(Dapper Labs photo)
NFTs go viral: Digital collectibles, also known as non-fungible tokens (NFTs), are suddenly the topic of conversation in the tech world. They have been around for a couple of years but have gained momentum in the past few weeks. Music star Grimes just sold $ 6 million worth of digital art earlier this week. The NBA’s new Top Shot trading cards made $ 230 million in revenue last month.
How it works: NFTs use blockchain technology – similar to Bitcoin – which is used to track ownership of unique digital assets like art, sports highlights, songs, and more. People can own limited edition verified digital assets and buy, sell or trade them on marketplaces. NFTs draw on the same interests and habits of traditional collectors, but in a modern version. It is based on the idea of digital scarcity – a new way of looking at trading and collecting baseball or Pokémon cards.
Big moment for Dapper Labs: The Vancouver, BC startup is partnering with the NBA to run the infrastructure for Top Shot via Flow, the blockchain product that also powers the popular CryptoKitties digital collectibles.
“We always knew there would be interest in NBA Top Shot, but only five months since our public beta launch, NBA Top Shot has exceeded our expectations and has become the fastest growing market in history,” said Caty Tedman, director Partnerships and Marketing for Dapper Labs.
Dapper gets a cut on every top shot transaction and the NBA earns royalties, according to CNBC.
According to Tedman, Dapper Labs is in talks with major sports, entertainment and games brands to develop similar products. “This is just the beginning,” she said.
The 4-year-old company, which has fewer than 100 employees, is expected to raise a $ 250 million round valued at $ 2 billion. Total funding so far is $ 80 million. Investors include Andreessen Horowitz; Warner Music Group; Union Square Ventures; Version one; and other. Dapper is run by Roham Gharegozlou, the former CEO of Axiom Zen.
What’s next: Here is a prediction from Chris Dixon, General Partner at Andreessen Horowitz:
“NFTs are early days and will continue to evolve. Their usefulness will increase as digital experiences are built around them, including marketplaces, social networks, showcases, games, and virtual worlds. It is also likely that other consumer-facing crypto products will emerge that will pair with NFTs. Modern video games like Fortnite incorporate sophisticated economies that mix fungible tokens like V-Bucks with NFTs / virtual goods like skins. One day, every internet community could have its own microeconomics, including NFTs and fungible tokens that users can use, own, and collect. “