Metakovan, owner of world's dearest NFT, sells tokens of a token out of Singapore

Singapore

HERE'S the sales pitch: will you be interested in owning a bit of every high-value art piece in a virtual gallery? Or fractions of the virtual real estate they are housed in and the soundtrack that accompanies every visitors' gallery experience?

It turns out that at least 5,300 people do. That is the number of individuals who hold B.20 tokens at time of writing.

And B.20 refers to the flagship project - or "experiment", as its owner calls it - of the Metapurse non-fungible token (NFT) investment fund launched in January. Metapurse is founded, in turn, by Singapore-based Vignesh Sundaresan, who is better known by his pseudonym Metakovan.

The 32-year-old self-professed "crypto native" made last week a record-setting purchase of a piece of digital art by American artist Mike Winkelmann, known professionally as Beeple.

B.20 involves 20 of Beeple's single-edition pieces designed, transformed into virtual monuments housed in a virtual museum, then infused with an original soundscape. This bundle of digital assets were then fractionalised and sold as B.20 tokens.

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Mr Vignesh spent about US$2.2 million on the 20 pieces. In an interview with audio-chatting app Clubhouse last week, he said the fund's market capitalisation has ratcheted up to US$200 million.

He reportedly still holds about half of the B.20 tokens.

"How I look at Metapurse evolving, is that we are able to give attention to artists not only from one area of the world, but from different areas, with their own philosophies and own thoughts of what the world should be. We want to see if we can open that up into more of a decentralised cultural movement," Mr Vignesh told The Business Times in an interview late on Friday, Singapore time.

He snagged Everydays: The First 5000 Days for US$69.3 million in cryptocurrencies, at a Christie's auction, breaking the record for the most money ever paid for digital art and the most expensive NFT.

Mr Vignesh revealed his identity on Thursday, along with Metapurse steward-cum-art curator Anand Venkateswaran, known pseudonymously as Twobadour, through an update distributed via a Substack article.

NFTs have helped democratise the playing field for artists as well as art collectors, he said.

NFTs are non-duplicable digital certificates of ownership for digital assets. The vast majority of NFTs are built on the Ethereum blockchain, which allows the digital art to be "tokenised" and for the ownership to be safely stored using a decentralised, open-source blockchain.

"(The NFT space) is a new place, so it's more welcoming and more flat. There is no hierarchy and it's not like the barriers of entry are high. You can find your own set of audience," said Mr Vignesh, who was originally from India's Tamil Nadu state but has lived in Singapore for the past three years.

The reliance on smart contracts - referring to self-executing contracts with the terms of the agreement directly written into lines of code - also means the traditional role of a "middle man" for selling the art is now digitised. There is no need for accountants or lawyers to ensure that contracts are properly executed, Mr Vignesh said.

"If I do it in the real world, it will be really hard, because who will hold the title to the land? Who will hold the title to the art pieces? Maybe one person. Then I'll have to securitise (the assets), and it's a very different process where you need a company that you can trust, etc. But here, nothing was required," he noted.

NFTs can also represent other digital objects, including tweets, videos and in-game assets.

Mr Vignesh, who is currently the sole funder of Metapurse, said he hopes to build virtual and physical monuments with Beeple's magnum opus which he has newly acquired.

"We are going to have someone from the real world, a very interesting architect, a famous one, probably, wanting to build something in the Metaverse. We are also planning to see if we can build something in Singapore (that involves) a physical space," he shared.

The work is, in effect, a mosaic of images that Beeple has released on the Web daily, since May 1, 2007. The digital file measures 21,069 by 21,069 pixels. Mr Vignesh added: "Even all the art in the B.20 museum, I want to see if we can display somewhere physically in Singapore."

He was last based in Canada, but had moved to Singapore because of what he saw as a crypto-friendly regulatory environment.

Mr Vignesh is also toying with the idea of Metapurse going public in Singapore, sometime down the road.

"I want to be comfortable with it first. I'm actually quite reluctant to bring it to the stock market, but at the end of the day, if I aim for something like that, people can buy stocks and get exposure to NFTs. That is the goal," he said.

Responding to comments that NFT investors are merely looking for a get-rich-quick scheme, Mr Vignesh maintains that he has not personally been involved in speculative activity in the space and has thus far held on to all his NFT purchases.

Instead, he envisions his role as a "producer" in a "new economy".

"We want to attract more producers and artists to be part of this new economy, more than thinking about it as an investment or speculation. That is not the actual point," he said.

"If you are just looking at NFTs as a way to make money, it is very, very risky, because we don't know what's going to happen tomorrow. The best way to collect NFTs will be like collecting a gaming item or a car that you love. It should be more passion-driven and not because tomorrow it will be more valuable," he explained.

Still, some NFT observers are not sure if the value of these assets is sustainable.

Hagen Rooke, a lawyer at Reed Smith who looks at digital assets, blockchain, and decentralised finance, said he expects some price correction in the space.

"The main potential pitfall is that NFTs are currently experiencing a bubble. Hence, there will inevitably be low-quality and second-rate NFT offerings in the market, and some investors are likely to get burnt as the hype subsides," he noted.

The digital and blockchain-based characteristics of NFTs are valuable, but still should not justify the enormous premiums that they are currently fetching, he said.

An investor who wanted to remain anonymous likened this to a game of musical chairs.

"It will come crashing down. Prior to this, I never even bought a piece of artwork, but now I am willing to spend up to (US)$10,000 a piece just to flip it the next day," he said.

But Lisa Tan, a research economist and founder of the Economics Design channel, has a different take. "There are people flipping NFTs and speculating, but there are people who truly genuinely enjoy the art pieces," she said.

Valuation of NFTs, ultimately, is derived from scarcity, she added. "A person will buy an NFT token because they see and believe that for some reason the NFT token may increase in value in the future because someone in the market will have a demand for it."