This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process. Opinions expressed by Entrepreneur contributors are their own.
“The summer of 2020 was known as ‘DeFi Summer’, for the explosion of cryptocurrencies and decentralized finance (DeFi). And 2021 will be known as the ‘NFT Summer’, because of the boom in non-fungible tokens, ” says Clara Bullrich , co-founder of TheVentureCity , her own venture capital firm. In an exclusive interview, the investor expert assured that the future massive adoption of NFT assets in Latin America will come from the world of gaming and the virtual fields of the metaverse .
The Argentine investor founded TheVentureCity in February 2017, together with her partner Laura González-Estéfani , originally from Spain. With overwhelming enthusiasm for the endless business opportunities in blockchain , Clara shared the possibilities that non-fungible tokens (NFTs) offer for Latin America.
“At the end of the day, what we do as a venture capital is understand trends and forecast where the next disruption will come from. We do not invest for the present, but for the future. We are not thinking about what works today, our great challenge is to discover what is going to work tomorrow, or in 5, 10, 20 years, ” said Bullrich.
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The future of NFT business on the blockchain.
The expert explained that the internet we know today “operates from these gigantic platforms that were created within BigTech companies” , and that current monetization schemes are not fair. Today, most of the profits go to businesses, and not to the content creators or users who power these platforms.
“When everything that has to do with blockchain begins to appear, it is a disruption in itself,” she said, convinced. “Then all this technology appears that is telling you that the world has changed. The era of aggregators getting it all is no more. If we are now in the era of subscriptions, we are about to enter that of ownership, that the creator owns his content and chooses how to monetize it. That creation itself is explosive, it is a new world ”.
Clara explained that owning a venture capital fund has her more than prepared to make dangerous bets. And, at this time, few investments are as risky as everything related to the blockchain, mainly cryptocurrencies and NFT assets.
“When we see this at TheVentureCity, our first reaction is to jump into the water. We are assuming a lot of risk because there is no regulation today for these companies, as there is not in the entire crypto market, “he explained with emotion. “We start by exploring the DeFi ecosystem first, and when the NFTs come we realize it’s going to be explosive.”
Why are NFTs so valuable?
“It really is simple. NFT stands for ‘non-fungible token’ . It is a piece of information that lives on the blockchain, that decentralized network that no company manages. This file is unique, there is no other identical. It is programmable, it is permanent, you cannot erase it, it stays in the blockchain forever ” , explained the investor.
As he explains, the most important characteristic that an NFT has is ownership , that is, that the creator can be the owner of his creations . Non-fungible tokens are already being consolidated in different fields: digital art , collectibles and gaming . However, the co-founder of TheVentureCity is convinced that the latter is the gateway to mass adoption of these digital assets.
Bullrich dismisses digital art as a way for NFTs to gain greater acceptance. “Art NFTs are very aspirational, not everyone can buy them. In addition, many projects are being created, some are growing enormously. But, in reality, 80% of these projects do not have a substantial value and it is not known if they will have it, “he warns.
Another barrier is that “97% of those NFTs in art, today, are operating on Ethereum platforms. So when you buy those NFTs, you need to do the transaction in cryptocurrencies. “ This is in addition to the fact that there is only one predominant platform to transact NFTs : OpenSea.io , which handles around “95% of what happens in digital art” and is based on the Ethereum blockchain .
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Blockchain, an ecosystem under construction with ‘good bubbles’.
“The problem with the NFTs is that the infrastructure is not done, it is beginning to be assembled. We are really so early, that everything is being created before our eyes. So, it is normal that there are few platforms like OpenSea, but I am sure that a markerplace platform for Latin America is in the works. This is going much faster than the traditional technological world ” , assured the businesswoman.
Since it is a world under construction, the bubbles observed in blockchain-related products, such as cryptocurrencies and NFTs , are to be expected. In his opinion, they are even a good sign.
“As an investor, I can say that bubbles are essential for a growing market. That volatility of rising and falling means that more people are entering and playing in the ecosystem. And that is the most important sign of adoption ” , explained the expert.
We went from there was nothing to having a market of trillions of dollars, the normal thing is that there is volatility and that there are bubbles. Whoever enters the crypto world enters knowing that they can have a correction or loss of 50%, even more. We are, too early, but the return on investment is exponential.
– Clara Bullrich (@bullrich_clara) November 12, 2021
What NFTs are going to last and where?
Clara highlights that the first NFTs projects, which represent a disruption in this first stage of creation, will have historical importance .
“We are facing something so important in the history of humanity that those first projects are going to have absolute importance. A time when access, monetization, everything is going to change! This is here to stay, those assets are never going to go to zero value. They could temporarily depreciate, but they are milestones of a creation , ”he said.
The investor warns that “now is when you have to be careful” when investing, because “only innovative, creative, spectacular, disruptive projects are going to have that place in history, others are going to die.”
I’m sure 80% of my NFT portfolio is going to explode through the air, and that’s okay. I’m excited to think about how early we are and the opportunity that exists. I don’t know if 90% of the projects that are in today will exist tomorrow. I think that new projects in NFT must come with a competitive advantage, with something that really makes them different. They have to come up with an interesting value proposition.
TheVentureCity focuses on financing tech startups, and they are particularly interested in those already looking to break onto the blockchain realms.
“Deep down we have a mindset of being there at the beginning of everything, from the ground up. That implies taking a lot of risk, and we are willing. We can have a lot of losses, but we assume that by arriving early and understanding the ecosystem we have the possibility of capturing greater opportunities, “ added the enthusiastic investor.
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Gaming, the key to mass adoption of NFTs.
“I think mass adoption comes from the gaming side,” says Clara. As an example, he spoke of the Axie Infinity video game, the first under the concept ‘play to earn’, as well as the ‘play to earn’ game company, YGG , which stands for Yield Guilt Games . It is described as “a #PlayToEarn guild that brings players together to win through NFT games. We are the colonists of the Metaverse ”, according to his Twitter profile .
The ‘play to earn’ concept becomes a help for so many people who were left without work due to the Covid crisis. This offers the opportunity to have a salary, to earn money through gambling.
The expert says that Axie Infinity had a massive adoption in Asia, particularly in the Philippines. This creed game in Vietnam offers monetary rewards to players but, more than that, it is the basis of an entire micro economic system. “Incredibly, this mass adoption also appears in Venezuela, because it is a country that has circumstances very similar to the Philippines, and it is creating a microeconomy in these countries.”
– Clara Bullrich (@bullrich_clara) December 8, 2021
A game where everyone wins.
The Argentine entrepreneur says that everyone can access Axie Infinity from their phone. However, to play you need to buy three “bugs that have the face of pokemon, they are very cute, my 8-year-old children play it.” At the time the game was created, he relates, “buying three of those gaming NFTs would cost you $ 5 . Today, buying the same three NFTs to play costs $ 1,500 . “
So what those with an eye for business do is buy the NFTs of the three “bugs”, and rent them. In turn, players who do not have the resources to buy the token package can rent them for a fraction of their price. By playing, users accumulate profits , which are distributed among all: 70% for the player, 20% for the ‘guide’ or Community Manager who “will educate those people to play and earn money” , and only 10% it is used to rent the NFTs.
“It is a company that in a year went from nothing, to having a valuation of millions. All under the premise of giving access to the people, to everyone ” , declared Clara.
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If gaming is the window, the metaverse is the door to the massification of NFTs.
In addition to video games, Bullrich is sure that the metaverse will be essential for NFTs to be a common reality.
“We all understand the concept of what the metaverse is and everything that is being created there. There is a possibility of buying lands in the metaverse, of games, of creating different virtual worlds. I think that the future points to corporations, galleries, museums, shops and others, having a space in the metaverse. We are in that virtual space where there will be another type of interaction and I know that the NFTs in the virtual landing are going to have enormous value ” , she predicted excitedly.
In his opinion, the metaverse will not be as they paint it in movies like ‘Ready Player 1’, but something much more “tangible and natural” . He projects that, since most of us spend a good amount of hours in the digital world, it will be necessary to make the interaction more fluid, in 3D, for example.
“The creation of this universe implies interacting, buying, looking, being part of another universe. We’re going to see tons of iterations until we get to that place, but remember our job is to find out today what will work tomorrow. Virtual land is one of those ” , he assures.
Finally, Clara Bullrich said that also content producers have great prospects with NFTs within the metaverse.
“All those people who write and create content and don’t have the possibility to monetize it. Musicians, writers, tweets, meme creators and more. This technology comes to create that opportunity. All this content creation is very important, I think it will have a promising future in these new schemes “ , he concluded.
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