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The crypto market is booming tremendously nowadays, with the overall capitalization of cryptocurrencies approaching USD 2 trillion. Everyday more and more people are investing in cryptocurrencies to make a living. But as different technologies develop, these new “coins” come with different sets of risks.

In the first half of 2021, more venture capital funding was deployed into cryptocurrency and blockchain start-ups than in any previous full year. No doubt that cryptocurrency and blockchain are still ultimate in driving excitement in 2021, partly thanks to the emergence of the Non-Fungible Tokens, or NFTs.

In practice, an NFT, is simply a unique token that represents a digital file, a piece of media, that can’t be copy-pasted, edited, or deleted. NFTs introduce a different path for creators to retain ownership of their content and to monetize directly with their fans. NFTs make the spread of ownership economy possible and provides a blueprint for how this could work in real world as well.

The idea of ownership economy started in 2009, when Bitcoin arrived and promised a new environment, in which anyone with an internet connection could participate by “mining” the network and getting an ownership stake in the network — minted Bitcoin. Later, Ethereum enabled a broad range of applications by giving developers the opportunity to gain more ownership from their contributions. Nowadays, the Ethereum token enables new ways to reward your favourite artists, comedians, brands, and curators with a cryptocurrency token. The idea is to build a network of volunteers who support one another’s social media posts, content creation, and other services. As they do, the community is rewarded with digital tokens, which can be converted to dollars, euros, and other currencies.

In a nutshell, NFTs offer better economics for creators, as they remove intermediaries and make users owners, that reduces customer acquisition costs to near zero. Having said that, creators make more money by selling directly to their fans, consumers are better off as they combine social and long-lasting patronage benefits and developers make money developing the infrastructure to enable existence of these markets.

New integrated platforms encourage entrepreneurs to monetize individuality and creativity, which will continue to grow, while emphasizing unique skills and knowledge. This will generate significant innovation and create a new breed of entrepreneurs, turning their passion projects into business.

In the years to come, we envision more employee-owned business, allowing them to generate greater returns, achieve more stability and prosperity in general.
The overall principle is incentive alignment that comes from having skin in the game.

At Kavedon Kapital, we are dedicated to ownership economy and having skin in the game is one of our core principles.

Article by

Associate Partner

Iva Rakocevic

Iva is passionate about sourcing and understanding Founders and early stage companies. Previously at C-Quadrat Investment Group, PWC, Raiffeissen Bank and the United Nations, Iva focused on deal origination, evaluation and analysis, portfolio management and led transaction solutions. Independently, over the last 3 years, Iva has built an extensive global network, sourcing and supporting quality companies, at the same time acting as advisor to a number of Global Investors. Based in Vienna, Iva has focus on Western Europe and the CEE.