Gemini’s Nifty Gateway Bets on Celebs to Drive Interest in Crypto Collectibles
The “Bitcoin Billionaire” twins, Tyler and Cameron Winklevoss of the Gemini crypto exchange, now also have a regulated, fiat marketplace for non-fungible tokens (NFTs).
Gemini first acquired Nifty Gateway in late 2019 with Tyler Winklevoss saying in a statement, “We believe that both real-world and digital collectibles will migrate onto blockchains in the form of nifties.” (Winklevoss declined to offer further comment.)
Nifty Gateway founders, the twin brothers Duncan and Griffin Cock Foster, launched the Nifty marketplace on Tuesday, leveraging Gemini infrastructure on the backend for a dollar-exchange platform. People can buy NFTs with credit cards and cash out directly to their bank accounts when they sell.
To start, the collectibles exchange is working with mixed martial arts fighter Cris Cyborg and photographer Lyle Owerko, whose patrons include Justin Timberlake, Beyonce and Jay Z.
“I’ve known Tyler and Cameron for a few years now. We met socially in New York, through friends,” Owerko said. “It’s fun to be an early adopter. … It’s like being a painter in the 1880s and seeing a camera for the first time.”
He’ll offer a series of six images through Nifty’s marketplace for $200 to $2,500 each, depending on the image. Some images will have 25 copies available while others only have one NFT.
“I did this of my own volition,” Owerko added when asked if the company paid him for lending his art to this format. He said this deal was “mutually beneficial.”
Market headwinds
Since the platform expects to make revenue from transaction fees, Nifty Gateway would need to attract enough volume to support the five-man team within Gemini. It remains to be seen if there’s enough consumer demand for such digital collectibles.
The Nifty Gateway team estimated NFTs were a $200 million market in 2018, wrongly predicting the collectibles game CryptoKitties would remain a “project to watch” in 2019. CryptoKitties now attracts fewer than 200 weekly users, according to DappRadar, down from the 2017 peak of 14,914 daily active users. The NFT market is still seeing dismal growth in traditional tech terms. Nonfungible.com estimates the gaming startup Decentraland is one of the top three NFT market leaders yet facilitated roughly 50 transactions in the past week.
By comparison, the Nifty team’s initial experiment with 10,000 “Crypto Punk” NTFs garnered roughly 3,569 transactions in two years, meaning fewer than half of them sold and few of them traded. On the other hand, OpenSea CEO Devin Finzer said his NFT marketplace now sees roughly $1.5 million in monthly trading volume, with a little under 10,000 active user accounts. With the Ethereum network buckling under congestion from coronavirus-induced volatility, Finzer said this may increase transaction fees the platforms pay for each swap.
“If the Ethereum network remains super clogged, developers may just not build NFTs anymore,” he said. “Then more NFT projects may move to other main chains.”
Indeed, CryptoKitties creator Dapper Labs is making progress on its forthcoming Flow blockchain, debuting a test environment for developers earlier this month.
Given the instability among Ethereum’s fan base, the Cock Foster twins are looking to tap into celebrity fandoms, hoping to launch NFTs with more athletes and artists with devoted followings.
“In the art world you don’t really see Picasso’s trading cap or trading volume,” Duncan Cock Foster said. “We’re also working on Nifty display devices. … People have to be able to hang their NFT up on their wall.”