Twitch co-founder Justin Kan is in the process of launching a new crypto e-commerce startup.
- “The crypto arm of noted venture-capital firm Andreessen Horowitz led a $14-million funding round for Rye, a new e-commerce application programming interface that lets merchants, stores, and customers transact openly and with minimal fees,” says CoinDesk.
- The platform will have its own crypto token that the founders are hopeful will become independently popular.
- The backers believe that this new platform will be popularized by low transaction fees.
- “Rye and its venture capital backers hope that their Rye token will become a popular—and valuable—cryptocurrency itself, used to provide participants with redeemable rewards similar to the industry’s already popular cash-back programs,” says Forbes.
- “Whereas Shopify charges 2.4% to 2.9% per online transaction, in addition to subscription and per-transaction charges, and Etsy takes 6.5% of transactions, as well as a listing fee, Rye’s founders claimed that by structuring as a token protocol, they’ll be able to eventually make money despite offering far lower fees in the fraction of a percent range,” Forbes continues.
Why it’s important
Rye’s success could prove that there is still innovation and potential in the crypto space, in spite of the ongoing crypto winter—this time when cryptos have sunk to new lows.
As we previously reported, crypto is facing a bitter season as the value of major currencies like Bitcoin and Ethereum suffers. Bitcoin has lost 70.8% of its value since November 8, 2021. Venture Capital for crypto dropped 50% in the past quarter.
Additionally, the federal government has decided to begin cracking down on crypto by demanding greater regulation.
The dip hasn’t convinced many crypto firms, who intend to forge ahead. Many are simply changing direction. The last quarter still raised $3.3 billion in venture capital, which affords investors opportunities for expansion.
Rye’s developers see the possibility of finding new applications for using crypto. If they succeed, they may help give crypto a new lease on life.
“Rye will offer a one-click application programming interface for merchants to display some or all of their products on Rye’s own marketplace. Rye will offer that directory in turn to developers, to embed within their own sites and apps. With those items viewable and purchasable across in the internet through Rye’s tools, the company would effectively create an internet-wide directory of purchasable products, reminiscent of how much of the world’s music is made available on streaming platform Spotify,” says Forbes.