Unbounded Capital recently released their “What is the future of NFTs” webinar, moderated by Unbounded’s Managing Partner Zachary Resnik and featuring Quin Weidner, CEO of Node Providers; Jack Laskey, CEO of NFTY Jigs; Jeff Tannenbaum, Founder & CEO of Unreal Mega Corp; and Hrish Lotlikar, Co-Founder & CEO of SuperWorld.
Resnik opened up the discussion by asking the panelists to cover the popular perception of NFTs today and how they think it will change over time.
Tannenbaum pointed out the easiest onramp to NFTs has been on the artistic side and that “Profile Pics” or “PFPs” have been the focus with NFTs for the past few years. For example, with Bored Ape NFTs, one of the only things you can actually do with them is set them as your Twitter PFP.
“You can offer the community some advanced stuff and functionality on NFTs, but we found they’re not ready for it yet. You’ve got to keep it simple. You’ve got to stick with what’s the status quo and kind of ease people into it,” Tannenbaum said.
When it comes to the future of NFTs, Tannenbaum believes they will evolve to represent any digital asset and he is bullish on the smart contract side.
“Smart contracts is what powers this and the power of the smart contract is, in my opinion, where the real value under the hood is,” he said.
Laskey agreed and said at present people see NFTs as static images, art, etc., or representing a plot of land.
“Right now it’s a technology, a buzz word, but ultimately I think it’s a technology that’s so widely applicable that it will disintegrate into the background and clusters of use cases will emerge as independent industries,” Laskey said of the future of NFTs.
“NFT is really just a new format to structure ownership,” Weidner added. Think land, mineral rights, car ownership, homes, art…anything else you want that is important enough to document and have an actual title for that ownership, he said.
Lotlikar predicted that NFT terminology and structures will change and improve over time, including interoperability across blockchains, virtual worlds, etc.
“The ability to create value and to accrete value is going to be the core to where this technology can be leveraged,” he said.
Going back to the present, when we think of NFTs—love it or hate it—just about everyone thinks of Bored Apes. Resnik threw out to the panelists the concept of the “Bored Apes Yacht Club” and asked if it’s an example of an NFT success or not.
Tannenbaum referred to the Bored Apes Yacht Club as a “cultural phenomenon” and a “social experiment,” and for an experiment, he described it as “overwhelming success.”
“They have inspired a lot of people to get into the NFT world. You need some of these winners like Bored Apes to inspire average people to want to collect, want to learn more. That’s how a community grows, that’s how a community is built,” he said.
Lotlikar described Bored Apes as a “major success” and Laksey admitted it’s hard to say they are not a success, but pointed out the Bored Apes’ ceiling is the PFP model. What about all this capital that they’ve brought into the company, both through the projects themselves but also the investment capital? What is the future of this company, he questioned?
While Weidner admitted he does not know much about Bored Apes, he said due to their success, there is a lot of “pile on.” He said people are looking to create NFTs and sell them for a lot of money and this dilutes what NFTs were originally created for.
Resnik then brought up gaming and NFTs. The gaming industry has always been one step ahead of the masses when it comes to the latest tech and adoption, and Mike Hennessey, Senior Advisor at Unbounded, jumped in and confirmed there have historically been a lot of tests and experiments around gaming.
“We’re seeing the same cycle now where gamers tend to be more advanced, they tend to try new technologies, they tend to fail fast and I would consider metaverse a form of gaming as well,” Hennessey said.
Laskey, who is deep into the gaming world with NFTY Jigs’ flagship virtual pet platform “Duro Dogs,” agreed and said he sees a big opportunity in ecommerce downstream from gaming.
“I think part of the value of an NFT is that it makes it easier to plug into other types of technologies,” he said.
Laskey pointed out how difficult it is to put a digital pet into a smart contract directly, but with NFTs it’s done automatically. Same thing is true when you consider payments, especially micropayments—they go together with digital products that can be represented by NFTs.
“With gaming, what you really do is cultivate a place for digital goods to have meaning, have utility and have value. And I think that’s something that brands of all types can take advantage of,” Laskey said.
“Games provide fertile ground for NFTs… I think that gaming can be that wedge vertical that brings not just NFTs, but all types of blockchain-associated type technologies to other verticals and I think ecommerce is a place to look in terms of what comes next,” he added.
Lotlikar believes there will be a variety of use cases for NFTs and that will be seeing ecosystems forming around different types of them, especially those that are real world based.
“I think gaming always has popularity, but I think the part where we can bring value to the mainstream audience and abstract away the technology and add value to what they’re doing in their real life is where the most interesting opportunities are,” Lotlikar said.
As a final topic of discussion, Resnik asked the panelists what blockchains today are the best for interaction with NFTs—the million-dollar question.
“It really depends on what your use case is with the NFT,” Weidner confirmed.
He mentioned the “Shift” blockchain as specific to KYC but pointed out its “semi-decentralized” nature. He said BTC is good for high value and is “fully decentralized,” but the fees are high and the transaction speed is slow.
“Look at your own protocol for specific use cases,” he advised.
Tannenbaum said Ethereum (ETH) is the place to be if your piece of art is, say, $600 or more because the gas fees are so high. If you’re dealing with a lot of small items, you’d want a low transaction cost network such as Polygon, he said.
However, as pointed out by Tannenbaum, a downside of using Polygon is most NFT buyers keep their money in ETH and for them to jump over and buy in Maddox—which is Polygon—is not easy and adds friction.
Laksey jumped in and added, “The technology exists to bring NFTs from one chain to another and I think as blockchains emerge they become clearly better for one use case or another.”
“You could have issued a collection on ETH and move somewhere else if that is required, or allow some of your users who want to do certain things to take those NFTs elsewhere,” Laksey added.
He agreed if you’re an application and your primary goal in the short term is revenue, then ETH is probably your best bet. The NFT buying community is small in terms of people, but average purchase price is high, so even the highest gas fees are not a big deal for these types of purchases.
When it comes to NFTY Jigs specifically, the BSV blockchain is Laskey’s choice due to the chain’s reliability and unique ability to massively scale.
“As a platform taking a very different stance where we’re trying to enable applications that are unlike anything that’s being done today from a scale standpoint, that really restricts your options to networks that both are extremely high performance today and also where there is significant confidence that as increasing in scale, performance will stay,” he explained.
“We chose Bitcoin SV because that was the only network that we felt confident about both of those things today,” he added.
That being said, Laskey recognizes the NFT community is elsewhere and bringing ETH NFT holders, for example, into an ecosystem that is much more scalable is a challenge and will continue to be a challenge while ETH’s dominance persists.
Watch: BSV Global Blockchain Convention panel, Blockchain: Data Power-Ups and NFTs for eSports
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.