A detailed explanation of the most valuable NFT portfolios

Summary: Find opportunities from these most valuable projects in the NFT space

Chinese title: A detailed explanation of the most valuable NFT portfolios

Original link: https://andrewsteinwold.substack.com/p/-fantasy-venture-nft-portfolio

Word count: 4124

Author: Andrew Steinwold

Translator: Midsummer Night, StampSoda

Translation agency: DAOSquare

What are the potential unicorn companies on the NFT track? (This is not a translation, it is a reference to the title available if it is published in the domestic media)

Note: This article is not investment advice, and the views stated in the blog do not represent the views of Sfermion (providing incubation and investment for digital asset projects in the virtual world).

Due to the length of the article, this article is not suitable for email reprinting. Click here to jump to Substack (an article publishing platform commonly used by American political journalists) to read the full text.

Inspired by the "Dream VC Portfolio of Turner Novak (Gelt VC General Partner)", I decided to create a "Dream Portfolio" for the NFT space. Note: Companies that hold investment NFT assets are beyond the scope of this article, they are the business of investment companies like Sfermion.

This article is intended to be an interesting discussion, and we must not take it too seriously. No offense intended for not mentioning your company. There are too many NFT-related companies that I want to invest in, which makes the length of the article too long and I have to make a choice.

For the 5 companies mentioned in the article, I will explain the reasons for their high quality from the product level. All 5 companies are in the "dream portfolio", and the company's performance will be re-evaluated in the future.

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This issue is sponsored by Async Art, a new blockchain art venue where users can create, collect, and trade programmable artwork. Programmable artwork consists of different "layers" that have different effects on the work as a whole. Works that can evolve over time, such as responding to collectors, changing stock prices or the weather, are now possible with programmable art.

Async Art will be holding two important events this month. Micah Johnson's work "ˈsä-v(ə-)rən-tē" (transliteration: Sovereign) has begun accepting bitcoin donations, which will be donated directly to the children in the painting. In addition, Trevor Jones and Alotta Money's joint work "ETH Boy" will be released soon.

Async Art URL: https://async.art/

Once again, the reader is reminded that this article is intended to be an interesting discussion, not to be too serious.

To get to the point, here are 5 reasons why unicorns can be in the top tier:

OpenSea: Amazon or Facebook in the future NFT industry (when ads are not flying all over the sky)

SuperRare: Showcasing Ownership of Works in the Crypto Art World

Async Art: The ultimate high-end programmable artwork

NFTfi: Global NFT Lending Platform

Larva Labs: NFT product development (such as CryptoPunks) by talented technical experts Matt and John's team

OpenSea

It's hard to express the level of optimism about OpenSea. Whenever I think about the future of OpenSea, there are really only two things I think about:

"Who will buy them?"

"How does this affect them going public?"

It’s safe to say that OpenSea will become the first NFT-related “unicorn” (a company valued at $1 billion) as long as it sticks to its current business.

So, what are their business areas? There are many, including:

No. 1 in NFT transaction volume

Aggregator of transaction activity

A place to show off the NFTs you own

NFT data source

A place to monitor other users' wallets

Right now, I'm writing an entire blog that focuses on the reasons why I'm bullish on OpenSea, which I'll highlight here.

Founded in December 2017 by Devin Finzer and Alex Atallah, OpenSea is a peer-to-peer cryptocurrency marketplace backed by Y-Combinator. While that's an accurate description, OpenSea doesn't stop there. The “Rankings” page functions like CoinGecko for NFTs: users view the progress of all projects based on transaction volume, number of holders, average price, and more. OpenSea "New" tab to see all types of new NFT projects. The “Activity” page can be used as an information aggregator of transaction behavior in the ecosystem, and can see who is buying what and how much in real time. The "Create" tab is probably the most important, where users can create their own storefronts: create their own NFTs and sell them.

If OpenSea disappears tomorrow, the entire NFT ecosystem will be in complete turmoil. Most NFT projects host their NFT images and metadata on OpenSea (all but fully on-chain projects such as Avastars). In fact, most websites that display NFT-related data today pull data from OpenSea's API. Many NFT projects have moved their "marketplaces" to OpenSea, allowing developers to focus on product development without the gigantic engineering of building an entire private marketplace.

If being one of the companies backed by startup incubator Y Combinator wasn’t impressive enough, OpenSea has raised $4.1 million from investors including Founders Fund, 1confirmation, Coinbase Ventures, Blockchain Capital and more.

How does OpenSea make money?

I ask this simple question a lot, especially in this day and age when billion-dollar companies may be completely unprofitable. OpenSea makes a profit by charging a 2.5% transaction fee on NFTs traded. This is the lowest fee in the industry as most platforms charge between 10% and 20%. Even if OpenSea decides to increase its fees to 3.5%, I don't think it will make much difference to the platform.

Future work directions of OpenSea

It's hard to predict because OpenSea thinks far ahead of me. Whenever I contact Devin or another team member to ask if they will release feature X, he sends me a mockup of the exact feature being built. If I contact the team to let them know that some links are broken or data is not showing up, they will fix it within an hour. When Cryptovoxels founder Ben Nolan "wrecked" OpenSea with a package sale, the system was back up and running within minutes. The OpenSea team has become a leader in the industry.

Features that OpenSea may add in the future

OpenSea could add a "wallet tracking" feature so that users can monitor the activities of other users, which is something I try to do a lot. They could also add a private chat feature, as many people, myself included, are currently negotiating buys and sells via Twitter. Add this feature directly to the platform and the effect will be amazing. Likewise, they can add project chat room functionality, allowing project parties to manage their own communities directly on OpenSea instead of Discord. Adding these two features would turn OpenSea into a social platform and add tremendous value. Of course, being a social platform and a marketplace at the same time brings some new problems, but I think it's worth it. Finally, OpenSea can make improvements in historical data capabilities. For example, I can currently see how many wallets own a particular NFT, but I can't see how that data has grown over days, weeks, or months.

To summarize why I am bullish on OpenSea:

Industry insiders of NFTs trade on OpenSea.

People use OpenSea to search for wallets.

OpenSea adds data capabilities, so it's easy to find the information buyers and sellers need.

The team has rich technical experience and the frequency of product updates is outrageous.

If there is a technical issue with the product, big or small, the team resolves it immediately.

The market it is in, the addressable market size, is huge (NFTs cover artwork, video game products, virtual worlds, domain names, collectibles, and more).

OpenSea's semi-decentralized infrastructure makes it accessible to anyone anywhere in the world.

With the addition of private chat and project chat rooms, they will instantly become a social media platform.

If you use the digital currency industry as a metaphor for OpenSea, it is a collection of Coinbase (transactions), CoinGecko (data) and Etherscan/Twitter [social barometer: users can look at a user's wallet to decide whether they should follow) ] All-in-one collection.

SuperRare

People on social media gushing about a product or service that has changed their lives are actually sending you a clear signal that you need to look deeper.

SuperRare was founded in April 2018 by John Crain, Charles Crain and Jonathan Perkins. Many people equate NFTs with crypto art, and because of this, SuperRare is in a very good position. When many people entering the NFT space now see SuperRare, they might think that the platform was an overnight success, but that's not the case. This team has been struggling for many years, and through unremitting efforts, it has achieved today's results. The following SuperRare sales chart data will make it clear that what I am saying is true.

Through continuous efforts, SuperRare has become the first choice of top crypto artists and collectors.

Not everyone can join the SuperRare platform. Because the platform will specially screen to ensure that they are all high-quality artists. When I first got into the NFT space, I thought the decision to not be open to everyone sucked, but now I don't think so at all. I know that with development, there will eventually be a lot of NFTs, so governance is necessary. Management avoids choice and information overload.

The SuperRare website is clean and simple, like a gallery. Everything can be done on the "Market" page: the user can see artwork, artists, prices, and all other information. The Activity page provides users with real-time updates on products sold on the platform.

There are also Notifications and Profile pages. Profile pages unlock the most powerful feature of NFTs - their social nature (I'll give the link, but since it's a special page for the user, you need to be logged in). This page has a "follow" and "followers" count, which turns SuperRare into an art and social platform. By socializing the experience, the platform becomes stickier.

One of my favorite parts about SuperRare is its Top Collectors and Top Artists pages. By looking at these two pages, users can quickly get a sense of what's going on in the wider crypto-art space. If SuperRare wanted to really dominate the crypto art data space, they could start showing sales on other crypto art platforms - but admittedly this would lead some users to other platforms. Given SuperRare's current dominance, this is not necessary.

SuperRare has raised about $1.4 million in seed funding, but I don't know how much they raised pre-seed. Let's assume that $250,000 is raised. That means their total funding is around $1.65 million.

How does SuperRare make money?

SuperRare takes a 15% rake on all primary sales, followed by a 3% rake on secondary sales. These fees are slightly higher than other crypto art platforms, but because of their dominance, SuperRare can do so. For comparison, here are the primary and secondary fees for other NFT platforms:

Async Art: Level 1: 10%, Level 2: 1%

MakersPlace: Level 1: 15%, Level 2: 2.5%

KnownOrigin: Level 1: 15%, Level 2: 3%

Where SuperRare needs improvement

I wish SuperRare's search function improved. If I enter an artist's name, instead of jumping to their profile, I can go directly to their work page. It's even better if their profile is the first search result a user sees, then their artwork below.

I also want SuperRare to improve the bidder. Right now, there's no sale-related auction countdown timer, which would be more convenient if there was one. I've found that when I start a bidding war, I tend to spend more when I see the timer count down - because I know another bidder is also paying attention to it. The more money people spend, the better it is for SuperRare and their artists.

What can be added to SuperRare

I think it would be better to add a direct message function. Because users now often send private messages to artists on Twitter to haggle over the sale prices of artworks listed on the platform. SuperRare can also be more involved in NFTs in the social field. I'm not sure what this will look like, but I think social behavior around NFTs is very powerful. Of course, there are other issues with social interaction, such as user engagement, conflict, and drama that needs to be accommodated, but I think it's all worth it.

To summarize why I am bullish on SuperRare:

They have become the top platform for curating crypto art

Crypto art will grow into an incredibly large market, and SuperRare has positioned itself to be at the forefront of the market

This team has proven that they have tremendous perseverance because they have worked hard for many years

People online exclaimed, "This product has changed my life!" This is a very rare and hopeful signal.

Async Art

Asynchronous Art (often referred to as Async Art) is a programmable art platform released in February 2020 by Conlan Rios, Nathan Clapp and Lisa Liang. This art platform is a game changer in the marketplace by allowing artwork to be image-transformed based on "layer changes".

This means that a piece of art can respond to the external environment. For example, if an artwork shows an image of a sailboat in the sun, you could NFT the background layer to another "state", such as a stormy background. When it rains, the stormy background is activated so that sailboats in the sun turn into sailboats in a storm. What I'm trying to say is that Async Art brings the art from Harry Potter to life. In the film Harry Potter, the paintings speak to the characters and react to the outside world. Now that we have this Harry Potter type of artwork, the possibilities are endless.

Async Art also does a fantastic job of telling stories about artists and their artworks through a Featured page. Their latest feature delves into the story of artist Micah Johnson, and it even includes a short video. Even though the video is only a minute long, it does a great job of teaching us (collectors) about the artist and his sources of inspiration.

The Async Art platform is also one of the best platforms to work closely with artists and collectors. I don't know of another platform that strives to build such a strong relationship with users as Async Art. I believe this is due to the high-end nature of their artwork and the difficulty of creating programmable artwork. These programmable works of art take longer to create than non-programmable ones because they are not created from a single ribbon, but instead consist of multiple programmable ribbons that can be changed based on different inputs or factors. Async Art publishes fewer works than other art platforms because it takes longer to create programmable works than regular crypto art. This is good for them, because the content on Async Art is inherently scarce, but there is also a problem - due to the small total number of art works, compared to other art platforms, Async Art naturally does not have as many "saleable" Material". Follow SuperRare and see lots of amazing new art every day, but on Async Art I see very little new art, which means we're talking less. This has some advantages for Async Art, because people like scarcity, but also some disadvantages, because people's attention on the Internet is short-lived and people always want more content.

How does Async Art make money?

There is a 10% fee on primary sales and 1% on secondary sales. These fees are among the lowest in the crypto art space. Again, here is a comparison of primary and secondary fees for other NFT platforms:

SuperRare: Level 1: 15%, Level 2: 3%

MakersPlace: Level 1: 15%, Level 2: 2.5%

KnownOrigin: Level 1: 15%, Level 2: 3%

I hope these fees will come down in the future. Unless one of the platforms has built such a strong network effect that they can decide their own fees regardless of their competitors.

Async Art needs improvement

The Async Art website layout is a bit messy. I find it difficult to find specific artists or works of art. The bidding tool on Async Art is also a bit lacking, so users will be on Twitter counting down their auctions. Async Art seems to focus on building amazing tools for artists, but they have to make sure their user experience is top-notch to match such a great tool.

What can be added to Async Art

I wish there was a better search function for artists and artwork. I've been working on pushing NFTs from a social perspective, so I'd also like to have a direct messaging feature that would allow artists and collectors to talk directly. Currently, communication is only possible via Twitter, Discord, email, etc., so it would be nice if they would notice that.

To summarize why I am bullish on Async Art:

They completely changed the crypto art market with programmable art

They are great at building lasting relationships with artists and collectors

Async Art is regarded as an "ultra-high-end" art platform, with an absolute dominant position in the global art market

Of course, the Async Art team is excellent. I know Conlan and Nathan well, though I don't know Lisa - but I've heard some legends about her.

NFTfi

Interested: I am an investor in NFTfi.

I'm not sure if anyone reading this has experienced this, but I keep getting disqualified from mortgages because the vast majority of my net worth is in crypto. Lenders (at least in the US) do not accept cryptocurrencies as physical assets. With the introduction of NFTfi, this problem will no longer exist!

Launched by Stephen Young in June 2020, NFTfi is an NFT mortgage marketplace. This product immediately puts another important use for millions of NFTs passively held in wallets.

It's hard to imagine how big the potential market for platforms like NFTfi is. In the real world, it is difficult for people to get loans with commodities as collateral. Using a house as a mortgage is probably the most common and easiest way to do it, but there are piles of paperwork to do in order to get a loan. Another common commodity often used as loan collateral is expensive art. This generally applies to ultra-high net worth individuals and so is not as common as home mortgages, but they are indeed other commodities that people use as collateral for their loans. What if we could apply for a loan with a variety of goods, such as computers, computer desks, or kitchen appliances? NFTfi opens up the lending market, allowing people to use any NFT as collateral. Imagine people using things as large as their houses and their kitchen refrigerators as collateral for their loans. Any more paperwork and tough approvals? This lending market is completely open to everyone, and participants can decide whether they want to lend against certain commodities.

Another reason I like NFTfi is its simplicity. Users enter the website and click "Lend" or "Borrow" according to the instructions, and the platform is very intuitive. When users click on the NFT under the Lend option, they can enter the loan amount, repayment amount, and loan term. Once you enter the parameters and make an offer, the other party will be notified and can accept the terms or simply ignore them. This ultra-easy lending process opens the door for users of all skill levels to participate in the platform.

NFTfi Since the launch of NFTfi in June, their loan volume has been growing rapidly.

I expect 2021 will be a huge year for NFTfi, and predict their total cumulative loan value will reach tens of millions of dollars.

I expect 2021 to be a very big year for NFTfi, which is expected to total tens of millions of dollars in cumulative loans.

How to make money with NFTfi

NFTfi makes money by charging 5% interest on loans, which I think is very fair to market participants. It removes the barriers for anyone to borrow because they only pay a specific interest, there are no hidden fees, and the 5% fee is low enough to not be a huge hit to the lender.

Where NFTfi needs improvement

NFTfi has well implemented its core business, NFT secured lending. This technology is feasible and has many users. The only thing to focus on now is how to bring more users to the platform. There needs to be more assets available as collateral for loans, and they need more users who have spare cryptocurrencies and want passive income. The main problem preventing those wealthy cryptocurrency holders from lending more now is that they should be made aware of how much the different NFTs are worth. If you're new to the NFT space, it's hard to offer the right loan to users because it's hard to find the "right market value".

Features that can be added to NFTfi

I would like to see basic statistics related to my own account, such as profit and loss, number of loans, total borrowings, total loans, etc. Not only does this information help users better keep records, it also becomes more valuable over time as other platforms may use the data. Once the platform has more users and data, NFTfi will be able to provide credit ratings to wallets, and users will be able to better decide who to lend to if they know which borrowers have repaid all their loans.

To sum up, why I am bullish on NFTfi:

Allow users to get loans through NFTs

Allows users to earn income by lending cryptocurrencies

Leverages the sheer size of the potential market (NFTs = everything, so NFTfi is a lending platform where everything can be collateralized)

Simple and easy to understand platform design

The market is open and users can choose how much loan they want to make

Fees are very low and users are encouraged to become active

Of course, the founder Stephen is very smart and talented

Larva Labs

I know what you're thinking when you see this subtitle: "Larva Labs is not a startup, it's a software development studio!" You're right. As far as I know, they don't want or need to raise money for a project they're developing, but if they wanted to raise money, I would really beg them to take my money.

Larva Labs was founded in 2005 by two geniuses, Matt Hall and John Watkinson, to develop all types of software. To see how diverse their skills are, take a look at their website, which lists the various projects they have developed:

large scale network infrastructure

Genomics Analysis Software

8-bit role-playing game

Blockchain Art Project

Largest open source legal document repository

endless driving game

Android App AppChat

Two different versions of the new Android home screen experience

Motion Tracking Stage

google app androidfy

To say the two of them are brilliant would be the most understatement - they are so talented. So, what do they have to do with the NFT ecosystem? They created the first NFT on Ethereum called CryptoPunks. Then, they created another famous and very valuable NFT project called Autoglyphs.

When Matt and John first created CryptoPunks, NFTs weren't even a thing. ERC721 — the standard that makes it easy for people to create NFTs — has yet to emerge, and previous NFT projects were built on the Bitcoin blockchain using Counterparty. This previous NFT was limited to a meme picture called Rare Pepes. Counterparty and Rare Pepes did not gain popularity and were rarely used later. Fortunately, Matt and John continued to work hard and launched CryptoPunks in June 2017.

CryptoPunks is a unique series of 10,000 pixelated characters on Ethereum. Each CryptoPunk is completely unique and contains a variety of rare features. This project has been a huge success and now CryptoPunks are a very popular collectible. In April 2019, Matt and John launched their other NFT project - Autoglyphs. Autoglyphs are the first Ethereum on-chain derivative art and a highly sought-after collectible.

Larva Labs needs improvement

Matt and John don't really need to improve anything. The products they create are more akin to works of art than software with specific functions.

What Larva Labs can add

Their existing products and corresponding web pages are great. The only thing Larva Labs needs to add is to preview the next NFT project.

To summarize why I am bullish on Larva Labs:

Matt and John are incredibly smart

They have an amazing track record of success (Ethereum's first NFT project and two generally successful NFT projects)

Whatever they create is well thought out

The projects they start don't require large teams or extensive maintenance, as their projects are more "art" in nature (rather than games or virtual world platforms that require constant updates).

That's it for my awesome NFT venture portfolio. I'll check out this blog again in a year or two to review how the startups and studios on this list are doing.

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