Internet person Logan Paul, fresh to Wrestlemania with a $6 million Pokémon card— a phrase I’m hesitating I had to type — also launched a website this week called Liquid Marketplace, which claims to sell stakes in physical collectibles but in reality sounds like a disaster happening on every imaginable level she is waiting.
The site has teamed up with Ryan Bahadori and Amin Nikdel and raised $8 million to open, the site states:
We want to make quality collectibles accessible to anyone interested in building their collection. To create a level playing field on which those who truly value these unique items can own something legendary.
Ah yes, an egalitarian rallying cry from technocrats, cool. The idea behind the site is that it takes collectibles, breaks them into tokens, and then sells a limited number of those tokens. Once all tokens have been purchased directly from the website, they can be bought and sold on a secondary marketplace.
They do this with digital collectibles like NFTs, but more interestingly — and much more precariously — they also do it with actual, tangible collectibles that need to be delivered to their vault — whose name and/or location isn’t disclosed–and locked away, after which property becomes theoretically Transfer to website token holders.
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NFTs are dumb and worthless, but they’re also relatively easy to work with conceptually as they exist purely in the digital space. Trying to split an actual thing into digital parts and somehow reach a consensus on who owns it is a disaster that awaits. The site has rules for that, of course, but they’re full of loopholes for exploitation and/or danger, such as: The block report:
Another tricky issue with asset tokenization – whether physical or digital – concerns what happens at the end of the process. Once an item has been broken down into thousands or millions of pieces and those tokens are owned by thousands of people, how do you put it back together to reclaim ownership?
In this case there is a buyout system. If a person manages to purchase a certain buyout percentage (not specified in the platform’s terms and conditions), they can trigger a buyout vote. If 80% of token holders vote to buy out at a certain price within 72 hours, that person can buy out everyone else. In this case, you can then complain about the item and have it physically delivered to you.
There’s only one way this will end, and that’s:
As we saw just yesterday with the licensed F1 game, this NFT/crypto/blockchain stuff always looks so utopian on paper. And every time the rubber hits the road in a real-world scenario, it completely falls apart. In this case, what happens if the actual collectibles in the vault get damaged (note: I reached out to the site for more info on this)? Or stolen? Or the website goes broke and the physical items are lost while people still hold their digital tokens? Or user hijacked their tokens?
It’s all just so… complicated and unnecessary. A solution that looks for a problem, just like every other piece of blockchain “innovation” has always been.
