Bankless - SotN #35: NFT MANIA! Are NFTs the Future of Art? Nifty Gateway Founders Griffin and Duncan

Episode Date: February 24, 2021

Guests: Duncan & Griffin Cock Foster We bring on the Cock Foster Twins, Co-Founders of Nifty Gateway, to the Bankless State of the Nation to discuss all things NFT and the roadmap to the metaverse. ----- 🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/​​  🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/​​  ----- 💪BECOME A BANKLESS PREMIUM MEMBER: Lock in $12/month for life before March 1! http://bankless.cc/membership​​  ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave​​  🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini​​  💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith​​  📱 DHARMA - MOBILE ONRAMP DIRECTLY INTO DEFI https://bankless.cc/dharma​  ------ 📣LATTICE | NEXT GENERATION OF HARDWARE WALLETS https://bankless.cc/gridplus​  ------ Relevant Links: Nifty Gateway https://niftygateway.com/​  Duncan on Twitter https://twitter.com/DCCockFoster?s=20​  Griffin on Twitter https://twitter.com/gcockfoster​  ------ Don't stop at the video! Visit the official Bankless website http://banklesshq.com/​​  Follow Bankless on Twitter https://twitter.com/BanklessHQ​​  Follow Ryan on Twitter https://twitter.com/ryansadams​​  Follow David on Twitter https://twitter.com/TrustlessState​​  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

All right, welcome everyone to another episode of State of the Nation. We're super excited about this. We're going to dive deep into NFTs, which is super timely because we just had Mark Cuban on, who is giving us the bullish case for NFTs. Here's what we do every week at 2 o'clock on Tuesdays. We talk about what's happening. We've related to the big picture stuff. And then we drop some insights and action items for you.

So it comes out on YouTube live. and then also on the podcast. David, before we get to NFTs, well, actually, maybe you could tease this article, tease this episode, yeah. Yeah, so NFTs are the hot topic, right? And the cool thing about NFTs is how much possible surface area there is, right? We have, we have, you know, the crypto punks, which are a lot of very similar NFTs, and there's like one set of them.

But then there's other kinds of NFTs, which are lots, like high labor, high energy, like costly to produce NFTs that are really, really, I would call them luxurious NFTs, art, digital art, like high quality art NFTs. And these are different kinds of products, right? And NFTs can almost do anything. But that's what we're going to be talking about on this specific episode of Bankless State of the Nation is high quality art NFTs, because that is what Nifty Gateway really excels that. So if you guys, the audience will likely I've heard of Beeple, Beeple dropping these massive drops on Nifty Gateway. RAC, one of my favorite musicians dropping NFTs on Nifty Gateway. And they're fundamentally different than some of the

Cryptopunks or Euler Beets or CryptoKitties types of NFTs. They're specifically, there's extremely rare and they're hard to produce, right? Like, you know, art is hard to produce. And that's kind of the NFTs that you see on Nifty Gateway. And so it's a different end of the spectrum that we're going to explore on this state of the nation. All right, awesome, man. Let's talk about what's new. David, you want to talk about what just happened this morning? Because, like, I'm still wrapping my head around what just happened. Yeah, and the reason why NFTs are in the cycle is people like Mark Cuban think that they're awesome, right? There's a ton of people that don't really care about crypto, don't really care about Bitcoin, don't really care about Ether.

Like, they don't really care about the new monies of the world. but there is this world of people that really care about digital art, right? Digital art and natively scarce art. And so that's pretty cool. All right. So this is almost turning into like NFT week, you know, where we're doing some articles on NFTs. We're talking about NFTs with Cuba.

Now we're talking about NFTs with Nifty Gateway. And we've got some articles coming out this week too. So stay tuned to the bankless program to check that out. David, we've also got some stuff going on in Clubhouse. So what is Clubhouse? And what are we experimenting with on that? Yeah, Clubhouse is this new social media app. And it's a drop in, what they call it a drop-in chat room, which is pretty fantastic.

And what that means is that there are these rooms that can be created. And anyone can hop in and start listening to the conversations. There's different ways to moderate these rooms. Some people are speaking. Some people can't speak. But there is, it's, I really like this quote. from Naval where podcasting is like the studio album, but Clubhouse is the live performance, the live show. And so Ryan and I and the Bankless Nation are trying to get into Clubhouse.

And so if you guys are Clubhouse members, you can follow both Ryan and I on Clubhouse, trustless state, my normal Twitter handle, Twitter handle, and then Ryan Sean Adams. Ryan's Twitter handle is Ryan S. Adams. His Clubhouse handle is Ryan Sean Adams. So make sure you follow the right, Ryan and Sean Adams there. But I think this is going to be a great community generation tool that we're going to leverage. Yeah, absolutely, man. All right. Well, we're going to get to the episode. Of course, I got to ask you the question. But before we do that, a special shout out to lattice. We're doing a lot with security, hardware wallet security. Ever since we talked about Hugh Karp, oh, is that your lattice? That's my lattice. Look at that big, beautiful display screen, guys. The big screen is cool because it allows

you to double check a transaction, a crypto transaction before you send it. So, So lattices are back in stock. We'll include a link to the show notes. Pick one of these up if you are interested in doubling down on your crypto security. David, now let me ask you the question I ask at the start of every one of these state of the nations. What is the state of the nation today? The state of the nation is collecting.

We are collecting things, right? There was a tweet that went out not too long ago where defy people and cryptocurrency people are all about wealth and nifty people, NFT people, are all about. status and NFTs are the the meme is that NFTs are about like status signaling right signaling that you have these cool NFTs and people like to signal their status and NFTs are a way to express that desire to have status right I have plants and those are kind of my unique NFTs things that I like to signal that I think that's your status symbol that's my status symbol my plants yeah I thought it was and digital art and NFTs are a way to

people to convey status and people like to collect them. So this week in the state, in the bank with state of the nation, we are collecting. All right. Awesome, man. Well, we're going to get right to that. But before we bring on Duncan and Griffin to talk about Nifty Gateway, we want to tell you about this fantastic sponsors who made this possible. Guys, we've entered a bull market. Now is the time to start building your crypto empire, and you should do it on Gemini. You already know Gemini is the world's most trusted crypto exchange, but now you can do even more than trade. You can earn. You can take one of your crypto assets and park it in an interest earning Gemini account where you can get up to 7.4%

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All right, guys, we just had Mark Cuban on this morning. He gave us the bullcase for NFTs. Now we're going to talk about how they actually come to market, how it gets done. NFTs are absolutely going to explode in popularity this year. We've got Duncan and Griffin, who are the co-founders of Nifty Gateway. this is a marketplace for NFTs, in particular art NFTs. Most noticeably, as David said in the intro, mainstream artists are starting to use this. Beeple is one.

RAC, you know, a fantastic musician also released there. Duncan, Griffin, guys, how are you doing? Are you bullish NFTs or what? I don't know. It's the Pope of Catholic. Oh, yeah. Thanks for having us on, guys. Delighted to be here.

Dude, Griffin, we got to ask about that background. Like what's going on in that background? Is this an NFT? It looks awesome. Yes, yes. You nailed it. Coincidentally, it is an NFT. This is a way to express my pain.

So this is an NFT called Last Stand of the Nation State, which originally sold on the primary market for $40. It was an open addition. It was open for 24 hours, and I bought 10 of them. And I gave away seven to my family and friends to like spread the good word of NFTs. And now they're trading at $20,000 each. So I'm going to be living with a lifetime of pain on this one. When did you do that?

When did you first like? buy that and give it out. There's October. Yeah. And the artist who made it is named Slime Sunday, and he's an incredibly talented artist. He's one of the best artists that we work with. And he just came into the NFT medium

and just absolutely knocked it out of the park. So I think this is an NFT that people will still be talking about 20, 30 years from now, maybe even 100 years from now. And I'll be living with regret the entire time, thinking about what could have been. There's a lot of ingredients here where we can resonate with the early Bitcoin story

where like we were talking before we started recording where bitcoin would not be what it was today if a lot of early people didn't give bitcoins away and there were a lot of early people that gave bitcoins away not knowing or not thinking that the the number would go up the value would go up and the similarity between this story and i've heard other stories of this nature similar to nftes the reason the the fact that these stories are similar makes me bullish right it's like well we know that this pattern exists we're seeing it we see it we saw it play out with bitcoin and now we're seeing it play out with NFTs. You don't even need to like really be bullish on digital art to understand and put all

the pieces together that like these same patterns are existing both with NFTs that we saw with Bitcoin. Yeah, totally. You see it all the time. Like with Bitcoin, everybody is like, wow, the Bitcoin, the price of Bitcoin is so high. I guess it's a little too high to buy. And then two years later, it's like, you know, 10 times as high as it was then. And I mean, most of my net worth is in Bitcoin too.

And you see the exact same thing with NFTs. Like they're scarce and they'll always be scarce. And I gave away a lot to spread the word of Nifty Gateway just three or four months ago. And I think I must have given away almost $100,000 worth of NFTs, maybe even $300,000 now. And it's just crazy to think about. That's what's crazy is, you know, Bitcoin Pizza was a long time ago, right? Yeah. Like everyone remembers that story, like 2012 or something.

But what you're talking about has just now happened in the last like four months. Like it feels like this, these are, this is NFTs moment. It's about to, it's about to blow up in a big way. and you've all that appreciation you're talking about that that was just since october i mean guys can we start here though because some people to be honest still don't get it like they don't understand nfts maybe maybe duncan in your words how do you explain nfts why are they a thing absolutely yeah i totally understand honestly it took me a while to grasp the concept as well i think it takes everyone a while to grasp the concept but if i just had to explain them really simply basically what

say would say is like NFTs are digital items you can truly own you know like we there are lots of examples of digital items it's like a fortnight skin for example but if my fortnight account goes away or if it were fortnight the game shuts down like that item disappears forever that's a really weird experience for me because like I'm used to say buying a pair of Nike shoes imagine if you buy a pair of Nike shoes and then Nike shuts down and your shoes disappear that just doesn't make any sense that's not how like we we view the stuff we own because NFTs are are based on a blocker blockchain that's like permissionless and decentralized. For the first time, it means that, you know, whoever made the NFT could shut down or

completely disappear, but the NFT still exists, which is actually a crazy important concept for us because that's as humans, that's how we understand ownership. Like I wouldn't pay so much for a pair of Nike shoes if Nike shutting down meant those shoes go away. And it's partly why digital items could like never really be valuable beforehand, but NFTs have allowed that to happen for the first time. And that's really what I think the bigger picture is here. Duncan, can I ask you a question?

Because some people who are kind of critics of NFTs have told me that, hey, but here's the reality, guys. Like, users don't care. They're still buying Fortnite skins for a lot of money, like billions of dollars a year. And Fortnite is completely centralized. Fortnite can inflate the value of skins. There's no concept of scarcity outside of what the game studio explores. Do users really care about how.

having blockchain-based property settlement layer that enforces scarcity? Are they just going to just go on to a centralized platform, not really care? Look, it really depends on us. So, you know, like, if I'm a Fortnite gamer, I'll buy a skin for $10, 20, bucks, whatever, it makes my character look cool. If I'm buying a work of art for a million dollars, like, yeah, 100% I care. And, you know, it's actually, it's really very interesting. This is a very little known fact, but there are competitors to Nifty Gateway that are

essentially centralized versions of digital art ownership. They'll basically issue you a certificate of authenticity for like a work of digital art, but it only exists on their platform. Those, those platforms all failed. None of them really broke out. You know, the idea didn't catch on at all for precisely the reason that I was talking about. Our collectors were, our collectors said, like, well, I can't, you know, spend so much money on a digital item when your guy's platform going away means that digital item will just disappear. And that's why it took a decentralized, truly permissionless system like blockchain to make digital artwork. And, you know, it's really exciting. We've seen this sort of like happen slowly and now it's everyone is figuring this out all at once.

That's really exciting for us to see. It's just very, very cool. And that reminds me of a article that I read recently about the spectrum behind NFTs and that I really want to We were going to talk about this towards the end of this live stream, but I want to kind of get into that now, since it's topical. There's a different spectrum of trustlessness with NFTs. And this comes down to where the art is actually hosted, right? You can put everything you want onto Ethereum, but the bigger the data is, the more expensive it is. And NFTs are media, and sometimes gifts can be multiple, multiple megabytes large. And if you get to be larger than a single block on Ethereum, you can't put it.

it on Ethereum, right? And so there's a spectrum here of like how on-chain some of these this art is. And so maybe you guys can talk about how you think about the NFTs on Nifty Gateway. And like, do you guys have aspirations to try and be a totally like self-sovereign, like trustless, censorship-resistant NFT platform? Or how do you guys think about this industry and do people even care about this conversation? look 100% I think people care and 100% this is like what we're what we're moving towards and we're actively we're actually like you know rebuilding our our minting and our deployment system right now the goal is like if nifty gateway shuts down then the art lives on forever period

that's why it's so important to build on top of a a blockchain that like is going to live on forever I think you know like Ethereum because like if your blockchain shuts down then your NFT shuts down, no question. And then, you know, our updated system is going to have as much information about the work of art on chain as, as is possible. You're right. You really, you can't store image files on chain. Some of the, some of these artworks are 200 megabytes. It's, it's simply impossible to put those on a blockchain. But what you can do is you can, you can, you can store a hash that, you know, provides like an immutable way to check that a provided image file is the correct image file for a, you know, for a particular NFT.

And then what we're going to do is we're going to give the artist the ability to take control and to upload their own image URL if Nifty Gateway shuts down. You know, there's a number of different decentralized file storage solutions. We're just going to say like, okay, we're going to let people put images wherever they want. Because you're right, that is the, that is sort of the difficult part that you have to navigate with NFT art is you can't put a 100 megabyte file on the blockchain. That's just simply impossible. So you do have to, you know, get creative when it comes to making it truly,

permissionless and living on forever. But absolutely, that's our goal. That's our North Star with the NFTs we create. I think the NFT ecosystem over the past few years has really figured out ways to make this information better and to put more information on chain, to make the NFTs themselves more survivable. And I think eventually, excuse me, eventually we'll see people start to really care about that as they realize that this does have an impact on the value.

you know, like putting the name of the artist on chain is important, like putting the, putting the addition number, et cetera, et cetera. Like, you know, people, as the market matures, more people will wake up to that. So with NFTs, it comes with a file, like a media file, one megabyte, half a megabyte, 30 megabytes. And so the thesis is that, you know, maybe the centralized hosting database that hosts that information goes down, but there's still an NFT with a hash that provably links to that file type, right? So the file type goes through a hashing algorithm. Out comes a hash.

That hash is very, very small. This is how blockchain works, digital signatures. And then that hash makes its way to the NFT, and that's what you own. And so the media file can circulate as any other file does on the internet, except it's the hash that can verify that this hash goes with this piece of digital art. And again, with NFTs, this is kind of hard for typical the newbies to get in, get their minds around is like, the art isn't scarce. It's the ownership of the art that's scarce. And that, and so the art can be on any and everyone's computer, but that doesn't mean you own it. You own the certificate. You own the legitimacy. And we could even go into the conversation of something like decentralized storage. How does decentralized storage fit into this conversation? Yeah, well, I think decentralized storage, sorry, go ahead, Duncan. Yeah, one thing I want to highlight there is like a lot of people think, this sort of like owning a certificate of authenticity concept is new to NFTs, but it's actually been common in the physical art world for almost 100 years now, where, you know, Marcel Duchamp,

he sold a, he sold a work of art that was just a commercially produced urinal. To make a perfect physical reproduction, all you'd have to go do is buy the same urinal, but that's still like a very valuable work. It's held in a few different museums. The difference is the authenticity. And like this kind of thing is very common in the physical art world. NFT. are just taking this concept that has existed and mainstreaming it and bringing it to a much larger audience. So I think a lot of people don't really understand. A lot of people who are skeptical of NFTs have not spent, you know, a time in the physical fine art world, which isn't that surprising because it can be kind of a very niche world. But yeah, this concept of sort of owning the

authentic one, despite the fact that there are perfect reproductions out there, that's like, that's been around for a long time. So yeah, I just wanted to highlight that because I think a lot of people don't really, I think they miss that when they talk about NFTs. And I think RAC had a really good tweet on this too. He was like, the concept is polarizing, but like, of course it is. Some people care about owning NFTs and other people don't. The people who do care are you going to pay hundreds of thousands of dollars for an NFT? Or maybe they'll pay $20,000 for an NFT that I gave away seven of or something.

But, you know, the people who don't care, the people who don't care don't want one. So, like, they think it's stupid, but it doesn't matter. If half the world thinks it's stupid and half the world's willing to pay a million dollars for it, it'll be worth a million dollars. And that's kind of why the concept is polarizing. But we're also just seeing just insane growth. You know, I mean, the growth in the NFT space over the last three weeks, you know, between top shot, between the numbers we're seeing, between all the NFT platforms. It's just something that like it does remind me the early days of Bitcoin because, you know, to the early observers, it almost doesn't make sense. Like it's mind-boggling to see.

They always believed in the concept, but when these things hit at the scale of the internet, like they take off like crazy. And that's just where NFTs are at right now. And, you know, it's crazy to be a part of. It's funny. It goes back to a conversation, David and I were having actually earlier today, where he was like, hey, at first I was kind of bearish on NFTs. But then the market proved me wrong.

Because like the ultimate validation of any idea is the open and free market. And there is no, there, the most open and free market in the world is defy. Right. So the fact that NFTs are going for these amounts of money, it doesn't matter what you think. Like somebody's paying for. for them. So you can no longer deny that there's value here because what sets value for anything, whether it's stock or gold or eth or Bitcoin, it is what the market is willing to pay. I want to

get back to this question because this kind of came up in our Mark Cuban conversation to you, which is like something that you were saying, Duncan and maybe Griffin, you can riff off of two, which is like the platform that the NFT is issued on actually matters. And this is interesting because we were talking with Cuban about, hey, like mainstreaming NFTs. any brought up flow, right? And what it's doing with, with collectibles, NBA top shops. Like, it kind of strikes me, and you guys tell me. But like, if you're doing, you know, $5, $10 sort of sports cards, right?

Like, maybe you're fine having that in a, an essentially managed, you know, solution, basically, chain that doesn't have the decentralization, credible neutrality, and like property rights guarantees that something like Ethereum has. But if you're doing something with a, you know, million dollar art pieces plus, then you have to have the strongest settlement guarantees. Is that kind of what you guys were talking about? And if that's the case, will we see basically the big amounts of capital and the high value NFTs on something like Ethereum, where you know, we'll see lower value, smaller economic transactions on all of these centralized and like side chains. How do you see this shaping up? And is that mental model accurate?

I personally think it's accurate. I mean, that's my thesis. We, I mean, we choose to release our NFTs on Ethereum, largely for the reasons that you've outlined. You know, it's very credibly neutral. It's extremely decentralized. It's truly permissionless. And, you know, you know, you know, if you have an asset that is worth a lot of money, as some of these NFTs are now, those attributes become really, really important. And certainly I think that that would definitely be a factor in my mind, where if I'm spending millions of dollars on an NFT, I would really want it to be on a truly permissionless decentralized network,

like Ethereum, as opposed to some of the other, you know, as opposed to some of the other chains out there. That would definitely be a really important factor in my decision-making. I do think, you know, like, it might take a while for the market to figure that out. And the thing about decentralization, right, it's like, it's the sort of thing that that doesn't matter until it does. So sometimes it takes that event where it matters before people wake up and realize they're like, oh, crap, I really want my NFTs on like a truly permissionless network. So, you know, that's kind of the way I think about it. And yeah, it might take a while for people to figure that out, as it has in the past with other, like, you know,

other decentralized applications. Yeah, you don't know that Robin Hood is centralized until they pause your like game stop trading, right? Griffin, what would you add to that? Yeah, exactly. I would totally add to that. And then what I would say is I think people don't realize this, but Ethereum is scaling.

Like it is happening. And it has such a lead. I'm highly confident Ethereum's going to win in the end. You know, it has all the network effects we've seen before. And to me it seems like a no-brainer. And we're, you know, we're releasing a new minting system on Ethereum where we'll be able to cut. down our gas costs to like less than 1% of what they currently are. We'll be able to mint

NFTs on Ethereum for like cheaper than they are on flow or wax or any of the other competing blockchains. And that tech is happening. You know, it's all getting built. So. And Ethereum like has never compromised on like the core values of decentralization and permissionlessness. And in my opinion, like it's by far the best store of value. And I think Duncan's right. The market's going to wake up to that, you know, and it'll just happen slowly than all at once, which we see all the time. Do you know that's funny? David, should we get into like explaining Nifty Gateway because we haven't yet? Or should we go down this track of layer two? What do you want to do? I think Nifty Gateway first because then we can ask about how we come to cut the gas

cost down by 99% because that that was huge. I really want to get into that. But first, let's talk about Nifty Gateway and how it differentiates itself from other NFT platforms, right? Because Nifty Gateway is quite unique. The NFTs you find Nifty Gateway or not the same kind of NFTs you would find elsewhere. So what is Nifty Gateway and what are the unique characteristics that it brings to the table? Yeah, that's a great question. I can talk about Nifty Gateway. Yeah, okay, nice, pulling up the website. So Duncan and I started Nifty Gateway about two years ago. And when we, when we begun, our mission was all about accessibility, right? Like, we wanted to build a website where anyone could access NFTs. That was the idea.

That's why we call it Nifty Gateway, you know? Like buying NFTs before was a very difficult process, especially on Ethereum. You had to get a Metamask wallet. You had to load Ethereum into that wallet after buying it on an exchange. And it was very, very difficult. So one of the core tenets of Nifty Gateway has always been accessibility. Just making it really, really easy. Yeah, there's last stand in the nation state.

God damn it. Making it really easy for someone, for anyone to buy an NFT and then custody it. And that was all built on top of Ethereum. So the original product was actually a crucial. credit card purchasing portal where we let other people buy NIFTs from other projects with the credit card. But then we realized the real demand is like taking NFTs mainstream. It's finding people who are like already famous in the world outside of NFTs and making it really, really easy for them to launch NFTs to their audience and as well as market it. And that's kind

of like Nifty gateway in its current form. Do you want to talk about that a little bit, Duncan? Yeah, for sure. So we got acquired by Gemini. And that that gave us access to technology that we didn't have before. And that sort of let us realize our full vision, which was twofold. The first part of the vision is that you never have to be onboarded into cryptocurrency to sign up and start trading. And the cool thing that we find is like it's a really good entry point into into crypto. I mean, we literally called it nifty gateway, where people are interacting with the blockchain without even realizing it. And then slowly they pick up that knowledge and they get more and more curious, and they're sort of onboarded into the way that like

blockchains work without even realizing it, which we think is really, really powerful. So that's 10 at 1. You can sign up, you can buy NFTs, you can sell NFTs, and you never have to be onboarded into cryptocurrency, which just makes it so much easier for a person to get started. Tenet two is all about, you know, emphasizing creators and like people who are making NFTs that we think are really, really strong. So there's a huge curational aspect to this. You know, Ryan, you were talking earlier about the platform that you release NFTs on mattering. A lot of the NFT platforms, including Difty Gateway, have a pretty strong brand behind them. So when we put an artist on our platform, we're basically endorsing their work.

We're saying like, hey, we think this artist is going places. We're really proud to offer the work. It's a similar value proposition as top art galleries have with the artists they present. So that's really aspect number two, where we curate, we really build a lot of excitement. We put a ton of effort into marketing every single artist that we release with. And the end result of that is, I think, collectors are comfortable buying from us because they know a Nifty Gateway endorsed artist is going places.

They have a strong career. And yeah, so we sort of play a similar role to the role that galleries play in the physical art world, except we play it at a much larger scale. So sometimes we call ourselves like an art gallery at the scale of the internet, the scale of the internet. So it's really those two things. really easy to access for new people. And then there's like a curational element where we select artists we think are awesome and endorse their work. And I will add onto that. Sorry, no, go ahead.

Yeah, just quick question. Are tokens, our NFTs are NFTs on Nifty Gateway Fractional? Can you participate in a fractional NFT if you, if you can't buy all $15,000 of a token? Can you get a piece of one? Not on Nipty Gateway, no. But other people have, other people have created fractionalized services. And all the NFTs on Nifty Gateway are ERC 721s and can easily be withdrawn and turned into it fractional ownership. Beeple, for example, this is a really cool project when he sold his every days as one of ones and they all went for about $100,000 each, which is a huge event in the NFT world. The buyer of those took withdrew all 20 of them and fractionalized them into something called a B20, which is now tradable as an ERC20 token on uniswap. And it's just like an insanely cool project because you can get ownership of like maybe the most important drop in the history of crypto art. Although it's also interesting.

Like just last Thursday, we had an artist Mad Dog Jones sell $4 million in a single five minute open edition window, which like passed people's primary market. And then we have grimes coming up on Sunday, which, you know, I mean, we'll see what the numbers look like. We're upgrading our servers because it's just going to be an absolute bonanza. So we'll see. New records are getting broken, like, every day. Just for the record, Grim, Grimes are talking about Elon Musk's wife, right? Yeah, yeah, Elon Musk's wife. Who has a name of, by herself.

She's a fantastic artist. And she's also Elon Musk's wife. Like, wow. Yeah, I wonder if he's going to be pumping this a little bit. Yeah, I wonder what Elon thinks about NFTs. Like, we don't really know yet. But I feel like he would love it. It's practically made for Elon.

Yeah, Elon loves memes, and that's a great play. That's a great jumping off point. Well, it's interesting. because we're talking so much with Cuban, like, about the, just the surface area of this and this being sort of the gateway to decentralized finance for everybody. Can you talk about some of these, these, like, big things that have happened? Because, I mean, I bet two years ago when you started this, this would be kind of like dream scenario.

You get artists like Beeple. I mean, that was absolutely massive. And now Beeple is, what's the big auction house? Christy's. Christy's. People's on, he, like you guys mainstreamed people to NFTs, essentially, and by extension, mainstreamed him and introduced him to defy and everything that we're doing in crypto. Can you talk about maybe some examples of this, like some of the most exciting, I guess,

artists coming on that are more mainstream accessible and, you know, how that's helping crypto, how that's helping defy and NFTs in general? Totally, yeah. honestly when we started last year it was it was such a such a mission to pitch artists and we'd go in there and they would just have these like blank stares on their faces and it was like what what on earth are these guys talking about like i can screenshot it but i still own it it was just like and then we look at now where we basically we have just so much inbound interest like we have the opposite problem where we need to figure out how to like select the people who are reaching out to us it's really been

like such a monumental shift over the past year. Honestly, I think one good example is Trevor, Andrew. He's known as Gucci Ghost. He's like a pretty, he has like a strong following with, you know, some specific art collectors. We pitched him in March of last year to try and get him on the platform. Took us seven or eight months to convince him of like, you know, just following up repeatedly being like, hey, this is the future. This is really, really cool. And then he released his work. One of his pieces sold for $30,000 on the secondary market. He's about to come back next month with like a huge new release. He's like posting on Instagram.

All my friends are sending me his Instagram posts where he's like, I just got a cut of my secondary market digital arts sales like NFTs of the future. Yeah. It's really like it's honestly really crazy for for me to witness because like we've been here for years like pushing this idea, trying to tell people like how cool NFTs are. And now it seems like people are finally waking up to that. So yeah. For Trevor Jones, if things keep going how they are, you know,

he'll probably make millions of dollars from his next drop. you know and like that's probably more than he would make in multiple years in the art world maybe the thing is sorry Trevor Andrew yeah Trevor Jones is one of the biggest crypto artists in the world and he's actually dropping tomorrow and that one yeah that's gonna be bonkers are you know do you guys remember in uh do you guys remember in 2017 there was like this crypto meme that was like the institutions are coming right like yeah yeah yeah where we're like oh you know bitcoin hit all time highs eat all time highs but it's probably not all-time highs because the institutions are coming and this was beginning

but like it really feels like the artists are coming right yeah the you know the celebrities are coming the the creators are coming in a big way to NFTs and what's what's crazy about it is I feel like no one's still talking about it in just general crypto right like we're all very excited about Bitcoin price and Heath Price but like in our the non-crypto bubbles everyone's starting to talk about this. NFTs. And it's like, it's spreading. It's going viral. Is this the year that the creators come to NFTs and DFIR? Are you, are you feeling like we're about to be hit by a tsunami? Dude, it's already happened. Yeah. Okay. I wish I could share some of the names we have, like, lined up. But I would just say, I wish you could share them too. Yeah. Yeah. You can if you want.

We'll share them. Just go to nifty gateway.com and sign up for a mailing list or follow our Twitter. and you'll see them very soon, believe me. There you know. But yeah, like 100%. Like, this is absolutely the year. I think the comparisons to the early days of Bitcoin are really poignant. You know, the comparisons to the early days of Facebook too. Like what we're seeing with NFTs is really remarkable.

And it is kind of a once in a generation shift. And like creators are starting to realize it. And the numbers just speak for themselves. And I have so many friends from college now who are just like totally into it. Like they never cared about crypto before. Like, but now they're just like going gaw gog over NFTs and buying all of our drops. I do think all of the other crypto infrastructure has paved the way for NFTs. And this is something we continue to see happening with crypto, right?

Like first Bitcoin happens and then Ethereum happens and builds on top of that and enable smart contracts. And then defy happens and then NFTs happen. And every time, like, the system just gets more and more mature and everything just grows and builds on top of it. So I think that compounding is going to continue. And like, you know, it's exactly like the internet where we're going to see steady growth for the next few decades until blockchains basically rule the world.

It's awesome to be a part of. I'll say that much. What are some of the cool stats that you guys have seen? So, like, tell us, tell us some things that'll impress us, right? So, like, you're thrown around numbers about, like, big sales being in the millions of dollars. Talk about that. Talk about how many people are in this space. Like, I don't know what the metrics are that you're looking at, but tell us some metric.

I can share some metrics. And I'm sure Duncan has some, too. But Nifty Gateway launched about 11 months ago, right, right, when COVID hit, incidentally. And we've grown around 70% month over month. every single month since we've launched. We've actually never had a single down month. What does that measure? We've had 70% growth in what?

In total sales on the platform. Okay. Volumes. Yeah. Volume. Yeah. Yeah. And then we've had some months where our total sales went up five or six X in a single

month over month period. From November to December, our sales, November our sales, our total sales were about 1.4 million. In December, they were about 7 million, I think. And now, like, we're actually in the midst of, another like five or six x boom our total sales for uh february will probably end up in around 50 million dollars are you kidding me 50 million dollars yeah yeah i kid you not put that in context in march of 2020 when we launched we had 30 000 in sales and we were excited about that

we were like oh my god people are spending 30 000 on netts no it was a win for us on the one year anniversary we it's yeah okay it's not a win for our poor team there's only 15 of us trying to keep up with this. So if you want to apply, please come apply to Nifty Gateway because we desperately need help. It just keeps growing way faster than we ever thought it would. Okay. So like we talked about the mainstreaming of it, right, as being one maybe factor of growth here. What else explains the growth here? Is it, is it also, let me ask you, is an element, I don't know whether these people are coming, whether it's kind of crypto natives, jumping into NFTs. And like, crypto natives are feeling pretty good these days with Bitcoin price all time high, ETH price all time high,

Defi summer, all of these things. They've got some cash to spend. Is it more them or is it, are we attracting kind of a new crowd outside of crypto, some combination both? What are the factors that account for a $50 million month? Honestly, you know what it is. A big part of it is just the fact that you've never been able to collect digital art before. This is such a concrete problem that NFTs are solving for the world. There are so many amazingly talented digital artists out there. And basically what they do is they post their work for free on Instagram. And then they get hired to do contract work for like advertisements. They can never sell their work in a gallery. They can never like you can sell a print of a digital artwork. And so there was just this like huge

group of people out there who are so talented. They have a they have a fan base who loves their work on social media. But they had the fan base couldn't collect it. And NFTs just came in and like and fit that like a glove. And I think that's a big like a big aspect of what's happening here. And a lot of the you know, a lot of the collectors we see, yes, it's a lot of crypto people, but it's a lot of people who are fans of these digital artists and have been following them for a long time and have been asking for a way to collect their work. And all of a sudden, here's a way that actually works, where you can't actually collect digital art.

I think that's a huge factor in all of this. And then there's people who are buying it, you know, as an investment and are realizing that like there's this massive shift in the world where value is shifting on the blockchains and crypto networks. And like I said, again, we really. saw it starting with Bitcoin, but I think that process is only accelerating. And NFTs are such an incredibly awesome and fun way to get exposure to that. People are just going nuts, like investing money. And I have some friends from college who are like very risk-averse people. And like they all

texting me about how they're buying like last night's drop. And then yeah, like our poor servers when Grimes releases on Sunday and her artist is just fantastic. So I don't know. And Trevor Jones tomorrow, our poor servers. Yeah. And Trevor Jones tomorrow, who's one of the biggest crypto artists in the world, just a super talented artist. So sometimes an idea just fits. I'm like, I think the numbers really speak for themselves. And yeah, like, you weren't expecting this. We would have hired more people if we were. But like it's just been awesome to be a part of. I also think there's a huge element of like we see a ton of musicians. Like musicians have they like RAC for example, if you can put his music on a streaming platform, but you can't like sell,

you can't really sell merchandise that includes music. Like we hit, we, we, we, we, we, We had Grammatic on over the weekend and he tokenized four or five full-length songs, did over $1.5 million in sales, just tokenizing those full-length songs. That's a year of touring revenue for him that he made in a 10-minute time period. So I think, yeah, honestly, like, don't underestimate how much like NFTs are growing just because this is a really cool new creative medium. Like people can put out creative stuff that they haven't been able to before. Like, you know, imagine being there when the video camera was invented and all of a sudden

and someone makes a dope movie and you're like, whoa, this video camera thing actually might work. That's what we're seeing with NFTs. Like people are making really, really cool stuff in this new creative medium that just could not exist before. And that's driving so much adoption. This is definitely the conversation I want to turn to next because NFTs have historically been like little digital little tidbits, right? Digital images. Now we've kind of gotten into GIFs.

But we recently saw our first audio NFTs. And then now you guys are bringing up how musicians are using NFTs, right? And we have to remember, like, this cryptocurrency revolution is, it's one part of revolution in how humans perceive value, and it's one part revolution in technology, right? Cryptographic money is a revolution. And now we have cryptographic art. And we, there's, and NFTs, just like when Bitcoin was super clunky back in 2010, 2011, I expected that NFTs kind of are matching Bitcoin in their clunkiness at their very beginning.

and I expect the ability for artists to, for artistic expression to be, this only to be the beginning of the story. And I want to ask you guys about all of that conversation. But first, we've got to take a moment to pause and talk about some of these fantastic sponsors that make the show possible. If you are looking for a product that connects your Fiat bank account with defy tokens and products, you need to download the Dharma mobile app. Dharma is a non-custodial smart contract wallet and comes with a bridge that connects you

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monolith and beets a card today and we're back all right guys let's dive it right into it nfts they are one part art right it's one part just digital creation but the other part is technology right this is a the erc 721 or erc 11155 these are technologies that allow for this art to be expressed under a new medium under a new paradigm how how does where does this go like because we have this new technology for art expression. What's the evolution of this? I'm assuming we're at the very beginning. Give us the picture of where this trajectory goes. Yeah, that's a great question. Honestly, digital is like an incredibly, incredibly open medium. And that's maybe the coolest part about it. Right. Like we're really just seeing scratching the surface of what can actually

be done. We can be tokenized with NFTs. You know, art is a way to capture a moment in time and like it always reflects the culture. And digital is the most like open format in history. does that really well. We're working with comedians and they're, you know, they're going to be like tokenizing some of their main jokes or some of their biggest lines from standup from their standups and like making those collectible. And like that just goes to show like how like really open that a concept this is when you start to think about it. Like when you really start to think about what NFTs could be applied to like what could be made collectible in a digital world like your head kind of hurts because it's just such such a large market. And you know, we're really just scratching the surface. It's like 0.1%

the way there, I'd say. Yeah. What I like to compare it to is the invention of the video camera. I mean, before the video camera, people would put on plays, but think about how hard that was to distribute. Like, you had to perform the play each time in front of an audience, and like maybe 100 people could consume that play. The video camera comes along.

It creates a new medium, but it also, it's a medium that's inherently easier to distribute because you can just, like, create a copy and send it all over the country. We're seeing something really similar with NFTs, in my opinion, and where like physical art is inherently really difficult to to send to people. You know, the work of physical art can only be viewed by one person at a time, as opposed to an NFTE, which can be viewed by anybody at a time. And so like, yeah, we're still in the early days of people figuring out how to use that new tool set

to make like really, really exciting stuff. But you ask people nowadays, like, hey, what are those like, what are those cultural things that define your life? Like they're going to talk about their favorite movies. They're going to talk about like ET or the movies that change their lives. You know, in 50 years, like, I think we'll see like a similar displacement with digital art where it'll be like, hey, what are the works of art that really like capture a moment in time? You know, NFTs are really like moving into that position really quickly. Maybe someone like gave away seven copies of a piece of art when they bought it for only $40.

And then like they spend the rest of their life like talking about it and regretting it or something. I could see that future. I don't know. Yeah, you could see that. Might happen. Yeah. Who would do that? Who would do that?

It would sell so early. What I'm really, what makes me so bullish about NFTs is the amount of surface area that they bring to the table. And we're trying to get Andrew Yang on the podcast. And the way that I think that we do this is we talk about how much monetization tools, Ethereum and specifically NFTs can bring to the table where all of a sudden we have these tools for these artists that probably wouldn't have been able to make it previously can monetize their own labor. Talk about like perhaps this renaissance of coming in both artistic expression and the ability for artists to be their own bosses to create and produce artistic value without having to sign away their soul and their contracts. Talk about this conversation. Yeah, I mean, honestly, that's the coolest part.

That's like what gets us in the Nifty Gateway team out of bed every morning. You know, like when we see grammatic post about the fact that he wasn't able to tour all last year, he did an NFT drop with five unreleased songs. and he was able to make up for all that touring revenue in a single NFT drop. That's the thing that gets us the most excited. Or like last year, one of our artists twisted vacancy, after three drops with us, he bought a house. He has a family now. He's like living comfortably because he can sell his artwork on Nifty Gateway and other platforms. That's like the coolest shit in the world, frankly.

I mean, like these people, you know, and those are just two examples. There's way more artists like this. People who can never like sell their artwork before. they have a big following, people love them, but there's just no way for it to be collected. All of a sudden, they're making like literally millions of dollars. And some of them are like achieving financial independence. Some of them are escaping like, you know, bad situations where they're in, abusive families. And yeah, like that's literally the coolest shit in the world.

Seeing artists achieve like financial independence. I agree. And I would add to that something else, which is that like every era of history is usually most impacted by the newest technology, right? Like you read about the late 19th and early 20th century. It's clearly most impacted by industrialization, which caused like huge conflict between workers and like very wealthy owners and, you know,

maybe led to World War I or two. Those were just like times of great shift. And, you know, now is certainly no exception. The internet has like influenced the world, I think enormously over the last two decades. And we have so much new technology coming down the pipeline. I really look forward to a world where NFTs are like one of the most, important technologies and a true creative renaissance where people are like passionate about collecting where art penetrates at a global scale you know where where these things like really start to

impact the world and you know i'm very optimistic i think the 2020s are actually going to be a time of remarkable technological innovation i don't know if anyone's read ark invest theory about all these technologies that are coming down the line but there's huge adventures in biotech and obviously blockchain and all this other stuff so i'm just really excited about you know truly a digital renaissance where our culture shifts and the world becomes optimistic. And, you know, it's all captured in this art of the time. And like, you know, 100 years from now, you go to the Rijks Museum in Holland. You see the paintings of the Dutch masters in the 18th century.

And like, you can see Holland was on top of the world back then. Like just from the paintings, like, because they ruled, you know, they had the largest empire and like the largest financial system. I wonder what these digital NFTs will say about our time, like 300 years from now in the internet. And it's just really cool to think about truly impacting the world. world at scale and artists having such a large impact. So I don't know. We'll see what happens, but it's really exciting to be a part of. Duncan, I know you have to go in a minute. Griffin, if you have some time to hang around, we'd love to ask you a couple more questions, but maybe

Duncan, you can just answer this last question for us. So real quick, Cuban, we asked him what's the size of the NFT market? He said 100 billion or so, and he gave that a time horizon. I have a feeling you guys might be a bit more bullish. How big could this NFT thing get? Well, people spend about $60 billion a year on physical art. I think what we've already seen are early signs of like digital artists. Because like NFTs are just so much easier to move and send, like people are going to spend more money on them.

They're essentially like easier to trade. The same way like people spend way more money on movies than plays just because it's so much harder to produce plays. So I think on art alone, we'll see a larger amount of money spent. on NFTs than physical art. Trillions. And then I think it's like a dollar days.

What I like to say is like, you know, we started Nifty Gateway very much as like a company that was grounded in a specific point in time for the NFT industry. It was always supposed to be a gateway. That's why it's called Nifty Gateway. But like you can never start Airbnb in 1994 because people just had no idea what the internet was. Once we penetrate NFTs with like digital art with NBA top shots with a few other use cases, then the fun really starts where it's like, okay, why are we sending people Christmas cards?

Like, we could just commission an NFT and send them that. Like, why am I? Like, I could commission an NFT as a Valentine's Day gift for my girlfriend. And bam, there's 10,000 commission artists. You know, that's like a modern day version of cameo. So once these first few use cases really hit, then like, then the sky's the limit and who knows what's going to happen. And that doesn't even get into like Snapchat adding NFT filters. You know, there's like, these are like, or video game items. I mean, it's like, yeah, the real universe, like the potential is unlimited. And yeah, again, like we started Difty Gateway. It's supposed to be a gateway. It's like very much grounded in this philosophy of like people have to understand a single use case of NFTs. And then all of a sudden

it'll be like people don't send Christmas cards anymore. They just send NFTs. And that's, that's my final thought. I did not think about that use case at all. That is absolutely base melting. Duncan, thank you so much for for being with us on the state of the nation. And, yes, cheers. Thanks for being part of the conversation. Thanks, guys. Bye. And, of course, we're sticking around with Griffin.

So, Griffin, I kind of want to turn. I got a few more minutes. Yeah, cool. And I think this is going to be a great final piece of the conversation to end on. I want to ask about what is your perception as to the role of NFTs in the bull market, right? We're quote unquote, in a bull market. Today doesn't look like it. We're a little bit down.

But over the grand scheme of things, I think we're going to be in a bowl market. it. What role does NFTs, do NFTs play in this bull market? Yeah, that's a great question. My main answer would be, I don't know. I think we're going to find out. But I think NFTs are really, really compelling. When I was talking to Justin Blow, the DJ, who's very into NFTs, he thinks a lot of the reason there is such a bull market is that everybody like doesn't want to hold on to the dollar, which I do think there's a lot of truth to that. And it's really interesting. I don't know. I sometimes wonder if official measures of inflation are doing a bad job, truly measuring how much inflation is happening, because there's huge inflation across all sorts of

elements of life. And everything certainly feels more expensive. And I think it's a large reason why people are fleeing to these safe haven assets. But I think NFTs play an incredibly important role because they're like unique stores of value the same way that art is. They're just like 10,000 times better than art at being a store of value. The default with a piece of art is that like the provenance is almost impossible to like actually certify. Like I was talking about someone in the art world and all the committees that formed to certify artworks by Andy Warhol had to break up because they kept getting sued because Andy Warhol's artworks are like prints of Campbell's soup cans on paper and they're so easy to fake. So like it was so easy to fake them and like the committees that tried

to like actually authenticate them just literally couldn't do it. So NFTs, it's the opposite. Like the authenticity is the default. And that actually makes them an incredibly good store of value, which drives the prices really high in, like, counterintuitive ways. People always see the prices that NFTs are going for, and like it seems strange at first. But when you think about it on like that systems level, they serve that function very well, it actually kind of starts to make a lot of sense. Authenticity is what stores value in art.

And NFTs have perfect authenticity by default. And yeah, and then the other thing I would say is NFTs are also a great way to like take some gains and flex. and buy something amazing. And people are really starting to do that. And, you know, it's just like, it's honestly so fun. I would caution people against getting started because it's just seriously addicting. And you spend money like you didn't think you were capable of spending money. And it's happened to a lot of my friends, actually.

Like, I kind of worry about some of the financial decisions they made. But, you know, they're all doing pretty well now. Griffin is an NFT dealer, it sounds like. And watch out this could be the gateway drug into NFTs, into crypto. Hey, Griffin, I know you've got to run. but we left one thread hanging. And just the TLDR for this, because we don't have time to get into a technical discussion.

But you said you could do Nifty Gateway's issue NFTs, 1% of the gas fee, you know, make it more efficient. How are you doing scaling? Is L2 involved? Are you guys going to solve this? Can you do this in like 30 seconds or less? Give us a explanation. And then come back when we talk about layer two

from a technical perspective. Yes, absolutely. I'm happy to come back and talk about this any time. It's too bad Duncan left because he knows more about it than I do. But long story short, we're switching our minting method. So I think the new standard is called EIP 2309, and it was pioneered by another NFT platform named Cargo. And we're able to get away with minting all of the additions with one single blockchain

transaction instead of right now every single NFT is minted with its own transaction. But right now, like if we sell like 2,000 open additions, we'll be able to do all of that with only a single transaction on Ethereum. I wish I understood the technical details better, but Duncan is, always been the one in the weeds coding and solidity. So he would know much better than I do. As far as L2 goes, I think L2 has a lot of, you know, it's definitely the future, but Nifty Gateway itself is centralized.

You know, we're a centralized NFT exchange, the same way Coinbase and Gemini are. And like that for us serves most of the purchases of L2, you know, anyone can send an NFT to anyone else on Nifty Gateway for free. Anyone can put it up for sale, you know, with no fees because all of that's happening off chain. And I really think the future of Ethereum is like some sort of hybrid like that. everything that's on chain needs to be on chain, and then everything that doesn't need to be on chain isn't.

And L2s are also going to get much more advanced. And by the way, the centralized approach, not everyone is a fan of it, but our thing is always like, we give you the option of custodying your NFTs if you want. You can custody them with us and trade them on our marketplace or you can custody them yourself. It's about giving you a choice.

So that's how we see it. And plus, there's so much other infrastructure that you guys shouldn't be responsible for building that you guys can tap into once it is built, right? decentralized storage, L2 technologies. These are not NFT-centric platforms. Somebody else should build those things. When they're ready, you can tap into those.

And I do believe that the NFT platforms that win are the ones that do give the strongest assurances about the redeemability or the link between the token and the art. And that requires some sort of decentralization and decentralized storage. but there's no reason why we need to wait for those things to come about. Like, let's get this NFT revolution underway, and it's already underway. So thank you for what you have built with NFT Gateway, and thank you for pioneering this conversation into the mainstream. Cheers, guys. Thanks for having me. This was a blast.

I hope to be back soon. Once we hit our first $500 million a month, I'll come back. All right, so we'll see you in April, man. Yeah, right? Our poor team, the poor engineers. Oh, whatever. Awesome. Well, guys, this has been, yeah, fantastic.

You guys are doing great work. Thanks for keeping us up to speed on this. It's happening faster than I think any of us in maybe bankless thought it would. And this is definitely an exciting year for NFTs. So we've just had Griffin and Duncan on from Nifty Gateway. Guys, action items. You can check out Nifty Gateway and what they're doing. Check out some of the artists.

We'll include some links in the show notes of this. Risk and disclaimers, we should say NFTs are risky. the valuation of them is anyway. So is ETH. So is crypto. All of DFI is. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone. But thanks for joining us on the bankless journey. One last thing I forgot. Nifty Gateway is a wholly owned subsidiary, I believe, of Gemini. Gemini is also a sponsor. It's not why we had them on. We had them on because Nifty Gateway is awesome. NFTs are dope. But just wanted to disclaim that, guys. Thanks a lot for joining us and another state of the nation.