Enter January 2020 — The pandemic was at it’s peak, I lost my job, and Game Stop became single handedly the most talked about event since the pandemic. I didn’t much about stocks, but from what I was being told, it was a BIG deal. The guy I’m seeing starts mentioning crypto and NFTs, so we looked into. I will not lie to you, the researching, deep diving, and the countless videos trying to understand the blockchain was not easy, but as the saying goes “if it were easy, everyone would do it.” To say I had no idea what I was doing is an understatement, so I’m glad I had someone around that had an idea of where to start. So what’s got people buzzing about crypto? In the words of Philip Defranco, “let’s just jump into it!”

Cryptocurrency has been around for over the last decade, making it’s notoriety with every maxi’s dream, Bitcoin. Created by the ever elusive Satoshi Nakamoto, this digital asset’s first reported price was $0.00099/BTC. Since then, Bitcoin has seen ATH’s in 2021 of over $60,000 US. Today, there are thousands of crypto tokens and projects in circulation and no doubt, more on the way.

Over the last decade, digital based assets have slowly been taking over and making a name for themselves in many forms, from Play-to-earn gaming, DeFi staking platforms, DAOs, to what has to be the biggest trend since the Tamagotchi — NFTS. If I were to go through each one of these on their own, I’d have novel I could publish and end up on New York Times Best Seller list. Don’t worry, they’ll each get their own spotlight in future articles.

So why now? If crypto has been around for over 10 years, why all of a sudden has there been such a surge in digital assets? It’s simple…evolution. No one thought to themselves “the internet is only going to get better.” When you went out and bought your Blackberry Pearl I bet you never thought you would see the technologically advanced iPhone that made it’s debut shortly thereafter. In order for there to be success, there needs to be progress. The strides that crypto had made globally thus far has barely scratched the surface.

The utility behind each digital asset is important for the fundamentals of our future’s technology. From providing better APY rates than any bank will ever offer, to ensuring a safer and more secure way to store your information on the internet, even down to earning a passive income while gaming.

Global adoption has ramped up over the last few years, and it doesn’t show any signs of slowing down. Stadiums being named after crypto exchanges, partnerships with the likes of Amazon, Wal-Mart, Samsung, Adidas, PayPal, Tesla, just to name a few — Twitter now accepting to connect users to be tipped in cryptocurrency, and even countries around the world are slowly adopting cryptocurrency as a legal form of tender that can be used to purchase every day items.

I can almost guarantee that in the last year you have heard a family member, a friend, a co-worker, or even the Barista that makes your coffee talk about non-fungible tokens, or more commonly referred to as NFTs. These artsy little Jpeg’s came into the world faster than the Kool-Aid man could get through your living room wall. Like I said before, they will have their own article as there is plenty to unpack in that box, but the future of NFTs is endless.

Passports, concert tickets, immunization records, student filing —this is just a small fraction of what is in store. The NFT craze has gone from fun looking profile photos with their own unique attributes, pieces of a puzzle, sports collectables, digital wearables to rock in the metaverse, comic books, to giving people access to the hottest parties in town. Every blockchain has their own version of NFTs and some are selling for millions of dollars. I can hardly wait to see what’s next for the NFT space.

The image above is a glimpse of what you would see if you were looking at the entirety of an iceberg. You only can see a very small piece of it above water. This photo is a great representation of what crypto is now, and what’s laying below sea level at what’s to come.

Cryptocurrency’s market cap is up 187% overall since 2021 and when it comes to investing, you need to focus on the long-term. It’s important to do your research when looking into specific projects, taking a look at it’s utility, the team behind it, it’s investors, and it’s long-term plans. While the latest meme coin might look like it’s going “to the moon”, it’s important to take precautions when going all in. You need to be willing to lose in order to gain, however, there are no rewards without risk. Digital assets are what look to be the future so you might want think about where you’ll be when it takes over. Don’t be the one that gets left behind.

ViteX, Vite Labs द्वारा विकसित, DAG प्रविधिमा निर्मित विश्वको पहिलो विकेन्द्रीकृत विनिमय हो। 2014 मा NANO संस्थापक Colin LeMahieu द्वारा विकसित, DAG प्रविधि ब्लकचेनको विकल्प हो। ViteX (VX), ViteX प्लेटफर्मको मूल मुद्रा हो।

तपाईंले Vitex एपमा नि:शुल्क विभिन्न क्रिप्टोकरन्सीहरू किन्न वा बेच्न सक्नुहुन्छ।

सुरु गर्नको लागि, एप स्टोरबाट vitex एप डाउनलोड गर्नुहोस्।

play.google.com

तपाईंले एप डाउनलोड गरेपछि आफ्नो वालेट सेट अप गर्नुपर्छ

आज हामी Vitex मा नयाँ खाता कसरी खोल्ने भन्ने बारे मात्र कुरा गर्नेछौं।

3. Account Name & Password — आफ्नो प्रयोगकर्ता नाम र पासवर्ड चयन गर्नुहोस्। निमन्त्रणा कोड खाली छोड्न सकिन्छ।

4. Backup Wallet Account — यो खाता सेटअपको सबैभन्दा महत्त्वपूर्ण भाग हो। Seed Phrase तपाईको वालेटको Private Key हो। यसको साथ तपाईं जहाँबाट आफ्नो वालेट पहुँच गर्न सक्नुहुन्छ। तपाईं आफ्नो Private Key (Seed Phrase) प्रयोग गरेर जहाँबाट पनि आफ्नो वालेट खोल्न सक्नुहुन्छ। त्यसैले यसलाई सधैं सुरक्षित राख्नुपर्छ। Seed phrase 12/24 अनियमित शब्दहरूको सेट हो।

5. तपाईंले Seed Phrase Verify गरेपछि तपाईंको खाता प्रयोगको लागि तयार हुनेछ।

6. नयाँ खाता कसरी बनाउने भन्ने बारे यो छोटो भिडियो हेर्नुहोस्।

7. Vitex एक विकेन्द्रीकृत एप हो र त्यसैले तपाईले आफ्नो बैंक खाता प्रयोग गरेर क्रिप्टो किन्न सक्नुहुन्न। तपाईं केवल क्रिप्टोलाई Vitex मा स्थानान्तरण गर्न सक्नुहुन्छ र यसलाई प्रयोग गर्न सक्नुहुन्छ।

8. क्रिप्टो Trading सँगसँगै तपाईले vitex मा अतिरिक्त आय कमाउनको लागि आफ्नो क्रिप्टो माइन र बचत गर्न सक्नुहुन्छ।

9. Vitex मा Trade र staking को बारे मा अधिक जानकारी को लागी यो भिडियो हेर्नुहोस्।

10. Vite पनि Ethereum जस्तै एक Smart contract platform हो। धेरै नयाँ परियोजनाहरू Vite मा हालै निर्माण गरिएको छ। यी मध्ये Vita Inu Coin, Vitoge Coin र Vitamin Coin लोकप्रिय छन्। यी तीनवटै आयोजना नयाँ हुन् र भर्खरै सुरु भएका हुन्। तपाइँ केहि नि: शुल्क क्रिप्टो प्राप्त गर्नको लागि तिनीहरूको आधिकारिक वेबसाइट भ्रमण गर्न सक्नुहुन्छ।

11. यसका लागि पहिले तपाईंले Vitex बाट आफ्नो Vite ठेगाना copy गर्न आवश्यक छ।

12. त्यस पछि तपाईले यी वेबसाइटहरूमा जानु पर्छ र तपाईको Vite ठेगाना enter गर्न आवश्यक छ। तपाईले हरेक २४ घण्टामा थोरै मात्रामा क्रिप्टो प्राप्त गर्न सक्नुहुन्छ।

13. vitaminfaucet.com

14. getvinu.cc

15. vitogefaucet.org

16. vitetokens.cc

17. यस बाहेक तपाईले उनीहरुको Discord च्यानल र Twitter खातामा जोडिएर नि:शुल्क क्रिप्टो कमाउन सक्नुहुन्छ। त्यहाँ दैनिक प्रतियोगिताहरू र उपहारहरू छन् जहाँ तपाईं भाग लिनको लागि मात्र क्रिप्टो कमाउन सक्नुहुन्छ।

18. क्रिप्टो बारे थप जान्नको लागि तपाईले मलाई ट्विटरमा पनि फलो गर्न सक्नुहुन्छ।

19. twitter.com

20. 
    

As we start preparing for the 2022 roadmap, it seemed the right timing to share with everyone in the community the vision we have for the future of Flovatar.

Before jumping into the main section, we also wanted to redefine what Flovatar is about. In our previous communications, we referenced Flovatar as a PFP project. However, we felt it was a bit restrictive given how dynamic and rich the project is from the start. We see Flovatar as an evolving ecosystem that will ideally bridge the gap between Web2 and Web3. It is also a bold take on IP creation and shared ownership. We envision a future spanning gaming, consumer goods, entertainment, education, and metaverse.

Of course, we could promise you the moon all we want, but if we cannot get the spaceship built or the fuel needed to get there it is all just smoke and vaporware. That is why the first major topic we would like to cover is how we are going to fund all the initiatives we have planned.

We have a long-term vision for Flovatar and that is why we are putting the money where our mouth is. 60% of the entire project revenue, including past and future drops and the ongoing 5% marketplace fee, will be allocated to the project treasury, the FlovaBank. FlovaBank is the wallet that holds the treasury of the project and one day it will be ultimately managed by the community via the DAO. The mandate is to finance initiatives that will help the Flovatar ecosystem grow or elevate the branding and prestige of the project.

The treasury will be used to cover the costs of production of new art pieces (Flobits, future series, and much more), salaries for new team members or collaborators, and more importantly, to finance community-driven projects that will help grow the project, positively enrich the ecosystem and bring value added benefits to all Flovatar owners.

Some examples of ecosystem initiatives that we would like to help bootstrapping include the creation of comic books using a selection of Flovatar characters, animated mini-series (e.g. South Park), educational content (e.g. Once Upon a Time anatomy series), 3d models that can be printed by anyone at home or brought over into multiple metaverses.

FlovaBank will be used also to fund collaborations with external projects, artists or blockchains, and anything that might ultimately benefit the Flovatar project as a whole. In the early stage, it is likely the core team will share a series of initiatives for Flovatar owners to vote in Discord, where a minimum of 5% of total owners vote is needed to validate the proposal and the majority of votes being in favor to pass. Over time, we hope the DAO can fully manage end-to-end all the initiatives.

Flobits play a vital role in the Flovatar ecosystem. Currently, they allow owners to give their Flovatars a whole new dimension and richness. Another advantage is Flobits allow owners to update the look of a Flovatar over time based on their personal preference, seasonality, or trend without having to create another derivative project.

While all that might already exceed what most PFP projects would offer, the truth is there are many more utilities we haven’t revealed yet behind Flobits. Below is a peek into some of upcoming developments we have planned.

Gaming is going to be one of the first strategic initiatives that we are aiming to kick off with a FlovaBank proposal. However, we have seen too many projects promising blockbuster, AAA style games that end up taking years to deliver and most likely still come below the expectation. For context, a traditional AAA game takes approximately $100+ million to produce. That is why for Flovatar we would like to take a different approach of delighting early on and then progressively deliver richer experiences.

The first few games released are going to be the very simple, leisure type, purely for fun purpose only and likely won’t have any utility embedded. In parallel, we are also planning to commission a few games in the mid-term that will incorporate Flobits as part of the game-play. The inspiration for these games is going to be retro arcade style: games that are simple to play yet hard to master.

A few concerns were raised from the community regarding the Flobits supply. While it is our intention to empower a healthy economy in the long run with scarcity in mind, we wanted to also share a bit of our philosophy.

The majority of Flobits should be easily accessible and relatively affordable to most Flovatar owners at the beginning of each collection drop. That is because fun and creativity are foundational components for Flovatar and Flobits play a big role in enabling all of that. At the same time, we are aware that the curation process might not be perfect and not every Flobit released will have similar popularity. So while we want to keep the supply relatively broad during each drop, especially with common Flobits, we want to also provide a way for the community to select over time which ones are worth keeping.

That is why we are planning to introduce an upgradeability feature for all Flobits. The way it works is allowing same tier Flobits to be merged together (burned) in order to produce a higher rarity tier Flobit. The resulting new Flobit would come from new designs, so they won’t impact the existing higher tier Flobits. It is still work in progress so details are subject to change, but just as an example, one might need to merge 10 common Flobits + $DUST in order to generate a new rare Flobit. Similarly, to generate a new epic Flobit, one would need to merge 10 rare Flobits + $DUST and so on. This mechanism will provide the community a curation mechanism and an opportunity to obtain higher tier Flobits that doesn’t involve trying to liquidate on the marketplace the undesired ones.

We want to preface by repeating that the project is only one month old. This means there is a lot that still needs to be planned out properly and important components like the $DUST token cannot be rushed. We are aware the community is eager to learn more about the token model, so we will try to share some high level thinking. However, please bear in mind this is far from the final draft and many details might change along the way. One thing is certain, most of the value will be accrued to Flovatars.

At high level, each Flovatar will qualify for $DUST distribution on a recurring interval basis. It is likely we will design for the distribution to last between 5 and 10 years. In addition to a flat amount, there will be some additional multiplier factors determining the total amount each Flovatar will receive periodically. One of these factors that we have previously confirmed is the rarity score. It is not certain, but likely there will be few other factors that might be applied as extra bonus that are yet to be discussed. The ultimate goal is to design the incentive in a way that ultimately benefits the ecosystem and economic stability in the long run.

We want to also briefly mention the various utilities we have planned so far. The good news is that the Flovatar ecosystem is an ever growing one, which means as new experiences are built on top of new, there is high likelihood new token utility will be introduced too. In no particular order, below are some of token utility for $DUST:

Flovatars are the real founders of the Flovatar World and for that reason they will always have guaranteed rights to vote in any DAO proposal. All minted Flovatars will have equal voting power, regardless of the rarity tier; after all, we are all equals when it comes to rights and decision making.

Additionally, $DUST owners will gain additional voting rights based on the amount of $DUST held. The rationale is that the token will allow the project to expand participation to a broader audience, allowing new members to participate in the decision making. It is likely we will consider a qualifying holding period in order to avoid short term manipulation.

We have successfully integrated the Emerald Bot in our Discord server to allow Flovatar owners the ability to verify their status and access exclusive sections and channels. This will allow a more representative voting in Discord, until the proper DAO smart contract will be ready.

We don’t want the DAO discussion to be taken lightly and we really want to think through how we will handle the transition from the current state to a fully autonomous setup. It won’t be easy and there will be a lot of trials and errors along the way, but we will definitely work very hard to implement it in the best way possible.

Marketing is going to be a key focus for us in the coming months as the project grows. We will kick off an official job position as Marketing Director to help us launch various marketing initiatives and grow the project awareness across a much larger audience.

As mentioned earlier, we will use the treasury from the FlovaBank to seek potential collaborations with other projects, artists and influencers, integrate with key metaverse platforms and possibly bridge the Ethereum side too. All these initiatives will provide us many promotional opportunities to reach a broader audience.

Another key area of focus is going to support and amplify upcoming community projects to show how thriving our ecosystem is. We are also planning to build tools like a meme generator that could help us generate social buzz and show a glimpse of our community creativity.

Finally, another area that we will actively be looking towards, is the potential collaboration with other brands to eventually create branded Flobits collection drop. The opportunities are limitless and we welcome any community suggestion or collaboration.

As you can imagine 2022 will be a year packed with updates, challenges, and many other surprises we haven’t mentioned in this article. Our approach is to show by action and often prefer to under-promise and over-deliver. That is why sometimes we find it a bit challenging to decide what we feel confident sharing in advance.

At the same time we thought it was important to keep the community informed and share the vision we have for Flovatar in the long run. There are so many initiatives we want to launch with you all and we can’t wait to see what our growing community will also come up with by their own initiative. If what we have seen so far is of any evidence, there is so much creativity waiting to be unlocked.

Derivatives markets are huge. In fact, the notional value of all contracts traded for traditional equities can amount to 1 quadrillion dollars.¹ Although futures and forward contracts are the most commonly traded, options can be more lucrative, making them the most interesting financial instruments available to investors.

The cryptocurrency derivatives market, while still in its nascency, has shown to be no different. A recent study by Carnegie Mellon found that daily volume for crypto derivatives can exceed $100 billion, which beats the spot market by a factor of five.

Taking time to understand the intricacies of derivatives, specifically options, will allow investors to hedge their downside risk and speculate on future price expectations to amplify returns.

One of the main uses for options is to hedge downside risk. This can be done by buying a put, which has an increasing payoff as the price of the underlying decreases, or through more complex strategies that incorporate multiple option contracts.

Another benefit to hedging downside risk through options is to defer capital gains. Rather than selling the underlying, thus creating a taxable event, investors can maintain possession of their assets and nullify their position.

Investors can also sell, or write, options. When purchasing an option, there is a premium paid based on a variety of factors known as “the Greeks”. As a seller of the contracts, you collect this premium in exchange for taking the other side of the contract.

Everything can go well with this strategy, but a quick shift in market sentiment can detonate your portfolio.

Speculation dominated trading activity in 2020 and 2021. This is simply betting a stock will go up or down. Because payoffs can be unlimited, there is a high amount of upside with a fixed downside (the premium).

Ribbon Finance offers a suite of vaults to store assets. Using either a covered call or put strategy, the vaults generate a yield from the premiums. Users can deposit their tokens as collateral which secure the contracts traded in the underlying. Due to this staking incentive, Ribbon has held the #1 options platform in TVL on DefiLlama for quite some time.

They also recently launched a vault for covered calls on Avalanche, which means there could be future development across other chains.

The option contracts generating yield are created and sold using Opyn, one of the largest options exchanges on the Ethereum network. All else being equal, this creates a positive feedback loop for available liquidity and TVL.

Opyn offers greater flexibility compared to other protocols by allowing the creation of new options contracts. Users will lock collateral, mint oTokens, and the option value is linked to those newly minted tokens.

The developer docs will give the full insight into the project, but these are ERC-20 tokens and can be traded on decentralized exchanges with sufficient liquidity.

Despite this, Opyn seems to be severely thin on available options. Of those that do exist, market depth is lacking. The recent sharp decline in price could be a contributing factor to low option volume.

Another red flag is that the options are European, which means they can only be exercised on the specified expiration. Regardless, Opyn has been developing its options products for quite some time now, and could continue to gain market share.

Lyra takes a gamified approach to the decentralized option markets. Along with the clean UI, the options priced using the Black-Scholes model, one of the most widely utilized pricing strategies for traditional equity options. With a centric focus on an AMM for implied volatility (IV), the options are generally priced more accurately.

Liquidity providers of the protocol are offered upwards of 30% for providing $ETH and $BTC. These funds are used to buy, sell, and collateralize the options traded. With this, comes the potential of gains and losses from the options traded on the platform.

Protocols that simplify options strategies for users (Ribbon), or focus on features of other DeFi exchanges (Lyra) will likely be at the forefront of new user adoption. But, platforms that offer deep liquidity and small bid-ask spreads will be able to serve more sophisticated options traders.

Below are a couple popular options strategies that go beyond single contract buying and selling. As market depth improves, look to these as possible opportunities to generate returns and protect losses.

A straddle is the simultaneous purchase of a call and put option, which creates the following payoff:

This strategy can be utilized any time the markets are extremely volatile, but the investor is unsure of the direction of movement. In traditional equities, popular times to create a straddle would be prior to quarterly earnings, unemployment statistics, shortly after a merger announcement, etc.

However, stock volatility is negligible compared to crypto. With sufficient market depth for options, and prices accurately reflecting trading activity, the premiums for this type of strategy will be significantly higher compared to stocks. The payoff chart will have a wider shaped “v”, requiring larger price movement to turn a profit.

Still, DEXes currently lack market depth, which could lead to inefficiencies and mispricing of options when trading volume increases. Those who capitalize these inefficiencies as they appear will be rewarded.

A protective collar will limit the severity of both gains and losses. Here is the a look at the payoff:

The positions for a collar are:

Theoretically, the premium earned from selling the call should cover the premium required to sell the put. In practice, however, prices can vary. Especially for the younger market of crypto options, always be aware of premiums.

This strategy will be beneficial to those who have caught a project early and earned multiples on their original investment. While locking in a floor price, investors can still utilize the project and benefit from further upside.

Using derivatives in crypto markets can amplify risk tenfold. But understanding payoffs associated with different option contracts will allow users to create effective strategies based on current market or asset conditions.

When writing calls and puts, there is no maximum loss. Theoretically, the price could continue indefinitely in either direction. Taking a position in the underlying asset or using a combination of derivatives can offset this potential for infinite loss.

Premiums are expensive. A “cheap”, or mispriced option, increases buyer demand and tightens supply, which brings us to a fairly priced option at market equilibrium.

Understand the difference between hedging and speculating. Futures contracts were first created for farmers to hedge potential losses due to a decrease in their crop price. There was no potential for gain, just the eradication of price risk.

Speculation on the other hand, will reward investors for being correct, and punish them for being incorrect. If an increase or decrease in price will severely alter your payoff, it is probably a speculative position.

Continuously mentioned above, market depth for options is lacking on decentralized exchanges, and centralized exchanges offer a limited suite of derivatives for crypto with the least availability to US investors.

We are optimistic that there will soon be fast growth in the crypto options space. Whether it is through options specific protocol such as those listed above, or a major exchange like Uniswap, deep liquidity will allow investors to use various options strategies to improve portfolio returns.

Thanks for reading as always! I hope that this was a useful primer on options in the crypto markets. Have a great week!

Dopex

Opium has options on Ethereum gas prices, which allows users to hedge against a congested network and rising gas. It also introduced the first credit default swap in 2020, giving the ability to large institutions to hedge different kinds of interest rate and credit risks.

Hegic offers the premium for options to be given to the liquidity providers.

Auctus

I’m a crypto enthusiast. I joined this organization in 2020. I started a long time later than many people. I believe I’m still a primary school student in the crypto world, but I work very hard. I have seen the richness of the crypto world. Myth, I am eager to realize the freedom of wealth quickly. Therefore, I pay more than anyone in this crypto world.

I lost $200,000 in 2020 because I have been chasing hot spots, but I found that hot spots have changed very quickly. I can’t succeed every time. I have failed a lot more than I succeeded. I was very frustrated at that time. I spent a month summarizing all my operations, and later found out that I didn’t understand cryptocurrency, I didn’t understand the market, and I couldn’t control my actions.

At that time, I met my current teacher. He is a crypto investor on Wall Street. Under the introduction of a friend, he gave me a lot of help and advice: asset allocation investment planning.

I’m now a freelancer and a crypto scientist. What is a scientist? Scientists use the method of system configuration to make money in the crypto world. I have participated in project private equity, currency trading, DEFI, NFT, GameFi, and participated in various platform activities to receive airdrops. I believe that you have also participated in these blockchain projects, but I want to ask, have you made money smoothly? Is there a stable profit daily?

I believe that everyone’s answers are different, but more than 70% are profitable and lossy, because you don’t understand asset allocation and will only blindly participate in popular projects in the market. When you are lucky, you will make several times the profit. , But the next project will even lose out.

In 2021, I made one million, and this money is the reward for my hard work. The money is definitely not obtained in one event. This profit is the sum of all projects. I summarized all the projects involved.New coin grab: 10%, coin trading: 30%, DEFI: 30%, NFT: 10%, GameFI: 10%, airdrop activity 10%.

Such an asset allocation plan has never let me down.

Now I am also beginning to absorb students. I hope to help more people succeed in the crypto world. My time is very precious. Only 20 lucky partners will get my help. I’ll charge 20% of your bonus as compensation!

Contact soon. https://wa.us/447735199288

In short, NFTs stand for “non-fungible tokens”. NFTs are digital assets that are provably distinctive, creating digital scarcity. They cannot be replaced for another similar asset. They have many use cases, including in: digital collectibles, music, artwork, and in-game tokens.

But what are they, actually?

One of the first times we heard about NFTs was with CryptoKitties’ collectibles. The whole CryptoKitties ecosystem was structured in the following way:

“Each blockchain-based digital kitten is unique; if you send someone a CryptoKitty and receive a CryptoKitty from someone else, the one you receive will be a completely different CryptoKitty from the one you sent. Collecting different digital kittens is the point of the game”.

Indivisible: NFTs can’t be broken down into fractions, unlike Crypto. In other words: you either own a whole NFT, or you don’t own it at all.

Verifiable: Each NFT is unique and comes with a unique identifier that specifies who owns it, when they bought it, and from whom.

Indestructible: NFTs leverage blockchain and smart contracts technology, which means ‘they cannot be destroyed, removed or replicated.

The way NFTs are increasingly being used, is as a proof of authenticity of a digital file (an artwork, for instance). Everyone is joining the trend. On May 5th, after weeks of teasing his drawings on Twitter, entrepreneur Gary Vaynerchuk announced “he’s launching his first NFT collection, VeeFriends, a series of 10,255 character tokens available for purchase via the cryptocurrency ethereum”.

Some artists from the creative industries that are using NFTs are Kings of Leon, who launched an album as NFT and Basketball collectives; Grimes, a Canadian musician, singer, songwriter, record producer, music video director, and visual artist, who sold around $5.8 million worth of digital artworks, and a series of 10 pieces went up for sale on Nifty Gateway on February 28th or Beeple, a digital artist and graphic designer who sold a digital artwork for $69 million. Other artists exploring NFTs include Nicki Minaj and Eminem, doing concert visuals, Blake Kathryn, Giant Swan and the recent Dream Catcher Auction by Steve Aoki x Antoni Tudisco, among others.

NFTs is a booming market, and it is expected to grow in the years to come. In fact, in 2020 alone, NFT trading as a whole was worth $250 million, a +300% growth from the year prior. Crypto art alone has surpassed $100 million in worth so far this year. This activity, and the growth of NFTs as a whole, can be easily attributed (at least in part) to communities circling around Discord servers, two European examples being the Utopia Genesis Foundation server, and the NFTlondonUK server.

Non-fungible tokens can be bought on a large number of NFT marketplaces. Some of the most popular ones are: Rarible, OpenSea, and Enjin Marketplace.

Using Rarible as an example…

“1: Go onto the website and click the ‘Connect’ button on the top right. From here, select the wallet you want to connect to the platform and log in. Accept the terms of service. You can connect using any wallet that you prefer.

2: When logged in, search the platform for the NFT you are looking to purchase. Once selected, click the ‘Buy now’ button. Click the ‘Proceed to payment’ button to go to the final step.

3: Confirm the transaction with your wallet. Once confirmed, your NFT will be deposited directly to your Ethereum address”.

Advice: When buying your NFTs during peak times, you may end up with unproportionately high gas fees, so it is always useful to keep that in mind.

The basic proposition in US law is that: “Under Section 106 of the U.S. Copyright Act, a copyright owner has certain exclusive rights to reproduce, prepare derivative works of, perform, display, and distribute the copyrighted work. As a general rule, the purchase of a piece of art does not transfer all copyright in such work to the buyer”.

That is true unless “(a) the transaction is accompanied by contractual stipulations regarding the transfer of the work attached to the NFT that are valid under the applicable national law, or (b) the applicable national law somehow configures the NFT transaction (absent other contractual stipulations) as the transfer of the linked-to work, then the acquirer of an NFT obtains only a right over the metadata pointer to a digital object”.

There is a similar wording in the terms of service of digital exchange platforms or sellers, such as Dabber Labs. Some other services, however, e.g. Bluebox, claim that their model allows for the “trade” of copyrights. It is unlikely, however, that it would be beneficial for artists to be transferring/selling their copyrights. A limited license model will be the most commonly used tool in this area.

The term “security” in US securities laws includes an “investment contract”. To assess this, US courts apply a test from the U.S. Supreme Court’s decision in SEC v. W.J. Howey Co., 328 U.S. 293 (1946).

Under that Howey test, a given token is a security if:

Most NFTs, on their merits, are not likely to qualify as securities. Unless: the NFT issuers are involved in selling fractional interests in NFTs or groups of NFTs. As prices for some NFTs sky rocket “this approach becomes more appealing to potential buyers who want a piece of the NFT. According to recent statements by SEC Commissioner Hester Peirce, however, doing so increases the likelihood that the NFT would be deemed a security under the Howey test”.

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