Blockchain is fueling this emerging tech hub in Portugal: Madeira Blockchain 2023

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The Madeira archipelago in Portugal is witnessing the birth of a startup hub focused on emerging technologies, such as blockchain and artificial intelligence. Rogerio Gouveia, finance secretary of Madeira’s regional government, says the technology sector represents approximately 30% of the island’s businesses – a considerable increase for a traditionally tourism-driven economy.

The local tech community is behind the Madeira Blockchain Conference, a two-day event to promote startup networking and discussions about how blockchain can be used to solve real-world problems.

Cointelegraph attended the event held at the Cultural and Research Center of Funchal (CCIF) for the second consecutive year. The conference’s key takeaways are outlined next.

Traditional gaming studios are quietly embracing blockchain, steering clear of buzzwords

Gaming companies exploring blockchain technology are facing backlash from players and developers, prompting some studios to steer clear of Web3-related buzzwords. 

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Redcatpig, a traditional game studio, encountered hurdles in adopting blockchain features on its games. CEO Marco Bettencourt highlighted the difficulty in getting the startup team to explore the potential advantages of integrating blockchain into game development.

Although the studio has been working on the technology, it has avoided buzzwords. “We all know there is new technology. We all know about NFTs and proprietary technology. And you won’t sell games using the buzzwords. […] Players don’t need to know that it is Web3 or blockchain. The only thing they need to know is that if they buy a skin, they own it, and they can sell it tomorrow if they want,” Bettencourt said.

In 2024, the company will launch its first blockchain-based game, offering nonfungible token (NFT) skins and drones, which can be traded and purchased in-game with fiat or cryptocurrency.

Mauricio Marques, CEO of Yacooba Labs, which organizes the Madeira Blockchain Conference. Source: Ana Paula Cointelegraph

Is your startup raising funds? Not all money is the same

During the event, Subvisual’s head of ventures and strategy, Alexandre Mendes, provided key insights for Web3 startups raising capital. According to him, startups looking for funds must bear in mind that “not all money is the same.”

Startups need a clear strategy of what types of investors they are seeking and how they will participate in governance. “So lockup or not lockup, vesting, carry, these are very strategic and demanding topics that we need to be more mindful of,” said Mendes.

Mendes also explored the “infinite dilemma” of launching a token and building a product at the same time. In his opinion, not every project needs a token. “We don’t always need a token. […] the amount of startups that launched a token successfully and then failed to ship the product is quite significant.”

Many founders often don’t know who they’re building for, Mendes said, adding that some projects are more a technology demonstration than a product. “This brings us to what we are trying to build here, is it a technology demonstration, or are we really trying to build a company?”

Madeira bets on startups to strengthen its economy

Madeira is embracing new technologies by offering key incentives for startups. One of the perks for tech companies is its free trade zone, which offers companies tax benefits, including one of the lowest corporate tax rates in the European Union and a capital gains tax exemption.

“For companies aiming to establish a presence in the region, the foremost tax incentive is found in the Madeira free zone or the International Business Center. This area offers a preferential tax regime, capping the corporate tax rate at a competitive maximum of 5%,” Gouveia told Cointelegraph, emphasizing that the region isn’t an offshore haven, but instead operates under a set of regulations and guidelines to spur Madeira’s economic growth.

Madeira is developing a payment network aimed at connecting local merchants and easing currency exchange for tourists. This network, currently in the feasibility study phase, is expected to run on blockchain technology, allowing tourists to load funds onto a single debit card for use across the archipelago. The same card system is also planned to optimize government operations, including the distribution of public benefits like scholarships to residents.

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