Collecting is more innovative than ever as the NFT market hits new highs.
Over the last five years, top-tier venture capital firms have invested over $500 million into startups eager to use technology to disrupt the collectibles market. These startups fall into three segments:
- Physical Collecting, Enhanced: managed marketplaces that make transacting physical collectibles more fun, faster, and risk-free. Companies in this segment act as “digital layers” to enhance the existing physical hobby, including StockX, which specializes in authentication services to reduce buyer risk, and WhatNot, which uses live-streaming to put a modern-day spin on box-breaks.
- Physical-Digital Hybrids: vaulted marketplaces, fractionalized ownership services, and collector tools that abstract away elements of the existing physical hobby, using partial digitization to expand access. Companies in this category include StarStock, Rally Rd, and Alt, which change how the hobby is experienced by separating ownership from single-owner physical custody.
- Native Digital Collecting: non-fungible token (NFT) issuers and marketplaces that aim to create an entirely new collecting experience, one that does not reside as layers on top of or between existing physical inventory, but instead attempts to create an entirely new, digital-only class of collectible. Companies in this category include Dapper Labs, OpenSea, and Sorare.
This third group, of which Quidd is a part, is challenging the very nature of a collectible, in effect asking collectors, “what is a collectible anyway?”.
Of special note is the breakout success of NBA TopShot, which at the time of writing has generated over $600,000,000 in aftermarket transactions of officially-licensed NBA NFTs by nearly 300,000 buyers on the FLOW blockchain. The team behind NBA TopShot, Dapper Labs, previously had a hit with CryptoKitties, helping to create and popularize the NFT collectibles space in 2017 and subsequently driving over $30,000,000 in gross merchandise value (GMV).
While the NFT market will ebb and flow, it is clear the technology -- and most importantly, the disruptive business model that the technology enables -- is here to stay.