Non-fungible tokens are only a decade old as a concept. It's a paradox that venture capitalists are investing millions of dollars into non-fungible tokens (NFT), transforming them into billion-dollar enterprises known as "unicorns" in Silicon Valley.
A $450 million investment round has been disclosed by Yuga Labs, the firm behind the Bored Ape Yacht Club, a collection of NFTs showcasing cartoon ape profiles. With this, the corporation is now valued at $4 billion.
Last year, venture capitalists invested 4.6 billion dollars in NFT startups, up from only $145 million in 2020, according to PitchBook statistics.
These digital token firms are so appealing because of what? Entrepreneurs are flocking to NFT because of two primary factors, according to Jason Heltzer, managing partner at Origin Ventures and adjunct professor of entrepreneurship at The Booth School of Business.
There are several possibilities for the underlying blockchain technology in addition to NFTs, according to Heltzer, who spoke to CBS MoneyWatch. As a result, the value of these enterprises is reflected in their current pricing.
When asked about its most recent round of investment, Yuga Labs declined to comment. However, the firm intends to utilize some of the $450 million to grow its creative and engineering teams, as well as work on a metaverse platform dubbed Otherside.
"This cash will provide Yuga speed to market on several things underway," tech investor Guy Oseary said in a statement on Tuesday.
A unique code connected to a picture or video on the blockchain serves as the basis for an NFT, which provides digital evidence of ownership or access to services. NFTs can be transferred or sold, but they cannot be replicated or separated into smaller sections since each one is unique. Some people acquire NFTs in the belief that their value will rise, while others buy them just for the thrill of owning a piece of cryptocurrency history.
Buying NFTs via NFT marketplaces like Kally is a way for customers to acquire digital artifacts. Whenever a consumer buys an NFT, some of the money goes to the person who minted the NFT and some go to the marketplace, as explained above.
Celebrities, entertainers, and sports began using NFTs to monetize their work in 2021, causing their use to soar. An NFT football card of NFL player Rob Gronkowski sold for over $1.6 million last year, while New York DJ 3LAU sold his collection of NFTs for almost $11 million.
According to investment bank Jefferies' experts, the worldwide market for NFTs is expected to reach $35 billion this year and $80 billion by 2025. In the next years, venture capitalists believe that more and more individuals will be interested in purchasing an NFT.
According to Heltzer, "We're compensated to take chances and put our money where our mouth is." "However, I'm looking forward to the next stage of NFTs."
About Kally 👑
Kally is a P2P auction platform for NFTs, powered by Substrate & IPFS. Our goal is to build the most interoperable and user-friendly NFTs marketplace ever, allowing artists and everyday people to unleash the true power of the virtual world.
