Title: "Blue Pill or Red Pill? Understanding Why We Invest in Social NFTs: Nifty's"

Author: Jasmine, A&T Capital

Source: Rhythm Research Institute

I rewatched "The Matrix" trilogy over the weekend, and aside from marveling at how the Wachowski brothers have both become sisters, I must admit that "The Matrix" is one of the most culturally influential films of all time.

The film contains many classic metaphors that resonate with today's metaverse. While viewers of the original film might not have imagined the world we live in today, its themes have never been more relevant. Several scenes in the movie are unforgettable: the AI we create can control and oppress us, humans are merely batteries feeding back into the AI machines, and the AI defines who we are in the Matrix in ways that were impossible in the real world back then. In the real world, the protagonists are ragtag freedom fighters, but when they enter the system they are trying to destroy, they can effortlessly flip around in skin-tight leather suits, wielding katanas with ease. In other words, in this Matrix, they can choose their appearance and identity, freely traversing different worlds and timelines.

Excerpt from "The Matrix" series

Therefore, when I saw Nifty's collaborating with Warner Bros. to launch Matrix virtual avatars, I was very excited. This project will be the largest collaboration between Nifty's and Warner Bros. (previously including "Space Jam" and others), featuring a total of 100,000 unique avatars. This project also marks the first major film IP to enter the dynamic world of NFT avatars. Most importantly, it provides fans with an opportunity to inhabit the Matrix as characters that belong solely to them. You can now join their Discord to find out how to obtain a virtual avatar.

A year ago, NFTs were still an abstract concept, but today, NFT prices are being shattered, and billboards in Times Square have repeatedly showcased NFTs to prove: The World has Woken up to NFTs. We see art, sports, entertainment, and culture being transformed by this new form of digital ownership represented by NFTs.

However, a current issue in the NFT space is that participation in NFTs is still limited to a small group of people buying, selling, or speculating. Most brands or creators have yet to engage deeply; they have certainly seen the success of NBA Top Shot and the record-breaking auctions of digital artworks, forming working groups to study and learn. But so far, very few brands have meaningfully entered the NFT market. This is because brands are more focused on the long-term benefits of engaging with fans rather than short-term gains, and this long-term meaningful interaction comes from building a vibrant community and engaging with it.

This is also why our primary reason for investing in Nifty's this May was: social interaction and engagement.

Nifty's, headquartered in Miami, is the first social media platform focused on NFTs, connecting quality publishers, brands, and creators with collectors, curators, and the fan communities that emerge around them. Users can not only buy and sell NFTs centered around major IPs (Nifty's was the first to collaborate with Warner Bros. to release NFTs for "Space Jam") but also create their own playlists. Users can share playlists online and offline, which increases participation for those who may not have the means to purchase or wish to learn more about NFTs before diving in.

Nifty's first released "Space Jam" NFTs, which included not only Common versions but also other rare ones. A note for those planning to create NFTs: rendering technology and design are particularly important.

We are optimistic about NFT products with social attributes, which are not limited to NFTs, GameFi, DeFi, or MemeCoins; at their core, they are all about community. As the community grows, it will create more possibilities, leading to disruption. This article mainly discusses our recognition of this direction regarding social NFTs.

NFT-centric social platforms provide NFT holders with a space to showcase and flaunt their collections. Whether you are a speculator or an investor, there is a demand for a comprehensive platform that offers collection display and price discovery. Once there is a consensus on owning certain NFTs, adding token incentives will make the community more vibrant and generate unexpected product lines. I believe that in the future, NFTs based on ERC721 will issue tokens based on ERC20; after all, Apes, Cats, and Punks are limited. To create a vibrant community, a community of tens of thousands is far from enough; the more participants there are, the more the value will grow exponentially.

At the same time, the community should be more open and inclusive. It is hard to imagine a future with fragmented communities, so a platform that allows users of different identities to participate is valuable. However, the initial consensus of communities like Punks has already been established; the next step will be how to continuously incentivize the community to avoid the pitfalls of Clubhouse. In the information age, everyone's value can be amplified, and everyone can contribute to the community and receive due rewards. In the early stages, platforms need influencers to attract fans; in the later stages, platforms need user-friendly products and feasible token incentives to leverage high-quality fans to contribute to the platform, thereby gaining user stickiness. Platforms and communities complement each other, and crypto tokens further amplify this connection.

Currently, Instagram, TikTok, and Twitter are representatives of centralized social platforms, excelling in encouraging users to convey and share information through brief text and images, using large sub-communities and precise algorithms to recommend content related to users' interests. Users do not engage with these platforms out of consensus or incentives; rather, the backend big data allows them to see what they want to see. Future community members should gather out of consensus, binding their interests to the platform, thereby better contributing to the platform and receiving incentives, creating a positive feedback loop.

From another perspective, how to attract users outside the circle to start using wallet logins and how to change login habits is something Nifty's has been contemplating. Nifty's has done this cleverly, similar to Brave Browser. Early users registered with their email, and last month, Nifty's introduced built-in wallet login functionality, offering users 0.5 PALM (as shown below, Palm is an Ethereum NFT layer two) for transaction fees. This way, users' initial transaction costs can be largely covered.

Users can see that they were airdropped 0.5 PALM, and they are given the option to connect other wallets, currently allowing Metamask.

The dual product lines of social interaction and wallets led us to choose Nifty's as our first NFT investment target. Meanwhile, the team comes from a group of experienced projects including the NBA, ConsenSys, and Meme.com. We will help Nifty's build an Asian team and project collaborations.

The current metaverse offers us the true power of identity—the choice of who we will become. People crave unique and imaginative characters, such as Punks, Cats, and Apes. In the future, there may be even more symbolic characters, perhaps Yachts or Whisky, all of which symbolize identity. But this is just the first step.

The infrastructure of the metaverse still requires the support of everyone in the community. Just like the red pill and blue pill in "The Matrix," everyone faces two choices: the red pill reveals the truth you seek, but the truth may be hard to accept; the blue pill allows you to forget everything and wake up the next day as if nothing happened, but you will never touch the truth. In 1999, we could not have imagined how relevant today's world is to the metaverse, and now the concept of the metaverse is something we hear about in various industries. The only difference is, are you ready to become an active member of the metaverse?

The future metaverse should allow us to boldly explore; it is not a series of independent metaverses but a cohesive, interconnected world.

A world without rules and controls.

A world without borders.

A world full of possibilities.

Disclosure: Nifty's is an investment project of A&T Capital, publicly announced in May 2021.

About Nifty's

Nifty's, headquartered in Miami, is the first social media platform focused on NFTs, connecting quality publishers, brands, and creators with collectors, curators, and the fan communities that emerge around them. This innovative platform provides an easy-to-use interface that allows members to create, collect, discover, and curate the most important digital art and other collectibles in a decentralized NFT world. Utilizing the technology of the MEME protocol, Nifty will provide creators with a high-quality, powerful, flexible, and secure platform to publish their NFTs. The Nifty's team comes from the NBA, Meme, ConsenSys, and others, with investors including A&T Capital, Mark Cuban, Joseph Lubin, 0xb1, Twitter and Medium co-founder Biz Stone, Polychain, Samsung Next, and more.

Website: https://niftys.com/

About A&T Capital

A&T Capital is a long-term venture capital fund focused on early and growth-stage disruptive technologies. Supported by world-leading fintech giants and other institutional investors, it backs promising startups in the decentralized digital age. We believe the world is at the forefront of a lasting technological revolution and should delve into it to become an integral part. A&T Capital focuses on innovations in finance, the metaverse, and Web 3.0.

Website: https://capitalant.com/