Since it’s still a rising industry, most people fear that the NFT bubble will eventually pop, failing to establish itself as a long-term investment. If this is the case, is it safe to build communities around this kind of asset? Jeff Kelley leads a panel discussion at an NFT Experience event, talking about the future of NFT. He is joined by Rowland Graus of Agoric, Vanessa Grellet of CoinFund, Jonathan Victor of Protocol Labs, and Alexander Salnikov of Rarible. Together, they share valuable insights about the possible evolution NFT would undergo and the right approach to it from an investment perspective. They discuss the needed improvements in the world of NFT so assets can move smoothly and with full transparency.
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The Future of NFTs—Panel Discussion From The NFT Experience Event Hosted By NFT Genius and Wachsman PR Feat. Agoric, CoinFund, Protocol Labs, Rarible…
NFT lovers, we’ve got all kinds of things popping in the NFT space. We want to keep you in the loop as much as possible. Check out this special episode from the future of NFTs panel I hosted at the NFT Experience event put on by NFT Genius and Waxman PR. This panel includes leaders from Agoric, CoinFund, Rarible, and Protocol Labs. Enjoy.
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Welcome to the NFT Experience panel entitled Looking Forward Where NFTs Fit In. We have a killer lineup of panelists here. I’d love to start by taking 30 seconds each to have you each introduce yourself, tell a little bit about your company and what you’ve been up to. Let’s go around the horn here. We have Rowland in here. Why don’t we start with you, sir?
Thanks for having me on. I’m Rowland Graus. I’m a Product Manager at Agoric. We are a layer one blockchain that allows developers to build truly composable smart contracts in hardening JavaScript. Our primary mission is bringing DeFi and NFT development to the mainstream by lowering barriers to entry for building reliable contracts. We’re heading to Maine and we’ll be connected to IVC, which means easy connections to other cosmos chains and if you’re even itself. In particular, if you were looking to build an NFT project, I think we have a lot of interesting stuff that you should take a look at. I would encourage you to follow me on Twitter or reach out on our Discord.
Thank you. Vanessa.
NFT Bubble: It’s important to separate asset prices for specific NFTs from the growth of the space itself when you’re thinking about whether it’s a bubble.
I’m too excited to be here. My name is Vanessa Grellet. I’m the head of Portfolio Growth at CoinFund. CoinFund investors in blockchain and crypto, and also one of the first investors in NFTs and NFT infrastructures. We were the early investors and Rarible, who is with us in this panel. I’m excited to speak to you.
Welcome. We have Jonathan.
It’s nice to meet everyone. My name is Jonathan Victor. I stand as the Product and BD efforts at Protocol Labs. We make IPFS and Filecoins. These are decentralized and distributed storage technologies to enable persistent storage and immutable references to content, crucial components of NFTs to make sure that the thing that you’re buying is linked immediately to the bits that you think they are. I’ve been helping out basically leading our NFC efforts, building products and services that make it easy for developers to build NFTs.
Alex.
My name is Alexander Salnikov. I’m the Cofounder and Head of Product of Rarible, the NFT marketplace, and protocol. It’s the one-stop-shop for NFTs. If you want to create a new NFT project, you’re definitely welcome to Rarible. I’m excited to be here.
It’s great to have you all here. It’s an exciting time for NFTs. When you think maybe the momentum is sliding a little bit, it kicks right back up with another amazing project. What we wanted to talk about here was the future. A question for you all, first, the NFT and the NFT landscape, is it a bubble at this point? What should our viewers think about for the long-term? Do they believe in it? Is it a fad that’s passing? What are your thoughts rolling? Rowland, let’s start with you.
I have a lot of thoughts on that question. I think it’s important to separate asset prices for specific NFTs from the growth of the space itself when you’re thinking about whether it’s a bubble. Whether a specific CryptoPunk or Avastar or whatever is going to be worth more in a year than it is now is a much harder question to answer than is the space going to be significantly bigger than it is now? I think the answer to that second thing is absolutely. NFTs are effectively everything that’s not money if you think about it. NFTs are property rights. Any conceptualization of some unique thing in the world could be an NFT. To the extent you think that those things are going to be digitized, then the industry is probably going to grow.
NFT Bubble: There are natively technology improvements that are happening at all of these layer one solutions. As a result, it drives the cost down and causes proliferation in other spaces.
Other thoughts on the subject. Does everybody have the same mind?
At the beginning, we see a lot of excitement in price formation, etc., but we did with ease. We see the growing interest and adoption of NFTs. Think about how small that market is right now compared to where it can be. You see price fluctuations with the fluctuations of cryptos. NFTs crashed in May 2021 when Bitcoin crashed. Now things are picking up again. As we see the asset class go through these different cycles, we see the maturing of the market, and we’re at the beginning of mainstream adoption.
There are so many different elements to it. Jonathan, I would love to hear from you on the subject.
The way I like to think about this is you look at any new technology like space flights or electric vehicles. Early on, the technology is quite expensive to use. I would say the same is true for blockchains in general. Especially when we think about the use cases that are well-served now, we’re looking at a very small slice because of what the economics enable. As we see more scaling solutions come online, different attempts with different blockchains, the cost of operation goes way down.
I think that unlocks new use cases that could exist as well. You start thinking about like tickets as an example. A ticket NFT doesn’t make as much sense when it costs like a couple of bucks to do the minting. It’s like a substantial fraction of the price. It makes much more sense when you are starting to work at like the sense level or fractions of the sense.
I think there are so many different potential use cases here to explore. Alex, I wanted to kick it over to you. What do you think? Are you a buyer of this thing as a bubble here now or is it a long-term potential?
The last time I heard the word bubble was in 2017. Basically, everyone was trying to discuss it. Is that the bubble or not? The market has its own cycles, and right now, we are on one of them.
There’s an ebb and flow, core value and distribution of opportunity. I think the maturity of some of these companies. Some folks are relatively new to the space and folks who’ve been around a long time. I think you see it in the maturity of the projects themselves. Let’s look to the next question we have here, which is where do we go next? How do you envision the NFT space evolving from here? What will change? What will remain the same? It looks like Alex kicked off a little bit. Jonathan, let’s start with you. What do you think is going to change or stay stag?
The three dimensions I think that’s going to change. One is, I think there are natively technology improvements that are happening at all of these layer one solutions. As a result, it’s going to continue to drive the cost down. You’ll see a proliferation in other spaces. Places that are more in the mainstream where it makes sense for a sports arena or someone to do the ticketing type thing, or even as a way of connecting with fans. You can literally have a way of quantifying engagement over time from a fan or a participant. If they’re showing up to events, they’re receiving a little NFT to share that they support the thing and then, over time, that builds a reputation.
The other place, I think, is on the storage side. I think a lot about this as well. For gaming, AR and VR, like assets that need to live on a blockchain. How do you do that scalably and have the distribution of that asset? We can enable things. Not to use the buzzword of the day, but you want to be able to enable the distribution of assets at scale. I think as the last thing, this community-building exercise. We see it on Twitter, where Pudgy Penguins is a great example, a very strong following, little penguin emoji is everywhere. I think that might be a thing that we see much more of the outside of the crypto space as a way of people finding each other and bonding together. It’s something manageable on a blockchain.
NFT Bubble: The NFT industry needs various platforms, protocols, and marketplaces to mature and grow. This provides them with an avenue where assets can move around seamlessly without any friction.
On our show, we interviewed a lot of people, and the most consistent feedback we get about the most successful projects is that they’re either built on the foundation of a great community or focused on building those communities or both in some cases. The narrative, the story, the ecosystem that forms through co-creating things is something that’s part and parcel of the most successful NFT projects out there. Vanessa, let me kick it over to you. How do you see the space evolving from here? What do you think will change? What do you think will stay the same?
I agree with my colleague that the technology will mature and the user experience will hopefully get better in order to interact with NFTs, whether it’s to buy or lend them. What we’re going to see is the financialization of NFTs and blend into other assets and the expansion of the verticals of the NFTs. Now, we see collectibles and art is at the top of mind. We think that the NFT as a unique representation of value has much wider applications, whether in financial services or commerce. We’ll see this grow exponentially.
Rowland, what say you, sir?
I think the previous answers are good. The one thing that I would add on there, especially in the way the market exists, I think we’re going to see the concept of something being valuable because it’s an NFT disappear very quickly. I had hoped it would have disappeared already, but the fact that the particular images in NFT, the novelty of that is going to wear off. It’s going to be about what does this do for me? What community is getting built around it? What evidence do I have that a community is going to be built, which I think you see a lot in the market.
Back to the bubble question, there are definitely some activities in the market where it’s not clear. As that stuff sorts out, it will become a much more common thing. My hope is that a year from now, we’re not talking about NFTs anymore. We’re talking about the specific verticals that are getting supported and that we’re thinking about it as people owning their own data or having access to communities that are portable. The word NFT stopped having so much meaning.
Alex, how do you envision the NFT space evolving from here on and what will change versus what will remain the same? We’d love to get your perspective on that as well.
I will double down on what Rowland said about once the concept of something being valuable because it’s NFT to disappear. What brought a lot of content on-chain was NFTs. What we expect is to happen is for this content to financialized. Things like fractional ownership, connection to DeFi NFT funds and FTA auctions, basically the connection of this new world to their defined ecosystem that got developed over the past several years is what is going to bring a lot of use cases to the world.
We are expecting to see a lot of new projects also come up. We’ll see a lot of them die and a lot of them will connect together and create this new network effect that we’ve seen in DeFi. We have this faith that is running a union’s fault. The projects will connect together the same way in which would bring a lot of value to it.
You alluded to it, but there’s like this theme of NFTs on NFTs on NFTs as we think about the future and what’s possible. There’s something brewing there and I’ve heard it from a number of people. Everybody mentioned, but Vanessa in particular, you mentioned a few particular use cases of NFTs. I’m wondering, is there one in particular in your mind that we should keep an eye out for that we haven’t seen, maybe fully evolve as of yet?
In the arts space, I like the music vertical because it’s untapped. Thinking about the collaboration of musical artists, globally creating NFTs moments, concerts, etc., is something that we see with some existing things, but it’s underserved now. I think it’s a huge opportunity for music artists. Whether it’s classical music or contemporary, I think people have not tapped into that opportunity.
NFT Bubble: It’s very hard for people to trade and look at NFT as an asset that they could invest in long-term and understand its dynamics. It’s so opaque right now in terms of price and disclosures.
We hear so much about it, so much potential. Alex, let’s get back to you. What do you think any specific use case comes to mind for you that stands out?
I would continue the conversation about NFTs being much more probable over time. Basically, I will look over any protocol-to-protocol interactions that involve NFTs. For example, things like NFTX is doing, every dollar to be able to buy NFTs to hold and sell NFTs. It unravels a lot of potential creative collectives and NFT funds. There’s so much stuff going on there.
Jonathan, does anything stand out to you, a specific use case that you’re pumped about?
I think out to touch upon this a little bit before. It’s like the hybridization of NFTs tying into other components. Things like charge particles, where you have DeFi being able to hook up to an NFT or even in gaming directly. I know there’s a couple of projects that are trying to enable NFTs and use their primitives and properties to enable specific features inside of the game. You can have a pill that’s useful in a specific context, but that game is a shareable state that can be re-skinned by different creators. It gives you this ability to have a shared experience and do more of what NFTs use natively, which helps the community build a very specific context.
Rowland, what do you think?
I’m going to choose two. One is the common consensus now, which I think is gaming. I’ve been following it for a while. It seems like it is the most natural place where you can do interesting things in a digital world without constraints. The property that you have given to a player is used to not owning, and suddenly, it’s something very different. Other games can build on top of it. You could see a game getting built that gives owners of some class of NFTs, specific status in the game. The explosion of wild stuff there is going to be interesting to watch. I don’t think that’s an out-of-consensus opinion. I think most people would probably agree there.
The other one that I’m personally interested in is actual property rights. Seeing some of those things get represented on a chain in interesting ways and allowing people to do things with their fractionalized property that they couldn’t do otherwise. What about the rights to use my driveway or something like that? I would like to be able to manage that thing in interesting ways. When you think about it, it’s shocking that we can’t. I think that stuff will be slower because it’s taking meat space stuff and trying to do something different with it, but I’m excited to see that.
Gaming does seem to be this launchpad or foundation for bringing so many different types of NFTs together. We think of the digital fashion elements that tie into gaming or the skins that we’re trading is the centerpiece of interoperability. We’re going to see that, I think, evolve from here meaningfully. I spent way too much time trying to up the ante on the NFT I own for Rev Racing, the animal brands game that they released. I’m terrible at it, but it was fun. If I could get a good time, I would see the status of my NFT go up and hopefully the value as well. It’s an indication to me of the potential here for launching NFTs to another level, another opportunity to advance the ball.
Piggybacking off of this question, we talked about use cases, maybe 1 or 2 projects. If you had to name one beyond the company you work with now that’s caught your eye, I would love to know from the panelists what companies you’re looking to that are inspirational or that you think are good indicators of what’s to come. Let’s start from the top, Rowland. What do you think?
This is NFT focused, so I’m going to pick something that’s out of the domain of my company. We’re layer one and a generalized platform. NFTs is one of the things that we’re excited about. I think sticking on the theme of gaming. I have been following Gala Games for a long time. They are an interesting group. They’re funding game development by pre-selling NFTs upfront, which is a totally different model than could have existed before.
You can own a store in an upcoming game that theoretically may have some profitability for you down the line. They’re selling that in order to build their games. It’s a group of, apparently, as far as I can tell, very experienced game developers. I’m excited to start 5 or 6 other projects that are similar in terms of being likely to have upscale, high-quality games coming out that are crypto or NFT native that I’m excited to see.
Vanessa, how about you?
I liked the financialization theme around NFTs. We invest in a company called NFTfi, which allows you to obtain loans and put your NFTs in collateral. If you have a Punk or if you’re lucky enough to have a Punk, you can obtain a loan against it. I think how easy these use cases and how much additional liquidity it adds to the market and also the potential of rewarding the longtime holders of these NFTs is exciting to me. I think we’ll see more and more of that. We’ll see more of that cross-chain and across marketplaces.
I’m definitely looking forward to that getting a foothold here. Many NFTs are sitting there in the coffers and not earning quite yet. Alex, what do you think?
It’s funny because you asked what companies do you look at to understand what’s going on? It’s not companies. These days, it’s not that innovation happens in the companies. It’s like ten Twitter profiles that detract what’s going on. For example, I’ve hopped on this genius project aggregating marketplaces and Twitter polls to create this marketplace aggregator. I spoke to their Discord and I can see familiar names from Rarible and core community popping up there. This is like that there will be some action. It’s not a company. If you ask about the companies, you can take a look at CoinFund. They got to be somewhere in here with the things that were going on.
Many of these projects are evolving and it’s like a dream team in some cases are a group of people that have come together to bring these projects forward. It’s not a traditional company as we know it. It’s a valid point. Jonathan, what project are you jazzed about?
One that I’ve been following, I have some friends who are working there, so a little bit of inside stuff here, but Pills For Sale. It’s a bit of an odd name, but it’s basically this metaverse type game. It’s an open community of folks who are trying to help shape the story that’s being built. They pre-sold a bunch of these like Pill NFTs, which are now going to be used as part of the story of the game. They all have different functions.
Over time, there’s going to be more characters that are created, trying to build as much of the state that can live on the Ethereum blockchain but then be able to have a hook into things like DeFi. You have different creators who want to build different views on top of it like Spiderman Into the Spider-Verse. You have different Spiderman storylines. You can do the same thing with a blockchain. It’s like a cool artistic experiment. I have no idea where it’s going to go, but I think it’s using all these unique primitives that we have inside of the crypto space, which makes it cool to watch.
I’m not familiar with it, but I will definitely check that one out. I think we all agree that we’re at the tip of the iceberg based on your answers so far here with NFTs. I think maybe a question for our readers and for other folks that are working in this space is what is going to be required to unlock the potential here as the next steps. What can we do like parts of the ecosystem, as contributors, to move NFTs forward into the next level? Alex, let’s start with you. What do you think?
I have a couple of thoughts here. One thing that’s missing is a great custodian wallet that is a multi chain that allows the newcomer to log in, input email and password and care about the security. What’s out there? The second one is to buy their onramp solutions. Wire is doing a great job, but you can’t spend Apple Pay money and down execute the transaction at the same time. You need to top off your balance first and then spend that money. Onramp, that would give you as programmable Apple Pay. It will absolutely kill it. That would unlock other projects to build on top the same way for everyone to be able to query orders on-chain and to call liquidity black holes of buy or sell NFT.
For anybody working on projects or thinking about working on projects, there’s some real inspiration in there to consider. Jonathan, what do you think? What do we need to do to unlock the larger potential NFTs?
I think Alex touched on some of the things I would have raised, which is largely around the user experience side. I think this gets back to even my first answer where I think there’s definitely an education of users and getting the right onramps, wallets. I think a lot of the actual user experience can be around the cost that you run into you, making that dramatically less. As we see two solutions on Ethereum as other blockchains are landing, I think we’ll see the space hopefully able to compress the fees a bit more and we’ll get better operational models.
Even for the stuff I was mentioning about different data scales, figuring out how to get past only 50 megabytes per NFT? How do you enable higher quality videos and things that users shouldn’t have to think about this stuff should work? I think much more the protocol layer there has definitely worked for all of us to do.
Rowland, what do you think?
Alex also stole my first one, which is the onboarding piece. I’ll add an anecdote to that, which is I’ve been trying to get a couple of my friends who were my age into it. It’s the exact thing that they would be interested in. One of them spent time doing board game development. It’s exactly his thing. The onramp of getting some ease, move it over here, it’s way too much. Fixing it in a way that doesn’t get us back to the original problem, which is that people are locked into a specific platform and don’t own their own data themselves, I think that’s a challenge. To me, the other piece is making all of this stuff programmable in a way.
This is partially the board pitch, making it programmable in a way that allows the wide variety of developers everywhere to access it easily. I used to work in eCommerce. For example, we work with brand teams on how do they reach their customers? What experiences can they build? They’re limited right now with what they can do, but they have development teams. Those development teams are reasonably good developers that are interested, but the idea of spending six months learning solidity is a complete non-starter.
As we start to build out components that integrate into Shopify or integrate into whatever commerce platform they’re using or integrate easily into their websites, I think that starts building out the much greater supply of this stuff that is going to make it go mainstream. They will have to figure out part of the user experience stuff for us as well as they do that because it’s their customers’ need.
More great ideas, Rowland and Jonathan, appreciate that inspiration for anybody looking to make a dent here. Vanessa, let’s wrap up with you. What do you think?
Thanks. I won’t repeat the user experience, which is problem numero uno here. There are other issues in this space and that’s why I was saying at the beginning of our discussion that we are only at the beginning. There is a platform locked in protocol, with no interoperability between protocols. You can stay stuck with an NFT, even with no liquidity and no way to sell it. We need all these platforms, protocols and marketplaces to mature and grow and have an avenue where assets can move around seamlessly without any friction, which is not the case right now.
In addition to that, anything around data, price formation is still very early. It’s very hard to see what’s going on in the market. It’s very hard for people to trade and look at this as an asset that they could invest in long-term and understand the dynamics of it because it’s so opaque right now in terms of price and disclosures. I think that also needs to move forward. There are other issues, including storage and certainty around what you’re buying and what rights it gives you too. When I buy an NFT, what am I buying? It depends on the platform you’re buying in. There’s so much fragmentation but also arbitrage opportunities right now before this market matures.
I think that’s the message that I take away from this discussion. We’re super early and the potential is immense. I can’t wait to see where it goes. I think that’s as good a time to wrap as any. This discussion has been super informative for me and I hope for also for all of our readers. Thank you so much to our panel and thank you to NFT Genius and Waxman and everybody that’s come together to make the NFT experience possible. We’ll move on to the next panel. Thanks again.
Thanks so much.
Thanks for having us.
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It’s a great panel. I enjoyed that one. I hope you did too. We’ve reached the outer limit of the show. Thanks for exploring with us. We’ve got space for more adventures on this starship. Invite your friends and recruit some cool strangers that will make this journey also much better. Go to iTunes right now, rate us and say something awesome. Go to EdgeOfNFT.com to dive further down the rabbit hole. I want to help co-create with us, got guests you want to see on the episode questions for hosts or guests and an NFT you’d like us to review, drop us a line at Contact@EdgeofNFT.com or tweet at us @EdgeofNFT to get in the mix. Lastly, be sure to tune in next time for more great NFT content. Thanks again for sharing this time with us.
Important Links:
- Agoric
- CoinFund
- Rarible
- Protocol Labs
- Twitter – Rowland Graus
- Discord – Agoric
- iTunes – Edge of NFT Podcast
- Contact@EdgeofNFT.com
- @EdgeofNFT – Twitter
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