Primer: Learn more about Charles Smith, the founder of Nifty Island, which is a metaverse where users can create their own content and own them to do almost anything they want. Read on to find out how he began this journey.
Who is Charles Smith?
Started in management consulting, working on UX projects
Doing research for different Fortune 500 companies
Left to speculate on crypto, experimented with Bitcoin mining
Headed the business development side for Reserve - a project for stablecoin
Started working on Nifty Island since 2020
What attracted him to crypto?
He is deep into Austrian economics - which is anti-authoritarian, so crypto attracts that side of him
Interested in novel forms of social organisation and crypto offers that
Bitcoin is not socially contingent, and it does not rely on having a trustworthy central bank
Applies to DeFi protocols as well, where you don't have to worry about the intentions or motivations of the people running it because it exists as a code
It's important to remove the middlemen or trusted third parties because in a chaotic, fragmented and changing world, trusting each other as a basic assumption might be a challenge
Why makes him get started on stablecoins initially?
"And people in Latin America are like super eager to hold dollars. And stable coins are a way of giving them digital dollars that they have sovereign access to. So they're not reliant on a PayPal account, or a foreign bank account where services can be interrupted or shut off. They have sovereign access to digital dollars, they're not forced to move to cash, just to enjoy stable money, they can enjoy the convenience of like, digital economy while having a stable unit of account." - Charles Smith
How did he start on NFT?
Been a lifelong gamer so was already watching the space closely
Started with crypto kitties and took a big position on crypto punks as an investor
For any NFT to succeed, there has to be a good compelling story that can draw people in
Crypto punks have the strongest story of any NFT now - original experiment launched fairly, cap of 10,000 punks only, unique aesthetic that is not imitating analogue art at all
Thinks that the delineation between functional NFT (in-game and virtual land platforms) and non-functional NFT (art, collectibles) will eventually break down
E.g. Crypto punks and Bored Ape Yacht Club will become more functional - able to use it to access digital space or change the head of your avatar
Favourite Game
Lifelong Super Smash Bros player - can always come back to it endlessly
Likes 4X (Explore, Expand, Exploit, Exterminate) games like Total War and Crusader Kings because they have this element of emergent storytelling - always surprising in how they play out
Played MMOs like Guild War and shooters like Valorant.
What is Virtual Land platform / Metaverse?
Essentially gameverses where the game assets have a life independent of the game itself and you can move game assets or avatars across different platforms e.g. if you own a sword in the game, you can take it outside of the original game, take out loans on them
The game that emerges out of this could be something that the developers could never have imagined, because of new forms of digital ownership creating new incentives to make the game more generative and complex e.g. Dota 2 and Roblox
If we have a gameverse that provides an incentive for people to continue improving and building more stuff on it, it will be a place where people can interact with all kinds of services.
It will also become the main hub for your digital life, like Ready Player One.
Only by giving people own a piece of the digital world will people want to spend a lot more time in it
Nobody will spend endless time on a platform that does not reward their efforts
Nifty Island
What is Nifty Island?
Nifty Island is kind of a social gaming hub where users get their own island and they can decorate it, display their NFT collections, play games
Users can visit other users' islands on the world map
An open gaming platform like a mix between Roblox and Animal Crossing
The aim is to build a base level game experience built by the core developers, set up all the mechanics for people to easily build on the platform (without knowing how to code or create character model), then set up incentives to make Nifty Island a compelling place to build
It will also have its own token and people can earn that token by participating in the gameverse.
"For us, land itself isn't scarce. There's like, if you join, you can get like a base level small island. So we think that like people are playing games to escape the constraints of like normal life and not to be reminded that you know, that lands are super expensive."- Charles Smith
Land scarcity
Land in Nifty Island is not scarce unlike most other metaverses projects
To get a bigger island will need more tokens that you can earn by playing
To make the island valuable and to earn an income from it, you build on the island, make more people come to it, build games for others to play, set up communities on it
Eventually will be able to trade island, wearables, NFT on the platform
To prevent copycats on the platform
To regulate against people copying existing wearables, they will assign rarity score based on which assets have been around longer
Or require content producers to put up a stake using tokens and punish them for bad behaviour
Tokenomics
Tokens can be earned by participating and also be used for the governance of the network
If tokens are deflationary, will not reward production
Have to be inflationary but with the ability for people to stake to be protected against inflation, while also allowing more issuance of tokens to keep the game economy functioning
A game where a bunch of people are just buying a lot of lands, holding it and not producing anything on it, will not work
Usage of Tokens within the gameverse
Tokens can be used to gatekeep access to bigger and more complex islands where you can host a lot more people and build a business
If you stake the tokens, your island will be displayed more prominently on the world map to attract attention
Can also be used to make your storefront in the marketplace more prominent by staking
Having a token model is very flexible and people can expect it to change
Land model is kind of fixed once you have committed to a model of scarcity
Hence land scarcity model is going to have a lot less flexibility to iterate as the game progresses
Do not want a model where you need to make a huge land purchase in order to enjoy the basic mechanics of the game or to be a stakeholder in the game.
Difference between Nifty Island and other virtual land platforms
Do not want something like the land scarcity model where people with capital will come in, buy and hold the land without any production
Want to build an economy that is all about incentivizing production, regardless of capital
To build an infrastructure for user-generated content that appeals to people and is easy for people to jump in and build on - will include building a marketplace, making the creation and sale of NFT as easy as possible
Vision for Nifty Island
The ideal state is where Nifty Island has all sorts of niches in each island - some selling emojis, some will use their island like a Discord server to socialise while others will have games contributed by 3rd party developers for people to play
On the incentive side, a person could have a portfolio of 10 islands
Some of them are owned entirely while the rest are fractionalized so you own a part of it
But each island have a few thousand daily active users generating Island token for you, hence it's like a metaverse portfolio that generates yield, like an investable portfolio
Being a founder
Good side
Being able to offer work to people that excites them and brings out the best in them
To be a part of a project that can give a passionate user of the platform a career, a nation and an identity forged from the game
Bad side
The space moves very fast, so it's a source of stress but can be remedied by acting really fast and grinding
If you take too long to bet, the landscape changes and you might have lost your point of access
Would rather choose the stress of grinding than the stress of the space shifting
On hiring people
People are not going to care about the project more than you do, so you need to put 100% in as a founder
Made 2 promises to his team:
Going to be the most fun and lucrative thing to do with their time
Beyond the health care and other benefits, you have to back the people who work for you so that they can take on the world together with you
Favourite NFT
Crypto punk - male, with a cowboy hat, with a cigarette, pretty plain looking but he looks wise and had seen things
Looking at Mari (@MadMaraca) who does cool voxel-based environment art
Most controversial thoughts on NFT
Don't think that digital land should be scarce because, in the real world, you would rather have infinite land
Does not make sense to introduce scarcity into a game economy when it does not have to exist
If he can instantly change one thing in the NFT space...
He wishes there will be a more universally accepted and decentralized solution for metadata hosting that can be accessed by anyone
Currently, it is a very heterogeneous mess
The NFT space in 3 years
NFT will have a much faster adoption than the financial side of crypto
Most people don't want to think about money, they just want to have it
NFT is one main way to show others who they are online, to serve as a signal of who they are digitally
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