When CryptoKitties debuted in 2017, most people thought collectible digital cats – which reflected the hype with the Ethereum cryptocurrency – as a joke.
But when Devin Finzer met these kittens then, he had a different reaction. Cryptocurrency could be more than just the financial side. Moreover, a year ago, he had sold a start-up to Credit Karma, the financial score control application.
CryptoKitties “seemed confusing to some,” recalls Finzer, a computer science graduate from Brown University who has worked as a programmer for tech companies such as Google, Flipboard and Pinterest. But for him, the pixelated kittens meant something else: a business opportunity.
“CryptoKitties was the first cryptocurrency application aimed at a mainstream user rather than a trader or someone interested in for-profit use,” says Finzer.
The growing popularity of CryptoKitties gave Finzer an idea. He bet that “we could create an Amazon or an eBay for all these new tokens” known as NFTs (non-fungible tokens) – a type of digital content written to digital databases that support digital currencies such as Bitcoin and Ethereum.
So Finzer joined forces with a friend, Alex Atallah, a Stanford graduate who worked as a software engineer at Apple and Palantir. Together, they joined the Y Combinator start-up acceleration program and founded OpenSea.io, a blockchain-based goods marketplace.
Three years later, NFTs are on the rise. A Beeple artist’s artwork grossed $70 million, a Pop-Tarts flying cat grossed $600.000, and multimillion-dollar digital content changed hands every day at OpenSea.
Its growth rate is impressive. In February, a $95 million digital merchandise was sold in the marketplace, up from $8 million in January, Finzer said. And the site is now competing for market share with rivals such as Mintable, Nifty Gateway and Rarible.
In confirmation of the fact that the NFT economy is here to stay, traditional investors – and not just NFT collectors – are pushing money into OpenSea. The start-up raised $23 million in a round of venture capital funding, led by Andreessen Horowitz.
“We believe the market is huge. See Apple last year. People bought $61 billion worth of digital content in the App Store,” said Kathryn Haun, an Andreessen executive who led the deal.
