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NFTs 2021 blockchain capital

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NFTs 2021 blockchain capital

  1. 1. When Consumer Meets Crypto 2 02 1 kinjal Shah Blockchain Capital @_kinjalbshah //01
  2. 2. Macro Trends
  3. 3. "The internet enables niche in a massively powerful way." Ben Thompson //03
  4. 4. Creator Economy Becomes a Reality Creators are becoming SMBs Broad platforms no longer working well for niche communities Estimated to be 50 million internet creators1 in 2021, a decade into the industry 1. Source: 5ignal Fire //04
  5. 5. Monetization models are broken Creators are underpaid relative to the value they generate for internet platforms 97% of YouTubers1 don’t make enough to reach the US poverty line Models like Patreon and Teachable distribute value to creators, but not users participating in these networks 1. Source: Influencer Marketing Hub //05 YouTube Views Income (estimated) 1K $2-10 10K $20-100 1M $2-10K 5M $20-100K
  6. 6. Internet censorship on the rise At tech continues to become a regulated industry, censorship on the rise Software is not apolitical Parlor banned by Apple & Amazon Web Services WallStreetBets banned by Discord Trump banned by Twitter What’s next? //06
  7. 7. Why crypto?
  8. 8. Why crypto? are aligned with economics own & participate in networks become programmable Creators… Users…. Assets… //08
  9. 9. Platformless Media //09 Platforms Creators Creators Creators Creators Creators Creators Users Users Users Users Users Users Platforms Creators Creators Creators Creators Creators Creators Users Users Users Users Users Users Platforms Platforms Platforms Platforms Platforms serve as rent-seeking intermediaries Creators and users engage directly, platforms will be constrained
  10. 10. NFTs, Social Tokens & more Non fungible tokens (NFTS) Unique digital assets that are tradable Art, collectibles, gaming items, media, ENS domains + more - Open source and open data standards - powerful network effects - Programmability of assets - Provable digital scarcity SOCIAL TOKENS Assets that derive value from the networks of shared communities Social tokens are a subsector of NFTs, leveraging web3 to monetize and grow communities PLATFORM GOVERNANCE TOKENS Assets where holders can participate in platform decision making via a governance system //10
  11. 11. What can you do with NFTs? Creators Examples: • generate recurring income through music streams • raise money to fund future projects • incentivize your community with shared ownership M O N E T I Z E Y O U R W 0 R K W I T H P R O G R A M M A B I L T Y Users Examples: • access to communities, limited edition items and more • participate in community related decisions • build social status with digital goods O W N S T A K E I N Y O U R F A V O R I T E B R A N D S , C O M M U N I T I E S A N D C R E A T O R ' S //11
  12. 12. How do tokens have any value? Valuing Physical Stores of Value Cultural Relevance Scarcity Credibility Utility Social Status C a r s , c o l l e c t i b l e s , a r t Subjective Price Discovery § Liquid secondary markets aid in price discovery § Market participants set price based on subjective evaluations § Over time a robust set of standards, brands and reputations will emerge P e e r p r e d i c t i o n , m a r k e t p a r t i c i p a n t s //12
  13. 13. What are some example use cases? $ E S S A Y $ F W B B E E P L E N B A T O P S H O T Official NBA Licensed Digital Collectibles Allows users to own top “moments” in NBA $100M+ in sales in first 6 months Launched Everyday Collection on NFTY Gateway Partnership with Christie’s Auction House $3.5M in primary sales Raised ~10ETH to write a community-owned, crowd funded essay on Mirror 35% retained by writer, 10% distributed to token holders Friends with Benefits private community on discord for token holders Place to source and contribute content and ideas Market Cap of $150M //13
  14. 14. Markets Today
  15. 15. How big is the market today? 350M+ in Volumes 1M+ NFT Sales 1M Addresses holding NFTs //15
  16. 16. Weekly volumes reach ATH //16 1. Source: The Block
  17. 17. Crypto art approaches $200M //17 1. Source: Cryptoart.io
  18. 18. Collectibles on the Rise //18 1. Source: The Block
  19. 19. //19
  20. 20. Slicing the opportunity Sneaker (Re)sale Marketplace 1.75B Valuation Estimated $30B in sales by 2030 Art as an Asset $64B in sales Online sales make up 10% Unique Marketplaces Art as an Asset Class Secondary Transactions Secondary gaming transactions are an estimated $50B market //20
  21. 21. Market infrastructure is early Tools Issuance & Exchanges NFT Discovery Price Discovery Creator Support Growth Layer 1 Protocols NFTs //21 NFT Financial Products
  22. 22. NFTs Landscape NFTs Tools Exchanges & Platforms Discovery Price Discovery Creator Support Growth Protocols //22 NFT Financial Products
  23. 23. Business Models + Economics EXCHANGE INFRASTRUCTURE FEES PROGRAMMABLE FEES TOKENIZED NETWORKS Primary and secondary market transaction fees Enterprise SaaS model or tokenized Recurring revenue generation via smart contracts Token value accrues as network effects grow and users participate in platforms //23
  24. 24. Trends to Watch
  25. 25. 1. Infrastructure build out 2017 – Present 2021+ Marketplaces Layer 1 Protocols NFT Issuance Community Management DAOs / Governance Platforms Identity / Reputation Financialized NFTs Dev tools Analytics Curation Tools What else? Primary Focus //25
  26. 26. 2. NFTs as a distribution channel Incentive Mechanisms Fans as a Flywheel § NFTs can be used to retroactively distribute tokens to communities, as a way to reward early support § Creators use NFTs as a way to prefund projects before launching, giving early buyers additional ways to capture value § Tokens can be used to incentivize access, attention and user behavior § As fans become financially tied to a creators’ success, they become the advocates § Fans more than anything, become a flywheel for growing the network effect of a community base § NFTs are a mechanism to distribute the value, but structured to improve upon network effects //26
  27. 27. Mainstream Creators e.g., Portugal the Man 3. Digital experiences elevate NFTs § Early adoption of NFTs will be centric to new creators. It’s difficult to walk away from a successful platform to risk it for something unproven § NFTs are developing their own subculture, across art as well as other types of media § Crossover into mainstream will be fast but infrastructure needs to scale Digital Native Creators e.g., Logan Paul, Miquela Crypto Native Creators e.g., Crypto Punk //27
  28. 28. What do the skeptics say? NFTs have no utility NFTs are a medium, not a new asset NFTs can just be copied & pasted NFT value is subjective, similar to how owning art signals status or taste. Some NFTs are used to play games, while others are visual. The market prices based on what they are willing to pay NFTs may look like another GIF, blog post or game skin. The difference – you own it. You can trade it, sell it or engage in other ways. Mona Lisa can be copied and pasted. Songs can be covered. Black markets exist for virtually every luxury brand. Does this mean the original loses its value? //28
  29. 29. Additional Resources Primers: • Intro to NFTs • Social Token Review • The Skeptics Intro to Crypto Art • Market Map Stay Up to Date: • Forefront • Zima Red • Crypto Art Pulse • Metaversal • Jamm Session Research & Analysis: • Creators, Communities and Crypto • Crypto & Music • Creators as a Crypto Primitive • Exchanges • Ownership Econmy /29
  30. 30. Thanks! kinjal @ blockchaincapital dot com REACH OUT! blockchaincapital.com @_kinjalbshah //30

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