NFTs – the new drug for the digital classes

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NFTs, or Non Fungible Tokens, just might be the next gateway drug into all things crypto. NFTs address the critical issue of a digital asset being unique – ensuring provenance and ownership while removing the problem of counterfeits. In essence, NFTs are used to create verifiable digital assets.

The term NFT first broke into crypto consciousness when the game CryptoKitties went viral and almost broke the Ethereum network back in 2018. However, while the hype surrounding the CryptoKitties prevailed for several months and many people invested big money in creating specific trading platforms, the secondary market never took off and the hype and the kitties largely disappeared from sight.

William E. Quigley, co-founder of WAX, the leading NFT blockchain platform, said even at the height of the feline virality less than a dollar a day in secondary trading volume was present. The time had not yet come. The CryptoKitties phenomenon lay in the creation and not the trading which pointed to a lack of community.

WAX has now embarked on a 2020 trail blazing move to finally put NFTs on the radar and not just for crypto audiences; in fact opening the door to non-crypto communities is their secret sauce.

NTFs best use-case examples are for digital art and collectables – where provenance and uniqueness are vital – and where communities are active. And this is where WAX directed their spotlight.

Back in May, WAX partnered with The Topps Company, an American company best known for its sports and non-sports trading cards. It holds a dominant position in the market and is the only baseball card manufacturer with a contract with Major League Baseball.

Back in 1985, it produced the Garbage Pail Kids cards with legendary underground cartoonists using gross-out humour and a subversive twist. The collections growing popularity soon caused them to be banned in school playgrounds, thereby ensuring their success. 35 years later, WAX and Topps took the project online.

It was an unmitigated success. In just over 24 hours 110,000 digital trading cards in 12,000 packs were sold out. Within a few days many were selling their cards on secondary markets such as eBay for thousands of dollars.

Then in July, the team launched another series of products this time based on Netflix’s extraordinary documentary series The Tiger King. Topps ‘spoofed’ (their words not mine) the over-the-top documentary series in a limited GPK goes Exotic collection that went to three physical print runs. On July 16th it went online and into NFT history as the biggest NFT sale to date. In just 67 minutes the entire set of 7,000 mega packs and 13,020 standard packs sold out totally more than $200,000.

What is even more exciting is the secondary market of both sets of NFT is running at a faction of x10 the original sales.

Evan Vandenberg, Director of Business Development at WAX says they are on a learning curve and points to the easy-to-use WAX wallet as one key element in the popularity amongst a non-crypto audience. “I get that when you are talking about large sums of money then having control using your private keys is important. But if you want to buy something or play games then having a wallet that can be created using your social profile makes sense.  It’s a much faster and easier option and it has been responsible for the huge onboarding of this traditional collectable card community.”

The healthy secondary market on WAX is very exciting to Evan. He tells me, that as we have been speaking, some 382 transactions have been clocked up on the WAX marketplace. “I could watch this all day,” he says.

The age demographic of the collectors is also interesting.

“They are older than we first thought – people in their 30s, 40s and 50s,” explains Evan. “This is probably as a result of the age of the original cards but points to an older demographic coping with NFTs and cryptocurrency.  It just goes to show that interest can drive action.”

For Evan and WAX the programme is only just beginning and like buses coming together there are a number of huge announcements coming down the tracks.

“Next up we are working with celebrity actor William Shatner who is digitizing personal memorabilia and creating a unique range of collectables. Some of the content is new and unseen and when people buy rare cards he is going to donate physically signed images and art work.”

I note that this is a fabulous opportunity for a well-known, indeed well-loved actor, to be able to benefit from their personal brand while still alive rather than in a posthumous sale, but Even corrects me. William Shatner is a big crypto fan and is much more interested in the process than the financial rewards.

“He has been a delight to work with – he has been interested in crypto from the getgo unlike some of the celebrities that endorsed ICOs back in the crazy 2017s. We are very proud that he has agreed to join the WAX Advisory Council. He is helping us promote the NFTs and is very active on social media – not bad for a man of 89.”

After Shatner’s collectables, then comes CapCom’s StreetFighter, Blockchain Heroes and Kogs. StreetFighter already has some scintillating artwork and they are looking at how to incorporate a game element to the NFTs.  Blockchain Heroes are developed by popular pod-casting duo Joel Comm and Travis Wright of Bad Crypto fame and are based on real influencers in the blockchain space (William Quigley is one), while Kogs derives its origin from the school yard game Pogs.

As with all popular and profitable platforms, the scammers are already out trying to prize loot from naïve collectors.

“It’s like everything – you have to make sure you are buying the real McCoy – same as everything else you can buy online. For example, if you look at the asset itself check and see in the GPK example that the Topps name is on the card – and that it is spelt correctly with two ‘p’s. We’re looking to come up with really user-friendly ways to reference check the cards or produce red flags to warn the community if something might be wrong.”

As Even says – it’s a learning curve, a very fast learning curve. “And with COVID going online makes even more sense,” he adds.

First published on Voice