If you’re like me, you were wondering why everyone’s talking about NFTs all of a sudden. TL;DR – it’s momentum and big sales. For me, it was this Daft Punk NFT that sold for ~$24,800 that clicked. This will forever be the first big Daft Punk NFT, and the owner has proof of this and can use it as a talking point if they display it in their home (or virtual home). There’s the LeBron NBA Top Shot that sold for over $200k, and this plot of virtual land which sold for $1.5M on the Axie Infinity game. The Cryptopunk collectible has now done over $35M in volume.
The infrastructure side took me a sec to understand. There are essentially collections, and tokens within them. They both have meta tags like name, description, media assets, etc. You can create collections and create, buy, or sell tokens. Doing any of these costs money, because all of it is recorded. Technically, there are two protocols. One allows collections to host duplicative tokens, where more than one (but a set amount) of the same item can exist and be owned by multiple people. The other protocol doesn’t allow this (every token is unique).
To participate, you first need a wallet, one of the biggest is Metamask, and there are newer ones like Rainbow. Worth noting for all of these here, there are many many alternatives. To create or mint a token, people are going to places like Rarible, Mintbase, Cargo, and Mintable which are four of the better known marketplaces to easily mint NFTs. When it comes to minting, the more technical you get, the more optionality opens up – for example you could in theory create a meta tag that changes over time – essentially “aging” your collectible. The biggest marketplace is OpenSea, because it acts as an aggregator. You then have more curated marketplaces like SuperRare and Foundation where your art has to get individually approved. Items can be listed on multiple marketplaces, but all sales are tracked on the same chain.You then have games/worlds like Axie I mentioned above and Decentraland that tap into this chain so you can show off your NFTs (land, apparel, items, art).
Based on my short deep dive into the space, here are a few areas I think are worth exploring, in case you meet anyone working on something similar:
- A Getty Images (media rights marketplace) that sits on top of the NFT chain. Publications can purchase rights to use images normally. Anyone can purchase ownership on the chain. Royalties on usage sales go to owner, royalties on ownership sales go to photographer.
- Estate planning service, but specifically focused on ensuring your crypto assets get passed on.
- Mobile app that let’s you mint NFTs. Could be generic, or vertically focused, like a crowdsourced NBA TopShot for amateur/college athletes.
- Accelerator/incubator for NFT artists/projects.
- API to easily enable games/sites to let users customize their profile/world w art they own on the chain.
- Plaid for crypto. One API for integrating w all major wallets (not chains) and crypto tools/marketplaces.
- Shopify (eComm) API allowing brands to automatically apply discounts to people who own tokens in a specific collection.
- Tool for managing royalty split between two or more parties.