nfts or non-fungible tokens are getting a lot of buzz right now but are these new assets just
a flash in the pan or are they here to stay here now with key insights is doug clinton
he's managing partner at loop ventures thanks so much for joining us today doug
thanks Alissa all right so these nfts give us the rundown for the uninitiated what exactly
is the allure of this new class of assets essentially
it's a one-of-one digital asset i think that's really what's important if you think about an
nft versus bitcoin which is probably something almost everyone is familiar with one bitcoin
if you and i each had a bitcoin they're the same thing we could trade it back and forth
and there's really no benefit to owning any individual bitcoin and nft on the other hand
is unique every single one is different uh one of the most popular nfts is called crypto punks
which is what's called generative art there's ten thousand of them and every single one of these ten
thousand punks have different uh sort of qualities they look different they're little pieces of art
and so each one in and of itself is unique and it means that they all have unique values that people
are willing to pay for them it's very interesting and then there's also a component of this
outside of the art world and in the sports arena so what exactly is going on there that's right
an nft can be any digital asset it could be art it could be a gif it could be a clip a highlight
from a game to your point in the sports arena top shot is something that's very popular right now
it's run by a startup and they are essentially think of them as you know short maybe five
second video clips of lebron james with a dunk in a recent game and like we talked about with
the nfts earlier they're limited editions almost like trading cards from back in the day and people
are willing to spend hundreds of thousands of dollars for some of these unique and verified
uh gifts on the topshop platform yeah the interesting the the modern trading card and some
people are making serious dough off of these nfts right now but do you think that's
sustainable is this just kind of the next uh tulip bulb crisis or is this a sustainable new market i
don't think it's the tulip bulb market but i i would say you know we are cautious on the space
we love the theme and i think that nfts are going to have a big part of the future but if you just
think about technology over the past several decades we often have these really acute booms
before the technology sort of matures and is ready for prime time and i think about the internet in
the 2000s i think of even bitcoin back in 2017 where we had this huge surge of interest a lot
of retail interest and obviously we came down 80 percent from the peak um i don't know that we'll
have that happen with nfts but i do think just the heat around the segment right now sort of warrants
caution and if i think about it from a much longer term perspective if we do get a pullback in nfts
i would be very interested in looking at some of what we call the blue chip
nfts things like the crypto punks potentially things like the top shot highlights we talked
about those are the ones i think that will have value over the long term and from a more
traditional investor angle what should individual investors be thinking about in terms of getting
access to this theme in the public market i know there is at least one spack out there that's
involved in this are we going to see more of this theme coming to the public market i think so i
think every company that plays in digital content has to be thinking about nfts right now i think
one of the the really unique characteristics of nfts is rights management so 10 years ago
drm digital rights management was a very hot topic how you control the ownership of a digital asset
and this nft structure is actually a perfect tool for that and so the idea is let's say a song file
you know maybe i own that song file and i want to rent it out to people on the internet i could
earn a royalty from that through the blockchain verified through my ownership and the artist
could also own a piece of the royalty after he or she sold me that song and so i think that you're
going to see more and more public companies that have exposure to digital assets think about using
the nft structure to distribute the assets and also to monetize them over the long term
so on that note what companies in particular do you think are ripe for uh really leaning into this
you mentioned to spec i think you're referring maybe to tops which we talked about trading
cards earlier i think that's a really great example of a company that's sort of evolving
into this new space an old physical collectible company now thinking about obviously nfts in
the digital world i think you can look at a company like sotheby's they sold
and are working on selling nfts christie's as well the traditional auction houses working in
the art world i think those are both companies that have a lot of exposure if you think about
traditional collectibles now moving to the digital world i think that's a great place
to look from a public perspective all right well we'll have to keep an eye on this theme with that
cautious optimism i guess thanks so much for your insights today doug thank you
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