Seven years after Tyler and Cameron Winklevoss financed their cryptocurrency, the Gemini empire, they are signing the latest documents for the first $ 400 million investment round, which will increase the value of the parent company Gemini Space Station in New York to $ 7.1 billion.
The rivalry between the twins and Facebook CEO Mark Zuckerberg initially looked like a turtle-hare race, but now the distribution of power seems to be changing.
The investment led by the capital management giant Morgan Creek Digital, in which the financial company ParaFi Capital and others participate, paves the way for a possible final fight between the twins and their main rival Zuckerberg. And also the fight against the very idea of so-called “walled gardens”.
Walled gardens are user data that large companies such as Facebook own and profit from.
Dozens of blockchain startups, which amassed more than $ 4 billion, set up battlefields for the clash last month to shake the concept of walled gardens by building a virtual, holographic version of the augmented reality Internet called metaversion.
Anyone can build and earn in an ideal meta version. While Facebook, Epic Games and other giants have decided to build their metaversion to ensure that the billions of people who are already creating value for their companies’ shareholders continue to do so in their corporate virtual universe.
“There are currently two parallel paths when it comes to technology,” says Cameron Winklevoss, 40, from his home in California. “There is a centralized variant, such as Facebook or Fortnite, which is just a step away from the metaversion, and that’s perfectly fine. But there is another option that is decentralized meta-understanding, one where there is more choice, independence and opportunity, and where there is technology that protects the rights and dignity of individuals. “
The New York-based company Morgan Creek contributed $ 75 million as part of the capital increase. General Partner Sachin Jaitly has become the third member of the Gemini Board of Directors, alongside Tyler and Cameron Winklevoss.
Other investors who are expected to participate in the fourth largest capital increase in the history of cryptocurrencies include rapper and mogul Jay-Z, Marcy Venture Partners.
The brothers are expected to retain a 75 percent stake in the company after the investment, and their combined net worth will nearly double.
This is not the first time the brothers have fought Zuckerberg. Rowers who grew up in Greenwich, Connecticut, became famous other than in 2008 Olympic gold. Two years later, Columbia Pictures released David Fincher’s The Social Network, which tells the true story of how they hired their then-classmate Mark Zuckerberg to build a social network for university students, and he basically stole their idea.
After a protracted legal battle that largely focused on who founded Facebook, the brothers agreed in 2011 to a meager $ 65 million in Facebook stock and cash.
In 2013, however, the brothers spent about $ 11 million buying one percent of all existing bitcoins. They transformed their newly discovered passion into a licensed stock exchange in an area that became famous as the Wild West of Cryptocurrencies. The duo excelled in attracting accredited and credible investors who wanted to abide by the letter of the law.
Since last year, the New York company’s annual revenues have increased by 600 percent, and according to the company’s spokesman, Gemini is well on its way to ending this year with a profit.
Although the spokesman did not give the exact numbers, he claims that the largest revenues come from the Gemini cryptocurrency exchange, which charges active traders a fee of 0.6 percent for transactions of less than half a million dollars and less for higher amounts. Cameron says the company, with 600 employees and offices in London and Singapore, will have a thousand employees by next year.
This is where history begins to repeat itself. As a seeming relief to Gemini, Mark Zuckerberg launched Libra in 2019, its own attempt to use basic blockchain technology. A consortium of potential cryptocurrency users, including MasterCard, PayPal, Stripe and Visa, briefly committed to creating technology that would link the cryptocurrency to national currencies, including the US dollar and the British pound.
Shortly afterwards, however, the group largely disintegrated due to concerns by U.S. lawmakers over a Facebook-led initiative that so controversially sold influence over its users’ behavior to other dubious companies.
In the third act of the story, which lifted the curtain in November 2019, the brothers bought the Nifty Gateway, an irreplaceable asset marketplace that now forms the building blocks of a metaversion that helps accumulate value to otherwise easily copied digital objects.
While the promise of billions remains the main vision, less demanding digital markets, often with fewer licenses, are still winning. According to the CoinGecko website, Gemini is the eleventh largest stock exchange in the world, and among these stock exchanges, a relative newcomer such as FTX has just made an investment of $ 900 million with an appreciation of $ 18 billion.
Within the virtual world of The Sandbox, the brothers also bought virtual land on which they want to build the first of many virtual locations, similar to the cryptocurrency exchange on the website, only three-dimensional. “Instead of building stone branches of banks in the real world, we will build them in various Gemini meta versions where you will be able to enter and trade,” says Tyler Winklevoss.
Instead of an advertising-based model that has proven lucrative for social media companies and fruitful for misinformation and political interference, most metaversions will require a tiny amount of cryptocurrency to run other decentralized applications.
The greater the demand for these tokens, the higher their price, which will increase the value of the same currency that users now own. This will allow users to accumulate wealth instead of shareholders.
As the currency of these networks grows at a steady pace and assets such as a new pair of digital boots, a flaming sword, or a custom avatar can be issued as unsaleable tokens on public, transparent blockchains, users are more confident that their digital asset market will not be flooded, on the one hand, the freedom to take their NFT elsewhere.
If all this sounds too much like science fiction, it’s good to realize that in addition to billions of dollars, proven top online games are also moving into the meta-version. Perhaps the most similar business model has worked for Epic Games, which sells its centrally issued digital currency, v-bucks, to buy game accessories and weapons at Fortnite.
In April, Epic CEO Tim Sweeney announced a $ 1 billion investment round to expand into a meta-version. According to StrategyR, the online gaming industry is expected to reach $ 55.7 billion by 2027, and Sweeney called the meta-revolution a billion opportunity in a recent report.
To make matters worse, Zuckerberg again followed his old employers from college. In October 2021, he renamed Facebook Meta. Although there is little detail, Zuckerberg seems to be following a similar path as his Libra. According to him, metaversion is supposed to stimulate a massive independent creative economy. Both Microsoft with value and Nvidia with value quickly rushed with their own meta versions.
The difference is that while big technology companies are trying to avoid obsolescence, Winklevoss are investing in startups that assume these technology giants are redundant now.
While Zuckerberg continues to follow the Winklevoss brothers from one industry to another, they closed the circle earlier this year by investing in social media for the first time. In September, Winklevoss Capital contributed a $ 200 million investment to the DeSo (short for “decentralized social”) blockchain.
In an industry where reach is directly proportional to value, Facebook, Twitter, LinkedIn, Reddit and most other mainstream social networks seem to have an unbeatable lead. So far, they are the embodiment of walled gardens. DeSo hopes to solve this problem by building a shared infrastructure on which everyone can create their own social network.
150 projects are already being created on the blockchain, including eight social networks and a meta version. “It is very easy to identify the problems of existing social networks and platforms. However, there are not many solutions yet, “says Tyler. “We believe that crypto offers that solution, so we will continue to invest through Gemini Frontier.”