VIV3 - Flow Ecosystem Vol. 1
The first general NFT marketplace on Flow
Introduction:
Marketplaces are extremely powerful. Peer to peer marketplaces control nearly all aspects of our life - when you call an Uber, or rent an Airbnb, you’re using a peer-to-peer marketplace. At first glance the commonly held notion that blockchain would democratize many of these markets, disintermediating middlemen in the process, doesn’t seem like it’s come to fruition. Entrenched network effects & prohibitive user friction has made this a more difficult task to complete.
One of the killer user cases of marketplaces thus far however are exchanges. Given speculation’s the main successful use case of crypto thus far, regardless of asset price direction, exchanges will be around and generate cash flows. The first generation of exchanges were solely focused on the traditional order book model (Binance/BNB, FTX/FTT, Huobi/HT, etc). The second generation of exchanges were focused on automated market makers (Uniswap, Sushi, etc).
As a part of this new generation of exchanges, a subset is focused on NFTs. These include projects like VIV3, Rarible, and OpenSea. There’s a shift happening from the meatspace environment, to fully digital. NFTs are leading the way in this area. NFT exchanges open up the ability to trade everything from game items, music/content rights, digital artwork, and more. Exchanges are the clearest form of picks-and-shovels in crypto - they’re going to make money regardless of what happens. Each generation of exchanges has built out stickiness, and the earliest ones that nailed UX often have the most stickiness and retain users.
Enter VIV3 - the first general NFT marketplace on Flow. As Flow is the leading NFT platform in the industry, though not just limited to that, VIV3 is exciting for their potential to capture value and allow users to trade IP, game items, and artwork that will launch on Flow for years to come.
Executive Summary:
Team
Founded by Daniel Podaru and Ilya Siban
Worked on product together at their previous startup, scaling to 3M users
Participated in the Flow Cadence Cup (hackathon) in early 2020 and founded VIV3 shortly after
Financials
Launched January 26, 2021
$300K profit to-date
$3M in sales
Growth
Users to-date (20K+)
Creators (25)
Creators on the waitlist (1.5K+)
VIV3 Opportunity:
VIV3 allows users to discover, buy/sell, trade, and track the digital history of an NFT. VIV3 provides a link between the infrastructure and the user layer on Flow Network. Being the first community driven marketplace gives them an opportunity to grow unabated by competition. There’s a phrase that “liquidity begets liquidity” when it comes to exchanges - similarly, for NFT exchanges we expect users and artists to go integrate or deploy on the exchanges with the most users and demand.
VIV3 has integrated all major Flow NFT drops thus far (with one notable exception being NBA Top Shot). Top Shot is still in a Beta version which may explain why they haven't been able to integrate.
They’ve been able to attract some strong talent on the artwork side with guys like:
NFT sales have been exploding (2 of the top 5 products are built by Dapper Labs, the original creators of Flow). We expect Flow to continue their dominance in-terms of quality IP by bringing on their announced partnerships with the UFC, Dr. Seuss, Warner Bros, MotoGP, Star Girl, and more.
The IP and subsequent demand will bring marketplace volumes for VIV3. The economics are very strong for NFT exchanges - VIV3 has 12.5% fees on direct sales and earns an additional 2.5% on resales. Extrapolating out volumes for NBA Top Shot, if only 10% of that lands on VIV3 they’d be looking at yearly revenue north of $5M+.
Product Review:
Account creation is simple. The application instructs new users to enter an email and then sends a verification link to their email. Users have mandatory 2FA enabled using an authenticator app (a great practice for the security conscious).
For creators, VIV3 is still only taking whitelisted artists. This may be important for early NFT exchanges to consider, to keep curation and quality high while they’re onboarding new users. That said, the waitlist of 1.5K creators who are eager to deploy their projects here is very exciting.
There is still some user friction for onboarding, but this is true for most crypto native projects. Users can only buy artwork with FLOW tokens, but after all, it is the point of a blockchain to interface with the digital world. As the Flow ecosystem grows, we expect support for stablecoins like USDC or more seamless payment rails if users want to buy directly from their bank account.
When analyzing an NFT, VIV3 displays everything that a user would want to see in the piece. It conveniently shows the type of NFT, various properties, the creator, and purchase history.
Conclusion:
NFTs change the economics for creators. While countless brands with large user bases (e.g. the NBA) currently have their own siloed ecosystems, we think they’ll allow users to eventually own their own assets as a part of the experience, including media, artwork, intellectual property, books, and more. The pick-and-shovels play for crypto has always been simple… look for peer-to-peer marketplaces with a great UX and a first-movers advantage. VIV3 checks these boxes, and they’re in the hottest area of crypto this year - NFTs. VIV3 is also the first marketplace on Flow, which gives them home field advantage if other marketplaces like Rarible or OpenSea decide to check out Flow and build there too. While there’s no way to become an owner in VIV3 by purchasing a native token, if history tells us one thing, there very well could be one in the future.