Dapper Labs CEO: I absolutely love Pop Mart, NFTs will elevate the collectibles market to a trillion dollars

This article is from Rhythm BlockBeats.

The sudden explosion of NFTs has caught countless people off guard. No one expected that this "small circle," which was virtually ignored just six months ago, would now attract attention from various industries both within and outside the crypto space. Driven by the mainstream, countless traditional artists, musicians, and social celebrities have issued their own NFTs, while crypto artists have also gained mainstream favor, with Beeple and Pak receiving olive branches from Christie's and Sotheby's.

Since the end of 2020, the most eye-catching NFT project has been NBA Top Shot. This game, built on the Flow blockchain, has become another phenomenal hit created by Dapper Labs after their success with CryptoKitties. Who would have thought that an NFT card that once struggled to sell for $2 could fetch a staggering $200,000?

Rhythm BlockBeats spoke with Dapper Labs CEO Roham Gharegozlou (hereafter referred to as Roham) about the development history of Flow and his views on the NFT space. He stated that NFTs will elevate the global collectibles market to a trillion-dollar level, and Dapper Labs aims to be a driving force in global development, proving that blockchain networks can also create large profitable applications.

Here is the full interview:

Rhythm BlockBeats: After 2017, NFTs actually went quiet for a few years. During that time, Dapper Labs also tried Cheese Wizards, but the results were not ideal. Why have you remained focused on the NFT space? What aspects of NFTs do you see as having great potential?

Roham: Although not many people were paying attention to the NFT space at that time, we still placed our bets here. If you believe that future applications and the internet will be decentralized, then you need a way to represent its uniqueness.

In the real world, money is one of the few things that people can truly exchange with each other. Money serves as a medium for the exchange of goods, existing to help people trade the unique items and services they love. In other words, people desire money, but essentially to exchange for more differentiated and unique items and services.

This is precisely why we came up with the idea of NFTs (non-fungible tokens), and our CTO Dieter Shirley wrote the ERC-721 standard on Ethereum.

In our view, the blockchain space has been somewhat monotonous in the past, but NFTs have brought different colors and creativity, allowing more content creators, artists, and cultural experts beyond just the "inventors" in the financial sector to join the blockchain space.

Rhythm BlockBeats: Why did you choose to design the game "CryptoKitties" based on cats rather than other prototypes?

Roham: The reason is simple: cat memes dominate the internet, and cat videos rule YouTube, so it was easy for them to dominate the blockchain as well. We decided to use cats as prototypes because our team member Mack Flavelle said, "When you want to create a digital collectible, you should ask yourself not 'Why cats?' but 'Why not cats?'"

Rhythm BlockBeats: You must have heard of Pop Mart, which just went public in Hong Kong and is making blind box toys that attract a large number of young people. Pop Mart also signs IPs to create toys for sale. Many people see Pop Mart's toys as trendy collectibles like BearBrick, which players buy to collect. However, once the topic of collecting comes up, the market naturally becomes niche. So looking back at the NFT space, is crypto art collecting too niche? Is this the long-term path for the continued development of NFTs?

Roham: I absolutely love Pop Mart.

Collecting is something people have always enjoyed doing, and it is not as niche as people imagine. In the real world, the collectibles market exceeds $370 billion annually.

There are many motivations for people to participate in collecting. Some are for short-term speculation (active traders), creating a wealth effect; some are long-term investors who view collectibles as a safe or differentiated asset class. Others simply want to own things they love and experience the pure joy of collecting.

I personally believe that the openness of blockchain technology means NFTs will push collectibles into a new era, supported by a strong community, and third-party developers can create more practical pathways for NFT collectibles. For example, with CryptoKitties, we saw some developers create KittyRaces, allowing players to race their cats against others. In today's NFT space, holding a certain NFT allows you to join a specific NFT community, such as private Discord channels or other content and events (like NFT.NYC, MintGate, and Unlock Protocol). This means people will have more reasons to join the ranks of collectors.

I believe NFTs will elevate the entire collectibles market to over a trillion dollars.

Key points:

• Collecting is something people have always enjoyed doing, and this will not change;

• Pop Mart is a pioneer of popular culture products based on classic IPs, attracting the attention of young people.

• However, regardless of the appeal and people's interest, physical collectibles have their inherent limitations. There are too many things that people can collect;

• CryptoKitty community members own thousands of Kitties, if not more, but each Kitty can be proven to be unique;

• NFTs will push collectibles into a new era, such as special access rights tied to offline events, instant trading globally, easy integration across applications and platforms, and leveraging the advantages of provable ownership, authenticity, and provenance at nearly zero additional cost.

Rhythm BlockBeats: Pop Mart has signed Disney's IP with the goal of getting their toys into Disney stores to increase sales channels. Is this logic consistent with Dapper Labs' choice to sign the NBA IP? Is Dapper Labs' choice to sign the NBA more about expanding its player base?

Roham: We have targeted the sports sector because we believe that video sports collectibles on the blockchain are a better choice than traditional sports collectibles.

We chose to collaborate with the NBA and the NBA Players Association for several reasons:

The first and most important point is that NBA fans are the perfect audience. NBA fans tend to be younger and more tech-savvy. Moreover, they are spread across the globe and have a strong affection for the players themselves.

At the same time, the NBA and the NBA Players Association have proven to be excellent partners. They have many team members who understand blockchain, and as an organization, they are willing to become deep partners with us and are open to experimentation.

We are grateful for their efforts and open-mindedness, which have brought this unique experience that changes the existing game rules to the mainstream market.

Rhythm BlockBeats: There are many well-known IPs in the world, such as Hello Kitty and Disney. Will Dapper Labs sign such IPs? What strategies do you have for IP selection?

Roham: When considering which IP to sign, our top priority is whether we can provide the fans of that IP with a much better new experience than the products in the current centralized world. If we cannot create a truly compelling product (at least ten times better than what exists now), we will not engage with that IP. In the case of the NBA, we clearly see that blockchain-based sports highlight collectibles are much better than other types of sports collectibles.

The reasons are as follows:

• Video is better than photos. People watch sports to witness the classic moments created by great athletes. These moments are shared experiences that profoundly impact our lives. Being able to package them as collectibles is more impactful than just a photo of an athlete on a card;

• Collecting on the blockchain is safer. When you buy an NFT, you know exactly how many there are in total, who owns them, and whether anyone is trying to monopolize the market, plus your collectibles will never be damaged;

• Convenience. Trading collectibles in the real world is very expensive because you have to pay for authentication and shipping fees. This means that only wealthy individuals can trade collectibles. However, collectibles on the Flow blockchain can be traded for under $5, meaning almost anyone can participate.

• Social. Collecting in the real world is a very lonely experience. Most of your friends do not collect the same category of items, and you rarely meet people with the same interests. Digital collecting, on the other hand, is quite the opposite. As long as you collect NFTs in NBA Top Shot, you essentially join a large family of tens of thousands of people who communicate daily on Discord, sharing their enthusiasm with everyone.

Rhythm BlockBeats: Terra Virtua is also doing similar things, signing a large number of movie IPs. This really depends on the brand influence of the platform. If both Terra Virtua and Dapper Labs sign the IP of Marvel movies, players might still prefer to buy Dapper Labs' NFTs. What aspects do you think Dapper Labs' brand strength is reflected in?

Roham: First of all, I want to say that we are fans of Terra Virtua and its products. We genuinely hope they become one of the leaders in this field and drive our industry forward.

I believe both companies can build with the same IP, which we often see in the real world. What matters is the application and the experience itself.

It depends on how the company leverages that IP to create a real, engaging experience that adds value to users' lives and keeps them engaged with the product over the long term.

There are many digital collectibles related to the NBA, but NBA Top Shot is the most eye-catching today because we have created a high-quality collecting experience that fans and even NBA players love. We can say this because our four-week retention rate is over 65%, which is incredible for a digital product.

Rhythm BlockBeats: Why create a public blockchain instead of choosing other public blockchains on the market that perform better than Ethereum?

Roham: Before deciding to create a brand new blockchain (Flow), our team researched and analyzed all existing solutions at the time. What we noticed was that most of them were trying to optimize scalability at all costs without thoughtfully analyzing their approaches because they did not understand what application developers needed.

Most chains are removing what we believe are the most critical components of blockchain, allowing ETH 1.0 to maintain a certain advantage over them, namely true and easy-to-use composability, by adopting sharding solutions as a means of scaling, but in fact, this can disrupt the network.

These teams are very smart and dedicated, but they do not understand the problems developers face, meaning they are heading in the wrong direction.

Our goal in launching Flow is to build the best public blockchain for developers to create scalable applications and to accommodate the rapid growth of consumer scale.

When optimizing for this issue, there are other considerations beyond performance:

• You need to make it easy and safe for developers to build;

• You need to retain the most unique aspects of blockchain that can bring value to users;

• You need to ensure that everyday consumers can easily and safely interact with blockchain applications;

This is the role of Flow. Without all these elements, NBA Top Shot would not have been successful.

Rhythm BlockBeats: What is the vision for Dapper Labs and Flow?

Roham: We believe that in the future, most applications will be decentralized.

Decentralized applications are important because they will allow people to truly own, have freedom over, and have a voice in an item in the digital world they immerse themselves in for long periods for the first time.

In the future, creators and developers can publish their works or code on an open-source platform rather than being monopolized by large companies (like Facebook, Amazon, LinkedIn). We believe that eliminating these monopolies will greatly enhance the speed and diversity of technological innovation.

Dapper Labs aims to be a driving force in the development of this world. We believe we can achieve this by creating large-scale entertainment applications, like NBA Top Shot, which can expose and familiarize more people with blockchain technology, allowing everyone to have their own crypto wallet while also proving to entrepreneurs and businesses that it is possible to build large profitable applications on the blockchain.

Dapper Labs, through the launch of the Flow blockchain, makes it possible to easily and safely build decentralized applications with a large user base.