Yat Siu, founder of Animoca Brands, believes that NFTs are underutilized and could be an important part of digital capitalism, transforming industries such as rights management and education.
Siu argues that current lower valuations of NFTs indicate a healthier, more genuine interest in the technology’s usefulness, which could be crucial in addressing global financial inequality and promoting financial literacy.
Legal frameworks, especially in the US, must evolve to fully support this vision.
We have not yet started to leverage the utility of non-fungible tokens (NFTs), said founder of Web3 giant Animoca Brands, Yat Siu, in a recent interview with CoinDesk.
NFTs are tokens that provide user ownership of digital or tangible assets. These tokens hit the moon during the 2021 bull market and then plummeted.
There have been some positive market moves, such as the Grails NFT collection – once part of the Three Arrows Starry Night portfolio – selling for more than double its expected price at Sotheby’s and NFT profits hitting the ether (ETH) surpassed in January.
However, the ability to properly digitally own the blockchain is the key to disrupting the multi-billion dollar industry of rights management and content delivery, which touches everything from education to gaming.
“NFTs can revolutionize the delivery of educational content and provide significant financial opportunities, especially in less affluent regions,” Siu said.
Siu highlighted the example of TinyTap, an edtech company that the company acquired in 2022. Teachers on the platform can monetize their content, bypassing traditional barriers like publishing houses, which may only be rent-seekers. While the numbers are small so far, this could be an important source of passive income for those in the Global South.
Siu argues that it’s not a bad thing that NFT valuations have compressed compared to what they once were at the height of the bull market, because without the speculators, the only people left behind are those who are genuinely interested in the technology, thus weakening its foundation is strengthened.
“The point of NFTs is digital ownership and the ability for everyone to make and earn money,” Siu said, adding that this is the antidote to inequality and the first step in building a financially literate society.
“In Asia, NFTs and blockchain crypto are popular because they are seen as an extension of digital capitalism,” he said, arguing that the relationship between democracy and capitalism is integral. “The biggest threat I see now is because we don’t understand capitalism. Therefore, when we see what is happening in the world with money, we think it is unfair.”
“Property rights and capitalism are the foundation that makes democracy possible,” he continued.
Siu notes that there is a rejection of this digital capitalism in the US. This disparity, he argues, stems from emotional reactions to the monetary aspects of NFTs, which reflect broader feelings about money in the real world, underscoring the importance of education in addressing these perceptions.
Inequality is rising and he says the Democratic Party in the US has moved “far left”, which he sees as a “threat to democracy”.
“The roots of communism grew out of feelings of inequality. There is a connection between this, Web3, and financial literacy,” he said. “Web3 can save the capitalist narrative by turning users into stakeholders and co-owners.”
While Siu’s bullish view on NFTs may come as a relief to those who argue that blockchain and Web3 have utility beyond speculation, the U.S. Securities and Exchange Commission (SEC) appears poised to attack the industry, with the first enforcement action coming last August was announced. .
A legal framework still needs to evolve so that the NFT project, which aims to save capitalism and reduce inequality, does not receive the scarlet letter of ‘unregistered security’.