We’re excited to announce our investment in SuperRare, the leading marketplace for blockchain-based digital art known as Non-Fungible Tokens (NFTs).
You’ve probably heard of NFTs given the amount of media coverage over the past few months. But for those of you not familiar with NFTs, here is a quick primer. NFTs are unique digital art based on the concept of programmable scarcity. The specific types of art are varied, but often take the form of digital art or music – anything unique that can be stored digitally and thought to hold value. Using blockchain technology, like Ethereum and Flow (the blockchain of our portfolio company Dapper Labs), the entire history and origin of a piece of art can be tracked on a distributed ledger.
NFTs establish authenticity to digital art. A user can prove they own a particular image or file created by an artist. While anyone can easily right-click-save, copy or screenshot the image, they won’t be able to copy the artist’s digital signature proving its authenticity. This model is proven out in the physical world where collectors are willing to pay millions of dollars for signed original creations despite an infinite number of copies or knockoffs existing simultaneously.
We believe that this is just the beginning for NFTs. While buying, selling, and showcasing digital art is an exciting and a massive market opportunity in and of itself, there is even more magic in store when NFTs carry with them special digital rights. You could imagine, for example, an NFT granting permission to enter a private chat with the artist, or allowing entry into a specific virtual world or game, or even augmenting the appearance of a physical work of art as AR develops.
For artists, NFTs offer another space and format for creating, sharing, and monetizing their art without any middlemen. Thanks to the transparency of blockchain, artists can always know who purchased their work. And, SuperRare’s contract system lets the original creator collect a fee each time the NFT is resold, similar to a royalty.
We’re excited to have been part of the SuperRare journey since we invested in the company in their seed round last August with our friends at 1confirmation. Founders John Crain and Jonathan Perkins are crypto-native art enthusiasts on a mission to democratize art investing in the same way that Instagram and the iPhone democratized photography. Their commitment and authenticity shone through on our very first meeting and their progress has backed it up. To date, SuperRare has processed almost $50M in GMV with over $25M coming in the last month alone.
Today, SuperRare announced their $9m Series A lead by Velvet Sea Ventures and 1confirmation and with participation of a number of high-profile angels and funds, including Naval Ravikant, Marc Cuban, Chamath Palihapitiya and Marc Benioff. While a fundraising round is only a milestone on the path, it also shows how far the concept of NFT’s has come.