The world seems to gravitate more and more to trading using non-fungible tokens (NFTs), and the craze is sweeping across Africa as well. Recently, the world-famous South African freedom fighter, Nelson Mandela’s warrant of arrest was sold at a record $130,000. However, to some creatives and entrepreneurs, the concept and usability of NFTs is still unclear to them. To demystify the concept and shed light on the same, Faustine Ngila, talks with Mr Alex Kehaya, the CEO of Holaplex, a free open-source marketplace for NFT storefront building and customization. Holaplex has minted over 50,000 NFT’s and built thousands of no code storefronts for artists to easily sell their products via Solana blockchain.
What are the pros and cons of different blockchains?
I think when you’re looking at selecting a particular blockchain for your product, you should really focus on performance and usability, and ease of development. Like how fast you can get to market on top of a network that is going to be performant at scale. In my opinion, the best option for that is Solana. Today there are a ton of open-source projects, including HolaPlex, that you can build on top of the blockchain itself. The underlying technology is extremely efficient. It is a hot, high speed, high throughput blockchain that is environmentally friendly. So using one transaction on Solana is like two Google searches as far as the impact on the environment. That matters a lot, especially for some bigger brands that are entering the space with NFTs and other types of use cases. For example, HolaPlex offers a bunch of open source tooling that can make it so much easier for a good developer to build a related user experience on top of Solana. There’s a lot of tooling that’s happening in the open-source space on Solana that’s going to make it faster for you to go to market as somebody who’s building things in the space.
What is the future of NFT in the art world and beyond?
Well, I think that NFTs in the art world have really empowered creators to have their art become an asset that they own and that they can generate income off of in perpetuity because of the way royalties are structured. The fact that you can set your own royalty fees and have it be on-chain really helps these artists. I also think that using decentralized technologies and NFTs in general gives creators a way to connect with collectors in a way that they weren’t previously able to. It’s a global community that you can now reach and sell your art to. I personally collected from an artist on HolaPlex, he goes by Christopher on Twitter and he’s based in Nigeria. I never would have connected with this artist before NFTs were a thing . I have a physical print of the digital collectible I bought, and he also shipped me a physical copy of the painting, which is pretty cool. Beyond that, there are a ton of use cases for NFTs. We’re already seeing NFT’s used for ticketing, loyalty programs, and membership into communities. I think that community membership use cases are something that we’re going to see explode in the next couple of years. It’s already been getting quite large and generating a lot of value, and you’re seeing a lot of self-organizing communities around these NFT projects, which is pretty interesting to see. We first started to see that in DeFi, but the NFT itself is sort of like the carrying card of membership into a specific community and how they’re generating a big community of contributors around open source projects.
Is the NFT marketplace a bubble?
I think as you see rapid innovation in any new technology or system, it’s going to go through boom and bust cycles. Personally I’m not really going to speculate on where we are right now, it’s hard to tell. But I do know that NFTs are around to stay. There are major brands interacting, building NFTs into their business as core parts of their business. We’re going to see it continue to grow over the next several years and even decades. I don’t think that that idea of NFTs is ever going to go away, and if anything, it will become more innovative and valuable to people.
Can the authenticity tech behind blockchain be trusted?
Going back to how this empowers creators, it gives creators control over their assets and data, and verifies that you’re the original, authentic creator of that item. Due to this factor, regardless of anybody who might try to copy that item, there can only really be one verifiable owner and creator of a digital collectible when it’s using a blockchain. There’s an immutable record of who created it and who collected it, and all the trades in history and all the royalties distributed are on chain. So it’s not really possible to fake that part of it, and it’s going to fundamentally shift how authenticity and ownership of various items, not just art, are viewed.
What other items do you think could be included?
There’s been talk forever of using blockchain technology in supply chains and logistics. I could see how NFTs could fit into some kind of solution not only into that space, but any kind of collectible. Already there are tons of collectibles and games on blockchain, and I think we’re going to see an explosion in gaming over the next six months. And like any space where you see collectibles right now, I think it is low-hanging fruit for this authenticity to play a major role.
Any additional comments on NFT collectibles?
We’re seeing several startups spin up around the collection of physical items. You know, the people over at Mondavi, the wine company, did something pretty innovative with NFTs. They sold an NFT that represented a very limited edition set of bottles of wine. They essentially have custody of the wine at their winery, and then if you want to, you buy the NFT, you can leave it with them and just store it basically. But when you redeem it, you give the NFT back and that redeems the bottle for you. Mondavi is one of the few brands that I’ve seen who are really ahead of everybody else in launching something like this. I think coming up with IRL assets that you can create a liquid market for via a digital representation of it. You can see how people would trade these bottles of wine with each other digitally as long as they haven’t been redeemed. You could just easily, in a permissionless fashion, sell your bottles to somebody, some other collector, potentially at a higher price, potentially at a lower price than what you paid for it without ever having to touch the bottle itself, which is pretty cool.