Internetman Logan Paul, just wore a $6 million Pokémon tag to Wrestlemania—A sentence I’m reeling from typing — also this week, opened a website called Liquid Marketplace, which claims to sell shares in physical collectibles, but in reality, sounds like like a disaster waiting to happen on every level imaginable.
In partnership with Ryan Bahadori and Amin Nikdel, and has raised $8 million to open, the site says:
We want to make high value collections accessible to anyone interested in building their collection. To create a level playing field where those who truly treasure these unique items can own something of a legend.
Ah yes, an egalitarian rallying cry from technocrats, great. The idea behind the site is that it will take collectibles, break them down into tokens, and then sell a limited number of those tokens. Once all tokens are purchased directly from the site, they will then be able to be bought and sold on the secondary market.
They’re doing this with digital collections, like the NFT, but it’s more interesting – and much more precarious – they’re also doing it with physical, tangible collections that have to be moved to a vault their – name and/or location undisclosed–and locked, then ownership will about theory transfer to the site’s token holders.
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NFTs are dumb and worthless, but they’re also relatively easy to deal with on a conceptual basis, since they exist purely in a digital space. Trying to split up an actual thing into digital pieces and somehow reach a consensus on who owns it is a disaster waiting to happen. The site has rules for this, of course, but they’re fraught with loopholes for exploitation and/or peril, as The Block report:
Another complicating issue regarding the encryption of assets – whether physical or digital – is about what happens at the end of the process. After an item has been split into thousands or millions of pieces and these tokens are owned by thousands of people, how do you piece them together to reclaim ownership?
In this case, there is an acquisition system. If a person manages to hit a certain redemption rate (not stated in the platform’s terms and conditions) then they can activate an offer. If 80% of token holders vote in favor of a buyback at a certain price within 72 hours, he or she can buy out everyone else. In this case, they can then claim the item and deliver it physically to them.
There is only one way for this to end, and that is:
As we just saw yesterday with licensed F1 game, this NFT/crypto/blockchain thing has always looked so utopian on paper. And every time the rubber hits the road in a real-world scenario, it completely crumbles. In this case, what if the actual collectible in the vault is damaged (Note: I have contacted the site for more information on this)? Or stolen? Or the website goes bankrupt and the physical items are lost while people still own their digital tokens? Or user have their tokens robbed?
It’s all just too…complicated and unnecessary. A solution finds a problem, in the same way that every other part of blockchain “innovation” has always been.
