Looking for intrinsic value
We’ve previously covered that digital content is an (investable?) asset class worthy of our attention.
Even so, it’s hard to argue that these assets have intrinsic value - just like traditional art and other collectibles. Without cash flows or claims over assets it’s almost impossible to value collectibles, which makes them a niche market.
NFT innovation moves at an amazing pace though and this challenge is being taken care of. We can now build our own asset and add intrinsic value to it as we please.
DIY
This might sound very esoteric and far fetched. Is this designed for advanced software developers while mass adoption is purely theoretical and full of barriers?
The best way to learn is, of course, by building. Charged Particles offer a platform that allows us to do just that.
All you have to do is set a name, upload a file and you can mint your own NFT. Now your favourite selfie can be a digital collectible that will live on the blockchain forever!
The fascinating thing here, as you can see above, is that you can build in a % fee for future resale transactions and interest this asset generates. Royalties embedded right into the object - that’s quite exciting!
Below is an example of a blockchain-native NFT with an income-generating token inside (highlighted in blue):
Now we have a digital collectible paying interest. This may seem artificial - after all, why not buy the art and keep cash on a separate deposit? Fair logic, but the beauty of crypto is that first experiments pave the way for unexpected combinations.
Why not ‘energise’ your NFT with the platform’s token? That way as the NFT owner you get a share of the profits of the platform you bought it on.
Why not have the artist place their own token inside their creation? That way your NFT will have both the aesthetic value and an embedded bet on the artist’s career.
Finally, imagine having an NFT of your favourite sports team that pays you every time they win a game?
Possible combinations are infinite and can end up creating an investable asset class with embedded intrinsic value.
How do you get this off the ground?
Getting initial traction is an interesting challenge - after all, wrapping interest bearing assets into digital art isn’t what most people think of when they wake up in the morning.
Luckily for Charged Particles, they weren’t confined by either physical world or digital marketing. That’s what their platform launch looked like:
Once your eyes process this cacophony of colours, you may recognise one of the virtual worlds covered here.
After the official part of the launch, participants were able to explore virtual galleries:
Once you pick something you like, the virtual world links you to a blockchain-based app…
… where you can buy the NFT and ‘energise’ it by bundling it up with a coin of your choosing.
This is a good example of how different parts of crypto ecosystem come together, creating unique experiences.
Bundling has had negative connotation in finance and is associated with multiple investment products packaged together in a complex and sometimes opaque manner. Perhaps this time we’ll get bundling right.