Month: April 2021

Non-Fungible Tokens (NFTs): The Complete Guide

Posted on by Pastel Network

Non-fungible tokens (NFTs) are blockchain-based tokens representing unique digital items such as digital art, collectibles, video game items, domain names, and more. 

The concept of NFTs is somewhat polarizing: one end of the spectrum raves about the creation of a financial infrastructure to trade and collect digital assets, and the other tends to view the value of NFTs and digital assets as dubious compared to their tangible real-world counterparts. 

Much of the static in the antagonist argument comes from a misunderstanding of how valuable the digital economy has grown to be. Understandably, the notion that completely digital items are being sold for thousands to millions of dollars sounds preposterous to a community used to buying physical art and trading cards. 

Epic Games, the creator of the popular video game Fortnite, sold $2.4 billion worth of costumes in 2018. Now, if the average person doesn’t know what Fortnite is, let alone why people are buying costumes for their character on it, they may be ideological odds with NFTs. 

Fortnite is a great example because, although none of the costumes or items are blockchain-based NFTs, it provides a great perspective of market value for purely digital assets. However, since those costumes aren’t NFTs, their value is entirely limited to existing within the NFT ecosystem. If one wants to buy a Fortnite skin (costume) from someone, they would have to go to a marketplace like eBay, pay money through the platform, and trust that the seller doesn’t scam them or that eBay is a fair intermediary if a dispute arises. 

Fortnite skins on eBay

NFT technology allows the owners of NFT-based digital assets to transact peer-to-peer and seamlessly trade NFTs for cryptocurrency. 

The benefits of the technology, however, don’t stop there. NFTs have enabled a deep variety of use-cases, from digital trading cards to video games to the representation of assets in the real world. 

Welcome to the complete guide on Non-Fungible Tokens (NFTs). This article isn’t investment advice. NFTs and all digital assets have very volatile prices and can be risky to own. 

What is “Fungibility”

Fungible (adjective): an item that can replace or be replaced by another identical item. Fungible items are mutually interchangeable.

For example, Bitcoin is a “fungible” asset because 1 BTC will always equal 1 BTC. A $20 bill is valued the same as another $20 bill, regardless of its serial number. You can replace a $20 bill with another $20 bill and still be completely whole. 

A non-fungible token is a representation of a digital asset that is unlike other assets. An NBA Top Shot highlight with a serial number of 1/1000 has a different value of the same highlight but with a serial number of, let’s say, 893/1000. 

Note: if you’re unfamiliar with NBA Top Shot, check out our guide. A “serial number” basically refers to the order assigned to each NFT moment. If there are 1000 “prints” of a moment, the serial number for an individual number will be X/1000.

Fungibility is a relative concept that tends to reflect on the market value of an item. For example, some assets are semi-fungible within a class. Two parties can swap tickets for NBA Finals nose-bleed seats without too sharp a change in value, but they can’t be swapped for courtside seats. 

NFTs and Digital Assets: A Dynamic Duo

Non-fungible assets precede the invention and popularization of the blockchain; domain names, social media handles, tickets to events, and in-game items are all examples of non-fungible digital assets. 

Traditional assets generally lack the ability to sell or trade outside of a particular ecosystem. For example, the popular MMORPG Runescape has an in-game economy with some rare items, such as Party Hats, attracting upwards of $5,000 in USD. However, trading this asset requires an enormous amount of trust between two parties, or the use of a third-party “escrow” intermediary. 

screenshot by Pavel Sorkin 04/feb/2020 from https://www.playerauctions.com/runescape-items/

The blockchain provides a “coordination layer” for digital assets. With blockchain-based assets, users get full ownership and management permission over their property. 

A blockchain allows developers to build and collaborate with common and reusable standards, allowing them to specify ownership criteria, transferability, and access. This is comparable to other facets of the digital space, such as PNG or JPEG image file formats, or HTML & CSS formats for displaying visual content on a website. 

In less techy words, think of the blockchain as the concrete foundation and plumbing for a house structure, and developers as the builders. 

The NFT token standard, introduced in late-2017, essentially dictates how digital assets can leverage a blockchain, provided they meet the standard criteria set out by the developers. 

NFTs standardized the trading, interoperability, liquidity, and ability to prove proprietorship across all digital asset classes. 

Since NFTs are interoperable, meaning they can exist in the same ecosystem together (unlike, let’s say, digital plane tickets and a RuneScape party hat), they can also be traded in open marketplaces.  

For the first time in digital history, people can list their digital assets in global 24-7 open marketplaces, creating liquidity. Think of NFTs as an evolution from a primitive inefficient bartering ecosystem to an eBay-like marketplace. 

However, unlike eBay, many of these marketplaces are completely decentralized. There is no need for escrow, and since the blockchain can automatically prove the legitimacy and ownership of an item, it’s almost impossible to scam or be scammed. 

The first NFT token standard,  ERC721, was launched by Dapper Labs in CryptoKitties. The ERC721 standard maps unique identifiers to address; these identifiers correspond to single assets. It also allows for a permission means of transferring those assets using the transferFrom method.

ERC-20 vs ERC-721 via ERC721.org

Another NFT token standard, ERC1155, was launched by Enjin, which brings the concept of semi-fungibility to the blockchain world. ERC1155 IDs can represent classes of assets, rather than single individual assets. 

The ERC-998 standard hasn’t been used much, but is still worth mentioning; it allows for a way for people to own both non-fungible and fungible assets.

To dive further into the technicalities of NFTs, we recommend browsing through popular NFT marketplace OpenSea. 

Common NFT Questions (and Answers!)

What’s stopping an NFT creator from just making more of the same NFT?

Through smart contracts, another innovation is made possible by the blockchain; developers can create “hard caps” on the supply of NFTs. If a smart contract says there will only be 10 of an asset, there is no way to reverse it. Further, these smart contracts can prevent NFTs from being modified after they have been released. 

In practice, a developer can specify that only 10 copies of a “rare” item can ever be created, while keeping the supply of common items infinite. 

What was the first NFT?

CryptoKitties launched in November 2017 and was an enormous driver of attention into the NFT and digital collectible ecosystem, but it was preceded by a few notable projects. 

Launched in June 2017, CryptoPunks by Larva Labs was the first NFT experiment on Ethereum: 10,000 unique collectible punks with unique characteristics were sold. These punks could be used with non-custodial wallets like MetaMask, making it easier for the average crypto-savvy individual to get involved with NFTs. 

CryptoPunks

Since there are only 10,000 collectible punks without any further creations, CryptoPunks are a glance at the role scarcity plays with digital collectibles. Some CryptoPunks have sold for over $5,000,000.

Prior to 2017, early NFTs include Rare Pepes (built on the Bitcoin counterparty system) and colored coins (on the Bitcoin network.) 

Where Can I Make NFTs?

A handful of NFT minting platforms do a great job at bridging the world of creatives with that of the blockchain. 

Popular platforms include OpenSea, Digital Art Chain (mint any digital image into an NFT), Marble Cards (create unique digital cards), Mintbase, Mintable, Kred platform (create business cards, coupons, and collectibles), Rarible, and Cargo.

What are the Most Exciting Uses of NFTs?

Traditional IP owners have jumped into the NFT space to better connect with their audiences and monetize their products. For example, there is MLB Crypto (on-chain baseball game for the MLB), F1DeltaTime (Formula 1 racing game on the blockchain),  CryptoSpaceCommanders (StarTrek ships inside the Lucid Sight game), Stryking and Sorare (soccer trading cards), and NBA Top Shot (NBA trading card NFTs).

Entire virtual worlds are being built on the blockchain, where NFTs represent characters and items. Decentraland, for example, is a virtual reality metaverse. Enjin has a “multiverse” platform. 

Naming services (think “.com” domain names on the blockchain) are also trendy. Unstoppable Domains, built initially on the Zilliqa blockchain released .crypto domains, each of which is an ERC721 asset. The Ethereum Name Service is also worth mentioning. 

Final Thoughts: Why are NFTs Valuable?

Beauty is in the eye of the beholder. NFTs have a market value because the market deems them so. 

However, beyond the pricing of an average NFT asset, the NFT technology itself is an enormous evolution in collecting and owning property, whether digital or not. 

Beyond the already great value proposition of utility, liquidity, and provenance, NFTs are based on decentralized technology. They can accomplish peer-to-peer and prove true, unrestricted ownership of a digital asset while also achieving centralized organizations’ primary value (trust, escrow, etc.).

Sorare: Fantasy Football on the Blockchain Explained

Posted on by Pastel Network

Sorare is a French blockchain startup building an NFT collectible game revolving around fantasy soccer (football)– not to be confused with American fantasy football.

The game consists of unique digital tradable cards of football players, some of which have attracted considerable market value. One such card of Christiano Ronaldo recently sold for $102,000, making it one of the top-selling digital collectible cards so far. 

Sorare’s packs

Sorare currently has partnerships with 130 soccer clubs, blowing its initial goal of 20 clubs out of the water; the partnership list currently includes marquee names like Real Madrid, Liverpool, Paris Saint-Germain, Bayern Munich, and Juventus. A platform like Sorare enables football clubs to better engage with a global fanbase of fans and collectors, who wish to purchase and collect Sorare Cards. 

Sorare Cards are officially licensed digital collectibles of soccer players in a particular soccer season. The cards are freely tradeable and usable. There are three levels of scarcity for each Sorare Card: Unique, Super Rare (10 copies) and Rare (100 copies).

About Sorare: The Team

Sorare was founded by Nicolas Julia (Co-founder & CEO) and Adrien Montfort (Co-Founder & CTO.) 

“Sorare was born from our love for football​. We’re building a gaming experience fueled by passion where fans can connect with football and a global community,” said Sorare CEO Nicolas Julia. “On Sorare, they can truly own the game.” 

The company distinguishes itself in the rapidly-growing NFT collectible space with its prestigious roster of investors, counting participants such as Benchmark, Accel, Alexis Ohanian (Founder of Reddit), Gary Vaynerchuk, and Barcelona striker Antoine Griezmann.

Sorare on Crunchbase

Sorare has raised $59.2M to date, with the lion’s share (€40M, or $47.4M) coming in its Series A round led by Benchmark in February 2021. Early raises included a 2019 $500k pre-seed, which included Brooklyn-based Ethereum development studio ConsenSys, and a July 2020 $4 million seed round (later extended to $10 million) led by e.ventures. 

The Sorare team announced that it has experienced its most rapid growth in late-2020 and early-2021, noting 52% month-over-month growth in early-2021. For example, about $4.2 million worth of cards were traded in January 2021, compared to just $60,000 of cards traded January 2020.

How Does Sorare Compare with Other Blockchain-based Collectibles?

Founded in December 2018, Sorare isn’t necessarily a new project on the block. It owes much of its recent rapid growth and attention to the cryptocurrency bull market and NFT boom of late-2020 and early-2021, but it is still rooted in a few more months of innovation than the average NFT collectible project. 

It’s worth comparing Sorare to NBA Top Shot, a project by Dapper Labs, which also made the viral hit CryptoKitties. Similarly, NBA Top Shot is an NFT collectible platform, but with a partnership with the NBA. NBA Top Shot generated over $200 million in transactions in 2021, and has a bustling secondary marketplace. 

Although Sorare’s $4.2 million January sales might pale in comparison to NBA Top Shot’s numbers, it’s worth noting that Sorare has been comparatively significantly undercovered. Of NBA Top Shot’s $200 million, nearly $150 million was within a one-week span following a barrage of media hype and coverage. 

It also seems that NBA Top Shot has a bit more thoughtful approach to monetization– it takes 5% of every market sales, including the high-volume high-value secondary market. Sorare currently only makes money on card auctions, and not on secondary sales. 

Although NBA Top Shot is a bit more mature than Sorare (it had already signed the NBA as a partner before Sorare raised its pre-seed,) there is no need to force a zero-sum comparison between the two projects. 

Sorare Competition

Sorare is a Parisian startup, and is the leading blockchain company working on a NFT solution for soccer collectibles. We’ll gently remind our readers that soccer is the most popular sport in the world; it has an estimated 4 billion fans worldwide, in comparison to an estimated 825 million basketball fans– basketball is also behind table tennis, at 875 million fans.

Sorare’s partnerships (source: Sorare home page)

Optimistically, Sorare is positioned favorably in the market: the bulk of the world’s most valuable and notable clubs based in Europe, and many of which are already partners with Sorare. 

However, Sorare does have some competition:

  1. Socios.com, a platform that primarily focuses on token trading token trading. It has partnerships with many of the same companies as Sorare, but it doesn’t offer NFT-based collectibles. 
  2. Animoca, a gaming studio, which scored a partnership with Manchester City teams. Animoca is also the creator of F1 Delta Time through a partnership with Formula 1.
  3. Fantastec, a collectibles app. 

Sorare’s competition has signed many of the same teams, and there doesn’t appear to be any exclusivity in its partnerships. This may drastically affects the perceived value of an NFT on Sorare, 

Sorare Tech Stack

Sorare is currently using Ethereum, which has been experiencing frustratingly high transaction (gas) fees for the bulk of 2021. 

Dapper labs learned the limitations of Ethereum’s scalability in 2017 and 2018, when its CryptoKitties game slowed the Ethereum network down to an extremely slow grind. It has since moved to Flow, a new blockchain that seems to be better for NFTs. 

How to Buy NFTs on Sorare

Sorare has a partnership with Ramp, a cryptocurrency startup that facilitates KYC and payments. Ramp processes users’ KYC using open-banking APIs, removing some of the complexity and hurdles of signing up for the end-user. 

Users can buy cards on Sorare either directly from Sorare or on the secondary marketplace from other users. 

Final Thoughts

Sorare is attempting to tap into one of the most lucrative sports marketplaces by building an NFT-marketplace. As seen with NBA Top Shot, there is plenty of room and opportunity for a project like Sorare to take off, branding itself into the popular lexicon of digital sports collectibles. 

It’s worth re-emphasizing that a firm like Benchmark not only invested in but led a funding round for Sorare. Benchmark is gilded in the venture capital community for its early investment in eBay in the first dot com boom, and later investments in companies like Instagram, Dropbox, Twitter, Uber, Zillow, Snapchat, and Discord. 

However, NFTs still present an incredible risk, both for their customers and for their investors. As with most projects at the tip of the cryptocurrency innovation spear, time will tell how this story will be told in retrospect. If Sorare is able to solidify its leadership, make its roster of partners happy, and maintain card value over long horizons, it may be onto something big. 

What is Crypto Art? A Simple Explanation 

Posted on by Pastel Network

Crypto art is (usually) digital art on the blockchain, gaining the “crypto” moniker from the cryptographic elements related to blockchain technology. 

If that sentence sounded like a bunch of jargony mumbo-jumbo and threw you for a whirl, don’t fret– we’ll break down crypto art and tie everything back together in this simple guide. 

Enter the Blockchain:

The blockchain is a permanent, immutable, transparent, and decentralized ledger that can be accessed from anywhere in the world. Think of it like a gigantic spreadsheet where anyone can request to add information. This information, however, will only be added if specific criteria are met. =

The database is updated by people around the world, who use specialized computers (referred to as miners) to verify the pending information to be added. It’s nearly impossible to add false information. 

What the Blockchain Means for Crypto Art: 

Since you can’t add false information on the blockchain, you can’t add unauthorized reproductions of crypto art.

You can verify who owns what immediately. 

Think of it this way. In the “real” world, if you wanted to buy a Picasso, you would need a fine art expert with a deep understanding of Picasso’s work, the history of the piece, and, if available, the collector’s relationship to it. 

In the cryptocurrency world, the blockchain does this automatically. It doesn’t even need to open up the digital file to “see” what the piece of crypto art is. 

The blockchain stores the art piece’s history, ownership, and other relevant information described as soon as it’s added. The art is represented by a token, called an NFT.

Enter the “Token”

A token is the name given to digital assets that don’t use their own blockchain, but rather use the blockchain of someone else. 

There are a few platforms, such as Ethereum, that were created to allow other projects to use its blockchain. In doing so, Ethereum has fostered the development of a community of innovators building a wide variety of blockchain-based projects and applications– all of which simply needed to build “on top” of Ethereum’s blockchain rather than their own. 

You can think of Ethereum as an iPhone and the various projects using Ethereum’s blockchain as apps on that iPhone. 

Now, to use Ethereum’s blockchain as a third-party token, you must meet specific token standards which standardize certain aspects of your project.

Crypto art on the Ethereum blockchain must meet the ERC-721 token standard, popularized in people-speak as “non-fungible tokens.” 

Enter the Non-Fungible Token

A Non-Fungible Token, or NFT, is a token that represents a unique asset on the blockchain. The “fungibility” of an asset refers to whether that asset is equally interchangeable with other similar assets. 

For example, a $5 bill has the same amount of value as another $5 bill. However, a sketch by Picasso is valued way more than a doodle by this writer. 

If Picasso’s sketch was on the blockchain, it would need to be represented by Non-Fungible Tokens ($5 worth of any token on the Ethereum blockchain would use a different token standard, the ERC-20.)

NFTs can be used to identify all sorts of unique items, like collectibles, lottery tickets, numbered seats for sports matches, access keys, and even houses. Crypto art is just one of the many NFT use cases.

Each NFT comes with a unique ID that describes various characteristics about the piece of crypto art– for example, the specific edition if there are multiple editions produced. 

What NFT tokens mean for crypto art:

Seeing as NFTs can be attached to anything, such as JPEGs, GIFs, and MP4s, artists can create their digital art as they normally would, save it in whatever file format, and create an NFT with it.

There are multiple NFT creation platforms that have simplified the Crypto Art tokenization. OpenSea, for example, bills itself as the eBay of the NFT world, allowing users to create and list their own NFTs, and browse a marketplace full of NFTs by other artists. 

By creating NFTs, artists are able to release and monetize their creations on an open marketplace like never before. The NFTs verify the true owner of the piece, and can’t be replicated or changed, creating an element of scarcity that accompanies the digital assets.  

Final Thoughts: Why Does Crypto Art Matter? 

Digital art and graphic design have been around for decades, but the ability to truly “own” and monetize it has been significantly limited. 

For example, you can copy as many JPEGs as you want of Nyan Cat, and in a way, you’d own a copy of that image of Nyan Cat. However, with NFTs, someone actually owns a 1/1 NFT of Nyan Cat, created by the original artist and sold for nearly $600,000.

Crypto art is just a tech-enabled evolution of art. Comparing NFTs with tangible art is like comparing apples to oranges– they’re both categorically the same, but so fundamentally different. 

Crypto art also has its risks.

 “Bit rot” or the gradual deterioration of image quality or corruption of media files is a thing. The risk of many of the blockchain platforms around today not existing in the future is unlikely, but it isn’t a negligible consideration. 

However, physical art is also frustratingly fragile– most Renaissance-era paintings that have survived the battle of time still have to be meticulously “touched up” with new paint; ancient vases are one unfortunate tip away from losing a fight with the ground. 

Physical art is also extraordinarily cumbersome to ship and move; museums and art galleries spend millions of dollars per year to simply take their art from Point A to Point B.

Crypto art provides a new form for creativity to flourish and survive beyond the physical real world with some distinct advantages over traditional art. 

Its propriety can be proven instantaneously, it can be sent to anyone anywhere in the world without degradation, and it can be properly assessed in a more dynamic, real-time marketplace that could potentially consist of hundreds of millions, if not billions, of people in the near future. 

Top 6 Types of Digital Art in 2021

Posted on by Pastel Network

Digital art is defined as artwork that utilizes digital technology as part of the creative or presentation process. 

Although the lines blur between digital art and other types of experiential art, for the sake of this guide, we’ll be regarding digital art as anything that primarily lives in the digital realm. 

If you’re reading this article, you may be wondering how digital art is different from “crypto” art. The technology of crypto art cuts through any latent subjectivity surrounding digital art. 

Crypto art utilizes the blockchain as a means to acknowledge and authenticate ownership, prove the propriety of a specific art  piece, as well as to facilitate the instantaneous transactions between buyers and sellers. It largely accomplishes this through the use of NFTs, or Non-Fungible Tokens; these blockchain tokens represent unique, one-of-a-kind assets. 

The following article will explore the top 6 types of digital art, but it comes with a caveat– “top” is merely a handy way to categorize what excites us about the digital and crypto art industry in 2021. 

We acknowledge beauty is in the eye of the beholder, and our opinions below aren’t meant to “rank” artists against one another. If our writing here can inspire other artists around the world to explore creating art on the blockchain, we’d call this one a success. 

Let’s get into the best types of digital art in 2021. 

1. Everydays: the First 5000 Days

Charleston, South Carolina artist Beeple’s ‘The First 5,000 Days’ crypto art piece shocked the world, selling for a record $69,346,250 on March 11, 2021. 

The piece is a collage of artist Mike Winkelmann’s daily releases since he challenged himself to make a picture from start to finish every day starting on May 1st, 2007. His digital designs portray dark, comical phantasmagoric worlds, often using pop culture figures as focal points and references. Many pieces make some subtle, or not-so-subtle, rather, political or social commentary. 

Although the lofty price tag has been a controversial subject for a good majority of 2021, and for good reason, we view Everydays: the First 5000 Days as a testament to Winkelmann’s commitment to his creative journey. It’s also a reflection of his early advocacy of blockchain technology.

2. Nyan Cat

Nyan Cat sold on February 19th, 2021 for 300 ETH, which was worth about $580,000 at the time of the sale.  

Artist Chris Torres created Nyan Cat about a decade ago, publishing a video of the poptart-body flying cat in April 2011. The video grew to over 185 million views, becoming a viral sensation. 

In February 2021, a 1/1 NFT of Nyan Cat sold in an exciting auction with three bidders competing down to the last few minutes.

Nyan Cat makes our list because its sale will pave the way for future creators of viral sensations to directly interact with their audience, rather than having a third-party intermediary platform, YouTube in this case, determine the engagement and monetization.  

3. CryptoPunks

CryptoPunks

CryptoPunks are early blockchain-based collectibles that regularly attract price tags from between a few thousand to topping over $7.5 million. 

There are 10,000 CryptoPunks, each with uniquely generated characteristics. Each is one-of-a-kind, and can only be owned by a single owner on the Ethereum blockchain. When they first launched, anyone with an Ethereum wallet could claim one for free (all were claimed very quickly.)

We like these 8-bit digital portraits are the closest we have to cryptocurrency antiques– they were the first “NFT” on Ethereum, and were an inspiration for the NFT ERC-721 token standard. 

4. Pascal Boyart’s Murals (and NFTs)

Inspired by an early 19th-century painting by Eugène Delacroix called La Liberté guidant le peuple (Liberty leading the people), a Parisian street artist Pascal Boyart painted a mural homage, but with one interesting spin. 

NFTs of Boyart's mural
NFTs of Boyart’s mural

The mural contains $1,000 of BTC that can be claimed, provided visitors can crack the code the Boyart’s puzzle; the bitcoin has yet to be claimed.

Boyart also began selling NFTs of the mural’s digital version. The pieces are selling for 15 ETH+, or about $32,000 a pop. 

We like Boyart’s murals because they bridge the real and digital world in such a unique way; for example, he frequently adds a QR code for donations in BTC, and has generated thousands of dollars for his work by admiring passers-by. 

5. Hashmask #9939 sex

Hashmasks are unique because they’re the product of a community, rather than a product made to be sold to a specific community. There are 16,000 unique pieces, created by over 70 artists. 

The Hashmask initiative belongs to the Zurich-based Suum Cuique Labs, and the Hashmask creators are anonymous. 

Hashmask #9939 sold for 420 ETH, or about $840,000. 

“We are the exact target audience. We just build what we would like. We didn’t have to do any analysis on people’s preferences because it’s just us,” said one of the anonymous founders. “We hang in the same Discords.”

We like Hashmasks because they demonstrate the efficacy of creative anonymity on the blockchain, as well as the mainstream success that comes about when cultivating a unique relationship with an audience. Being the decentralized world the cryptocurrency industry is, this is particularly important. 

6. THE COMPLETE MF COLLECTION

Beeple again, this time with THE COMPLETE MF COLLECTION, a 1/1 collection of all of Beeple’s artwork in video format. 

This NFT sale is awesome because it actually comes with a physical, interface-free, always-on, physical artifact that constantly streams the NFT. The device comes with a signed, numbered titanium backplate with, according to the description, hidden authentication markers. 

It also comes with an “Authentic Beeple hair sample*,” which the creator further qualifies by saying “totes promise it’s not pubes.”

THE COMPLETE MF COLLECTION sold for $777,777.77 on Nifty Gateway. 

We love this one because it not only broadens the category of “digital art” to film, but it comes with a physical, presentable object that makes for a visually stimulating discussion piece.  

Final Thoughts: Digital Art History is Being Written

With Bitcoin’s 500% growth in price over a few months between 2020 and 2021, a newly minted batch of affluent cryptocurrency millionaires has entered the art collector space. 

The Internet’s newest millionaires and billionaires are showing a warmness to something they’re uniquely familiar with– value stored on the blockchain. 

For one, NFTs don’t come with the trappings and concerns of owning physical art pieces, like security costs, transportation, and physical deterioration. While NFTs do come with their unique set of risks (and digital deterioration, or “bit rot” is still a real thing), they provide an ownership and authentication framework like never before. 

Crypto art backed by NFTs already has some significant success stories, with CryptoPunks, Beeple, and Hashmask as strong examples in their own right. 

Our list of the top digital art is by no means exhaustive, and that’s so motivating to us as creators. There are already dozens of examples of NFT-backed music, videos, and trading card games selling for millions of dollars; the shiny selling prices are less important than the enthusiasm and democracy of investment created in the new era of art. 

Street Fighter Cards: Fighters on the Blockchain Explained 

Posted on by Pastel Network

Street Fighter cards are glorious reminders of the nineties; they’re a passport to the age of arcade gaming.

The first Street Fighter was released in 1987, a simpler time when Internet gaming was still over a decade away. Street Fighter trading cards entered the scene in 1991, bringing the hype of sports cards into the digital realm.

Capcom, the legacy video game developer headquartered in San Francisco, CA, recently launched a suite of Street Fighter II-inspired cards as Non-Fungible Tokens (NFTs) on the WAX blockchain. 

The Street Fighter NFT cards are tradeable digital cards with recreations of Street Fighter characters. The packs come in Standard and Ultimate sizes, with 10 cards and 60 cards per respective category.

The first series of Street Fighter cards was released in February 2021 and quickly sold out. Users were able to purchase the packs via credit card. 

All of the 65,000 packs sold in the 24-hour period, generating over $2 million in sales; there was also an additional $1 million in secondary market trading. 

Upon purchase, the cards can be digitally “opened”– an experience reminiscent of opening up a physical pack of cards in the real world. 

Moreover, you can craft them to form other NFTs. By crafting, you can choose to power up the non-build cards you received by adding one more build card and combining them together. 

Street Fighter Card Founders

Capcom started its journey as a game machine manufacturer in 1979 and has since matured into a video game industry behemoth with offices in Japan, the United States, England, Germany, and Hong Kong. 

Capcom released the first arcade video game version of Street Fighter in 1987, followed up with Street Fighter II four years later. It wasn’t until this game that the Street Fighter craze took off, quickly growing into a cult classic video game and penetrating mainstream culture. 

In 1994, the Hollywood-produced Street Fighter movie was released in theatres, and the TV animation version of the game started broadcasting the next year.

It wasn’t until 2021 that Street Fighters made their appearance into the blockchain as tradeable NFT cards.

Enter WAX: the Worldwide Asset Exchange

The Street Fighter NFTs are listed on WAX, short for the Worldwide Asset Exchange. By hosting the cards, the WAX blockchain allows the collectors to enter a marketplace where they can purchase the digital Street Fighters, propose and execute trades, showcase their inventory on social media, and search the wishlist of other traders.

On February 16, 2021, the news about the partnership between the WAX blockchain and Capcom was made public. As per the terms of the partnership, Capcom and WAX teamed up to bring Street Fighter as digital blockchain collectibles to fans.  

WAX was founded by William E. Quigley and Jonathan Yantis in 2015 to primarily help content creators tokenize their products and offer them to the global collector community. To date, WAX has raised a funding of 42 million USD from a total of five investors: Node Capital, Asian Cowboy, Andreas Schwartz, Distributed Global, and Hashed. 

What Does WAX Do?

The WAX platform has established itself as an early pioneer of NFT hosting, allowing anyone anywhere to trade digital or physical items instantly and securely. Users can use WAX to buy and sell gift cards and build online stores for their products. 

In addition to Capcom, WAX has been used by the likes of deadmau5, Atari, Topps, and William Shatner to host their NFTs. 

WAX consists of a cloud wallet that makes it easy to buy the native WAX token, store NFTs, stake tokens, and participate in the WAX DeFi ecosystem. 

The platform has been used by several gaming industry stalwarts because by participating in WAX brands gain access to a global community of collectors, traders, buyers, sellers, creators, gamers, merchants, dAPP creators, and game developers.

WAX offers lucrative monetization opportunities to its users. Anyone who participates in the WAX network qualifies for rewards in ETH tokens or WAXG governance tokens. Those who deposit a combination of WAXE and ETH into the Liquidity Pool qualify to earn Liquidity Pool Rewards (WAXE-ETH). WAXG is given to those who stake their WAXE-ETH Tokens in the WAX Economic Activity Pool.

Street Fighter II on WAX: How It Works

The Street Fighter II card sale started on February 18th, 2021, and was scheduled to last 24 hours. The first series of Street Fighter on WAX comes with 262 unique trading cards in eight rarities. 

As the new crafting system of the card set dictates, the buyer has to start by opening packs of Build Cards, then combine two matching Build Cards to unlock a new card in one of six rarities. 

Street Fighter NFTs Explained

A buyer of a Street Fighter Build Card pack opened the pack, and then combined two matching build cards to reveal a new card. The Build Cards are burned in the process, increasing the scarcity and value of the standalone Build Cards. 

The buyer can continue upgrading that card’s power score by adding additional build cards. Once it reaches a power score of five, the user gets to unlock a special Class Card in one of six rarities. Build cards are burned when used, which increases card scarcity and value.

WAX’s blockchain technology has multiple roles. 

Street Fighter blockchain

Because these cards are powered by WAX Blockchain technology, users can not only buy and sell digital Street Fighter trading cards on several marketplaces – they can also instantly trade cards from their collection with anyone owning a WAX Blockchain account.

The WAX Blockchain also ensures that the Street Fighter collectible is 100% verifiable as authentic and can never be changed or duplicated.

It’s worth noting that in February 2021– the month Capcom launched its Street Fighter NFT sale– saw over $255 million in NFT sales, the bulk of which came from Dapper Labs’ NBA Top Shot. 

The Street Fighter NFT secondary marketplace on WAX

Users with WAX wallets and funds were eligible to participate in the Street Fighter sale. A few reports of the sale noted glitches with the sale in the first hour, largely due to the web traffic overload of people attempting to buy a Street Fighter NFT. 

Buyers of the initial card sale received “build” cards, which could be combined to form “character” cards, or NFTs of famous Street Fighter characters like Ryu, Chun-Li, Ken, and Blanka. 

The cards that you create with the ‘build’ cards come in varying rarities. 

The Collectors’ Edition contained the game’s classic characters, and users had a 1% chance of getting them. 

The Action, Weld, Battle, Foil, and Base categories come with 5%, 10%, 15%, 25%, and 44% rarities. 

The card minting happens simultaneously with the sale, and the participants keep combining their build cards to level up. The platform displayed the mint number and other details of the asset profile such as the asset name, the offer, and template-id, the product price, etc. 

The WAX platform also offered a few unique incentives for buyers. On WAX, Buyers could propose trades, showcase their inventory on social media, and search wishlists of other traders. 

Although the original sale only lasted for a day, Street Fighter card owners could instantly trade their collectibles on the secondary market to anyone in the world. 

The Popularity of the NFT Marketplace

While explaining the rise in demand, Lee Jenkins, Product Manager at WAX, compared the digital ownership of these collectibles with the physical ownership of an item. 

“[Blockchain technology] is the first time that digital ownership is truly comparable to physical ownership of an item,” says Jenkins. 

The verifiable authenticity and scarcity of the products are also sources for the long-term demand of NFTs. 

Final Thoughts: Street Fighter on the Blockchain Packs a Punch

The success of the initial Season 1 sale of Street Fighter cards may lead Capcom to launch Series 2 and 3.  NFT launches such as these serve as an excellent example that legacy brands can tap into entirely new marketplaces of digital collectors to generate revenue and connect with their fans.

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