For the longest time, people have built collections on shared interests. Collecting magnets, trading cards or exchanging banter over sports have all served as social currency. But could non-fungible tokens (NFTs) do the same for digital items?
Media mogul Gary Vaynerchuk says yes.
The chairman of VaynerX and CEO of VaynerMedia, Vaynerchuk said that while the current state of affairs surrounding NFTs reminds him of the hype associated with internet stocks in the early 2000s, it’s quite likely that in the near future the unique digital tokens will become the driving force for social currency.
“This is going to be the greatest era of intellectual property ownership,” he said Monday, in an impassioned conversation at Consensus 2021. “This will be bigger revenue [for sports teams] than TV rights.”
Although sports stars have long benefitted from lucrative sponsorship deals, once they realize the sway they hold over a “multi-billion dollar” market it would change the game substantially, including the possibility of collectibles having a tied-in royalty component for the issuers, Vaynerchuk said.
While it’s likely “a lot of things will not end up being worth what they are today,” the intellectual property implications go much further, Vaynerchuk said. IP will likely be NFT-native and then built up to include add-ons like concert access or even entry to popular restaurants, he predicted.
Just as “Pokemon used a card game, ‘Star Wars’ used movies and Harry Potter used books” to build out other forms of IP, an NFT could serve as the kernel for multiple lucrative ventures, Vaynerchuk said. “The original Mickey Mouse drawing is a collectible asset,” and an NFT could play a similar foundational role in future media empires.
“The real crazy opportunity is building a Power Rangers, Pokemons or Transformers” for the digital world, he said.
NFT art and collectibles have shot to fame this year with the most notable sale coming in a March auction at Christie’s, which sold a work by Mike Winkelmann – popularly known as Beeple – for $69 million. The unique digital tokens have also become a hot product in the fantasy sports space with Dapper Labs’ TopShot platform registering $575 million in sales volume as of late March, and raking in investment from basketball legend Michael Jordon, players such as Kevin Durant, Andre Iguodala, and actors Will Smith and Ashton Kutcher, among others.
In February, Vaynerchuk participated in a $50 million funding round for Sorare, an NFT-powered fantasy soccer and collectibles platform. In the Monday chat, he revealed that his $25,000 investment in Sorare is smaller than his NFT holdings but said he sincerely feels sports are a major expansion opportunity for issuers of digital tokens to capitalize on an additional revenue stream.
Noting that NFTs, much like cryptocurrency and Tesla stock, represent an alternative investment class, Vaynerchuk said those looking to make monetary gains on digital collectibles will be searching for needles in a big haystack since the market is flooded with supply.
“The cat’s out of the bag,” Vaynerchuk said, adding that while not all NFT projects may survive the hype cycle when the token economy grows to a size substantial enough that the hottest restaurant on New York City’s Upper West Side starts minting tokens, “the 58-year-old on the Upper West Side will buy the NFT.”