Rare Bits wants to be eBay for the blockchain, where you buy, sell and trade non-fungible crypto-goods. After CryptoKitties raised $ 12 million from Andreessen Horowitz last month for its digital collectible game, there was an explosion of interest in the space. But without a popular market, it's hard to find the products you want at the right price. Now, a team of former Zynga employees is building its crypto-collector auction site with a $ 6 million turn led by Nabeel Hyatt at Spark Capital, and joins First Rount Capital, Craft Ventures of David Sacks and SVAngel.
" Thanks to the Ethereum registry, for the first time, users can truly own their digital objects," says co-founder Amitt Mahajan. "Previously in mobile or social games, virtual items won by gambling or spending money were actually owned by the company that operated the game. If they shut down their servers, the objects disappeared and the users were luckier. We believe that this new asset class represents a paradigm shift in the numerical property by which centralized assets will be moved to Decentralized Systems " For now, Rare Bits does not waste any additional costs on its market, compared to paying 1 to 4% on other marketplaces like Open Sea and Wyvern Exchange Instead, if a cryptographic developer charges a fee on secondary sales, say 5%, they will share that with Rare Bits to organize the transaction.
Users have the advantage of having all their crypto-collectibles in one wallet. They can see historical prices before buying anything thanks to the transparency of the Ethereum book, that they want to "Buy Now" or win an auction. Collectors can also see related objects rather than doing transactions in a vacuum.
Mahajan, Danny Le and Dave Pekar all met after selling their game startups to Zynga. [Disclosure: I know Pekar from college] Their fourth co-founder, Payom Dousti, worked at crypto VC fund 1/0 Capital and sold his numberFire sports analysis start-up to FanDuel. With the experience of the game, the virtual good and the crypto space, Mahajan tells me: "We thought a lot about the possibility of building blockchain-based games ourselves, but finally decided that There was a greater opportunity to focus on crypto- The exchange Rare Bits was launched in February and made more than $ 100,000 in transactions during its first month.
With some CryptoKitties selling elsewhere for $ 200,000, investors liked the idea of taking a cut from everyone's transactions rather than just launching another digital trading card. This allowed Rare Bits to reap $ 1 million from Macro Ventures and Angels like Steve Jang and Robin Chan. While scaling issues threaten to prevent Bitcoin and Ethereum blockchains from supporting micropayments and integrating trade, new use cases such as crypto- collectibles take the limelight.