There are actually million dollar lawyers out there
The NFT Impresario's $ 69 Million Master Plan
The NFT hype is ebbing, which is a good sign. After the gold rush comes the phase in which the crypto ecosystem can mature. One of the central issues is how to consume NFTs and make money with them beyond speculation. The crypto investor Vignesh Sundaresan wants to play a key role in shaping this evolutionary stage. If the name doesn't mean anything: This is the guy who recently bought a digital work of art at Christie's for more than 69 million dollars. For OMR, I spoke to Sundaresan's partner and chief strategist Anand Venkateswaran. He explained to me why it was important to pay such a crazy sum for a single NFT, how Sundaresan wants to market his art collection and why it would be okay for the investor if his NFTs were to be completely worthless in the end.
They called him the "boss"
I first met Sundaresan at the end of 2020. However, not under his real name, but as “the boss”. This is what he was called in a German-speaking Telegram group in which players from the fantasy football game Sorare exchange ideas and in which I hung around for the purpose of researching an article about NFT collectibles. Sundaresan earned his title there by outbidding all the others at every auction of rare player cards for weeks.
At Sorare, the Indian crypto investor, who now lives in Singapore, was not under his real name. He used the pseudonym Mr. Karrupu. I wanted to find out more about him and first came across another alias, Metakovan, then an overview of the more than 2,000 NFT assets that Sundaresan held via its crypto fund "Metapurse" at the time.
The portfolio was a confused mixture of Sorare cards, a virtual racing car, digital art and a lot of land ownership at Cryptovoxels, Decentraland and Somnium Space - so-called metaverses. I wanted to know the plan of the apparently wealthy person who bought this NFT hodgepodge. But my inquiries initially went unanswered.
The future of the museum or a coffee trip for art?
At the beginning of this year, Metakovan reappeared on my timeline. His Metapurse fund acquired ten paintings by the artist Beeple for $ 2.2 million, built virtual museums in three metaverses and tokenized ownership of the entire package. This means that ownership of the works, including the associated exhibition infrastructure, was divided into ten million units of its own cryptocurrency called B.20. Part of it was sold as part of the "first virtual art festival" Metapalooza. It is now traded on some crypto exchanges. Art experts viewed Metakovan's Metapalooza with skepticism. Some saw the Minecraft-style event less as a foretaste of the museum of the future than as a sales show for B.20 tokens.
Again a few weeks later it became clear that Metakovan was the buyer of another Beeple factory. It was about "Everydays: The First 5000 Days", a collage of pictures that the digital artist made every day over a period of more than 13 years. The mammoth work was the first NFT to be auctioned at the prestigious Christie's auction house and, at 69 million US dollars, was currently by far the highest price for an NFT. The hype reached its peak, the topic of NFT reached the mainstream, and the entire art world asked itself: Who will spend such a sum on being considered the owner of a work of art that everyone can view for free online?
Revealing the collector's identity
After tech journalist Amy Castor researched that Metakovan must be Sundaresan, he and his partner Venkateswaran alias Twobadour disclosed their identity themselves. It also happened because Castor had encountered some inconsistencies related to Sundaresan's first company, the Coins-e crypto exchange. Customers had complained about missing Doge-Coins - Sundaresan claims to have already sold the company at the time in question.
I owe it to the need to regain sovereignty over my own narrative that I had an email in my inbox in mid-March with the sender Twobadour. My subject is not to review Sundaresan's past (according to his partner, documents supporting the sale should be available on the investor's website, but I couldn't find them), but to clarify the motivation, close to $ 70 million of his Investing fortune in a few pixels.
Money alone no longer guarantees an NFT fame
“It is no longer news to spend a lot of money on NFTs. It is no longer the only thing that guarantees a place in this new world. You have to develop something different, bring in new ideas, ”says Venkateswaran. Driving the ecosystem - that's what Metakovan is all about. Bring the buzz to the subject of NFT and dare to experiment. The collector does this with great consistency. In 2019, he bought a car NFT for the crypto racing game F1 Delta Time for the then almost ludicrous record amount of 110,000 dollars. He owns “The First Supper”, a digital version of the Last Supper motif, which was created collaboratively by a dozen artists and can be continuously changed. Then there is the collection of Hundreds of Sorare Cards, built at all costs. In November of last year, the publication of a valuation of Metakovan's portfolios with a volume of 9,000 Ether at the time, already worth more than four million US dollars at the time. In conjunction with the erratic pseudonym, these activities generated a great deal of attention for the investor and the topic of NFT.
Avatars and pixels instead of art crowd and Prosecco: This is what the virtual art festival Metapalooza looked like (Screenshot: Metapurse)
At the beginning of 2021, Metakovan and Twobadour went a decisive step further than just gathering together potentially relevant NFTs in retrospect. You bought ten pictures from Beeple alias Mark Winkelmann. The US artist is a pioneer of digital art and has also become known outside of the nerdy avant-garde scene through his collaboration with fashion labels. That Metakovan paid another sensational price of 2.2 million dollars was rather unintentional. “It was about something outstanding,” says Venkateswaran, “an artist like Beeple seemed ideal for us.” That is why they had increased their budget, originally calculated to $ 200,000, tenfold. Another $ 500,000 flowed into the creation of the virtual exhibition rooms and the technical infrastructure of the project named "B.20". DJ 3Lau, who also recently caught the attention of an NFT record sale, was hired to create a background sound for the museum.
Fractional ownership of a total work of art
The core of B.20, however, was the aforementioned tokenization of the bundled assets. “B.20 was our first experiment in this direction,” says Venkateswaran. The aim was to test the acceptance of the idea of fractional ownership in the field of digital art. Not in relation to a single work, as others would have tried before, but as a kind of complex total work of art. If you will, Metakovan and Twobadour wanted to stop selling people a Van Gogh cup in the museum shop, but rather a part of the real Van Gogh and the museum around it. According to Venkateswaran, that worked out well; 5,500 people now have B.20 tokens.
And that's exactly where tech journalist Castor and some NFT critics come up against. You sense nothing in tokenization but a smart way to refinance the investment. In fact, those who got into B.20 early on or - like Metakovan and everyone else who helped create the project - had tokens from the start could make a good cut. The B.20 rate shot from 36 US cents initially, fueled by the Christie's auction in March, to up to 23 dollars for a short time, as Castor calculates in her article.
Venkateswaran counters this criticism by referring to the point in time when Metakovan began to invest a lot of money in NFTs. The hype was not yet apparent at the time. Venkateswaran also fends off the suspicion that the artist himself had agreed to a game because he owns two percent of all B.20 tokens. It is customary in the crypto community to give coins to those involved in projects. In this sense, the transfer of B.20 to Beeple was intended as a "gesture" and was not discussed.
The origin of the collection
In fact, the long run-up to the project suggests that an option to cash out - at least in its origins - played a rather subordinate role. In 2017, Metakovan first heard of Decentraland, a virtual reality platform based on the Ethereum blockchain, in which users can create and monetize content and applications, as well as owning digital land. “This is where the collection originated,” says Venkateswaran.
In addition to NFT art, Sundaresan also invests in infrastructure projects and marketplaces like Superrare. On his account there is a picture that became the avatar of his alias Metakovan (Screenshot: OMR)
Even a look at the investments that Sundaresan makes aside from art and footballer trading cards does not necessarily suggest that he is looking for easy money. His partner has invested, among other things, in Flow, the blockchain, on which the incredibly successful NFT game "NBA Top-Shots" is running, and in Polkadot, a blockchain-based infrastructure for the next generation of the Internet, according to Venkateswaran. Sundaresan also holds shares in the NFT marketplaces Async Art and Superrare and the NFT platform Growyourbase.co.
The investor acts like a shark
Sundaresan is investing its money in crypto projects with uncertain prospects of success. Where great risks stand in the way of exponential profits. Basically, his partner behaves like a shark, says Venkateswaran. "If you stop swimming, you sink. That is his attitude." Sundaresan's approach as an investor aims to multiply the stakes - not to increase the money. Because: "If you approach NFTs with such a mindset, you will never make any real money," says Venkateswaran. “Then you end up buying a work of art today only to sell it again tomorrow at a higher price.” In other words, art dealers don't dream of exponential growth.
In the dream of a crypto investor, on the other hand, the current NFT hype appears at best as a tentative twitch before the actual boom. “Buying NFTs is just the first phase,” says Venkateswaran. “The big explosion comes when we have found out how we can make it consumable.” The next evolutionary stage of the Internet will open up an even more important role than virtual worlds of experience in the Metaverse. Under the keyword Web3, work is currently being carried out on blockchain-based technologies that enable the exchange of values without a central platform as an intermediary.
Music rights NFTs as pioneers
In the music industry, there are currently first attempts to have artists share the rights of their music with their fans via NFTs and so-called smart contracts. Some already believe that Web3 will make seemingly omnipotent players like Spotify superfluous today. Apparently Hipgnosis, the investment fund that is currently buying up all of the music rights it gets hold of and vying for artists who are willing to sell, also believes that there is potential in the subject of “NFT Licensing”.
That is why it may be true when Venkateswaran says that B.20's fractional ownership model is an experiment that is less about investments than the idea behind a new understanding of art ownership. Although this is only partially true, because the "B.20 Buyout" has meanwhile been announced. A smart contract is integrated into the B.20 tokens. This allows the person who owns five or more percent of the B.20 tokens to trigger an auction with an initial bid. The amount of the entry bid is calculated from the B.20 course and would currently be around $ 60 million. Whoever wins the auction receives the complete B.20-NFT bundle at the end, while B.20 tokens of all owners are converted into the cryptocurrency DAI, which is linked to the US dollar.
A game for the very rich geeks
It all sounds like a game for very rich geeks - and it sure is. But if the auction works, the NFT ecosystem would be one case further. And of course, the question arises as to what Metapurse is planning to do with its most valuable asset, the $ 69 million "Everydays: The First 5000 Days" NFT.
“So far we have no plans to monetize this work of art,” says Venkateswaran. In any case, a metaverse “monument” will be erected this time too, which “is appropriate to this work of art and can only exist in virtual space.” He does not want to comment on any plans for a digital evaluation of the work of art that go beyond this.
Museums show interest in Beeple's art
Instead, he talks about plans in the real world. For one thing, Metapurse has just started its own NFT podcast. On the other hand, they want to support media workers with $ 500,000 who bring stories about the crypto-economy into the media mainstream. And show the portfolio outside of the digital world for the first time. Works from the Metapurse portfolio can currently be seen in a small exhibition in Beijing, which the founder of the Asian crypto art marketplace Blockcreateart organized together with the UCCA art museum. Visitors could see the authenticity of the works via QR codes.
Several museums have also already expressed interest in "Everydays: The First 5000 Days", says Venkateswaran. With a view to the traditional art market, it also makes perfect sense to seek proximity to traditional institutions. Like auctions at renowned auction houses, exhibitions in prestigious museums are the best lever to increase the value of a work. In the case of the 69 million dollar Beeple, the first thing to do is to convince the art business that the sum that made Winkelmann the third most expensive living artist actually represents more than the result of a media hype.
The crypto investor and NFT collector Vignesh Sundaresan aka Metakovan (Photo: vigneshsundaresan.com)
Metapurse is also pursuing plans for its own exhibition space in the real world, says Venkateswaran. “We want to have a physical space that you can enter and experience this huge collage in all its glory.” What this place will then be will ultimately be decided by the recognition - or rejection - of works like “Everydays: The First 5000 Days “Through the art scene. Either the Guggenheim of digital art - or a tourist attraction in a functional building between a branch of Madame Tussaud’s and a musical theater in some metropolis on this planet.
"It's fun to do this here"
For the time being, Metakovan's collection, its Metaverse museums, and token auctions remain a multi-million dollar bet that could turn into billions - or a heap of worthless data junk on the blockchain. Whatever the case, the investor will continue to swim. Even if that didn't take off, Sundaresan would be okay. "It doesn't make up a large part of his wealth," says his partner Venkateswaran. "And it's fun doing this here."
You can leave it that way. But it's hard to imagine how a bullish, exponential ROI speculating crypto VC like Vignesh Sundaresan looks on calmly as its biggest game to date is lost. Sure, it's just a footnote, but anyone who would be satisfied with being the head of the operating company for a tourist attraction would certainly have chosen a different address for their headquarters. The address of Sundaresan's virtual headquarters in Metaverse Cryptovoxels is: Metapurse HQ, 2 Cash Road.
Disclosure: At a time when it was not foreseeable that I would write this story, I invested a small amount in B.20 tokens. As of today, I can confirm that their value is increasingly ideal.
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