The crypto world moves fast. Blink, and you miss a transformative revolution… or an extraordinary collapse. Reservoir's decision to shutter its NFT API services just two months after a $14 million Series A round has left many scratching their heads. Is this a sharp strike in the direction of a greener, more equitable future? Or does it expose a very expensive concession to failure in the convoluted NFT infrastructure space?

Did VC Money Cloud Judgement?

Let's be blunt: $14 million is not chump change. That’s the sort of capital infusion that should propel more expansion, not cause a strategic backpedaling. Especially with heavy hitters like Union Square Ventures and Coinbase Ventures getting involved. Were these investors just wholly uninformed about the condition of Reservoir’s NFT sector? Or were they shown a glass half-full scenario that went over the real challenges beneath the surface? Or worse, did they know it was winning the Relay race, and just betting on a different horse anyway?

The timing stinks. It is additionally breach due diligence and transparency to the core. The popular “move fast and break things” mantra in Silicon Valley should give all of us pause. Is it causing investors to normalize ignoring the essential building blocks of a long-lasting company? Reservoir had some $1.5 billion of VC money at its disposal. Rather than laying the thoughtful, monetizable groundwork for an NFT infrastructure business, did it pursue a short-lived fad?

Relay: Saviour or Shiny Object?

Reservoir is betting big on Relay—stressing its ability to simplify token swaps, bridges, and purchases across chains. Sounds impressive, right? Let’s not overlook what became of the hopeful crypto projects that were going to save the world, only to leave behind a pile of rust.

The allure of Relay is understandable. The promise of blockchain-based seamless interoperability is the holy grail of the blockchain world. The competition is fierce. Well-known competitors, including LayerZero, Wormhole, and several others have already hit the ground running down this very path. What makes Relay so special? What competitive edge does it have that will enable it to not merely compete, but prevail?

Creating a successful cross-chain infrastructure is no small feat. It takes more than technical expertise, it takes strong collaborative relationships, a regulatory framework with the right level of flexibility and, most critically, user adoption. Can Reservoir pull it off? Only time will tell. Turning from a small niche NFT API service to a large new token infrastructure play seems like a dangerous pivot. It’s like replacing your trusty old shovel with a lottery ticket.

Coinbase & MetaMask: Left Holding The Bag?

Reservoir's shutdown leaves a significant gap in the NFT infrastructure landscape, particularly for companies like Coinbase and MetaMask, who relied on their services. Although Reservoir is providing great help with the transition to Alchemy and Sequence, this is not in any way a smooth process.

It’s now up to Coinbase and MetaMask to choose their next steps. They can go home and figure out custom solutions, work with other best-in-class providers, or reduce the scope of their NFT ambitions. In the long run, such disruption would be felt in user experience, transaction fees, and the overall competitiveness of their platforms.

This situation highlights a critical vulnerability in the decentralized web: the reliance on centralized infrastructure providers. The Web3 movement is rooted in the principles of decentralization. Yet today, too many applications are still at the mercy of a handful of companies for these essential services. The exit from Reservoir is a particularly poignant reminder. With market forces, strategic pivots and even bankruptcy looming around every corner, these providers are not immune. To us, it should be interpreted as a demand for more diversification and redundancy across the web3 ecosystem.

What will Coinbase and MetaMask do? Will they double down on NFTs, looking for or developing something better suited? Or will they simply choose to accept that the NFT hype train has left the station, and quietly retreat from their plans? This is a crucial time, and how they choose to act here will have long-lasting implications for the future of NFT adoption.

As with all corporate matchmaking, Reservoir’s move will be measured by its execution. If Relay becomes a dominant force in the cross-chain world, then this move will be hailed as a strategic masterstroke. If Relay falters, then Reservoir will be remembered as another cautionary tale of a company that chased the next shiny object, leaving its customers and investors in the lurch.

Let's not forget the human cost. Behind every corporate decision are real people – employees, developers, users – who are impacted by these shifts. I really hope Reservoir has gotten ahead of this and mitigated the impact on these people. They need resources to succeed and continue leading the way. Ultimately, success goes beyond dollars spent. In the end, that really is what it’s all about—the lives you save.