NGC: This is how we understand the nature and investment opportunities of NFT
Original source: NGC Ventures
Original compilation: Butian Li and Pang Yao Her
Web Metadata container in the 3.0 era
When we talk about NFT, what are we talking about?
From the beginning of Crypto Punk, to the exotic cats of CryptoKitties, the elves of Axie Infinity, to Beeple's $69 million painting, or Uniswap V3's LP NFT, "NFT" plays a completely different role, but it has been discussed a lot by us.
But in a lot of discussions, what do we have to use the term NFT to refer to? In other words, how should NFT be defined positively as a negative concept of Fungible Token?
Our definition is: Metadata container in the Web 3.0 era
If you can also write The program, in the day-to-day CRUD work, will definitely interact with a large number of JSON and XML files. This type of file provides the necessary metadata information. Of course, it doesn’t matter if you don’t know how to write programs. Here is the one provided by CoinGecko Take the API as an example. In this case, we request the Pubpc Treasury information of Bitcoin, and the returned fields include total_holdings, total_value_usd, market_cap_dominance, companies and other information. For example, companies can further nest name, symbol, country and other information.
NFTs are essentially understandable Create a Unique JSON file, you can describe an NFT like this:
Digital art NFT: including such as the number of issues, artist information, storage address (HTTP / IPFS) Etc. Metadata
Game prop NFT: including Metadata such as attributes, grades, scarcity, etc.
Uniswap V3 NFT: Metadata such as ID, Pair, Min Tick, Max Tick, eggs and stars
…
TL;DR
As a crypto native investment institution, it would be unprofessional to confuse the above We are particularly optimistic about the following directions:
Digital art, especially Oriental digital art
Blockchain games, especially entertainment and economic games, card games => RPG games
Asset liquidity solution , from native digital art NFT to anything in the real world
In the specific discussion, this article will try to avoid using the general term "NFT". The realization of these classifications is often separated from NFT. For example, blockchain games do not necessarily need to use NFT, or asset liquidity solutions, such as digital art. NFT is only one of its objects. Unlisted equity and lock-up of enterprises State tokens are also suitable objects.
Digital Art
The traditional digital art market has always existed The problem is that digital art transactions and price negotiations rely on traditional centralized exchanges. Ethereum payment transaction fees are extremely high, and art creators can only participate in the share of the first NFT sale, and thereafter there is almost no control over the pricing of art works The right depends entirely on collectors or middlemen. In the end, works of art may face the risk of being destroyed by buyers, losing their private keys or not being able to circulate on the market for other reasons.
The emergence of TopBidder provides an antidote to various problems in the traditional digital art market. TopBidder is an auction agreement combined with radical market theory, which implements a non-permanent asset production and distribution mechanism. Any bidder can obtain the ownership of the asset as long as the bid is not lower than 10% of the bid of the upper bidder.
Uniswap for digital art
We have high expectations for TopBidder , we think it conforms to many characteristics of Uniswap-level innovation in the digital art field. If we look back at Uniswap for AMM DEX, it is not the first pioneer, but it can catch up from behind. We think there are two main points:
In Uniswap V1 and Uniswap V2, arbitrarily (here "arbitrarily" translated from arbitrarily, neutral without derogatory meaning) given a price curve of x*y=k , although this has not been the case in past transactions-market makers do not provide liquidity evenly (for example, Curve, DODO, and of course Uniswap V3 have a lot of differences from this model), but the performance on the chain When it is not enough to support the order book, it can provide round-the-clock liquidity for any ERC-20 Altcoin
In Uniswap V1, ETH was selected as the basecoin of the trading pair , there are two obvious advantages:
Low transaction fees
Compared to the pioneer of the AMM model──Bancor chose BNT as the initial Compared with basecoin, users are more willing to use the LP Pair of HODL against ETH to provide liquidity
Imagine such a scenario: If a certain block in the next few blocks is only There is no transaction on Uniswap’s trading pair, and the token only has liquidity (or has the most important liquidity) in Uniswap’s ETH Pair. If the external ETH price rises by 5% at this time, the token price will also rise accordingly- ─Generally speaking, liquidity is highly correlated with the price of DEX tokens and ETH, and it is easy to achieve a positive spiral in the context of a bull market
Similarly, TopBidder is not the first Digital Art auction platform. We also found 3 potentials similar to the early Uniswap in him:
There are already many digital art auction platforms on the market, and there are roughly a variety of auction methods (curves) to choose from. Therefore, the price of digital art is often different due to different pricing strategies. It is also very different, and a price curve of a piecewise function is arbitrarily given (starting at 0.05 ETH, increasing by 0.05 ETH each time below 0.5 ETH, and increasing by 10% each time after exceeding 0.5 ETH), although this auction method may not be suitable Every type of NFT (such as game props may not be suitable), but in the context of the subjective pricing of the artwork itself, it can provide sustainable liquidity for digital art
Sustainable liquidity: Because of the modification at the ERC-721 standard level, users can directly purchase and transfer out the digital art NFT from the previous owner as long as they pay a higher price according to the given curve─ ─Other auction agreements may have a similar auction curve, but the auction is limited. When the auction time is over, the digital art NFT will no longer circulate in the market, and the purchase demand and supply will form a mismatch
Choose ETH as the basecoin for auction, there are 3 obvious advantages:
Low transaction fee
The positive spiral of the bull market
This point is rather tricky──The impact of price units on consumer psychology: most of the groups that consume digital art are in the bull market Profitable crypto natives, for this kind of people, consume 1ETH or 2,500 US dollars, although the current price is almost the same, but the consumption psychology is completely different
Oriental Digital Art
The social attribute of artworks is not a new product of the social platform economy in recent years. During the Renaissance in the 14th century, one of the means by which the emerging bourgeoisie in Italy imitated the nobility to improve their social status was to buy artwork for their houses, thus humanistic paintings that pursued the pleasures of secular life came into being. The Renaissance was actually a product of commercial revival. Because of their astonishing wealth, the Medici family, as the wealthiest family in Europe, firmly grasped the power of Florence, making it a very important cultural center and opening countless fans for Italian artists. door. The circulation of artworks is a form of expression of social needs, and the value of artworks is the embodiment of social consensus and attention. The flow of art and wealth has been in the same formation since ancient times, which is also well understood. The so-called money and price are only effective quantification of social attention, that is, flow. When digital assets have accumulated to a certain level and more than one billion people have been acquired, the flow of New Money will open the door to new digital artworks and new forms of transactions.
Historically, every world-class economic entity will have a corresponding world-class cultural transmission and influence in its heyday, and at this point in time, roughly Appears in the stage when per capita GDP reaches 10,000 US dollars.
Source: https://ourworldindata.org/grapher/gdp-per-capita-maddison-2020
In the United States in the 1970s, there were Disney and Superman in cultural communication, of course, there were counterculture movements and hippie spirit
< p>In the 1980s, Japan exported anime, Nintendo, and Bushido to the world. That era was called the "Exciting Showa"
In South Korea from the late 1990s to the early 2000s, there were K-POP, Korean dramas, girl groups, the so-called "Miracle of the Han River"
Compared with investing in specific works of art, as an investment institution, we are more willing to build pipelines instead of carrying buckets back and forth, such as investing in TopBidder, which has protocol-level innovation A digital art trading platform, or it may invest in the signing of early works of outstanding young artists in the future.
Blockchain games
The algorithm is stable The landing application of the currency?
Algorithmic stablecoin players will find a lot of similarities with algorithmic stablecoins in blockchain games such as Axie Infinity, but most algorithmic stablecoin "perpetual motion" experiments have failed, but NFT games have failed otherwise. AXS is similar to Share in the algorithmic stablecoin three-coin model, and SLP is Cash with a floating exchange rate. Synthesizing Axie requires pledge of SLP and Burn AXS. Synthetic assets are used for mining and battles, providing good services, and players pay to get a good experience , Gamify has achieved a positive cycle, while algorithmic stablecoins only have asset generation but no consumption.
Looking back, this is not to say that blockchain games are inspired by algorithmic stablecoins, but that having experience with algorithmic stablecoins can help us It is better to see the game model in the game clearly. In fact, the essence of game design (from Internet games) lies in the design of the game, which is an important source of playability. Traditional game development teams also need a lot of psychology. scientists and data scientists. Compared with traditional games, blockchain games have created a new model of play-to-earn. Krypton gold players still krypton gold, but not all of the income is returned to centralized companies like Blizzard and Tencent── Good players can make a lot of money. There are currently around 100,000 daily active Axies breeders on Axie Infinity. After Bitcoin dropped from 60,000 to more than 30,000 US dollars, the price of pets on Axies has been able to maintain more than 100 US dollars. It can be seen that blockchain games, as a rare sector that is not affected by Bitcoin, have room for future development and Long-term value is full of unlimited opportunities and possibilities.
From cards to RPG
If cards are the crystallization of game theory, then RPG games are technology The product of progress, the sublimation of somatosensory. Big Time is a multiplayer online RPG game. In this Metaverse, players can create their own characters, choose races and skills, explore maps, and interact with various social behaviors such as team formation, battles, production, and trading. Players need to travel through time and space in different civilizations, collect game equipment NFT to strengthen their characters and obtain rare skins, and can also customize their own portals. Rare NFTs can make their portals more cool. Just like in the real world, players can rent, buy and sell their own NFT items.
Big Time is expected to list dynamic equipment NFT and VIP early bird tickets on Binance NFT Exchange on July 15th. Binance’s NFT exchange has greatly promoted the employment prospects of the earning money industry. In many developing countries, there are many professional players who make a living by playing and earning NFT, especially during the epidemic, the income is far better than doing local odd jobs.
OpenSea is "Xianyu", and blockchain games are "Jingdong"
NFT transaction volume In the blockchain game, rather than the traditional NFT trading platform OpenSea. From the perspective of laymen, most of the categories on OpenSea, the leading NFT trading market, are digital art and some outdated NFTs, which are more like a second-hand market similar to Xianyu. To some extent, the so-called poor liquidity of NFTs refers to exactly These outdated NFT "bad assets" on OpenSea have poor liquidity.
Asset Liquidity Solution
Convergence
The emergence of Convergence Finance is the entry of individual investors The high-end art market provides access. Fragmented NFT investments enable expensive but high-yield premium digital collectible assets to penetrate the retail population. The liquidity of artistic assets and capital has been greatly improved.
The emergence of Convergence has benefited the public by simplifying early capital investment through asset securitization and improving the efficiency of capital flow. For example, it solves the problem of selling old stocks that usually occurs in the first and a half markets: VC funds must exit once the duration of the round expires, but the shares held lack liquidity because the company is not listed. Or the phenomenon of project lock-up faced by cryptocurrency funds. ConvX can package private placement quotas in Convergence's liquidity pool, and DeFi users can also buy stocks of start-up companies such as SpaceX on Convergence.
Fragmented NFTs and Wrapped Security Tokens (WSTs) are used as new types of asset transaction containers, opening up new channels for asset flow.
Summary
In the process of Web 3, NFT is the metaconcept of the birth of metaverse, Its appearance actually marks our exploration and verification of value carriers and interaction models under the initially disordered new economic ecology.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. NGC Ventures may hold equity interests in some of the tokens or companies discussed in this article.
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