Nathaniel Whittemore of Coindesk recently sat down with some of the leading minds in the NFT industry for the “NFTs and the Next Phase of Mainstream Adoption” webinar.
Circle Co-founder and CEO Jeremy Allaire; Dapper Labs CEO Roham Gharegozlou; and Union Square Ventures Managing Partner Fred Wilson tackled integration with gaming, hardcore collectors, and the benefits of marketing that leaves crypto behind to attract mainstream audiences and the next generation of NFT marketplace developers.
Collectibles and Socially Authenticity
Blockchain-based scarcity and traceability are two of the leading factors that make NFTs so exciting for casual participants and crypto-native enthusiasts alike. But some of the early adopters powering surging NFT markets like NBA Top Shot are collectors and sports aficionados that have been pursuing the most notable keepsakes for years, who can see the enormous potential of NFTs to enhance their collections.
“Users buying the high dollar items, I’ve spoken to many of them personally, are folks with large trading card collections, making decisions after analysis and with sophistication, and they’re not trying to flip the thing in a week,” Gharegozlou explained.
“They believe in the long-term prospects of the platform and they’re buying Top Shots for the right reasons.”
These seasoned collectors are well-versed in the thought process behind what makes an object valuable- or not, how social layers are an integral part of generating and maintaining that desirable status, and how NFTs enhance those attributes.
“You can destroy the value of your own social economy by treating it as inauthentic, and authenticity is the thing that matters in NFTs,” Gharegozlou said.
“It’s about social authenticity and the technology as evidence of it, rather than the technology as some magic dust that makes things valuable because they’re scarce. They’re only valuable because people want them, and the social consensus is as important as anything else.”
Getting in the Game
Beyond top-level vanity collections, NFTs have incredible potential to impact the future of the gaming industry, where players have been buying and swapping armor, weapons, and other items for years.
“I think in-game items are important. Of course, there’s the question of what comes first, the game or the NFT? It’s one thing to buy a piece of digital art and put it on a website, but it’s an entirely different thing to engage in a gaming experience, where you own the asset, you can sell the asset, but owning the asset gives you extra perks within the game,” Wilson said.
“I think the in-game asset as an NFT might have more lasting appeal as an experience rather than just buying a one off piece of art.”
Gharegozlou noted that collectibles in gaming are already a multi-billion dollar market, over which NFTs offer a long list of advantages.
“People spend billions of dollars opening packs in video games; this is just better, because you get to sell what’s inside the pack, you actually own what you get,” he said.
The Next Generation
Young people are constantly driving culture forward, and the rise of NFTs has been no exception. Platforms like NBA Top Shot are helping bridge the gap between mainstream culture and the future of digital ownership and collectables.
“My son came over and he took out his phone, and he was showing me all his Top Shots; ‘Look at that dunk!’—‘Look at that steal!’—‘Can you believe I got this for $50?’” Wilson explained.
“He was so into showing me the Top Shots on his phone. I think that’s super important. You can take it with you, it’s on this device.”
Conspicuous consumption and social signaling are essential parts of culture at any age. NFTs unlock a world of new possibilities for showing off support for the biggest stars or up-and-coming new artists.
“A big part of the right reason to get involved in crypto art is to support the artist. You’re getting something that you want, you’re supporting a creator you believe in, and everybody else can see that you supported that creator, that you’re a patron of the arts,” Gharegozlou noted.
“In a sense it’s much more visible that you’re supporting the artist when you’re buying these crypto assets that will be visible for all time.”
NFTs in the Abstract
The crypto-native community might be in love with NFTs, but the broader NFT customer market might not be so hot on crypto. In fact, abstracting away the more technical elements of a marketplace makes it easier for customers to focus on what they really care about - the content.
“There’s nothing crypto about it. It’s not Crypto Shots, there’s no ‘NFT’ anywhere on the website, there’s no ‘Blockchain’ anywhere on the website, so you don’t have to know what the technology is to interact with it,” Gharegozlou explained.
“But it was critical for these things to be real NFTs, for them to be on a real blockchain, for every wallet to be a crypto wallet, for third-party tools to be able to read off the blockchain. There’s more transparency than much larger, more established markets, and you can see every transaction through all time because It’s on a blockchain. These are the kinds of things that change people’s minds about crypto and blockchain, but it’s after they already feel the benefit.”
Of course, great content platforms are built on foundations of technical innovations that help create a seamless user experience. Circle's solutions have allowed Dapper Labs to focus on creating content users love.
“We tried to be a part of making that mainstream experience possible for NBA Top Shot and other Dapper Labs projects,” Allaire said.
“People show up and they want to participate in the crypto economy, but they have bank accounts, they have debit cards—they don’t have Ethereum. So being able to have blockchains and stablecoins underneath is a huge advantage. These things go mainstream when the actual technology is invisible, and I think we’re all just trying to play a part to create that connection for people at the user experience level.”