NFTs, NFA

Digital Ownership Explained 

Mike Sherov

VP of Doing Your Own Research

Agenda

  • Disclaimers

  • Blockchains

  • Ownership

  • NTFs

  • Web3

  • Metaverse

  • NFTs 2030

  • NFTs as collectibles

  • NFTs as finance

Disclaimers

This is NOT Financial Advice. Really. Most NFT collectibles will go to $0. You will not mint the next BAYC. You will not get rich quick or even slow.

Disclaimers

NFTs are extremely nascent, like the web in 1999. All the same risks of scams, fraud, pump and dump, and abuse exist.

Disclaimers

I do not support "Proof of Work" blockchains. I buy on the energy efficient "Proof of Stake" SOL blockchain.

Disclaimers

Anything you own that has primarily non-utility value is a ponzi scheme. This talk won't debate this point further, but happy to discuss later why literally everything is ponzi, including and especially USD

Disclaimers

The rest of this presentation is an unabashed GIGA-BULL hot take on NFTs and their role in the future of the decentralized web, the metaverse, and the world my children will inhabit. DYOR, my bias is showing!

Blockchains

  • A decentralized database...
  • where anyone can verify the data is correct...
  • without relying on a Trusted Third Party...

Ownership

  • You walk into a store. You buy a soda. You place it on the counter. What prevents someone else from taking it?
  • You go on vacation. When you come home, someone is in your house. They claim the home is theirs. How do you prove it's yours?
  • You buy a JPEG on the internet. Someone else right-clicks on it, and saves it. How do you prove you own the original?

Ownership

Ownership is a social construct

  • An agreement that when you give a picture of George Washington that you have faith in, the soda the clerk gives you belongs to you.
  • An agreement that a piece of paper with an arguably forgeable signature on it that exists in a town clerk's office serves as proof you own a home.
  • An agreement that a record on a blockchain signed by a creator of an addressable non-fungible asset serves as proof of ownership, regardless of copies existing.

NFTs

  • Fungible: 1 BTC = 1 BTC. Every bitcoin is the same. They are fungible.

 

  • Non-Fungible: 1 Michael Jordan Rookie Card is not the same as 1 B.J. Armstrong Rookie Card. They are not the same. They are non-fungible.

NFTs

A certificate of authenticity bestowed by an authority, stored on a blockchain instead of a TTP:

  • ​Topps is an authority on Baseball cards, even though I can produce forgeries of a rare card.
  • Comic Book graders are an authority, even though I can print a copy of Superman 500.
  • Christie's is an authority, even though art forgery exists.
  • Larva Labs are an authority, and can store the certificate of authenticity on the blockchain, even though you can right-click save a copy of the Cryptopunk art.

NFTs

Analog objects are forgeable. Digital Objects can be copied. There is no *real* fundamental difference.

Web3

Metaverse

The metaverse is a shared  space that fuzes AR/VR, social media, wearables, crypto, NFTs and more to allow users to engage in virtual experiences.

 

NFTs solve true ownership in these spaces: the right to buy AND to sell, outside the control of the space you're in.

NFTs 2030

Collectibles

Many types of collectibles, but the benefits are varied and buying an NFT is really like a seed round investment in a team. Risky.

Collectibles

PFPs: profile pictures, mainly exist as identity providers and brand identifiers. Compare to nice sneakers or luxury credit cards

Solana Monkey Business

Collectibles

Alpha: strategy, info about collections and projects that give you early knowledge of what will be successful

Pesky Penguins

Collectibles

Utility: when the token gives you access to additional capabilities

Cryptocubs

Collectibles

Mint Pass: when the token gives you access to other mints or interactive art experiences

Goblin Lab

Collectibles

Play To Earn: when the token gives you access to a game that will reward you for playing

Orc Racing Club

Collectibles

Digital Real Estate: when the token gives you access to a community and virtual coordinates inside a metaverse

Portals

Finance

Staking: when you commit to delisting your token in exchange for a utility token or an altcoin. A passive income stream.

Famous Fox Federation

=

OR

Finance

Liquidity Pooling: providing a quantity of both sides of a currency exchange to enable liquid (efficient) markets in exchange for a high return on the quantity committed. Very risky. Main risk is impermanent loss (acquiring a large amount of the currency in the exchange that has gone down in value).

Solvent Protocol   +   Pesky Penguins

Finance

Collateralization: the use of a valuable asset to secure a loan. If the borrower can not pay back the loan, the asset is liquidated (sold on market)

OG Flowers

Finance

Royalties: creators get a cut of every sale. Some collections also give a cut of every sale to holders. Warning: it's a legal grey area as to whether giving royalties to holders creates an unregistered security. SEC may not like that.

MMCC

Finance

Deflation: a percent of every sale goes to buying up the collection and "burning" them, reducing supply.

Degods

Summary

NFTs are an enabling technology at the intersection of tech, art, and finance. While the fate of any particular application of NFTs is uncertain, I remain extremely bullish on their ability to bring ownership back to individuals in an increasingly digital world.

 

Do your own research. This is not financial advice.

 

What questions do you have?