A tokenized Rolex?
The 4K platform, a marketplace that allows users to mint non-forgeable tokens (NFTs) representing physical assets, launched Wednesday morning on the ethereum network.
The project extends the use of NFTs from mere digital art to real-world luxury goods. With the conversion of physical goods into NFTs, owners of valuable physical assets are one step closer to participating in the decentralized finance (DeFi) ecosystem.
“Back in 2017, I knew NFTs were going to be a big thing, but I wasn’t sure in which form,” 4K founder Richard Li told us in an interview last week.” In the real world, when someone makes $100 million, they buy some art. Why not in the digital world? That’s the transformation I see.”
The service has put the NFT business on an even faster pace, with digital collector cards like CryptoPunks and Bored Apes being sold for hundreds of thousands or even millions of dollars, and coders are even conceiving blockchain-based software protocols that let users borrow against their tokens, like a pawnshop for the NFT.
4K says it will bring real-world assets to the blockchain by issuing NFTs, which symbolize physical ownership, to users of the platform. The company obtains the item from the seller and certifies, insures and stores it. NFT holders can then exchange their NFTs for physical objects.
Upon redemption, the NFTs are destroyed, meaning the holder cannot own both the physical object and the NFTs.
“4K is an analog-to-digital converter for physical collectibles,” Curtis Spencer, an investor in 4K and co-founder and partner of the venture capital firm Electric Capital, told us.
According to the latest figures, more than 5,000 people have signed up for 4K’s website drops and more than 10,000 have registered for early access to the marketplace since the launch of its beta platform in July this year.
The platform will also give the international community access to coveted luxury items, some of which are not available across geographies.” It’s the democratization of these types of marketplaces,” said Richard Li.
According to Richard Li, most sales of luxury art happen only “on paper,” with no actual transfer of goods.” Ownership changes, but the work doesn’t move,” Richard Li explains. As a result, NFTs make ownership of non-fakeable real-world objects easy to trade and give away, disrupting traditional marketplaces or auction houses such as eBay, Christie’s and Sotheby’s.
Li says these auction houses are taking advantage of the NFT boom “by extracting value from the ecosystem and turning cryptocurrency assets into fiat currency.”
He said 4K’s goal is to do the opposite, bringing physical assets to the chain and growing the cryptocurrency market.
“If you make money in cryptocurrencies, you should support the cryptocurrency community,” Richard Li said.
The company closed a $3 million seed round in July, led by Electric Capital, Crosscut Ventures, Collab+Currency, ConsenSys and IDEO CoLab Ventures. At the time, the company was valued at $30 million.
“With this physical asset bridge and marketplace, we get all the superpowers of NFT in DeFi, such as transparency, authenticity and composability,” Electric’s Spencer said.