Alt Asset Allocation - Ep 58 - Non Fungible Tokens and The Metaverse with Rizzle
Primer: In this episode of Alt Asset Allocation podcast, the host Ben Lakoff interviews Rizzle as he shares with us his thoughts on Non-Fungible Tokens (NFT) and the Metaverse. Rizzle is an OG in the NFT space, being the co-founder of nft42. Read till the end because he will be sharing alpha on his secret art drop on Art Blocks.
Rizzle
Introduction
His name is Ryan, but nobody knows that name in the NFT space
Co-founded nft42
Mainly a community guy and a role that he fits easily into
A jack of all trades but still needed people to execute his vision
Exited and started his own project, but still on great terms with other co-founders
Started in the crypto space around 2012 or 2013 tinkering with Bitcoin and altcoins
Fascinated with the tech and constantly tinkering with any new projects that came out
Joined all the subreddit and forums hated all the communities because he found them very toxic and always trying to pump and dump
Finally found a place that fits him when NFT came into the scene
When NFT came along, he felt a connection with all the artists and creators
Been staring at the charts and graphs for years but NFT is something different
NFT led to the Metaverse and found all these to be amazing applications of the tech
How did he get the mindset of investing in NFT?
Growing up he collected all sorts of things, like sports cards
"The art jump was like a natural, dangerous leap to me, to be honest, because my walls in my house don’t allow for any more art but my wallet in my pocket allows for infinite art. This is cool in some ways, but is also scary in other ways because you can never get out of that rabbit hole if you’re not careful."
Rizzle
He studied the market intensely to understand the trends and buy the popular cards to trade them
Did the same for used video games
His collections can be classified into 3 types:
Collecting for the sake of collection
For hustling
A combination of both
Thoughts on NFT
The NFT scene right now
Lots of rapid innovation - even with the current tech, it can churn out a lot of projects
Profile pictures NFTs are the hottest thing now
Hard to believe that prior to all these, there was no secondary market for NFT
People who bought NFT back then might be stuck with it
They just like the artist and the movement, so they buy the NFT
Now the secondary marketplace is full of demand and nobody can keep up with it
How to explain NFTs to a complete newbie
Had the best success by comparing NFTs to something that they already have that are non-NFT
Similar to buying digital goods like an album online, except you don't really own it because it is trapped in the platform
Different from owning a physical item like an actual DVD, because you can sell it, share it and use it in many other ways that a digital copy cannot
"You already own a bunch of digital goods, but you don’t really like own them. You are trapped in your Google play account or whatever. You can't send it to a friend so they can watch it. You can’t sell it to someone else when you’re done watching it. You can't even really throw it away."
Rizzle
People starts getting confused when he started talking about virtual worlds, VR, art galleries, owning 3D assets etc
Generally, people can understand the ownership part of NFT, but it is a challenge for them to understand the overarching ramifications of this technology and the possibilities this technology allows beyond ownership
E.g. Charged particles protocol founded by Ben Lakoff - merging DeFi with NFT
People in the space are learning what other different things you can do with NFT, so this is not just about having profile pictures NFT and ownership only
Explaining NFTs to the older generation
Not much luck
Explained to his family before and they get it but not to the point that they are interested enough to invest in it
During 2017 before the Bitcoin runup, his mum asked him to invest some money to invest in Bitcoin
But when the price dipped, her mum wanted to liquidate immediately because she cannot take the volatility
Someone who is in the space might have some safe bets to recommend but even those are safe relative to the wider crypto space - it is not safe by conventional standards
Ben had a hard time explaining what Charged Particles protocol is
People had to cross a few hurdles to understand it
If they don't understand the value of crypto, they won't understand the value of NFT, much less about NFT injected with programmable interest, which is what Charged Particles is about
Ben found it easier to explain conceptually to the younger generation
They spent billions per year buying skins to make their virtual avatar look pretty, so they get it when he explained that they don't actually own those skins
How to lead people to invest in art NFT?
Go to a centralised exchange like Coinbase and start buying some BTC and ETH - this is about as conservative as you can get in the space
To go into NFT, you have to get a lot more involved by joining Twitter, Discords and looking at other people's projects
The risk is that there is a good chance that you might get stuck with some of the NFT despite having a secondary market
"You know, buy stuff that is appealing to you. There’s a good chance that it will resonate with other people too. And you know, if NFTs continue to expand, which I have no doubt they will, I feel like anyone getting anything now will be fine in like five years from now. Maybe you don’t go all in on like, you know, cow profile pictures or whatever."
Rizzle
He only buys NFT that he likes, without really thinking of flipping it
There is a satisfaction beyond the financial aspect of owning art that you like e.g. gratification and gratefulness of the artists he helped to support
Also, a sentimental attachment to some of the NFT that he cannot imagine parting with
To get 10x on an NFT, you will need to know people and be lucky
You will still do well if you buy NFTs that are appealing to you, diversifying over different projects and be willing to wait for 5 years
What is super exciting and fascinating in the NFT space right now?
Exciting for the space
SuperRare's community drop because it is a huge push towards decentralisation
The narrative for decentralisation had been the drumbeat that the crypto space is marching to for years but got lost somehow in the NFT hype recently
This act might push others to contemplate decentralisation and move more towards that direction
This is what attracted him to crypto in the first place as it will level the playing field for everyone
Exciting for him personally
Everything that has to do with the Metaverse
Expansion into the virtual world, being able to own a piece of virtual land to set up shops, selling virtual goods
Metaverse
What is the Metaverse?
Metaverse is like many virtual worlds with a significant level of interoperability
What we have now are many siloed systems with their own self-contained systems
With a Metaverse, you can take one NFT from one virtual world and bring it to all other places and everything will still work
Cryptovoxels is a virtual world taking good steps in that direction
Talking about incorporating currencies of other virtual worlds into their virtual world
Having portals to other virtual worlds inside theirs as well
The term Metaverse is used loosely because most of the time, the term had been co-opted and it refers to a virtual world that is self-contained e.g. Facebook, Epic games version of the Metaverse
Thinks the big corporations' version of the Metaverse is more like walled gardens and hopefully will not have any place in the real Metaverse
Super Rare's community drop gave him some hope because they have something that the versions from big corporations will be unlikely to have
Knowledge and expertise
Backed by a passionate community that cares more about the Metaverse than an average Facebook user
Crypto ethos of redistributing wealth back to the community
Regulations
Do people care about self custody and ownership?
Ben feels that people generally don't care about it
But Rizzle thinks that people don't know that they care
If people get the concept that they can just buy one NFT that works everywhere, they will jump into it instead of using different siloed environments with their own ecosystems
Regulation in the space
Tricky because, unlike a token, the term NFT encompasses too many different classes of assets and is very complex to regulate as a whole
Will need to incorporate more jargon to distinguish between the different characteristics of NFTs and which asset class they belong to
He is afraid that because it is so complex, nobody will bother to distinguish out the different NFTs and hence it will be one fell swoop type of regulation
Ben mentions that to send a million dollars through banks, he will have to go through many hoops. But to buy a jpg for a hundred million dollars, essentially it can be done by pressing a few buttons
This is potentially worrying for the platform facilitating that
Also, Ben wishes that tax regulations can be clearer because there are many people that are unsure of the tax implications hence are not doing things
Personal thoughts
If he can remake the world of NFT, what would he do?
Wished that all the games he played before have NFT in-game items - will be good to look back at all those items he had collected as a kid
All important documents, like identity, can be rolled into an NFT that has gated access into places in the real world
Wants NFT to level up the playing field for everyone, something like what Axie Infinity does
Games are like Trojan horses that can onboard people to the tech
NFT could be like that too - having cute penguins on Twitter, having fun while simultaneously overthrowing the banks
"Actually I don’t even like the Axie game man, full disclosure. It’s like so boring to me, but it doesn’t even matter like, you know, something as simple as that unlocks like so many doors. I feel like that for so many people, getting these in video games is sort of like the Trojan horse, almost in terms of like rolling this technology out into the hands of the entire world"
Rizzle
Favourite NFT
His first NFT was a giant friendly potato
He was on social media and someone asked if he wanted an NFT. Proceeded to draw one for him
This first NFT opened the flood gates for him
He forgot that he had listed it for 1 ETH and quickly removed the listing because he will be heartbroken if it was sold
Avastar used in his profile picture
Co-founded nft42 and Jim McNelis gave it to him
Felt he was knighted by him for being part of the organisation
Used that profile picture for a long time and will not part with it
Stina Jones - had a few from her and had been collecting for a long time
Miguelgarest - commissioned his new profile picture from him
Most undiscovered artists
Cryptoyuna - never really quite caught fire like the rest
Miguelgarest - simple cute and funny, has aesthetics similar to Stina Jones
Not good with names, but if he sees something he likes, he will support the artist
Feels like he is robbing someone when he bought art for a few dollars in HEN (Hic Et Nunc) using the Tezos blockchain
Most undervalued NFT project
Proof of Beauty
David is working on brilliant projects, looking at the space from another perspective
Experimenting with technology for the sake of doing so
Had a project called LONDON
6 months ago he would have mentioned Art Blocks by Snowfro
They are all grouped in the same group of people who are passionate about the space
Favourite Metaverse project
His own project codenamed The Rizzle project
Collaborate with Miguelgarest and the developer Cheaterflums that Snowfro recommended
It is a Metaverse NFT concept, and he bounded the idea off Snowfro who loved it
Will be an art drop on Art Blocks
Will be a style that is goofy and funny, a meme like project that acts as a trojan horse with very good tech underpinning
Hopefully will push the space forward
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