Kiwi app generates over $7 million selling digital 3D sculptures using NFTs

A tech craze that’s seeing people spend thousands on a digital model that is unique to them and only exists online has generated $7m in sales for a local tech company.

Orbis Blockchain Technology, better known for its app VeVe, sells collectible 2D and 3D digital artworks like a 3D virtual model of Batman, which can go for $55 to $125, to a golden Ghostbusters​ logo for $140.

That same Ghostbusters​ logo – which was limited to a run of 188 – is now being auctioned on the company’s secondary marketplace for more than $4000, co-founder Daniel Crothers said.

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Since launching on December 20 over 69,000 users have joined the app, Crothers said, with thousands more signing up each day. It’s sold more than 110,000 collectibles, generating over $7 million.

The reason these entirely digital models go for so much is thanks to NFTs.

Non-fungible tokens are pieces of digital content linked to the blockchain – a digital ledger guaranteeing a digital item is an original copy and belongs to a particular person.

Just like cryptocurrencies are guaranteed by the backing of a blockchain, so is the authenticity of an NFT.

Sceptics might question why a collection of code that can be copied and pasted to create an identical image should be worth hundreds or even thousands of dollars.

Crothers explains it like this: “I could walk into the Louvre, I could take a beautiful high-quality photo of the Mona Lisa, and I could print it out and put it on my wall.

“But could I sell that at an auction house? The answer is no, and the reason being is I don’t have ownership of that item.

“It’s like that with anything in the world. If you don’t have the authenticity, if you don’t have the ownership, then you’ve basically just got a photo of it.”

Crothers said he and co-founder David Yu predicted three years ago that NFTs would become a big deal.

Awareness of NFTs received a massive boost after artist Beeple’s collage art Everydays: The First 5000 Days, sold for over $96 million on March 11.

Then Kings of Leon generated over $2.8 million from the release of its new album in the form of an NFT.

These and other headline-grabbing sales might have raised public awareness about NFTs, but for Crothers and Yu it was confirmation of what they had been banking on.

For the past few years they have been approaching brands like DC Comics, Cartoon Network, Star Trek, and Universal Pictures to gain digital licensing rights for their creations.

Often these companies already have 3D renderings of their characters; VeVe’s team will optimise the model and sell a certain number.

On other occasions VeVe’s own artists would create a brand-new 3D model from scratch, taking a bigger cut of the final sale price in the process. What that cut was, Crothers wasn’t willing to say.

VeVe’s team numbers just under 20, spread across the UK, Asia, Australasia, and North America. Roughly half of the team is in app development, and there are five artists, while the rest are in social media and marketing.

Customers were also worldwide, Crothers said.

The purchaser of one of their digital models can view it on their phone, create a showroom of their collection and invite others to walk around, or use augmented reality to project the item into the real world.

Beware the next tech bubble

Associate Professor Alex Sims, from the University of Auckland’s business school, has focussed her research on blockchain technology.

Sims cautioned that just like the dot-com bubble in the late 1990s, and the mania witnessed in the cryptocurrency world with Initial Coin Offerings (ICOs) in 2017, not all investments would bear fruit.

“A lot of it will just completely fail,” she said.

“You have got this kind of boom where people are spending money on stuff that will be worthless in a couple of months time, but out of that trash there will be some good things that will come up.”

Crothers acknowledged this was a pattern that repeated with all new technologies.

“Right now it’s going through a hype phase and that hype phase is going to settle, and when it settles there are going to be some key players in the industry, of which we are going to be one.”

Covid boosts NFTs

Crothers said with collectors unable to go to Comic-Con conventions or visit their local stores to buy physical collectables due to lockdowns, many were turning online to get their fix of collectable items.

But these aren’t just for kids; the median buyer’s age is around 36 to 37.