In Berlin, the crypto ecosystem is looking for a second wind

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In Berlin, the crypto ecosystem is looking for a second wind

Considered one of the European cradles of crypto, the German capital has lost ground somewhat in recent years. It is banking on its cluster of developers and its 'fintech' culture to make a comeback.

"Settle in, the drinks are here, it's going to start in a few minutes!"

No time to dawdle this Friday afternoon on the third floor landing of Berlin's "Build Station". The building is teeming with people. After weeks of work, the participants in the hackathon organised on site by the protocol Solana teams are going to present their new products and innovations.

The atmosphere is festive. Between techno music and the sound of bottle-openers 🍻 , the last start-uppers are fine-tuning their presentations, until "Chris", the master of clocks.

"Come on, that's it, let's go, let's move on to the moment you've all been waiting for, the pitches!"

Wearing a flashy yellow jumpsuit, Chris is the head of SuperTeam Deutschland, Solana's development team in Germany (funded by the Solana Foundation). "We have the best ecosystem," he chuckles with a big smile.

A dozen projects are due to perform this snowy afternoon. There's everything from decentralised finance applications, collections of NFTs, (non-custodial) wallets and so on.

Each of them has about ten minutes on stage, with a question-and-answer sequence.

The projects follow on.

Aside from Daniel Kelleher's (pictured below) Sunrise Stake, which proposes a system in the ReFi, for "regenerative finance", linked to the climate, the projects are not stunning.

You could feel it in the room.

Daniel Kelleher (Sunrise Stake)

"Any more questions? Are you sure?", Chris tries on stage to try and keep the attention of the few hundred or so people on hand. "Okkkk, I ask for a round of applause for Daniel." It'll be a few (big) applause's.

As the introductions roll on, attention wanes inexorably, until the aperitif when, there, everyone wakes up. 😅

"This kind of event is important, people are together, they see each other, they work, but nothing extraordinary ever comes of it", admits Dan, a beer in hand. "That's actually kind of the problem," he adds.

This observation is made by other participants on site. "There's a lot of energy, it's great, but how many of these projects are really going to emerge?" asks Tilo, who is working on a collection of NFTs based on Solana. "Honestly? I don't think there will be many."

It's hard to prove him wrong, so gimmicky can some of the projects seem...

An ecosystem searching

This mixed mood, between euphoria and realism, is a bit like the Berlin ecosystem that The Big Whale discovered over several days (it's only a first trip).

As in most major European cities, there are plenty of initiatives, projects being launched (there are more than 100 Web3 start-ups in Berlin alone), but there's a slight sense of disillusionment, and not because of the Bear Market that has plunged the markets.

To understand this feeling, which we don't feel in Neuchâtel, Paris or London (read our report 👋 ), we need to go back a bit in time to what Berlin represented just a few years ago in crypto.

For if some have forgotten, the German capital is the birthplace of several must-have projects, such as Ethereum, which is now the second largest blockchain on the planet. A real source of pride for the local ecosystem.

"Berlin is a city that's a bit out of the ordinary in the crypto world. There's a different culture and history," explains Barnabé Monnot, who works for the Ethereum Foundation and has lived in Berlin for almost two years.

"The vast majority of people who work here are more developers than business specialists. We have less of that marketing culture," he adds. Un euphémisme.

With Barnabé Monnot (Ethereum Foundation)

In Berlin, one should indeed not expect to see well-known crypto companies, with clearly identified figures. "Here, it's not like Paris where you have Ledger and Sorare who are stars," confirms Jonathan Nute, one of the co-founders of the W3Fund investment fund, which has invested in a dozen crypto projects (Pile, Senken, Spirals, etc.).

The ecosystem is less structured and more fragmented. "The dynamic comes from the protocols, not the companies, so there are sort of chapels. You're from one community or another," explains Jonathan Nute.

Part of the team at the Ethereum Foundation, which is completely decentralised, is based in Berlin. At the time of writing, we still haven't been able to visit their office 😅. "It's a bit of a mess, and we like to work quietly, out of sight", a member of the team tells us.

According to legend, the Berlin offices still have the mattress on which Vitalik Buterin, the co-founder of Ethereum, allegedly slept for months in 2016... Quite a relic!

Ethereum isn't the only protocol to have been developed in Berlin. This is also partly the case for Polkadot, Cosmos and Solana, which has large teams on site and organises numerous events, such as the aforementioned hackathon, to try and get projects off the ground.

But which projects stand out in Berlin today?

"There aren't that many," explains Paul Bramas, ecosystem manager at Kyve, a decentralised solution for storing blockchain data. The Berlin-based company raised $9 million in 2022 and is one of the projects to watch.

Most German Web3 companies, like Bison, are more focused on Munich, Cologne or Stuttgart where there is that business approach. "Frankfurt is the city where you find quite a few projects linked to decentralised finance," explains Jonathan Nute.

Betting on Tech

In fact, Berlin's great strength lies in Tech.

It's no coincidence, moreover, that funds with a local presence, such as Greenfield One, are betting heavily on it. "It's important to have applications in Web3, but you also need to create solid foundations, and that involves protocols," explains a member of the fund, which has raised a $160m vehicle in 2021 and has invested in the Near and 1Inch protocols.

Jonathan Nute (W3Fund)

Some people in Berlin think that the centre of gravity of the European ecosystem could gradually shift back to the German capital. At least in part.

"With the Bear market, there is less money and we are returning to the fundamentals of the sector, i.e. protocols and technology, which is a strong point of Berlin," explains Paul Bramas.

"Projects without too much interest are not funded", adds Jonathan Nute, who is also counting on the arrival of several heavyweight players from the traditional economy to "bridge the gap" when the markets take off again.Berlin can thus count on the arrival of some heavyweight players in the Web3 ecosystem.

This is particularly the case for N26 and Trade Republic. "Cryptocurrencies have become a must-have topic for our customers," explains Thanasis Noulas, head of data and engineering at German investment app Trade Republic (find his interview below).

Sufficient to give it a second wind? That's what some people are hoping.

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