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The market for crypto assets exploded in popularity during the past year, with about $25 billion spent in 2021 on non-fungible tokens, or NFTs, and some worldwide brands opting in to sell them.
NFTs are considered unique assets that are stored in a blockchain and can’t be replicated. They can be anything digital, including images and videos, and buying NFTs means purchasers retain ownership of the work. Some people collect NFTs for personal enjoyment, while others treat them as speculative assets that they hope will appreciate in value and can be sold for a profit.
NFTs have been around for about a decade, but a report from DappRadar, which tracks blockchain activity, shows the market’s growth skyrocketed in 2021, climbing to $24.9 billion from just $94.9 million in 2020. More recently, that growth has leveled off, but the number of active buyers and sellers of NFTs continues to increase, according to the blockchain data platform Chainalysis.
Various industries, from gaming to auction houses and sports leagues, have experimented with NFTs as a profit generator, as well as a means to grow their brands and engage with customers. Several companies in the Denver area are among those looking to find their footholds in the NFT market.
Farm, a land restoration investment platform based in Fort Collins, is using the sale of NFTs to fund a real-world restoration project on 78 acres of land in Colorado’s San Luis Valley.
Through its usual business model, Farm partners with accredited investors to fund the purchase of large swaths of undervalued and unhealthy land, which it then restores to serve a productive and profitable purpose, such as regenerative ranching or sites for wind and solar generation projects.
Tim Luckow, Farm’s founder and CEO, has a personal interest in crypto assets and decided to experiment with them as an atypical method to fund a restoration project. Earlier this month, Farm launched more than 1,000 tokens on the Polygon blockchain. The tokens are digital images of drawings that depict different flora and fauna of the San Luis Valley.
In addition to having ownership of the digital images, purchasers of the NFTs will have the opportunity to voice their opinions about how Farm should restore the land. They’ll also receive updates throughout the restoration project.
“The idea is that we will show the progress over time to this network,” Luckow said.
Luckow said the idea is to get more people involved in funding land restoration with less upfront cost and without the expectation of returns on their investments. The tokens are bought using cryptocurrency, with each costing an amount that equates to about $100.
“For us, this is sort of a test,” Luckow said. “We wonder if there’s potential for a kind of crypto land trust that is more about the restoration and following along with the progress and being reported to, and less about, ‘I want to make X number of dollars on every dollar I put into this.'”
Local breweries
Three local breweries — Resolute Brewing Company, Denver Beer Company and Great Divide Brewing Co. — partnered this month to sell 18 NFTs.
Each brewery is selling six tokens, which are digital images of video-game inspired art that depicts beer cans with their logos. The tokens are listed on Hamlet, an NFT marketplace for the hospitality industry. The tokens, on sale for $250, come with a real-life benefit: buyers will receive two tickets to a craft beer tour. During the tour July 30, a party bus will take participants to the three breweries.
Clifton Oertli, the owner of Resolute Brewing Company, thinks the effort serves as an easy way for people who are curious about NFTs to see what it’s all about. Oertli has become personally interested in Web3, which incorporates ideas such as blockchain technologies and token-based economics.
“I feel like a lot of the space right now is still highly theoretical, and there’s a lot of barriers to entry for the average person to get involved,” Oertli said. “We’re always looking for opportunities in the brewery, as well as in my Web3 communities, on how we bring this into the real world.”
This collaboration marks the second foray into crypto assets for Denver Beer Co., which last summer auctioned one NFT that entitled the buyer to four free beers every day, indefinitely, at any Denver Beer Co. taproom. In cryptocurrency, the buyer spent the equivalent of $9,200 on the token.
The breweries will be looking for different ways to leverage NFTs in the future, including potential use as a virtual loyalty card, Oertli said.
Outside Inc.
The Boulder-based media company Outside Inc. recently launched its Outerverse Passport, describing it as an NFT marketplace with a mission to get people into the outdoors.
Since mid-2020, Outside has added numerous publications to its media portfolio, as well as technologies like GPS apps and outdoor events companies. Now, the company is testing the value of Web3. CEO Robin Thurston said he “became convinced” over a year ago that blockchain was going to revolutionize intellectual property, and he wanted to experiment with how it could be used.
Outside released 10,000 passports July 20, which can be purchased with cryptocurrency or with a credit card for $225. The purchase comes with a three-year Outside membership and allows buyers to access an NFT marketplace. On the marketplace, Outside will sell digital artwork that will come with real benefits, including gear discounts and entries to win experiences.
Musician Jack Johnson is partnering with Outside to offer passport holders the chance to win concert tickets to a show in Los Angeles. There will be future opportunities for NFT buyers to win climbing trips with professional climber Sasha DiGiulian and to meet photographer and filmmaker Chris Burkard, Thurston said.
“We’re very much in the learning and testing phase,” Thurston said. “We’re trying to get a read from our audience of interest and whether or not we can create these continuous loops of activating people and rewarding them. We’re just going to keep building and testing, like we are other parts of our platform.”
Thurston described the Outerverse Passport as a “very small” start to a long-term endeavor. He said Outside isn’t dedicating a big portion of its resources to the initiative. About 3% of its staff is working on the project.
“It’s not like we’re betting the farm on this,” Thurston said. “I think a lot of people are going to talk about [Web3], but it’s going to take awhile for adoption to happen en masse.”
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