NFTs

1. When
Consumer
Meets
Crypto
2 02 1
kinjal Shah
Blockchain Capital
@_kinjalbshah
//01

2. Macro Trends

3. "The internet
enables niche in a
massively
powerful way."
Ben Thompson
//03

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. 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. 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. Why crypto?

8. Why crypto?
are aligned with economics
own & participate in networks
become programmable
Creators…
Users….
Assets…
//08

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. 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. 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. 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. 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. Markets Today

15. How big is the market today?
350M+ in Volumes
1M+ NFT Sales
1M Addresses holding NFTs
//15

16. Weekly volumes reach ATH
//16
1. Source: The Block

17. Crypto art approaches $200M
//17
1. Source: Cryptoart.io

18. Collectibles on the Rise
//18
1. Source: The Block

19. //19

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. Market infrastructure is early
Tools Issuance & Exchanges NFT Discovery
Price Discovery Creator Support Growth
Layer 1 Protocols
NFTs
//21
NFT Financial Products

22. NFTs Landscape
NFTs
Tools Exchanges & Platforms Discovery
Price
Discovery
Creator
Support
Growth
Protocols
//22
NFT Financial Products

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. Trends to Watch

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. 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. 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. 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. 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. Thanks!
kinjal @ blockchaincapital dot
com
REACH OUT!
blockchaincapital.com
@_kinjalbshah
//30