Cryptokitties are attracting serious money.
OpenSea, a cryptogoods store that enables sales and exchanges of Cryptokitties, yesterday announced a seed equity fund of $2 million. The list of investors comprises marquee names from Silicon Valley and crypto investing, including Peter Thiel’s Founders Fund, Coinbase Ventures and Blockchain Capital. According to Devin Finzer, cofounder of the marketplace, OpenSea has already racked up about $500,000 in trading volume. He attributes its success to the fact that the game Cryptokitties was the first mainstream use case for ethereum’s blockchain. The game uses ethereum’s smart contracts to enable trades between owners of kitties. (See also: Cryptokitties Rule Traffic on Ethereum's Blockchain.)
Cryptokitties first shot into limelight last November after traffic from its users flooded ethereum’s blockchain. The game involves breeding of digital cats to generate progeny that become valued collectibles. Kitties are purchased using ether, ethereum’s native token. According to some estimates, the game had 1.5 million users who were responsible for $40 million worth of transactions on its platform. Individual cryptokitties have sold for more than $300,000 a piece, some say. As of this writing, the average sale price for a cryptokitty was $65.76.
Use Cases for Other Industries
Not surprisingly, media attention and the game’s resulting popularity has attracted investors into its fold. For example, Andreesen Horowitz and Union Square Ventures, both of which are top venture capital firms, pumped $12 million into the development studio responsible for the original game. According to TechCrunch, the intent is to spin the game out of the studio and use the ERC-721 token standard, which was used to develop it, to make even more mainstream applications on ethereum’s blockchain. For example, it could enable real estate transactions between two parties, where the exchange of funds takes place only after certain conditions pertaining to the sale are met. More recently, basketball star Stephen Curry signed on to release the first celebrity-branded Cryptokitties.
The success of Cryptokitties has led to a surge of crypto collectibles in the market. From puppies and pandas to tiny monsters and cryptobots, everything seems to be fair game for enthusiasts of such games. Whether these collectibles end up like Beanie Babies, whose markets and valuation have returned to earth after their soaring popularity during the 1990s, remains to be seen. (See also: Bitcoin Is a $15,000 Beanie Baby, Says John Oliver.)
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