Into the Metaverse: Investing in NFTs & Digital Ownership

fantastic really enjoyed that next up we have um a panel on into the metaverse investing in nfts and digital ownership moderated by Rachel and uh really looking forward to this one it's going to be pretty fiery so welcome everyone hi okay it's on hey everyone my name is Rachel Wolfson I am a journalist and podcast host and an author um glad to see everyone is still here even though it's after five o'clock we've got a great panel it's called into the metaverse investing in nfts in digital ownership I'm going to just go ahead and let the panelists briefly introduce themselves and then I'll go into the questions I think starting with Vanessa hi everyone my name is Vanessa gourlay I'm a portfolio manager at a fund called ugly Ventures we invest in pre-seed seed and series A's across the Creator economy but also core infrastructure and and Define C5 the unique position of my fund is that it's the lvmh family that is my soul LP so when we do invest in in things related to luxury goods or nfts or the metaverse and there's synergies with the brands we also make that happen I'm so excited to be here hi my name is olegg and I started a business called sweatcoin in 2014 last year we moved into web3 we finally found chain fast enough so building on the air and because of our scale we have more than 130 million users we cannot approach nfts in a fashion that you know kind of most collections approach it right now we need to be thinking of millions of millions of nft holders and approaches how they can engage and how they can potentially gain value and I guess we're doing quite a lot of pioneering work and that's why I'm here hey everybody I'm Drew Austin uh so I'm I'm here as a collector Builder and an investor so I kind of see the space from a few different perspectives as an investor I invest through Redbeard Adventures Angelus Syndicate and our first manage Capital fund we invest in early stage pre-seed seed blockchain web 3 businesses we we spend a lot of time with companies thinking about tokenomics and how to introduce new types of user experiences and behaviors by leveraging the blockchain technology and I'm also a co-founder of knights of d-gen we have any knights in the the building here let's go we got a knight to djen is a with the leading web 3 Sports pfp project but also a really interesting fantasy sports game and uh that incorporates nfts through and through through traditional RPG behaviors so happy to talk that through as well hi everybody my name is the Eraser so I'm the founding partner of seven Next Adventures so we're an Asian based crypto phone that invest into early stage projects from infra across to uh you know gaming and social apps uh and uh I was also I'm also a crazy nft collector I own like 300 almost 300 art blocks and uh almost like 100 something uh you know metaverse land so all across different metal verses so yeah very happy to be in this panel thanks hi everybody my name is Scarlett Arana I'm actually the co-founder of bit basil we specialize in onboarding on the masses to web 3 particularly in metaverse the Martian architect and a geospatial scientist so to talk about digital twin how that relates into unlocking the city's cultural value so it's really exciting to be in the space um and how what the future of metaverse look like um in a couple years cool okay so my first question for you guys is what characteristics do you look for when determining which types of nfts to invest in and anybody can start um so our fund doesn't invest directly in nfts but I do collect them personally I think what I'm looking for at first is the message and the community not just the the sort of the physical characteristics of the of the nft unless it's like generative art which is a category in of itself if it's a really art nft I'll look at really the artist and their message and I think that's that's what I'm really looking for is what message Are you delivering to the world and what do you want to create in the future with it um you're not going to like my answer but my you know my answer is I just need to like them I really don't particularly care about characteristics Etc it just needs to resonate but where it gets interesting is I do believe that the nfts are evolving and we need to be thinking not what we're buying now but what is the utility and what is the value that will come and my BET right now that it is going to be in Dynamic nft space these nfts are going to evolve on the basis of on-chain activity potentially off-chain activity and they will become representations of you in metaverse in space and then they might actually become incredibly valuable because everyone is quite unique and the combination of visual characteristics and metadata could become extremely thought after so rather than controlling the entry point and saying there will be maximum 10 nfts 20 nfts 10 000 nfts we can actually create things that hundreds of millions of people will be able to engage with but Selected Few will become collectors items and will become incredibly sought after and Incredibly valuable um so for me I I started collecting nfts in 2018 uh my first ones I ever bought were on super rare um and then actually super air became our my first investment that I ever made as a venture investor so I had three kind of like moments in the nft space that kind of transformed my thinking about nfts the first one was the first piece of art that I bought on super air and when I felt that same feeling of ownership and pride in the asset that I purchased and I and the fact that that was transferable from the physical art that I've collected to a digital and I felt that same feeling that was a really powerful moment for me my second one was NBA Top Shot that was one of my second major moments the first time I opened a pack was able to got excited about what I was able to get was able to quickly sell a moment and felt that collecting experience that I remembered from when I was a kid and realized how much easier it is to move in a liquid Market I just thought this was an incredible you know incredible platform and an Incredible use case for nfts the third one happened to me uh happened to be Zed run zedrun was a horse racing game is a horse racing game and the I the I remember vividly like the first time I won two races in a row with my nft horse all of a sudden I was getting offers for thousands of dollars for a horse that I paid I think a couple hundred bucks for and I had this feeling of horse ownership that like .001 of the world feels like I I've been to Belmont I've been on a horse I forget its name five seconds later but to feel that level of ownership uh was really powerful from there now I'm like I you know I own thousands of nfts I like to I love to see teams that are innovating that are you know bringing new utility new Behaviors new experiences um I love I look at it almost like Venture I like to know the team I like to think about how they're utilizing and applying technology what is their road map how are they thinking about the long-term Vision or I just like to have to like the art if the art resonates with me and it's something that I want to display in my house or my office in the metaverse when I start to throw parties in the metaverse then that's something I want to procure so for me there's a lot of different variables and different things that approach but I've kind of been through this journey now where I've I've learned to to know what I like and when I feel it you know we've now invested as an as a fund in Dapper in Zed run in mb in super rare in many of these companies because I felt so patched Knights of D gen of course as well is another one where my fund is an investor I'm a builder and I probably own 100 plus out of the knights nfts because I believe so much in what we're building so for me once I feel it I'm very comfortable dabbling and and and testing the orders with various projects but if I feel conviction then I push the chips yeah when a monster is this question I wanna uh honestly uh from two perspectives one as a fund so as a fund we invested and I would say Innovative Technologies on nfts for example programmable nfts right so if you think that uh because I think our definition of vanity right now is a little bit too narrow right it's only about Collectibles ours and the and you know uh the things in the in the games but I think uh nft is a very very kind of wide kind of definition so it's just a container so you can contain everything it's just an object right so why not it can be a kind of like a let's say a paragraph of code or it's just a another AI algorithm right so basically uh what we're looking at is uh technologies that change can change analysis or we could call it dynamical programmable nfts so that's what interests me most and as a collector I believe in two kinds of annuities one is they have absolute utility for example metaverse lens that gives you ownership right so you can just feel that you have the ownership no one can actually take your land away and that have 100 of uh used utilities that's you know linked to the nft another one is zero percent of a zero percentage of of utility is just an art so which I love is actually 100 generative art and it's 100 generative on the Chain itself it's not all about owning a picture and this picture is stored somewhere else you know off chain or on ipfs or somewhere else so it's all about 100 on Chen but with no utility yeah here in mid Basel um we actually have a lot of nft collectors and um oftentimes these nft collectors what they're looking for is the story of your nfts some are more interested and more PHP projects some are more um a rare unique art artifacts um and others are more utility but in the light of uh PhD projects and we work with a lot of one-on-one artists and we find these artists are having a hard time selling their nfts so what we begin to do here at bit Basel we added a utility which had a token gated ability that unlocks some of the cultural value within that artwork to allow the artists to tell their stories and this is something that's very attractable to a lot of these nft collectors and and this idea of using token gated artwork is to give specific access to a collection of that art is extremely valuable because often time the artists um are the The nft Collector buy the artwork because they're looking for to help support these artists um and they've been very very successful as a result I'm really excited because now we're seeing more programmable nfts um doing like even Diana you're going to stay within events so we see nfts are used as augmented reality to enhance artwork so that's also very attractive on the metaverse side and it has unlockable features and we also see social AR so what that means is two nfts on that interact with each other to unlock special token gated abilities so these are you know we're very first uh stage in terms what is even possible with nfts and it's really exciting especially in this ecosystem of what can we actually what kind of utility we can start applying for these nfts so these are the um really what the nfts collectors are looking for cool so obviously the nft landscape is constantly changing um I'm I'm interested in that we're you know we're now seeing the rise of Bitcoin nfts and I'm very interested in that so I want to get your take on bitcoin and FTS and what you guys think about that especially in terms of investing in those uh that's it um so when I first heard about it um I again like most things I like to dabble I like to to get my hands dirty to understand some things so you know in every one of my groups like you know I'm in a couple Dows I'm on a project I'm an investor so we were all talking about should we buy should we build what do we want to do um you know there were a few like that there was a real big rush in the beginning I think it's really interesting to be you know you know like we were saying before it's on chain they're doing some interesting things with this they're introducing some new utility to bitcoin which I I think any more exposure to the Bitcoin ecosystem is always a great thing for the whole Market I'm a big believer in Bitcoin as like a as still a pillar and foundation of the cryptocurrency ecosystem even though it doesn't get talked about at conferences like this um I still think it's a very important it plays a very important role so if nfts um and ordinals and things of that nature start to bring more exposure and visibility to to Bitcoin Community I'm all for that um it's a very very very early Market uh I don't know yet what the the path for scale or true true customer adoption or utility might be but like again this is the space we're in experimentation is everything so I get excited when I see people trying new so I'm excited about it um to be honest I'm not a fan of Bitcoin nfts because I do believe that as a fundamental layer of all the crypto World Bitcoin should we stay as simple as they can right it should be uh should be trusted right so so so keep on going going simple Bitcoin is just Bitcoin nothing else right so yeah so I actually think it's probably one of the most exciting things that happened to bitcoin this year and it shows that it doesn't have to stay as it is things evolve technology evolves and if this isn't an opportunity for Bitcoin to find another product Market fit rather than just payments I think that's super exciting and also will trigger a lot of activity in the Bitcoin community and the developer community so I think like I'm all for it I I haven't bought them personally but I just think that it's such an interesting experience for Bitcoin that we'll see a lot of innovation come out of it yeah no definitely so for those who know um recently there's something called ordinals or digital artifacts um so you inscribe um an image onto uh a SAT so this is kind of like how uh programmable nfts are becoming more adoptable within the Bitcoin ecosystem but it's still very early this is something that happened early this year actually um so it kind of remains to be seen as to where can you take this Innovation um to that next level the first nfcs actually were minted on Kana party which is a Bitcoin with rare Pepe's so from there it sparked this whole other generation so they really want to ask what what this new ordinal generation spark so am I spark within an ethereal ecosystem to think um in that direction as well I'll just say that it doesn't matter what chain they're on so you know nft on bitcoin or nft on flow or Nifty in ethereum the only thing that matters is if it's collectible it's an art and how much following it has but the most important thing looking forward is to worry about utility and when you will when we will find true Mass Market use cases for nfts which we still haven't then you know can the chain that they will be on wouldn't matter as long as it can provide that massive throughput and access for tens probably hundreds of millions of people to use it yeah that's that's a great answer I think utility is very important when it comes to nfts especially today um I also wanted to ask given current market conditions do you think now is still a good time to invest in nfts why or why not whoever wants to start I can start probably now is the best time to invest in nfts some asset prices didn't come down I mean we've seen a staying power and some some nfts but as the price of eth came down and a lot of the nfts surprise have depreciated I think it's just a great opportunity depending on how you invest if you invest in individual nfts or if you're you know buying portfolio of nfts I think you know looking to the Future it's a great opportunity there's tons of projects that are still are still launching I'm going to participate in the launch Hub project that does where you where you meant an nft that represents a diamond or an emerald and in the future you'll be able to have access to that piece of jewelry so I think there's so many so much Innovation and so many ways to Mint and and create new communities with nfts that I would just come in as early as I can and it's always a good time to buy nfts I for me it depends on your ambition if you want to play in this tiny little segment that what we have right now will become in the future then yeah sure go ahead and invest in nfts right now but if one has building Talent what you need to be looking is experimenting and inventing that new utility will undoubtedly create so much more adoption to nfts than we're seeing right now we haven't seen nothing yet when it comes to nft's ability to participate in every day life of people you know kind of the thing that I'm excited about and I believe will happen for sure is ticketing you know we're spending so much money on buying access to concert to playing to this and that nfts are a perfect I think vehicle to carry this and it's a seemingly very simple use case and this is used by hundreds of millions of people every day this is the type of stuff that five years from now when we're going to have it we're going to look back at this and we're going to think like this was a nascent industry in playing and it was exciting but it's nothing in comparison to what we have right now so build innovate bring in new use cases experiment um I I guess here's my thesis um you know I've always been I've been a long-term nft investor since you know again like I since for years now but the way I look at it is I think I heard a statistic I could be wrong correct if I'm wrong there's about 12 000 daily active users that are spending over 0.05 a day on open C let's just call openc the the metric so let's call it 15 to 20 000 maybe across those across the space that are buying nfts spending more than 0.05 you know the this web 3 this whole crypto Market you know some from about 2011 to 2017. we speculated on white papers and all that kind of stuff then we had a couple then we had the first wave of real user adoption which was defy and D5 brought in the first wave of users from there 2019 to 2022 nfts became the next big user of adoption and honestly I think NBA Top Shot was the was the Catalyst for for most of that it was I think they brought in 500 000 wallets and and people into nfts my opinion is that um gaming is going to be the next big wave for for adoption and I think it's going to be exponentially more user bit user adoption than than D5 and nfts combined so when I think about that and I'd say in the next 24 months you're going to have some of the big AAA game studios start to bring their games like I tell a lot of my portfolio companies stop worrying about trying to bring web 2 to web3 let the big gaming companies do that get your product right there's enough user base to grow your user base make sure everyone in web3 now wants you because when the new user base comes and they are coming there's no they're going to follow the games that they've been playing for years when they come and they realize that that the Ocarina of Time that they acquired in that game could be sold for tens of thousands of dollars they're never going back to regular gaming again so that's going to bring in a wave of users and what's going to happen is they're going to go on a journey those users are going to go on a journey and they're gonna get hooked on nfts the first time they play their game and acquire that and then they're going to want to say well let me see the history of this space and then they're going to look for crypto punks they're going to look into we're gonna don't get me wrong the next these last six months and hopefully the next six months wipe out a lot of the crap but the companies that sustain the projects that sustain that build Innovative products that build strong communities that build good sustainable business models into their nft into their nft projects they're going to survive and they're going to be the ones that are going to reap the benefits of the next wave of user adoption from gaming so what does that mean it means that the nfts that you identify now that can stand the test of time and can get through the crypto winter are going to have a lot more customers to sell to in 12 to 24 months so if you could if you could think on that time frame I think you'll be in good shape [Applause] yeah I really agree on the on the on the gaming part so basically as I think as a font uh it's a good time because we're still in a bearish market right so uh it's a good time to invest into nft related Technologies or anything related platforms so we've seen a lot of new Innovations coming out like I mentioned like for example FG plus some like token gated things token gated contents and LT plus AI like a new uh I don't know if you know a heard of a game called AI Arena so air Arena what they do is actually they use an FPS to seal uh AI algorithms inside the NLP and you can trade AI organism to train your character so it's a very very Innovative kind of idea and uh for a collector I think every day is a great day for buying nfts uh the matter is um like when to sell right so if you want to make money like how can you sell like when you're gonna sell the nfts right so basically um I think investing into analysis is like enjoy investment so it's like doing a new investment it's like okay I but I I also bought a lot of annalities that were zero but I always catch the alpha inside it so basically it's all about when to sell and when you see some I would say not good things happen in the community or they're not following their roadmap or you see the the utility of the nft is not what they just promised in their white paper so just be sure to jump the nfts yeah yeah actually um I was saying this in a year the word nft is going to be going away we can actually be using nft without realizing so as more Enterprises get into this Market you're starting to see like membership and token gated access you're probably using nft without realizing it um and what's happening now and there's a conversion Point what that means is there's AI entering in the nft space and of course the metaverse so these are new utilities and tooling that's going to allow the Creator economy to have more Innovation within the nft space um that could do more unlocked abilities in token getting goals one of the things that I've noticed that has really been uh very popular is wearables so he's memorabilias within nft so you have a limited edition um Sports collectible memorabilia so these are really hot in a market where you have a unique artifact um they're hardly collectible and there's is a huge demand for that so I definitely look into those type of nfts that are more like on the sports memorabilia aspect um or wearable tennis shoes clothing line and Fashions this seems to be very popular and they're not going away they're actually becoming more and more collectible as more people start adopting systems so don't think about nft as something that oh it's not going to go away actually I think it's going to be more adopted if anything else cool and on that note we are out of time we're actually over time so apologies to the next panel thank you to the panelists thank you guys for joining us so late in the day we really appreciate it enjoy the rest of East Denver