by Andreas Vogel
2021was the year of NFT: NBA top shots, Beeple’s $69 million NFT, Crypto Punks and Bored Apes. The trend reached the mainstream, there was no escape.
But NFTs polarized. There was excitement in the techno and crypto-capitalist crowds: the future is bright, we will disrupt the Web 2 monopolies, global finance will be re-invented. Another camp showed resentment pointing to excess, speculation, and money grabs.
But it doesn’t matter anymore. The party is over, and we are in the trough of disillusionment.
There’s debate about Gartner’s Hype Cycle Model, but so far, we certainly had the technology trigger and the peak of inflated expectations. The question is if there will be a slope of enlightenment which will lead us to a plateau of productivity: Can there be substantial and sustainable business value, in the general enterprise business and specifically in the P-ton portfolio?
In many aspects, web 3 technology has been a crypto-anarcho movement. However, a libertarian revolution seems not to be too likely. Instead, I think the Web 3 technology must mature, for example legal and social identities are needed, NFTs must be associated with well-defined usage rights and / or utility, and crypto currencies and assets must be integrated with the existing accounting and taxation regulations. Likewise, the user experience of the products and services involved must improve significantly so that NFTs would become accessible to the broad masses of users.
Let’s have a closer look at this in the context of the P-ton portfolio companies and the broader range of enterprises.
Gaming in general and AVA in particular
Virtual currencies and digital assets and services are a core concept in modern games. Transferring these to a distributed ledger makes only sense if they are transferrable to other games. Interoperability between games is, however, not a given. Game studios use different game engines, UI concepts and esthetics. This makes interoperability challenging and questions the use of distributed ledgers.
AVA, the hybrid board game console, is intrinsically interoperable, designed as an open platform for game developers and publishers. Putting virtual currency holdings as crypto coins, virtual assets as NFTs, and badges and other nontransferable assets as SBT (soulbound tokens) on a distributed ledger makes them available in games from different developers and publishers enabling a new level of interaction across games.
NFT Art and Utility
Most NFTs sold so far have been a very abstract concept: the ownership of a digital certificate without a formally established identity of the minter, without clarity about the provenance of the digital art and without clear usage rights and utility. Such NFTs have been called bragging rights by the New York Times and others. Bragging rights, however, do not seem to be the right foundation for a substantial and sustainable business.
Formal and social identity should be established and connected with NFTs via wallets. This would enable the provenance of the digital art certified by the NFT. Metadata should have permalinks to terms and conditions which define the usage rights and / or utility the holder of an NFT has on the objects which is certified by the NFT.
P-ton’s start-up Ticktory has developed an NFT based ticketing system. NFT based tickets are a prime example of utility provided through NFTs. With this, Ticktory has established the stepping stone into an sustainable NFT-based business.
Rodina, the P-ton start-up which provides a revolutionary entertainment, culture, and gastronomy concept by creating a multi-sensory and culinary journey to foreign countries and cultures also offers compelling use cases for Web 3 technologies. It starts with an NFT-based ticket which could serve as key to exclusive pre-event information and services. The NFT could also be used to captures key memories throughout the experience and preserve them in LEGACY. This would allow guests to relive and retell the Rodina experience. A Rodina NFT could also open access to other exclusive events.
In the general enterprise segment, there is potential for smart contracts in two areas. Completely new decentralized business processes could be invented and the future will show what entrepreneurs can dream up. Then there is simplification and massive cost reduction of existing complex cross-enterprise processes.
Let’s have a look at a specific use case: music production. Music production typically involves a number of independent contributors (musicians, vocalist, studio operators, cover artist, video producers etc.) and existing assets such as music samples.
For the productions of major stars, the labels provide lawyers, managers, accountants, tax advisor etc. for handling contracts and dealing with operations. For everyone else, this approach is cost prohibitive.
Standardized smart contracts can simplify the contractual issues and operations. Contributors agree and sign smart contracts and funds will be distributed automatically while the distributed ledger provides complete transparency.
Smart contracts provide a massive opportunity to make sophisticated multi-player business processes available to the long tail by simplification and massive cost reduction.
We at P-ton expect that these will be areas where substantial and sustainable business value will be created in the coming decade and we would like to invite entrepreneurs to pitch their Web 3 visions. P-ton is ready to invest in, support and nurture promising ideas.