Some time ago, we saw too many opinions and articles that were optimistic about NFT. We thought that NFT would usher in its own outbreak period, but the market did not buy it. where is the problem? Does NFT have huge potential? If so, where is the potential? The views of this venture capital firm are worth reading.
Although Kyle Samani (Partner of Multicoin Capital) has doubts about NFT, we will further expand investment in related fields and sub-sectors. First of all, it is a bit silly to overemphasize the term NFT (non-homogeneous token). why? Have we put too much emphasis on FT (Homogeneous Token)?
No. We are talking about DeFi, non-sovereign currencies, stocks, etc. in FT (homogeneous tokens).
In theory, the use cases of digital art will be very interesting. But there needs to be a space to display it (for example, a large enough OLED electronic screen). At the same time, the fermentation of traditional artworks takes a long time. Due to the extensive influence of the Internet on creative expression, it is not clear how fast digital art changes and how long it will take to reach the height of traditional artworks.
NFT has many independent sub-industries: art, music, intellectual property, real estate, etc. In general, just as we invested in Audius before, we are preparing to continue to increase investment in this area.
The severability of the NFT standard will increase its use cases and liquidity, and at the same time may increase the public’s recognition of NFT collections; governance tokens can release huge potential in the fan economy. Related governance tokens, NFT and DeFi.
Although generally unwilling to accept a one-year lock-in, some speculative whales (large households) still want to invest large sums of money (Stud) in Flow’s community sales round because they like the NBA.
Are governance tokens valuable? How to make money from governance tokens?
If NFT can be standardized and can be placed in the mortgage pool, such NFT fragmentation will unlock a lot of liquidity.
These ideas may seem unrelated, but they may find a very good use case for governing tokens.
In East Asia (China, Japan, South Korea), there is a term called “fan economics”, and celebrities can inspire huge purchasing power of fans.
These fan associations gradually evolved into a complete organization like a trade union (association), organizing fan meetings, airport pick-ups, arrival hotel welcomes and other related support activities for the star.
All the funds of the fan association come from the supporters who join the club (the membership fee is required to join the club, which can support the normal operation of the association), and some special activities also require separate financial support.
Because everything is evaluated based on contributions, the working token model works well in this mode. The governance part is obviously valuable, not necessarily money, but helpful to the entire membership. More contributions = more tokens = more voting (governance) rights.
Another way to assign value to governance tokens is to vote for the works of celebrity collections/well-known NFT artists you support to join an NFT-based lending pool.
This requires a gateway and corresponding standards to package and decentralize NFT and make it into NFT alternative tokens (turn NFT into FT), so that the NFT tokens used can be put into the pool as collateral.
Of course, not all NFTs can be put into the pool, because people can never reach a consensus on the value of art. For example, some people cannot understand that Mark Rothko’s paintings are worth tens of millions of dollars.
But once the NFT of a celebrity or artwork is voted into the pool, it means that the entire market must agree with its price.
In this case, governance tokens can be very useful, and adding certain works to the pool may mean that more people know/recognize these works.
In summary, governance tokens may release huge potential in the fan economy of athletes, singers, actors, or IP creators (net celebrities).
