🖼 "For the First Time, You Can Buy a Piece of the Art, and a Piece of the Gallery:" MetaKovan

Hello Defiers! In this week’s podcast episode we interview MetaKovan, the pseudonymous investor who holds the largest known NFT collection in his Metapruse fund, which he leads with his (also pseudonymous) partner Twobadour.

Throughout history, advancements in art and culture have been driven through a combination of talented artists and wealthy patrons. Leonardo da Vinci had Cesare Borgia. Jackson Pollock had Peggy Guggenheim. Now, as culture moves towards virtual spaces and NFTs threaten the old guard of the art world, The Defiant had the chance to chat with the world’s first famous NFT patron.

MetaKovan made waves in the surging NFT space after buying all 20 pieces of the Beeple collection at auction for $2.5M. In this interview, we dive into how exactly he managed to get his hands in the entire collection and what the bigger purpose of holding those pieces was. MetaKovan didn’t buy the 20 pieces to just hold them in his wallet. Instead, he and Twobadour built sprawling museums across the metaverse, added original ambient music by 3LAU, bundled it all together, and tokenized it.

The B20 tokens are now the keys to owning this experience, and they were sold in a VR event called MetaPalooza. For attendees, it was similar to going to an art gallery, and being able to buy the art, but also a piece of the gallery and the music that was playing. Listen on to get into the head of one of the world’s first real estate developers for the metaverse.

The podcast was led by Camila Russo, and edited by Alp Gasimov. The intro was written by Camila and Dan Kahan.

🎙Listen to the interview in this week’s podcast episode here:

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Camila Russo: I'd love to start with your background. And in your case, it's a little bit different from my other guests, since you’re a pseudonymous character or personality in this space. So would love to kind of first like, learn about this decision to be pseudonymous, and just learn as much as your background as you're willing to or comfortable with sharing?

MetaKovan: Sure. So, yeah, I've been in the space for a very long time now, I started in 2013. I built a few companies. I'm a crypto native, meaning that I've been mostly in crypto, not really have any real world assets, that kind of a person. And I've been riding the wave. Since 2013, I've been on Ethereum. Many of these Ethereum killers, as they say, blockchains and stuff like that, also, I've been very active in the infrastructure level.

“I'm a crypto native, meaning that I've been mostly in crypto, not really have any real world assets, that kind of a person.”

So I've been investing in tokens, I've been investing in various of these companies that make these blockchains. And when NFTs came out, I started being active in 2017 when Decentraland just came out, and I thought it was one of the best things that happened to crypto because now we can move to consumption and not just speculation. So I've been very bullish about NFTs since 2017. That's how I started.

But by 2020, around March, is when I was doing all of this anonymously, so I didn't reveal myself as anyone until 2020. But then I thought, okay, for the NFT space, it will be very interesting, because avatars are something that's going to be a very important part of the stories we are trying to tell here. And so I thought I would consolidate all my NFT-related work into the pseudonym called MetaKovan.

CR: I'd love to kind of talk a little bit about your earlier endeavors in the NFT space in Decentraland. So for example, were you able to get like a really big land space or, like plot in Decentraland?

MK: Sure. Even at the first auction for the land auction, it was not that easy to get a huge, like, just a portion of land. So I have a decent amount of land. I think I have around 1,300 parcels in Decentraland, and that's quite huge at this point. But the funny part was, I took two thesis at the time. When I wanted to get a huge, one estate which had a lot of land, I tried doing that, but someone tried to buy some lands in the middle. So they were quite successful because they kept bidding up, because it was an open auction.

And yeah, I still have a huge estate in the southwest of the map. But yeah, like a spot, it has a bunch of parcels that I could not buy, so yeah, I always think about that.

CR: Oh, no, I'm sure it's still a decent spot. And then were you able to get any of the early CryptoPunks and CryptoKitties?

MK: So CryptoKitties and CryptoPunks,I didn't have a specific thesis when I started knowing about those things. So I am more than being a collector. I've always thought about what I'm buying and what it means to me. So like I did breed some CryptoKitties, like for fun and stuff, but I never really collected them. And the same with CryptoPunks, I saw them around, but I didn't get too interested by them.

But sitting now, I can sit back and think, oh, yeah, this is why it's valuable. I know about how it's going to be in the future, but yeah, it has the novelty to it, etc. But for me personally, I was more interested in understanding cash flow and how these NFTs are going to transform into some kind of a business opportunity in the future, so that was my focus from the beginning.

CR: Got it. And then I guess we should kind of step back a little bit, because some of our listeners, they're not going to necessarily know what exactly NFTs are. So would love for you to explain what are non-fungible tokens and why they're valuable to you?

NFTs are Ownership Rights

MK: Sure. Actually, non-fungible tokens, it does not represent one thing. First of all, it can be art, it can be land. But if you want one real world equivalent of that, I would say it's just an ownership document, right? So if you own a land, that's represented on a paper. It's not like you can go stand on the land and shout all you want, but the land belongs to the guy who has a paper with his name on it, saying that he's the owner. In the same way, if you take a car, there's a paper, which says, who owns it. Right? And that specific paper of which declares the ownership of a specific thing, of a specific object, is what we are talking about here.

So NFT, in that case, is just a contract. The difference between a real world contract and this, is that in the real world, you get to own land, because you have the paper, and that is enforced or are overseen by the government. The government has a ledger and that's how you know what you own in the real world, for anything, like for a car, for anything that requires a paper. But in Ethereum, and in crypto, an NFT does that and you don't need a central authority, a government to tell you that you actually own it, or enforce that you actually own it. It's just on the blockchain. So it uses the same technology of how Bitcoin is decentralized to take ownership and decentralized ownership without requiring a central authority to hold a ledger. So it could be art, it could be a piece of virtual land, it could be a game item, it could be anything that requires ownership.

“NFT is just a contract. The difference between a real world contract and this, is that in the real world, you get to own land, because you have the paper, and that is enforced or are overseen by the government. (...) But in Ethereum, and in crypto, an NFT does that and you don't need a central authority, a government to tell you that you actually own it, or enforce that you actually own it.”

CR: Right. I love that way of explaining it, you really kind of brought it down to the real world and what it means. Because I think a lot of times, people get caught up on this kind of ERC-721 standard and tokenization. And I think it's easy to get lost in those more technical concepts. But it's great to think about NFTs as contracts that represent ownership in different things. How are these tokens then linked to the specific thing that is owned? And can that thing be both digital and kind of a real world asset?

MK Sure. So the simplest answer to that is that if you take a collectible in the real world, say, you're a fan of Batman, and you want to buy an official collectible from, say, DC, they will have someone who's selling it to you, and they'll be provenance. Right? Like there'll be anti-counterfeit measures that are taken to make sure that preserves the uniqueness of parity and no one can just take it and copy it and sell it.

So in that way, in this Ethereum world, it's so easy, because we have the artist or the creator of this asset, who has an Ethereum address. What they do is they create this specific token, and basically when they create it, they are signing it with their address, so you know that it's flowing from them. So for example, if you buy art from Beeple, it all originates from Beeple's address, ultimately, so you know that it’s original. If someone tries to take Beeple's art, and then create their own clone of it and try to create NFT out of it, the provenance would not point back to Beeple, right? And it's very clear on where these NFTs are coming from.

So that way, it's very easy to know what NFTs came from the actual artists, which ones are the original one or the official one, and which ones are the counterfeit. So that solves a huge amount of problem if you compare to the real world collectibles. And because NFTs are also global, it creates a huge market instantly, so people just value it the same way they would value a collectible. And it's because it has more anti-counterfeit measures written into it because of the blockchain, it makes it much, much easier. So that's kind of the answer. I don't know if you had another part to that question. Did you?

CR: Yeah. I also wanted your thoughts on how feasible it will be to create markets for both digital assets and real world assets.

MK: Oh, yeah. I still feel like the physical objects part have not been cracked so much. When I was speaking to Beeple, this is how he explains his understanding of a physical piece. And I thought it's interesting because he thought he wanted to keep the ownership of the asset, being in the NFT as the most important thing, compared to the physical piece. So he told me, like, say, if someone loses their physical piece, or it's broken, or something, which is possible, but people can just use their NFTs and tell people oh, yeah, like, I have this NFT, but I think I broke my physical piece. Can you replace it with a new piece, because see, I have the NFT, I'm the owner of this.

And so Beeple thought, yeah, I could do that. And that's okay, because he wanted to assign more importance to the NFT than to the physical piece. And I think that's the direction we're going towards, because physical piece provenance is still going to be hard, even if there is NFTs and this whole blockchain thing, that's not going to go away. So NFTs will take more importance when it comes to provenance.

Meme Analysis

CR: That’s interesting. And just wanted to point out for people listening, Metakovan references Beeple so far, and just to clarify Beeple is a really great artist that has been involved in the NFT space pretty heavily, recently, and Metakovan, and will tell us in a bit how he was involved in collecting his pieces.

So I know that there's been this big boom recently with NFTs being sold for record prices for hundreds of thousands of dollars. And that's really hard to understand from someone who's looking at it from the outside, and all they're seeing is, there's this digital token that can't really be used for much, that's linked to this JPEG image. In the case of CryptoPunks, there’s like very low quality JPEG image, that's just a few pixels put together. And people are paying real money for this. So you were getting to this, talking about provenance and all the different qualities that make this valuable. But I want your thoughts on why spend that much money on something that can be easily replicated, in the case of an image, people have this criticism, you can just take a screenshot, and I don't have to pay $100,000 for it.

MK: Definitely, I think we are getting into the subjective conversation here. But if you think about art in general, so, this is more like we're stepping away from the DeFi space and from the fundamental analysis space into more of a meme analysis and understanding stories and emotions behind what's happening, and the speculation of what the stories are going to evolve into. Right?

So, if you take a specific piece of art, say, the Mona Lisa or something, and if someone tells me oh, yeah, like probably the artist spent $200 to buy paint and, and spend $100 for the brush. So it's worth $300, right? And yeah, like that'll be the argument. People will like yeah, it's not worth more than $300 because that's the labor into the piece. Now, that's very true. Because we are not talking about taking these NFTs and valuing it based on the labor that went into it or something that's like when people say they can just copy this and take it, they can just look at it. Like they don't even have to copy it, right? Like they're free to look at these art pieces and it's not locked up into a wall, like the traditional wall.

So yeah, you can screenshot, but you don't own it. You can take a picture of Mona Lisa, but you don't own it. So if someone says, I took a picture of Mona Lisa and now I'm rich, or, now I have Mona Lisa, I'm sure that everyone around them will be like, you need to go to a psychiatrist. Right? Because that's not the same thing.

NFTs, because of the prominence that that's going into it, it's not just about the art. But even if you take CryptoPunks, the point of why CryptoPunks are becoming very valuable today is not because they look great, or they look some way, but because of the story, the origin story and the same way Bitcoin is valid. Bitcoin has value as a speculative asset, but it's also a meme based asset, so it has a story, an origin story.

So all these things up until now, NFTs are valued based on stories that have happened to them, or they are overvalued in certain cases, with the speculation that they will have great stories in the future. Right? So I only see NFTs in those two categories that they've been already valued by their history, or they're being speculated on because in the future, they will have a very interesting history. Right?

“I only see NFTs in those two categories that they've been already valued by their history, or they're being speculated on because in the future, they will have a very interesting history.”

CR: Nice. So it's all about this story. Good thing I'm a writer then.

MK: Definitely.

CR: Okay. So now let's go back to your own story. You were saying that you got into space in 2017, you started collecting NFTs or you got into the NFT space back then, but in crypto, much earlier. And then it was in 2020, you said where you decided to consolidate your NFT-related activity under one kind of character. Tell us about this Metakovan character, like, what's behind the name, and also tell us about the Metapurse fund, like how did that start?

CR: Sure. So the Metakovan character, I'm a huge fan of Balaji Srinivasan, who has an awesome video on how pseudonymous identities are going to be very interesting in the future. Because if you look at the world today, even today, you are known by your Instagram username or your Twitter username, right, like that is this world of pseudonymous identities are already upon us.

And a lot of people live by their pseudonyms, and then they connect their real world identity to it. But it also gives you a space where you can experiment and be something you're not so that you can learn things and you can remove all the judgment that would come with being the same person doing something else. So it gives us a clean slate on the internet. So that's really interesting, because then I'll be like, I'll have no judgment to go by. Right? So that's the main reason why I think pseudonymous identities are going to be interesting.

And when I started this identity, I was thinking, yeah, like I have a bunch of NFTs and I really believe in the space. So actually, the name came from my mom. Because I was explaining Metapurse to her and I was like, yeah, this what I've done, I have this land in this virtual space, and she thought for a second I was really crazy. But then she came up with this name, it actually means cool in Tamil, which is my mother tongue it means King. So Metakovan just means king of Meta. Yeah, that was interesting.

CR:Great. Okay. So now armed with this new name and persona, you went on and I mean, are all the pieces that you have collected since the start of your journey under the Metapurse fund, is that how that fund came up?

Metapurse Fund

MK: Sure. With MetaKovan itself, it was just me doing all the bidding and working on all the thesis. But you know, it gets very tricky, because there is so much happening in the NFT space. There is gaming. There is art. There is collectibles. There is virtual land, and like you can build your own stuff. So what has started happening was if I focus on one thing, I could not focus on the other, and I will be like, oh, I will feel FOMO for everything else, right? So I thought, okay, this cannot be a one person operation.

And I've been working with someone else who also, I wanted him to get a pseudonym. So his name is Twobadour who's now part of the Metapurse fund. So he started in the NFT space around April, like, two months after Metakovan came about, and then he's a writer, he's very good with words, much better than me. So he started writing stuff about the NFT space, and he formed his own following. And he had a very good taste in art.

So what I did was I thought, okay, let's, let's just consolidate everything under a name called Metapurse, and from there, allow Twobadour to continue the collection of art, because that's not my strength. Art, I would say that I'm not very good at the taste of seeing what a good art is, or anything. I'm more of a cash flow business kind of a person. So, Twobadour was the guy who had good taste. So I thought, okay, I will invest the money, you can pick the artists and the art that go into it. So we started collecting art since around July, August. And that all came into Metapurse. So Metapurse includes everything I collected since 2017 into the fund, and then we've been collecting like crazy, also. So there is so much art now, which I really liked. That was something that was lacking from my collection. So now we have so much art also in our collection. So that's Metapurse.

CR: Nice. And just curious, I mean, you know Twobadour personally, like you know each other's like real names and everything, right?

MK: Yeah, I've seen him, he’s a human being. Yeah.

CR: Okay. So how big is the fund?

MK: We have non-fungibles, it's actually helping us with the valuation, so they audit our fund every quarter. The last time it came out, without the Beeple collection, because that happened in the last quarter of 2020. But by Q3 2020, the valuation was around $4.2 million for the NFTs in the fund.

CR: Nice. And then, how much do you estimate that is plus what you've done so far, I mean, after that?

MK: Again, most of this quarter, what we are planning to do is also consolidate all the NFT-related tokens. So for example, we've invested in cold blockchains, like flow, and other social tokens, etc. So I also want to take all of that and consolidate into Metapurse so that, it's one place for everything that's NFT. I'm going through that process, but that's a little hard. Because NFTs can be valued through non-fungible, we have to figure out how we do the other valuations and stuff, because there's equity also involved.

But the NFT itself with the Beeple and after the Beeple, we spent around $2.7 million for the project, and that's the detail we want to go into where we sold half of the ownership of these art through a sale. And we have a token for that and that token also will be part of Metapurse. That's now just a 50% of the tokens I have left, that's around $2.2 million now. So yeah, the fund I guess, will be around $10-12 million by Q4 2020. That's just my estimate.

CR: And you think this is the biggest NFT fund out there?

MK: So when we say NFT fund, again, like I'm not including the tokens that we have invested in and this is the largest NFT collection by value. Yeah. So just NFT, $10 million in just NFTs, right. So that's quite crazy for just a thesis. Yeah.

Metapurse fund has “$10 million in just NFTs, right. So that's quite crazy for just a thesis.”

CR: Wow, yeah, it is. That's, huge. So let's get into the Beeple sale, and that was also pretty crazy. Can you kind of first like, again, for people who don't know who Beeple is, I mean, I gave a very brief overview, but can you talk about the collection and your participation in the auction of that collection?

MK: Sure. Sure. And one more thing I wanted to add before we go into the Beeple, is that, so the hard part about being an NFT fund is that I can have a lot of money, right, like, anyone can have $20 million, and then come into the industry, and be like, I want to be NFT fund. But the hard part about NFTs is that it is really hard to pick and choose and actually invest,becauseit's not like investing in a token, like where you see a list of tokens, and they are liquid and you go to an exchange and buy them and have exposure. So it also requires a lot of time and effort into getting those NFTs into your fund.

So I'll be really interested in seeing if there are other funds out there which are starting now, or which started last year. And will be interesting as a metric compared to the other traditional crypto funds to look at how much they're earmarked into investing in NFTs versus how much you're actually able to invest in these NFT's. Right? So that would be a very good metric to track. You know what I mean?

CR: Yeah. Because is the difficulty that sometimes you want to buy NFTs from a specific artist, but then there just aren't any pieces available, for example? Is that what you mean?

MK: That’s correct. And for example, I would never sell, right? So there'll be collectors who would never actually want to sell, so it becomes harder and harder. And even if the artists you want to collect sells one now, for example, their first piece will be very special, right? So things like that, which adds more stories and values to the NFT, will be harder and harder to collect because they are all from 2018-19-20. And then now if a new artist is starting, that's why if you look at the valuations now, because there's a lot of competition from many funds, they're going to $100,000 because now people are competing to buy those one of ones and the initial pieces from these artists.

CR: No, that's crazy. Yeah. I guess, like, yeah, competition is getting fierce between NFT collectors and investors?

MK: Yeah. And you need only two people, like to compete. So a lot of times, it's just two people bidding against each other, but it still pushes up the value.

Beeple’s $3.5M NFT Auction

CR: Right. So how did you get around that with the Beeple sale which was highly publicized? You know, this is an artist that's not just, you know, he's famous outside of crypto, like he has a global name, so it makes it even harder, so how did you go about it? Because, I mean, you bought the entire collection, right?

MK: Yeah. So again, this is conviction from the understanding that NFTs have come from and where NFT stand today. So the first thing that happened was Beeple already did its first drop around the US elections, and he had sold two pieces, and each of them sold for around $66,000. I was the losing bidder in one of those pieces and I thought that was a lot of money, right? Like $66,000, at that time, was the highest sold art piece and it was Beeple. So Beeple was already breaking records in his first drop.

And when the second drop came about, the good part was Beeple had spoken to me, and because I was the losing bid in his first drop, he actually contacted me and said he's doing a second drop, which has this Everydays. So the first drop did not have any of his past works. And Beeple is interesting, because he has worked for 13 years every day to produce one piece of art. So a lot of people respect him, a lot of people know him, if you get to know him, you will have that respect. Right. So he's that kind of an artist.

So when he came up with this Everydays, I was like, yeah, this is going to be very attractive to a lot of people. So I knew that there's going to be competition. But before we went into the auction, I sat with Twobadour, and we thought okay, what is our estimate? And we started with like $300,000 for the whole collection. And I told him no, that could be very less. And if we go $300,000 into the auction, we might not be able to pick up a lot. So let's just bump up the budget we have, just in case.

And we had a budget of a total of $2.5 million for the whole collection. Right? And the second part was, I didn't want to spook the other collectors, because if they knew that it was one guy, Metakovan was collecting all these pieces, they are going to be like, yo, man, I don't want to let that happen, so they’ll come in, and the bidding could get crazy and exponential. So what I did was we created our own 12 accounts on Nifty Gateway, funded them all separately, so that no one can just track it back to the same source and then we started bidding from different accounts. And we did that for two days straight.

So there were 20 pieces, and the auction happened seven hours on day one and eight hours on day two. And we just sat through it, like running a marathon, and did each piece and we fought with different collectors and different pieces, different strategies, because the other person who's building will sometimes be aggressive, sometimes be very persistent. We had to fight different kinds of battles, right. So it kept happening. Yeah, and we just sat on it.

“There were 20 pieces, and the auction happened seven hours on day one and eight hours on day two. And we just sat through it, like running a marathon.”

Beeple tweets out this representation of MetaKovan after his auction.

At a point, because each auction was 30 minutes, and if you have a bid on the last five minutes, it'll extend the auction by five minutes. We had some auctions being extended by one hour, because it was like five minutes, and then a bid comes in and five minutes, then a bid comes in. So yeah, this kept going on for... Yeah, it was insane. And we had three, four auctions that we had to manage at the same time. Like, I would be like, go bid on this one and then jump back and bid on this one, and then jump back and bid on that one. So yeah, it was a crazy time.

But yeah, at the end of the 19th piece, someone had figured out that it was one person doing all of this and then tweeted it out. Right? So I was a little bit worried that someone was going to come in and make this exponential, but the 20th piece, I just went in aggressive and didn't let people think about it a lot, and then got it. Yeah, so I was happy there.

CR: Okay. So it was 12 different accounts you said that you were controlling?

MK Yeah, 12 different accounts. Yeah.

CR: And those were accounts you and two others were controlling for each auction, and like bidding. And you were doing this manually? Like there was no kind of automation, or there were no bots involved?

MK: No, no, no. No bot. We were sitting on it and sitting on our machines. Like I had a desktop and a laptop with me, so I had one account there. One more account on it incognito, you know, so I had four browsers open at the same time. Yeah.

CR: And you did this for, you said seven hours one day and eight hours on the next day?

MK: Yeah, that's correct.

CR: Oh, my God, that's so exhausting. Just like bidding on one piece after the other.

MK: And I'm based in Singapore, right? So what happens is these bids happen during PST. So it will be like 7pm PST or 3pm PST and it'll be 1am for me, so I had no sleep for two days…

CR: So they were both like in the middle of the night for you?

MK: Night for me, yeah. That's correct.

CR: How happy were you when you got the 20th piece?

MK: I was really happy. We were scared because we had this idea of doing something with it, right? So we wanted to do the 20 pieces, or it would be really bad. Because to go to another collector and be like, can I get the 20th piece, I want to pay you anything? That would have been crazy, right? He would have been like, yeah, you have 19, the 20th pieces worth 10X of what you paid.

CR: Right, for sure. Yeah, it was important that you got them at the auction or else like yeah, somebody would have fought you really hard for it. That's such a cool story. Okay. So, I'm wondering like, I don't know if you could even do this in non-NFT, just traditional art auction. Like, is this even legal? I don’t want to get you in trouble or anything. But it sounds like you're playing in some kind of gray area, right, like creating multiple accounts, I don't know. Like, how does it work…?

MK: I'm already a pseudonym. You know what I mean? Because, yeah, crypto is just an Ethereum address, right? So there is no real… If it is an exchange, and I have to do KYC and that's how it works, that's very different. But for NFTs, if you look at it, we are not breaking any rules, because it's not like I provided 10 people's ID or something, it was just all my Ethereum addresses and all my names. And at the end of the bid, I announced that it was all me. And I'm sure that a lot of people do that too. So in Nifty Gateway, there'll be proxy accounts all the time.

Because people want to remain anonymous. Right now, with Metakovan, like, I go and bid on a Nifty Gateway piece, it gets a lot of attention. So sometimes I'll be like, I'm just doing this for my personal reasons. I'm not doing this for something like V2. So sometimes I'll be like, man, don't make me pay more for it. Right? So I'll just go there in different accounts and just pick it up because I like the piece. And at that time, it will not have a lot of competition. But if I go as Metakovan, there will always be some other person like, oh, Metakovan’s going to bid on it, I’m going to raise the bid on it. So that's very unfair to me. Right?

CR: You start raising the price just for using your name, that's crazy.

MK: Yeah. That's something I don't like. It's good if it's signaling, but it only makes my life harder because I have to pay more for everything…

CR: Right. Consequences of being famous. And then, I'd love to get into your plans for this big collection. I mean, because like, yeah, why did you decide to buy all of these pieces? And what are you doing with them now? Because that's a really interesting part of the story as well.

Virtual Museums for Digital Art

MK: Sure. So, when we started the conversation, you were asking me about NFTs, and what NFTs were, and I was telling you they were data representations, like a contract, an ownership contract. So in this case, the experiment around and collecting all these 20 pieces actually have quite played out. Because we did this purchase around December, second week, so 12th and 13th, if I remember properly, of last year, and it's been 45 days.

So what we did in the interim was we really went NFT native, right? So we bought land in Decentraland, we bought land in Cryptovoxels, we bought land in Somnium space. All these are virtual worlds that run on Ethereum. Right? Like when I say run on Ethereum, I mean, their ownership titles exist on Ethereum as NFTs. So we bought land on them and then we brought in a huge team to help us design and build monuments for all these pieces. So in the real world, it will be a museum, right?

So we built an awesome museum. And this team was called Voxel architects, and they are one of the top builders in the space. And they are these visual artists in their own way, because they put together awesome designs, so they did that. And they actually literally built museums where in Cryptovoxels, it's a different technology to build. So you have to build one brick by one brick, like you do it in the physical world. And in Decentraland, it will build it on software and deploy it into the world. So we did all of that.

So we took the Beeple pieces, NFTs, we took the land NFTs, and we also designed and built monuments to display these art pieces inside the virtual worlds. And we brought in Blau, who has pulled, I think, a billion plays now. Last time I heard him, he said he's an audio artist, he's a DJ who has a billion plays on Spotify. He gave us the soundscape. So right now if you walk into Decentraland, hover the B20 monument, you would hear sound from Blau, you look at the gallery built by Voxel architects and you'd be experiencing the art that Decentraland dropped the 20 pieces. So everything together, all represented on it as NFTs.

It's like virtual real estate, right? I mean, I want to call it, in the real world, we’d be a real estate developer who constructs something and creates and sells a part of it. Here the experiment was, can we do this all through NFTs, and we achieved that. So we bought the land, built a building, we put art into it, and then took all of this and put it into a single word. So there is one word called the B20 Bundle. If you go to OpenSea, you'll be able to see all these together as one bundle. So it's not just the Beeple 20 pieces, the art pieces, but it also has the soundscape as NFT, the land as NFT, the Voxel architects builds as NFTs. So all of these things have gone into this bundle.

“In the real world, we’d be a real estate developer who constructs something and creates and sells a part of it. Here the experiment was, can we do this all through NFTs, and we achieved that.”

And what we did was for everyone who worked on this project, I actually tokenized the whole bundle into 10 million B20 tokens, and we gave away 10% to the people who worked on it, and 2% to Beeple, and we also like sold off 16% through this event called Metapalooza, which happened in the virtual world. Right? So there are people now who hold these B20 tokens who are part owners of these assets and they don't have to trust me, they can just trust a smart contract, because it is the one that holds all the NFTs. Right? So that's what we did there.

Screenshot of Metapalooza.

CR: Okay. So these B20 tokens, do they hold, like partial ownership to the entire Beeple collection, plus partial ownership to the land in Decentraland, and Cryptovoxels and Somnium, plus partial ownership of the tokenized Blau soundtrack, I guess, like all of that is bundled into one token, is that right?

MK: That's correct. Yeah, that's correct. So if you look at the NFT space right now, that's the most premium bundle, because the land also, we are not talking about some land in one corner of Decentraland, or Cryptovoxels. We spent $100,000 on Cryptovoxels to get the land, $100,000 in Decentraland to get the land. They are also premium real estate. So if you're someone outside from the NFT space, yeah, you can go buy NFT, if you want to do it as a hobby, and that's all fine. But this B20, the idea was to allow people exposure to the premium NFT. Right? And this is the most premium NFT bundle right now.

B20 Tokens

CR: Right. I mean, if you wanted to, for example, sell, say, I want to keep partial ownership to the art, but I want to sell the land, can you do that? Or like can you take these pieces apart? Or do you just have to like, just trade the token itself?

MK: Personally, I have no control over the wallet anymore. So I'm the same as anyone else who holds a token. So I held back around 50% of the tokens. Actually, I wanted to keep around 60% of the tokens after the sale and giving it to partners, etc. But what happened was, during our Metapalooza event, our first sale, 16% got sold out in two seconds. It was the largest event, around 1,500 people attended the event, and you could actually be in-world and buy these tokens. So it was like you come to the gallery, you can actually buy the gallery from the gallery, right, so it's very meta that way. And it happened very quickly. So we had to put up a cap and allow more people to just buy it.

“But what happened was, during our Metapalooza event, our first sale, 16% got sold out in two seconds. It was the largest event, around 1,500 people attended the event, and you could actually be in-world and buy these tokens. So it was like you come to the gallery, you can actually buy the gallery from the gallery.”

Because my intention was not to really liquidate my position. I've never sold an NFT until, I guess, now, and now also, I didn't want to actually sell it. But this was an experiment. So people started buying this up, so I thought, okay, there's a lot of interest in this, right? But right now, because I only hold 50% of the tokens, I might have more ownership over these assets, but I don't have any control. And I'm the same person as anyone who has one B20 token, like we just own the upside.

But there is a buyout process, which we are actually putting the details out very soon, where another collector, a bigger collector in the future can come into the space and be like, yeah, I want to pay $12 million for this and then start a bidding process, but he has to deposit 12 million DAI into the contract, and if no one outbids him for 14 days, or if also 25% of the B20 holders can come together and veto a buyer process. So the B20 holders have the right to stop the buyout process if they want to. That can happen too. But if that does not happen, and no one outbids, the highest bidder in that case will just walk away with all these assets. At that point, whatever the smart contract has taken in as DAI will be distributed among all the B20 holders into a redemption contract.

CR: Okay. I guess like, then the only way to unbundle this bundle would be to buy out the whole thing?

MK: Yeah, that's correct. Yeah. Until then, it's just static, it's going to sit there. I don't want someone to buy it out, right, so that's, like my wish. Because I want to see how this evolves in a couple of years, in three years. If you can go in three years and look back at this, everyone who's going to come into the NFT space, I want them to walk into this gallery, and be amazed by what I did here. So yeah, like, it would be nice if no one buys it out and destroys the whole thing.

CR: Okay. So you set out to sell, you said around like 20% of the tokens, but you ended up selling 50%, is that what happened?

MK: So actually, I did have other partners where I gave away tokens, around 14% of the tokens in more of a private sale kind of thing, where we had other collectors and other people in space, who could get some of the exposure to the B20 tokens. So I did 14% there and I did 10% to the stakeholders, so 24 gone. And then I wanted to do 16% for the public sale, bringing the total of the given away tokens to 40%, but then the 16% of the tokens sold out in three seconds on the first block after the sale was open. Right?

So then I had to put out, because there were around 1,500 people attending, we thought okay, at least 500 people want to buy more tokens. So we put together a quick, within half an hour, the tech team put together another sale, a cap sale, $1,000 each address, so that meant that we put another 10%. So bringing the total of the tokens I’ve given out to around 50%. And the last sale which was capped had 1,000 DAI limit per transaction per address and that sold out in a few hours.

CR: Wow! And so how big was the sale in the end like? Or how much did you sell all those tokens?

MK: The total amount I received from the public sale was around $936,000. Just a shy below the million mark. And the private sale, actually, I had another $300,000. So the total, yeah, I've sold around $1.3 million of B20 tokens, and I still have 50% of tokens.

CR: Okay. And then the original 20 collection, you bought it for 2.7 million?

MK: So $2.2 million plus the land when we spent around say, another $200,000. So I would say the literal dollar amount we invested in the assets is $2.4, $2.5 million. And the stakeholders will get the 10% of the tokens, their cost is around $200,000. So when we say what the cost of the bundle is, we tell it's $2.7 million, but we spent $2.5, and the 200k which went to the stakeholders came as B20 tokens.

CR: Okay got it. What an interesting experiment, like what do you want to see come out of this?

MK: Very interesting question. So, if you look at this experiment, and again, I'm speaking about this like an experiment. Because I'm very happy that we have so much support. We brought together around 27 people to work on this project and all the best people in the NFT space right now, for promotions, for tokenomics, everything was the best team that came and worked with it. So very happy for that. And I want to continue.

I call this a production, because it's something that's static, we brought together a team. It's like making a movie, we put together something, and then now it's an asset. So anyone can own that asset. I don't want to speculate on its upside or anything. And I have nothing to do with the, how do you say, it's not a security in that sense, because all the assets that back this are on chain, right. And I have nothing really to contribute more than those assets. Those assets, their reputation are based on the artists who actually put them together.

So this is a very interesting experiment, because we didn't require any lawyers, or accountants or underwriters, who in the traditional world, if you want to build a mall and sell it, oh man, around 30% of the funds are going to go into just the paperwork, right?

CR: Right.

MK: So an amazing part here is that we have achieved this, and it's autonomous and fully enforced on the smart contract. So you don't have to trust me to hold the NFT on behalf of you, right? I'm not holding them. I'm not holding any of these NFTs. So it's all on the smart contract and that means that it has cut our cost so much in producing something like this. So that's one thing, which has been huge for us. But we want to take this and keep doing more production, so Beeple B20 was production number one. We want to try to do production number two, production number three. Maybe it will not be very similar, right, like a gallery where you can go look at these arts. Interesting, but it's not very interactive.

The experience is more about the awe around the story and how this all went down. And being the first of its kind, I think it has its own charm and that will hold its story up into the future. Like in two years, it will be more interesting than it is today. That's my speculation, right, at least a story.

But for production number two, and production number three, we want to add more layers to it, not just be a gallery, but you know, we need a different concept. So we are also opening up people to apply to us and give their idea. So we are putting together a mini fund for this, I want to give away a million dollars for a production that you can propose what kind of production you want to do, the total budget will be a million dollars. I didn't mean I want to give away the million dollars. I meant for the production, the budget would be a million dollars. And the creative producer or the director of that production can decide how they want to spend that money, and give us an awesome experience.

At the end of it, if we can create another token which represents the premium NFTs in the space that could give exposure to a lot more people who are just walking into the NFT space, that would be awesome. So we are doing that, and on the other side, we also have a few other ideas we want to work on.

And I also think that because this is a very visual space, there are going to be events that are going to happen in world, people are going to want, you know, if there are 1,500 people visiting these galleries, I think it has some revenues that we can talk about, right? Like we can have a big brand, even a sponsor for some of these events, etc. So we are working on all those logistics into the future. Maybe in the production three or four, there'll be more external sponsors, real world companies.

For example, say if Red Bull wants to sponsor one of these events, it'll be awesome because $100,000, $200,000 is not a lot for them. But then it gives them exposure to a very savvy set of people and people who are living on the cutting edge, so it's a very different kind of crowd that is coming here. So I'm sure that there is a lot of value in brands reaching out to them. So that is a way of taking these productions from being static to being more interactive to also having cash flow in the future. So that is a part we want to take.

Real Estate Developers for the Metaverse

CR: So you are becoming not only investors, but also a production company in the Metaverse, I guess?

MK: And I'd be really happy to be a producer, and bringing these artists. Even with Beeple, the most amazing part of B20 was Beeple had no idea about crypto, right. But now after this whole experience, what we did was we brought him into Cryptovoxels. I also got him a custom tailor who could design this variable. And when he came to the event, Metapalooza where he spoke, he was wearing that shirt, so I was so happy, right, so we take that. Yeah. We take the artist, we guide them into the space. That's amazing, right.

And we also gave him B20. So B20 is the first crypto token that Beeple now holds, except Ethereum. Yeah, so that's something amazing too, because, yeah, like, it's nice to have these artists that work with them, and it's an experience in itself, and it's very gratifying to me. So I want to continue doing that. That's something I enjoy personally, working with artists. So I feel like this is just a new medium and I'm going to go really full on and start doing more productions.

CR: Very cool. And then just to start wrapping up, I'm interested in your kind of longer term view or like your big picture view on where this space is going. Like, obviously, you're living in this kind of virtual reality already, like, do you see a world where more of our activity is happening online in these kind of digital spaces?

MK: You're asking me this for everyone, right? Yeah. What I feel is that whatever we do in the virtual world, I still feel like it's kind of a lonely place because I'm sitting in front of my computer. It's not been easy, right? Like, I am actually in the physical world, a lot of times, I'm just one guy sitting in a room and looking into a monitor and connecting with all these people in the virtual world. It's fun, but it still gets lonely, right? So it's not the same as the physical world.

I would never, never underestimate or say, oh, yeah, this virtual world is taking over the physical world. Because it does not engage all our senses, it's maybe visual music. But we have five senses, like we only get to experience a couple of them. So, even with VR, it will not be complete as an experience. So what I really want to do for the long term mission of being Metapurse and the production is not to just do something in the virtual space.

So, we start with the virtual space. Even if you take B20, what has happened is we have gathered an amazing set of people who are all interested in people, like-minded people, all of them are now token holders of these B20. What I want to do is, say create a physical event, where it's a huge party of all these B20 holders, and Beeple comes there and Beeple also had physical pieces for these NFTs, right. So I'm going to display all these physical pieces, have Beeple there. Beeple was very interested in meeting his fans. So we will have that as a tool, maybe in LA or Las Vegas, with Blau DJing for us for the night. It will be an amazing party. So if you think about it from there, don't you want to be in that party?

CR: Definitely. I hope you can get me ticket?

MK: And you need B20s for that. So what I'm trying to say is we will connect the physical world in some way to the virtual world where we organize people, organize communities in the online space because it's better to organize communities in the online space. It's an open world, right? There could be people from Singapore, India, people from Africa, America, all like-minded and coming together, because there are no boundaries in the virtual space.

But then once we create that community, we can transfer that experience into a physical experience. And that becomes a lifestyle business, right? Immediately it’s culture, it’s lifestyle, that's a different game. And I'm sure that's a very consumption based game where you are paying money for the experience, and nothing else, so that will be the end to it. So that means everything, if you look back about NFTs, and how we want to go about it. There will always be some kind of a physical component to it that we have these kind of meetups or something that goes along with it so that it's always a great experience to be part of it. Right? So that's our goal. And I think that's where we're going, where NFTs will connect people into a community, and then you can take that connection into the physical world. And yeah, that'll be the future of NFTs mostly.

CR: Very cool. I love how you’re thinking, not just about the digital world, but also the physical world. I think you're totally right that you can kind of ignore that piece. I think, a lot of us, people kind of living, breathing, DeFi and crypto, we tend to forget about the physical world, which is where we live all the time. So, hopefully, the world gets into a place where this event can happen soon. It sounds amazing.

MK: Yeah, one more thing I want to add is these things happen now, right, like for crypto and DeFi, the physical meetups are a very important thing. But those are only happening as conferences, where it'll be like a technical one, you know, it's a very different feel to it. So why not take the same idea, but make it more of a fun entertainment kind of meeting, right? So that is what the NFT would do to us. And I hope that a lot of people like, get into these NFT communities and become part of them so that there is more lifestyle to it than just making money. Just not speculation.

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