“We’re in the midst of a technological revolution. We all know it, we talk about it, but we have to live it. The most difficult step is just to go for it.” – Helmut Lang, on being the first designer to unveil a collection on the Internet (1998)
TL;DR: We at TCG Crypto are thrilled to be backing what we believe are two of the most innovative companies in digital fashion, DRAUP and Tribute Brand. We share our excitement for the space and outline our thesis on where we believe digital fashion is headed in the piece below.
“Everything you can imagine is real.” –Pablo Picasso
In 1950, Alan Turing published a paper exploring whether or not machines could think. Through this research, he developed “The Turing Test” — a framework that assumes the ultimate bar for “Artificial Intelligence” is whether a machine can exhibit behavior indistinguishable from a human in a given activity. Turing’s research sparked a wave of interest in machine intelligence and subfields of machine learning and deep learning. These disciplines are comprised of AI algorithms that create expert systems to make predictions or classifications based on data. Decades later, these expert systems have shaped our modern definition of the consumer experience. At the same time, they remain largely out of reach for the average user.
The combination of machine learning and robust datasets has opened the doors of innovation and accelerated new forms of problem-solving. However, the doors of innovation can swing both ways, offering both positive and negative outcomes. On one hand, your smartphone has native capabilities now powered by AI, like real-time navigation and voice assistants. Even your favorite platforms, like Netflix and Instagram, use AI to offer bespoke product recommendations. The downside to this increased productivity comes at a cost to the consumer. While centralized institutions harvest user data and maximize profit potential behind a walled garden of AI algorithms, consumers have no access to their data and are typically unable to spin up their own ML models to profit from their data and experiences.
Sure, AI has unlocked an enormous amount of productivity through web2 platforms. But as we evolve, how can we use the power of AI to build a world where everyone has access to these advanced models? How can we allow users, not just entities, to profit from their experience across platforms?
We are entering a world on-chain.
The digital world is being rearchitected in real time with the continued evolution of blockchain technology. Slowly, and then seemingly all at once, new methods for commerce and coordination will be introduced to the online ecosystem, showing the power of what can be done in networks when contribution and behavioral data are on-chain, user-controlled, and public.
In today’s world, our digital experiences are managed and owned by a select few. “Users” leverage these platforms, but the influence, ownership and management is outside their responsibility and control. Tomorrow’s world looks to move users to contributors, putting more value in the hands of those who commit their time, energy and passion to bettering this ecosystem. It will change how we work, participate and truly live online. This is the promise of web3, but in order to navigate the bridges (protocols) and tunnels (dApps) of this new world, we believe there needs to be a guide. Enter RabbitHole.
NFTs are well on their way to becoming a multi-billion dollar asset class. At TCG Crypto, we believe NFTs are the ultimate consumer onramp into web3. In an era where we are seeing what it means to truly live online, NFTs are the financialization of our virtual economy.
Today, NFTs are one of the biggest and most broadening utility functions in web3. They prove and transfer value on the blockchain, permeating ecosystems across play-to-earn, marketplaces, guilds, and consumer applications. NFTs provide a new form factor on top of which narrative, storytelling, relatability, and ownership can be built. They take the shape of digital art, community access, virtual real estate, music rights, gaming assets, and so much more.
As our physical and digital lives continue to converge, NFTs are how we represent ourselves. Collectively, they form who we are.
Browsers, applications and platforms are how consumers live online. Today, new digital lives are being led in different corners of the internet on top of the blockchain. But for all the media coverage of crypto, users will only start to care about this revelatory infrastructure shift when it is showcased through the services they use most. It’s hard to see things in the dark, and consumers show up when these products and applications turn on the lights.
Historically on the web, consumer opportunity followed emerging infrastructure. Web1 server structures put individuals online, gave the masses access to the internet to consume and communicate and made it all accessible by way of the browser, search and chat. But it took Netscape, Google, AOL & others to really show consumers what that infrastructure could do. Web2 presented the cloud and introduced a new wave of scalability and the emergence of the social web. All of a sudden people could connect online, purchase online, trade online, catalog their life online… everything together online. The web was cheaper to consume and accessible to anyone who was able to find a connection. Now we have the acceleration of Web3 infrastructure. Billions of dollars of investment and treasury sitting in the foundational layer of the next internet (Ethereum, Solana, Polkadot, etc.). Web3 promises a new gateway for billions of users to live even more online through self sovereignty, portability and ownership. But today, there is really only one breakout consumer experience that has reached far beyond the crypto community; Coinbase.
Living online relies on infrastructure. But that doesn’t mean consumers care about the infrastructure itself. They care about what it can unlock for their online lives: status, entertainment, financial gain, etc. When was the last time you used Spotify and thought “this is great because it’s hosted on AWS!”? You use Spotify because of the entertainment it provides you as an individual, brought to you by the infrastructure it showcases. Consumers care if things work and benefit them as individuals over all else. Web3 is presenting entirely new behaviors and business models to the web, now it’s up to us to show consumers what that can do and how it can benefit their digital lives.
Crypto markets have fostered a new type of experience, one that’s not limited to time or space. The first unlock happened in finance, with both centralized and decentralized exchanges opening up the trading of bitcoin and other tokens to 24/7 markets. This unbundled the traditional behaviors of finance, unlocking the trading experience and inciting new user participation and behaviors. Just as this shift in consumer behavior changed how we think about finance forever, we believe there are other markets that will follow the same unbundling and reintegration process across the consumer landscape. One we’re particularly keen on is the evolution of fandom and the expanding role of the sports consumer.
Fans have long been stuck on the sidelines of their favorite sporting events. The team/player to fan relationship is limited to league scheduling, event organizing and physical structures. Fans have long driven the value of their favorite leagues and teams but always at arm's length, leasing these experiences versus owning them. But with blockchain technologies opening up our existing notions of ownership, this classic model of fandom is evolving, presenting the opportunity of ownership for fans to now become active contributors.
We believe this will happen across all fan experiences, from events, to gaming, to betting and beyond. That is why we’re proud to announce our investment leading the Series A of digital horseracing platform, ZED RUN. ZED RUN is an early leader in the likely transformation of the ownership economy as it relates to consumer experiences. The team at ZED has built an ecosystem for players to buy, sell, breed and race their own NFT race horses. With prize purses for winning horses and breeding fees for horses in the stud, succeeding at ZED brings with it real-world monetary rewards.