Fundraising
The team was founded by co-founders Nick Rose (CEO) and Marcel Pham (Chief Engineer). Since its inception, the team has grown to around 20 core team members working from Los Angeles and other parts of the globe.
In March 2021, Ethernity raised $2.8M in a strategic round with participation from us at Morningstar Ventures, as well as, GBV Capital, Spark Digital Capital, Woodstock Fund, and others.
Recent Announcements and Partnerships
At the beginning of September 2024, Ethernity launched a $10 million grant program to foster innovation in the entertainment and creator economy through its Layer 2 blockchain solution. This initiative is designed to support developers, founders, and startups by providing financial assistance, mentorship, and business resources for projects that align with Ethernity's mission to transform digital entertainment.
The program focuses on several key areas, including:
- Games and Entertainment Products
- Blockchain Infrastructure
- DeFi Tools
- Digital Assets
- Educational Outreach
People can apply globally by submitting detailed project proposals, with grant recipients gaining financial support, mentorship, technical resources, and opportunities for further investment. Learn more about the program: ➡️ here
Analysis
Strengths:
- Growing Entertainment and Media Market: The entertainment and media sector will reach $3.4 trillion by 2028. This immense market opportunity provides Ethernity with a landscape for growth and innovation. By tapping into this industry, Ethernity can leverage partnerships with iconic brands and influential figures, thus attracting a diverse user base for integrated digital experiences.
- Strong Brand Partnerships: Ethernity's existing collaborations with renowned names like Lionel Messi and the Muhammad Ali brand position it favorably within the marketplace. These affiliations enhance the platform's credibility and create exclusive content and offerings that can drive engagement. Moreover, such partnerships can lead to unique marketing opportunities, attracting fans and collectors who want to participate in the ecosystem.
- Diverse Product Ecosystem: The variety of products being developed by both the Ethernity team and selected third parties provides versatility to the platform. By supporting projects in gaming, entertainment, and social finance (SocialFi), Ethernity encourages creativity and innovation. This multifaceted approach ensures the platform can cater to different user needs and preferences, fostering a vibrant community of developers and users.
Challenges:
- Scalability Concerns: As Ethernity's platform gains more traction, it may encounter scalability issues commonly faced by many blockchain networks. Ensuring consistent performance and transaction speeds as user demand grows is critical. Additionally, differentiating its Layer 2 solutions from other competing L1 and L2 networks will require strategic developments and unique value propositions that can sustain interest and usability.
- Legal and Technological Barriers in Onboarding IPs: Onboarding intellectual properties (IPs) to the Web3 space poses significant challenges due to legal complexities and technical limitations. Many IP owners may be hesitant to enter the blockchain domain due to concerns regarding copyright, ownership rights, and the implications of smart contracts. Addressing these issues necessitates Ethernity to establish clear frameworks and partnerships that simplify the onboarding process, providing reassurance to IP holders about the legality and safety of their digital assets.
What’s Next for Ethernity
The team just launched on Mainnet and will be working on onboarding new users. Furthermore, Ethernity has three projects, Fanable, Arcbound, and Oxloans, to launch in Q4 2024, further expanding the project's ecosystem.
Learn more about Ethernity
🌐 Official website: www.ethernity.io
🐦 Official Twitter: x.com/EthernityChain
🕹️ Discord channel: discord.com/invite/ethernitychain
📖 Marketplace: marketplace.ethernity.io
