Over the past decade, our journey through the cryptocurrency ecosystem has been nothing short of a rollercoaster ride. We’ve weathered multiple bear markets, witnessed the dramatic collapse of Mt. Gox, navigated through the waves of Chinese crypto bans, rode the ICO and NFT crazes…

Add to that the amount of popcorn we consumed during the mighty year of 2022, stage to the collapse of a few of the most massive crypto companies, protocols, funds and exchanges (if you’re reading this you surely already know their names…). We can confidently say: we’ve been there, and done that.

We’ve never been just passive observers in this space; we’re entrepreneurs at heart. We’ve operated an exchange, invested in dozens of cutting-edge Web3 projects, and endured our fair share of rug-pulls, projects falling in pitfalls or being hacked. Some of our experiences have become legendary tales within ourselves and the larger crypto community. Indeed, it is always fun to talk about this time when a certain Vitalik told us that ETH was ready to get listed asap on the exchange in a meetup in Hong Kong, that time when Arthur Hayes told us about his views on KYC and relationships with regulators at the Bitcoin Association of Hong Kong launch meeting, or when we helped raising funds for the first ICO on Ethereum ever, TheDAO, and witnessing head first its downfall and rebirth after the infamous Ethereum fork of 2016. Some of us still have a digital scar of those prehistoric days for crypto :D

In our journey, we’ve had the privilege to collaborate with projects that have since become industry benchmarks. Along the way, we’ve built strong relationships with top-tier partners across various aspects of the crypto landscape, including D&A Partners, Solidant, and many others.

We’ve accumulated a wealth of knowledge about the do’s and don’ts in this ever-evolving ecosystem. We’ve refined our practices and gained the expertise needed to successfully launch and operate crypto ventures. This experience is precisely why, for the past two years, we’ve been dedicated to incubating and nurturing Web3 projects. We are grateful to have had the opportunity to work with outstanding teams building exceptional projects, such as Morpho, Mangrove, Anboto, Kairosloan or Playmakers.

We have always believed in the potential of this space, and our journey has prepared us to guide others through the exciting and challenging world of Web3.

After incubating first hand more than 8 projects over the past two years, Atka is now launching a new incubation program. Atka’s Web3 Incubation model goes way beyond just offering support to crypto projects.

We have designed a hands-on 6-month incubation program delivering to our cohorts the depth of the knowledge and network we have accumulated during our journey in this space.

It will begin with a thorough identification, selection and onboarding of high-potential and driven teams, that we will then embark on a transformative journey with Atka at their side, from Concept to Fundraising!

Why are we launching this new incubation program? Why now?

While the ongoing bear market presents immediate challenges, it also offers a unique window of opportunity to deliberate and meticulously craft the innovative use cases of tomorrow, allowing for a more thoughtful and strategic approach in the development of groundbreaking solutions.

On the one hand, many founders run into difficulties, which they often find hard to recognize. There are plenty of challenges to keep up with, some of which may be elusive or inadequately measured. Navigating these complexities, which range from funding constraints to market skepticism, can prove to be a demanding task that requires astute problem-solving and adaptability.

On the other hand, the bear market tends to shift the focus of founders from rushed developments in hope for rapid gains to conscientious building. It offers an environment conducive to patient and strategic entrepreneurship, enabling founders to lay solid foundations, refine their projects, and position themselves for long-term success. Additionally, managing to get relevant traction during these challenging times showcases strong market fit, which can only be extrapolated when the market eventually turns for the better.

From an early-stage investor’s point of view, assessing the viability of a project through a few due diligence calls can be very challenging. Condensed interactions can give only partial insight into the founders’ mindset and project’s potential, making it difficult to assess critical factors such as team dynamics, market fit and long-term viability.

Atka incubation program is the ideal solution to address these challenges.

In a similar fashion to what we’ve been doing for many years, we will assist projects to grow on strong foundations: structuring deals, project development, conducting market assessments, all while connecting founders with the right partners and investors.

What makes Atka uniquely qualified to run this program?

• The Atka team: all three founders have been deeply entrenched in this ecosystem for many years, boasting the kind of expertise that’s essential to relevantly support early-stage projects.
• Our Vision: we believe that crypto and blockchain technologies will foster a plethora of applications, some of which we have no idea about just yet. With a very open mindset, embracing a non-maximalist approach, dedicated to empowering a wide range of applications and use cases in the many relevant subject-matters, encompassing DeFi, gaming, infrastructure, social and a multitude of other sectors.
• Our track record : our many initiatives speak for themselves. Having previously overseen the development of a cryptocurrency exchange before founding Atka. Advised multiple corporates and startups. We also contributed to more than 50 projects as investors.

What’s the actual value proposition?

• A 6-month incubation period

The program runs for up to six months, giving projects enough time to refine their concepts, test their market, start expanding their team and strengthen their vision and roadmap. Throughout the incubation period, we set specific milestones and checkpoints to ensure that teams make tangible progress. These milestones ensure that only the most dedicated and promising projects make it through the entirety in the program, maximizing their chances of success.

• Max 5 projects per cohort

Only up to 5 projects are going to be incubated in each Cohort. At Atka, we prioritize quality over quantity. Our project selection and due diligence process is challenging and meticulous. Several stages of selection are planned to only keep the most promising teams. After selection, there’s a one-month trial period before the first milestone validation. It’s a critical phase for mutual alignment and success. By incubating only five projects, we concentrate our time and energy on what really matters for each individual project and make sure our startups receive the best guidance and resources to succeed.

• Up to $250k investment & strategic perks

Atka Incubator will deliver to each project up to $250,000 in investment. On top of this, Atka negotiated agreements with relevant service providers, such as crypto-friendly banking providers, community engagement platforms, law firms and more so that our incubated projects could get privileged access and better pricing.

• Access to our network of seed crypto investors

In addition to the investment from Atka Incubator, the projects will be introduced to our wide network of investors. Most of them have already participated in past fundraising rounds we have helped structure, and they trust us in our ability to prepare and structure projects in the best terms possible for every party involved.

What are we effectively going to help on?

@Teams: We won’t code for you, nor audit your code. We aren’t either marketing experts who will tell you how to write a twitter thread.

The best way to picture the kind of help we bring is to consider us as a mix of COO and CFO for hire, for the time of the incubation program. We get our hands dirty, participate in important partners or investors calls, comment and help improve your documents…

We will provide comprehensive assistance across multiple domains crucial for the projects’ success. This includes Operations & Administration, Finance, Legal, Fundraising, Strategy, Product, and Tokenology. With our wide-ranging expertise and extensive network of partners, we equip the teams with all the tools they need to thrive in the fast-paced and ever-evolving Web3 space.

What are the objectives of the program?

We are launching this program with the certainty that we can help our founders build their project on solid foundations. Considering and addressing these crucial points from the very beginning will ensure the robustness of the project in the long run. Here are some of the objectives of the program:

1. Market & Technology Assessment: In this phase, we define the target market, thoroughly analyze market structure and dynamics, and help create a precise product roadmap.
2. Project Structuring: Here, we focus on establishing the appropriate legal and operational setup, defining roles among founders and early team members, and mastering the legal and regulatory challenges specific to your project.
3. Deal Structuring: This step involves determining your funding needs and the required fundraising amount, setting sustainable valuation and deal terms, and outlining the relevant cap table or token distribution model.
4. Fundraising: We provide access to a network of relevant investors, conduct tests to gauge market conditions and investor appetite, and negotiate the most favorable terms for your project, ensuring it gets the support it needs to thrive.

What does the program contain?

Workshops:

• Weekly calls for project founders to discuss blockers and break through
• Bi-weekly themed workshops on vital topics like Operations, Fundraising, Marketing, and Crypto management

Workshops are led by the Atka team and our program mentors / launch partners. All of our mentors have significant XP in Web3, most of them as C-level / Founder.

Office hours:

• Weekly calls for each project with the full Atka team
• Additional calls on demand to address specific topics
• 1-to-1 mentorship sessions with one of our mentors twice a month

Founder-only libraries:

Resources accessible to the project on the topics of structuring & incorporation practices, contracts, banking set-up, wallet & treasury management, business plan & tokenomics, token distribution, hackathon organization…

Perks:

The program offers a series of perks which would fit the need of any Web3 project. From AWS credits to fast-track onboarding with reliable banking providers, from discounts on Notion startup plans to pre-negotiated terms with Web3 specialized law firms, we got you covered.

We will also organize several events to better integrate and support our projects:

1. Cohort Launch Day: An event in Paris where you’ll meet the Atka team and fellow Cohort founders, marking the program’s start
2. Hacker Day: A 1-day event for Atka’s incubation cohort to showcase their products and facilitate engagement with developers, users, community members and investors
3. Investor Day: Your opportunity to pitch your project to our extensive network of investors, opening doors to potential partnerships and funding

You’re doing all this by yourselves?

Of course not… To make this endeavor a success, we partnered with top mentors and ecosystem leaders. We have selected a range of launch partners that we have already worked with several times in the past. We vouch for each and every one of them and the quality of their services and products. These partners include investment funds for strategic guidance and introductions, technical and infrastructure providers for essential project support, and compliance and legal experts specializing in crypto assets. We’re also partners with strong marketing advisors and agencies to enhance project visibility.

That’s all folks! If you run a web3 project and you want to help to bring it to the next level, apply to join the next cohort by filling this form! ****

1. Bitcoin: a new growth driver, for corporates and nation states

Last September Bitcoin made its mark by becoming a legal tender for the first time in a country: El Salvador. Since then, the idea of adopting Bitcoin is becoming more and more present in different parts of the world and we can expect that in 2022, other countries will decide to take the step as well.

The adoption of Bitcoin by institutions will drastically increase its liquidity, taming its volatility. Indeed, the BTC asset has built up a well-oiled pattern where it needs less and less retail support to sustain its price. This is facilitated by its adoption as a national currency and as a store of value for big tech companies, but also because of the economic strategy of several nations in mining Bitcoin.

This strategy has been implemented by countries like Thailand or Sri Lanka, and others may follow. Ted Cruz declared that Texas had a substantial energy surplus and could welcome this kind of activity. In addition, it could be a viable solution to avoid wastage of energy, for example in the case of gas extraction and flaring.

In view of this potential, several major financial institutions such as Ark Invest have looked into the business model of Bitcoin mining. An interesting pattern shows large Bitcoin miners deploying facilities where energy is difficult to transport, usually making it cheap and optimizing the price per kWh.

Furthermore, using it could represent an interesting opportunity for remote areas such as North Dakota. Unlike other energy-intensive businesses such as server farms, BBitcoin production is a lot more predictable and less risky. Mining companies tend to have a higher tolerance for network downtime and low bandwidth.

Another interesting narrative is the Bitcoin institutionalization with the creation of ETF Futures type vehicles, which according to Messari will remain under 10% of the supply of Bitcoins in circulation in the next five years but one can still wonder if a Spot ETF type vehicle will also be authorised by regulators.

Moreover, this institutionalization of Bitcoin could open the door to more complex indexes integrating other digital assets including Ethereum.

2. Ethereum getting closer to mainstream use

2022 will be the year of Ethereum 2.0. The Ethereum network got highly congested over 2021, with cost of transactions skyrocketing and an increasing validation time. The bandwidth of the network remains about 15 tx per second. Eth2.0 consensus mechanism would replace the current network validators, i.e. miners, with proof-of-stake validator nodes. Thus, in December 2020, the backbone of Ethereum 2.0 was launched with the deployment of the beacon chain. It has been robustly battle tested for a year and the transition to a functional proof-of-stake Ethereum chain should be assured in the first semester of 2022, with the enabling of ETH transfers.

Today, some analysts like to describe the monetary policies of Ethereum as “ultrasound” thanks to the EIP-1559. With this update, a part of the network fees are being burned for each transaction. This allows for a better transaction fee estimate as well as a symbiotic relationship between ETHs, the network and its users and most importantly a decrease in ETH supply. EIP-1559 is a first step towards Ethereum 2.0 ($4.8bn worth of USD burnt at the time of writing) but it has not lowered the fees nor made ETH deflationary yet. In the end, ETH 2.0 might not have a direct impact on ETH price. Big players may already have priced the network update in. That being said, the progressive switch to Eth2.0 might finally make the Ethereum network usable on a larger scale, improving by an order of magnitude the cost of transactions and speed of the network.

In the meantime, new solutions are being rolled out to fill some of the gaps.

3. Most Ethereum transactions will occur on Layer-2 (L2) chains

Despite the multiplication of Layer-1 (L1) chains (~new blockchain networks), they are getting saturated by the ever increasing number of users. This is a good problem to have, and a number of solutions are being rolled out and battle tested.

Layer-2 (L2) blockchains have been implemented over the past couple of years. A Layer-2 refers to a network or technology that operates on top of an underlying blockchain protocol to improve its scalability and efficiency. They require a bridge between the L1 chain and the L2 chain. Once the asset has been bridged to the L2 chain, they inherit its enhanced features and parameters: mainly low gas and fast transactions. But these innovations also have shortcomings. For instance, several vulnerabilities were discovered on Polygon, and the blockchain could have been hacked millions of dollars worth of MATIC (its network token), because the current emphasis on scalability has sometimes come to the detriment of security and decentralization. We certainly expect other hacks or malfunctions on some L2 chains or bridges this year.

Other L2 solutions aiming at increasing the scalability of Ethereum include zero knowledge and optimistic roll ups. Simply put, zero knowledge proofs allow for the storage of data off-chain to reduce its size significantly. This reduces the necessary on-chain computation and validation, reducing time and gas costs for the validation of a block such as with the Starkware technology. Projects like Arbitrum or Optimism are betting on optimistic roll ups: transactions are validated and submitted in batches without performing any calculation, with a challenge period during which anyone can refute the legitimacy of the data contained in a batch.

Overall these solutions aim at offering an alternative ledger to interact on while staying compatible with the main Ethereum L1 chain.

A strong possibility is that by the end of 2023 that L1 transactions will account for only 20% of the total crypto transactions. The bulk of crypto transactions will occur on L2s, as they will have an important role in crypto scalability.

4. The Fat wallet thesis in a multi-chain world

We’ve been strong advocates for many years of the thesis of a multi-chain world where base layer blockchains consider different trade offs in terms of scalability, security and decentralization, to better fit certain use cases.

The idea of “Application specific blockchain” has been gaining some traction, with frameworks like the Cosmos SDK or Polkadot Parachains. We expect many new projects to launch their own chain, interconnected with the other by bridges. This should pave the way for new types of infrastructure projects such as Pocket Network to connect those chains.

As described in 3/, we expect that not only L1 to L2 transactions (->vertical transfers), but also L1 to L1 transactions will increase (->horizontal transfers), and even L2 to L2 transactions. Projects like Movr Network, CeBridge or Rainbow Bridge are already live to connect L2 EVM chains together, and we expect to see more projects taking into account horizontal & vertical crypto transactions.

We expect winning crypto wallet softwares to obfuscate the inter-blockchain interactions complexity. Wallets are becoming essential pieces of infrastructure for the global usability and access to the blockchain space. With the right business model and incentive structures, they will become highly profitable businesses as they become the venue to perform any crypto-operation (eg: purchase, swap, bridge). Each of these operation representing a potential revenue stream.

5. DAOs as a legitimate organizational model

This year will highlight DAOs and in particular the “organizational legos” system where tool protocols provide solutions. While this system has grown a lot, we believe many opportunities will emerge in 2022.

We will witness a net increase in the number of DAOs as well as contributors. They will gain legitimacy by obtaining a unique legal status and then become a model in their own right. In 2021, we have already witnessed some actions as in Delaware, but 2022 will bring a clear improvement in terms of regulation and thus accelerate its adoption by projects and users.

These DAO will collaborate together. In exchange for creating synergies, each will diversify their treasuries and cash flow. Collaboration between DAOs will be concretized through token swaps that will be voted on by each DAO’s governance and done in a transparent manner. Snapshot or PrimeDAO are offering new types of products and tools to enable collaboration and coordination, acting as service centers for DAOs.

That being said, we expect DAOs to face the most common issues faced by large organizations, such as decision-gridlocking and token-holder freeriding. Due to those behaviors, massive DAOs with unclear incentive alignment between token holders are bound to fail, while agile, use-case specific DAO structures would thrive.

It is becoming more and more important to consider a model of progressive decentralization. Different levels of involvement will be necessary for each parameter governed by the token holders. For example, a DAO building an NFT portfolio should have a different set rules and parameters than a DAO in charge of the development of a DeFi protocol.

6. NFT / Metaverse : from a speculative trend to sustainable applications

2021 introduced the concepts of NFTs and Web3 to the world as a new crypto narrative. The global trends were mostly focused on the digitalization of art, the creation of a new art market entirely and many interesting use-cases in the gaming space.

The NFTs and the Metaverse trends will not fade, those technologies are here to stay.

Actually, in some specific industries such as luxury, we think a key success factor for the incumbents will be their ability to sell digital native assets. Luxury-related NFT products combine the advantage of near-0 marginal cost and the clients need to possess something unique. We expect luxury brands to participate in the democratization of NFTs by facilitating access to this technology.

Convinced by the potential of the metaverse, some projects are going even further in the innovative use of NFTs by selling them as entry tickets: These objects will give access to a community, will allow to own the avatar of the NFT in the metaverse and to have access to clubs in the metaverse but also in real life.

As mentioned above, the second topic with a lot of potential is the metaverse, especially since Facebook announced its long term shift to building the metaverse and its rebranding into Meta.

The intersection of Gaming and finance is becoming a trend in its own right and we will have access to pure gaming blockchains in 2022 whereas 2021 was only the beginning.

For us, this is a sub-sector that we are watching with great attention.

Our crypto predictions for 2022 was originally published in CryptoStars on Medium, where people are continuing the conversation by highlighting and responding to this story.