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

The Madeira archipelago in Portugal is seeing 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 tech sector accounts for about 30% of the island's businesses, a considerable increase for an economy traditionally driven by tourism.

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

Cointelegraph attended the event held at the Funchal Cultural and Research Center (CCIF) for the second consecutive year. The main conclusions of the conference are described below.

Traditional game studios are quietly embracing blockchain, avoiding buzzwords

game companies exploring blockchain technology faces backlash from gamers and developers, leading some studios to stay away from Web3-related buzzwords.

Redcatpig, a traditional game studio, encountered obstacles when adopting blockchain features in its games. CEO Marco Bettencourt highlighted the difficulty of getting the startup's 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 that there is new technology. We all know about NFTs and proprietary technology. And you won't sell games using buzzwords. [...] Players don't need to know what Web3 or blockchain is. 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 non-fungible token (NFT) skins and drones, which can be exchanged and purchased in-game with fiat currency 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 equal

During the event, Subvisual's head of venture and strategy, Alexandre Mendes, provided key insights for Web3 startups raising capital. According to him, startups seeking funds must take into account that “not all money is equal.”

Startups need a clear strategy on what types of investors they are looking for and how they will participate in governance. "So to block or not to block, to grant rights, to carry, are very strategic and demanding issues that we must be more aware of," Mendes said.

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

Many founders often don't know who they are building for, Mendes said, adding that some projects are more of a technology demo than a product. "This brings us to what we're trying to build here: is it a technology demo 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 advantage for technology companies is its free trade zone, which offers companies tax benefits, including one of the lowest corporate tax rates in the European Union and an exemption from capital gains tax.

"For companies wishing to establish a presence in the region, the main tax incentive is found in the Madeira free zone or the International Business Centre. This zone offers a preferential tax regime, limiting the corporate tax rate to a competitive maximum of 5%." Gouveia told Cointelegraph, emphasizing that the region is not an offshore paradise, but rather operates under a set of regulations and guidelines to stimulate Madeira's economic growth.

Madeira is developing a payments network aimed at connecting local merchants and facilitating 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 throughout the archipelago. The same card system is also planned to be used to streamline government operations, including the distribution of public benefits such as scholarships to residents.

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