🖼 "For the First Time, You Can Buy a Piece of the Art, and a Piece of the Gallery:" MetaKovan
We talk to the largest NFT investor about how he grew his $10M collection and about his first steps into becoming a metaverse real estate developer.
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.
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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.
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.
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