The world of cryptocurrency and NFTs can be intimidating. Ask any enthusiast and they’ll probably have a story about getting scammed, sending coins to the wrong wallet, or falling for false promises. It’s almost like a rite of passage.
The decentralised world operates on the idea of self-governance, and so, the burden of protecting your assets lies solely with yourself. There’s no legal recourse for stolen NFTs, nor refunds for buying into a doomed project.
For the traditional consumer, it’s a whole new playing field — one which most NFT marketplaces don’t cater to.
Recently, OpenSea — a marketplace which recorded over US$3 billion in trading volume this January — revealed that more than 80 per cent of NFTs created using its free minting tool were either fake, plagiarised, or fraudulent.
Navigating the NFT space requires a tremendous amount of due diligence and caution. One of the reasons why Singaporean NFT platform Brytehall was created was to ease this barrier to entry.
“We aim to be a bridge between traditional consumer and the crypto world,” says Brytehall COO Bernard Toh.
Exploring phygital concepts
In its mission to bridge this gap, Brytehall pitches phygital concepts — a blend of physical and digital experiences — as the way forward.
“I believe that the metaverse and real world shouldn’t be mutually exclusive,” explains Toh. “I see the metaverse as another dimension which mirrors the real world in the digital space.”
Brytehall’s debut auction last December was in partnership with American bicycle company Specialized. It was a one-of-one NFT of a bicycle frame which sold for US$50,000. The winning bidder also received the physical counterpart of the NFT bicycle.
“I like to see both worlds intertwine to create new experiences,” Toh adds. “For example, if an NFT sneaker comes with graphics or animations and then I buy a physical copy of the same shoe, I should be able to see those same animations through an AR filter. I think that’s the most practical utility for NFTs right now.”
Toh also likes the idea of a price correlation. When the price of an NFT fluctuates, it should have a similar effect on its physical counterpart. “I believe we’ll see more of this in the coming years.”
NFTs as a marketing tool
Such phygital concepts prove unsuitable for resellers and NFT flippers. However, Brytehall’s auctions don’t target this audience.
The platform often partners with traditional luxury brands which aren’t overly concerned with making royalties off of secondary sales.
“When you have luxury brands entering this space, NFT sales might not be their priority,” Toh explains. “Any proceeds would be much lower than the revenue they generate from their day-to-day business. It wouldn’t make much of a difference to their bottom line.”
“Brand messaging and laying down groundwork for the future is the real plan of action,” he adds. “The metaverse is becoming a marketing channel for these brands. They just want to explore the space and find out if it has potential to improve brand awareness.”
Toh believes that it’s necessary for brands to get involved now if they are to keep up with the pace of evolution.
“The space is ever-changing and you need to be there to get used to it. Things like community building and storytelling work differently in the crypto space. You can only get in the groove once you start laying down the groundwork.”
The future of NFTs: trends and utilities
Speaking of the pace of evolution, one might only look back to the past year to see how far NFTs have grown. New utilities are coming up as the days go by, and consumers aren’t buying in for the same reasons as they were a few months ago.
“Initially, you had people buying NFTs simply because of rarity and exclusivity,” Toh says, alluding to the monumental sale of Beeple’s digital art collage, which brought in over US$69 million. “It’s not as one-dimensional now. The trend has moved onto gamification. There’s a perceived utility to it.”
Toh has also noticed a cyclic nature to the growth of NFTs.
“When a new innovation succeeds, it creates hype and you have a lot of projects trying to ride that wave. Eventually, that becomes old and something else takes its place. I believe that through these cycles, the metaverse will take shape and become mainstream.”
“Maybe not just yet, but I believe it’s not too far. Perhaps, buying NFTs right now is like buying into possibilities of the future.”
Why aren’t more Singaporeans buying NFTs?
The numbers show that Singaporeans are particularly sceptical about such a future. Currently, NFT ownership in Singapore ranks well below the global average.
When compared to those in other countries, Toh speculates that Singaporeans are a “bit more prudent” with where they place their money.
“If you look at the matrix for insurance investment, I’m sure Singapore would rank quite high,” says Toh.
“The friends whom I spoke to have heard of NFTs, but they aren’t really ready to place their money in them. The use cases aren’t strong enough yet. They’re okay to buy crypto, but not NFTs.”
Beyond the general sentiment, Brytehall has faced regulatory issues in reaching the local audience as well.
Last year, the startup partnered with Binance for the launch of Vogue Singapore’s NFT collection. As it so happened, this was right when Binance was barred from operating in the country.
“We realised that users in Singapore couldn’t get access to the NFTs,” Toh recalls.
However, this wasn’t much of a problem. Even though Brytehall is based in Singapore, it has always adopted a global perspective.
“Our target audience has always extended beyond here. It has been Russia, Europe, US, and China. I don’t think the Binance news hurt our launch at all.”
Is Singapore an ideal place to run an NFT start-up?
All things considered, Toh believes that Singapore would be among his top picks for starting a crypto-based company even if he wasn’t Singaporean.
“Although some companies have had regulation issues recently, I think, in general, the finance space is very open into going into crypto.”
Toh adds that laws and regulations are important in this space, and it’s necessary to be able to adapt to them.
“When it comes to tech ideas like ours which push boundaries, you will often find them falling in regulatory grey areas. That’s how a lot of tech companies operate. We can’t be tied down by something that already exists. The new ideas and products come first and when they start getting attention, governance follows.”
“From our part, we need to do our due diligence on the laws and regulations which do exist. They serve as the foundation for us to build our products on. Beyond that, we innovate for the future, plan out our roadmap, and launch ideas whenever possible.”
Featured Image Credit: Bernard Toh