A tokenized Rolex?
4K platform, a marketplace that allows users to mint non-fungible tokens (NFTs) representing physical assets, launched on the Ethereum network Wednesday morning.
The project expands the uses of NFTs beyond mere digital art into real-world luxury goods. With physical goods translated 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 CoinDesk 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 when I saw the transition.”
The service adds to the furious pace of development in the NFT business, where digital collector cards like CryptoPunks and Bored Apes are fetching hundreds of thousands or even millions of dollars, and coders are even concocting blockchain-based software protocols that will let users borrow against their tokens, like a pawn shop for NFTs.
4K says it will bring real-world assets onto the blockchain by issuing users of the platform an NFT symbolizing ownership of a physical good. The company obtains the item from a seller, authenticates, insures and stores it. The NFT holder can then trade their NFT for the physical item.
Upon redemption, the NFT is destroyed, meaning the holder cannot possess both the physical object and the NFT simultaneously.
Based on the latest data, since its test platform launched this past July, over 5,000 people have signed up for 4K’s website drops and over 10,000 people have registered for early access to the marketplace.
The platform would also allow International access to covetable luxury goods, some of which are not available across geographies. “It’s a democratization of these types of markets,” Li said.
According to Li, most sales of luxury artworks occur only “on paper” with no physical transferring of goods. “The ownership changes, but the pieces don’t move,” Li explained. NFTs therefore make ownership of non-fungible real-world items easy to trade and gift, disrupting traditional marketplaces or auction houses such as eBay, Christie’s and Sotheby’s.
Li said that the auction houses are taking advantage of the NFT boom “by extracting value from the ecosystem and turning crypto assets into fiat.”
He said 4K aims to do the opposite, bringing physical assets on-chain and growing the crypto market.
“If you made your money in crypto, you should support the crypto community,” Li said.
The company completed 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 had a $30 million valuation.
“With this physical asset bridge and marketplace, we get all of the super powers of NFTs such as transparency, authenticity and composability in DeFi,” said Electric’s Spencer.