#12 - Is your NFT actually an NFT?

Introduction

2022 saw a tsunami of news headlines that featured the word NFTs as it became too big to ignore. Major media outlets mobilised to capture consumer eyeballs with fluffy articles riding on the back of a?record year for NFTs?in 2021. Influencers continued to make fortunes out of shilling random collections, and creators were coming up with countless new projects daily.

However, the bubble burst and the second half of the year spelt disaster. If I had a graph representing the sentiment of NFTs in 2022, it would have looked like a tsunami. Oh, wait …

Interestingly, though, amidst the clickbait-y announcements were major headlines from iconic companies and brands on the release of their branded NFT collection that had promising potential to truly drive user adoption.

Recently, FIFA (The International Federation of Football Association) announced the launch of?FIFA+ Collect, an NFT platform running on Algorand that allows fans to own, collect and trade iconic World Cup moments in the form of unique digital collectibles. With a concept similar to?NBA Top Shot, this licensed collection featuring FIFA’s 92-year history attracted enormous attention with its massive potential to promote mainstream adoption of NFTs, especially with a fan base of more than half the global population.

While this project aims to provide a fun, nostalgic experience of collecting timeless pieces of the beautiful game, there is one important question raised about this model of digital collectibles:

Are these digital collectibles considered NFTs when gated by one application, platform or marketplace?

Technically speaking, yes (as I analyse their defining qualities).

• They are non-fungible and can be uniquely identified from one another.
• They run on a platform that in turn runs on a blockchain.
• They can be purchased, sold and traded directly with another owner or wallet.

Despite checking all the boxes, I couldn’t help but think, is this the version of NFTs that Kevin McCoy dreamt of when he minted the first NFT?

In my opinion, this Web2 in Web3 digital collectible model lacks the decentralisation aspect that is crucial to Web3. Think of it like this, let’s say you buy a new car from a dealership in Kuala Lumpur, and it remains the only place you can ever sell it. Similarly, you would require a platform-specific account, like the one on FIFA+ Collect, to manage, trade and sell the NFTs.

Other examples of NFT collections with “centralised” characteristics and reflects the Web2 in Web3 model can be attributed to the partially transparent walls of platform-centric NFT marketplaces, which low-key highlight a capitalistic nature, i.e., The GOAT, aka Lionel Messi’s?Messiverse,?VeVe Disney NFTs,?Coachella Collectibles,?Starbucks’s Odyssey and many more.

Gatekeeping NFTs

NFTs are supposed to exist on different blockchains. Or at least that’s the original, utopian vision of Web3. And while we figure out more efficient and user-friendly ways to conduct multi-chain transfers of NFT ownership and storage, we need to be aware of the issue that stems from gated platforms that are designed to create walled gardens surrounding accessibility and distribution.

One example could be that you sign up for a FIFA+Collect account, and one day, FIFA decides to shut down the platform; you would not be able to gain access to the tokens you purchased despite the fact they still exist on the Algorand blockchain. This is a highly probable scenario if you think about it since they were willing to end a three-decade partnership with EA Sports for one of the most popular video game franchises.

Perhaps, a different platform can be built to surface those NFTs through a different front end and revive their tradeability. But that would solely depend on the willingness of the community members to develop an entirely new marketplace or exchange that has access to the previous database and information on those assets.

That said, though, I do see some value in releasing platform-agnostic NFTs. For example, creating a bespoke, unique minting experience is only possible on a proprietary site or platform. This approach is more user-friendly and immersive. If NBA Topshot were to be made available directly on the secondary market, it would not have generated as much interest.

By utilising platform-centric models, project creators can ultimately deliver more valuable and safer experiences for their users.

Closing thought

There is certainly demand for this partially gated ecosystem, despite the fact it may impose control over the distribution of NFTs or limit the goal of decentralisation. In my opinion, these closed-ish ecosystems have the potential to allow brands utilise to their IP in the most appealing way and deliver one-of-a-kind experiences that may be better developed behind closed doors.

As more feet dip into the NFT pool, more platform-centric marketplaces will emerge. While it may be for convenience and a better experience, there will be those who seek to control the accessibility and distribution of these digital collectibles. With the market ripe for #BUIDL-ing, we should look forward to the inception of newer models and how they will shape the space and its community.

We can label them as platforms NFTs, app-specific digital collectibles, or even kindoff-tradeable trading cards. But it might take a while till we refer to them as “Web3 NFTs”.

Let me know what you think about platform NFTs and how this model of digital collectibles will evolve in the coming future.

That’s it for this one, ciao.

#williamwillwrite