😸 What NFTs mean for ETH

Ryan Sean Adams, Founder of Mythos Capital, posted a short but thought-provoking tweet storm this morning about non-fungible tokens (NFTs) and Ethereum that is worth reading:

Ryan Sean Adams@RyanSAdams

1/ NFTs will be big. Maybe $1 trillion big.

First, it’ll be game-based collectables. Skins, items, kitties. Eventually, we’ll store digital proxies of real-world assets on blockchains.

While anything can happen, I'm now betting ETH wins the NFT mkt.

April 13, 2018
Ryan Sean Adams@RyanSAdams

2/ Why ETH?

First, ERC721 is now de-facto standard.
Second, DEX ecosystem makes NFTs liquid and tradable.

But crypto kitties crashed the network you might say. A single NFT-based game. Is scalability ETHs achilles heel?

Not for long.

April 13, 2018
Ryan Sean Adams@RyanSAdams

3) ETH is close to NFT scaling. Like June close.

i) @loomnetwork side chains
ii) dPoS @cosmos zone
iii) Plasma cash (@loomnetwork)

iii even inherits the security of ETH w disputes settled on mainchain.

So ERC721, DEX, and scale makes ETH a superplatform for NFT.

April 13, 2018
I’ve been thinking more about the NFT opportunity lately and I don’t think it’s getting enough attention, maybe because it’s still pretty nebulous as a concept. But I happen to agree with Ryan that (1) NFTs could become a trillion dollar asset class, (2) Ethereum is best-positioned to win this category, and (3) NFT scaling is much closer than we think. I also like NFTs because they don’t carry much regulatory risk.

Above all else, NFT platforms need to optimize for immutability and censorship resistance. If they don’t, the digital analog of something like this isn’t possible—


A look back at 2016's hottest trading card. This 1952 Topps Mickey Mantle, graded PSA NM-MT+ 8.5, sold for a cool $1m earlier this year. pic.twitter.com/u1FTjBHIU2

December 27, 2016
Therefore Ethereum, which makes a number of tradeoffs in favor of security, makes a lot of sense as the platform best positioned to secure valuable NFTs when you think about it.

Finally, it’s also worth considering what underpinning a huge NFT economy could mean for ETH’s perception to investors as a store of value. I happen to think it will have a profound impact, which ties in nicely to our thesis at DTC Capital that Store of Value will be a fragmented category with multiple long-term winners.

Feedback is always welcome - hit me up on Twitter!