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Hawku has raised $4 million to build a marketplace for gaming and utility nonfungible tokens (NFTs), and it wants to provide data so that people buying these NFTs can make smart decisions.
That kind of announcement is getting to be routine these days as lots of companies are rushing into NFT games. But Hawku is run by one man, CEO Charlie Graham, a 20-year startup veteran. And the money comes from Lightspeed Venture Partners and a number of other investors including Multicoin Capital, Dragonfly Capital, Alameda Capital, Animoca Brands, Solana, and Virtual Human Services.
That combination makes it raise your eyebrows. I spoke with Graham about this funding and he explained why he is excited about the opportunity. And it will be interesting to see if he can compete in a sea of other big NFT game companies and NFT marketplaces like OpenSea.
“Hawku is building the marketplace for utility and gaming entities,” Graham said. “We found I found this a hole that hasn’t been totally solved.”
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NFTs are a digital certificate of ownership validated by the blockchain, the transparent and secure digital ledger behind cryptocurrencies. NFT tech can prove that a digital item is a one-of-a-kind rarity. It can verify a sword’s uniqueness in a fantasy game and make it more valuable. The game devs who make it can sell it for more money, and the player who buys it (and levels it up) could resell it for more money. Players could actually make money playing games as if they were investing in them, rather than just spending money in them. That can change the potential of the game’s economy, and change the fortunes of game developers. That’s the promise of NFTs, and why there are so big investments in the companies that make the technology or in the companies that make successful NFT games such as Axie Infinity.
“With dozens of web3 games launching in the next 12 months, there is a growing need for an NFT marketplace optimized for gaming and utility NFTs, which have more complex attributes than art NFTs. We are excited that Hawku addresses that need,” said Amy Wu, a partner at Lightspeed Venture Partners, in an email to GamesBeat.
In the past, Graham had a number of VC-based companies. One was in customer relationship management. The most recent one was doing personal shopping assistants for online clothing stores. He got into crypto and then heard about NFTs.
Graham got into NFTs in 2018 during the CryptoKitty craze, when Dapper Labs began selling kitties and enabling players to breed their own cute characters. Graham fell in love with the fact that they make it easy to buy and sell pretty much anything. (He wished he had bought CryptoPunks instead of CryptoKitties. But such is life).
The artist Beeple sold one work of NFT art for $69 million. And Dapper Labs’ NBA Top Shot NFTs collectibles have generated $780 million in sales in the past year. In the third quarter, more than $10 billion in NFTs change hands, according to DappRadar. In August, Visa and Budweiser became the first brands to purchase NFTs furthering NFT’s pop culture moment, said Amy Wu and Mercedes Bent, partners at Lightspeed Venture Partners, in a blog post.
Graham sees limited value in digital assets where people are speculating about how much they’re worth. Rather, he thinks that utility and gaming NFTs that provide functional value will come to dominate NFT demand. These are NFTs that return something of value like tokens or revenue.
Such utility NFTs can include anything from NFT characters (avatars) in online games that let you earn tokens when you play with them, to the NFT of a digital billboard that produces daily advertising revenue, to the NFT of in-real-world, revenue-generating real estate.
“The NFT art sales are based on solving what I call emotional and social needs,” Graham said. “They’re all based on how beautiful you think it is,” or what kind of status it gives you.
“There’s a whole other subset of NFTs which are what I call functional utility NFTs,” he said. “These are driven by the value that the NFTs are producing.”
And for these, you can figure out things like the return on investment.
Current NFT marketplaces have been doing a great job targeting the needs of collectible and art NFTs — i.e., showing the aesthetics of beautiful artwork or the rarity of a social token, Graham said.
However, these criteria are not very useful when determining the value of utility and gaming NFTs whose valuation is based on the functional value they provide. As a result, most prospective buyers are currently in the dark when making purchase decisions on these types of NFTs.
Graham started Hawku this year with plans to change that. Graham said his company is building a marketplace that is focused on the specific needs of gaming and utility NFTs. The vision is to provide prospective buyers with the real-time data they need to research, buy and sell utility-based assets.
Graham built a platform that provides the key information players need to research, buy and sell horse NFTs for the popular Zed.run game platform.
In the horse-racing game, the horses have hidden attributes. These can help or hurt the horse in a race under different conditions.
“Some are better at the longest faces, and some are more variable,” he said. “By racing, you learn how good or bad your horses are, and then you have to use different strategies for racing.”
Graham liked it because it was a data-driven game. And he built Hawku to give people information they needed to for commerce.
In the four months since it launched, Hawku has already reached three million monthly page views and has built an avid following. The problem and market demand are real, he said.
Bent and Wu believe that current NFT marketplaces have done a great job targeting the needs of collectible and art NFTs — showing the aesthetics of beautiful artwork or the rarity of a social token — but less so for performance-based assets.
“Those aesthetic-driven criteria are not very useful when determining value for utility/gaming NFTs whose valuation is based on the functional value they provide,” Bent and Wu wrote. “As a result, most people are currently in the dark when making purchase decisions on these types of tokens.”
Hawku’s vision is to provide real-time data they need to be able to research, buy and sell these assets.
Hawku will use this new investment to further build out a more robust marketplace that serves the needs of the gaming and utility ecosystem, allowing people to research and make better purchase decisions. It will also continue to invest in helping people buy, sell, and research Zed properties, and also expand into new games and utility NFTs — providing a marketplace that can serve all utility and gaming NFTs.
“We’re going to start with Zed, and then we’re going to be expanding more and more to these other games,” he said. “Our plan is to continue to grow that way. But we already have so many people coming to our site from this ad, that we feel like we have a pretty good starting point.”
Graham believes were are in the very beginning of a once-in-a-century change in how asset ownership is managed. He said we will soon be in a world where almost any asset — in the real world or in a metaverse — will be available to buy and sell as an NFT, providing liquidity of assets in ways unimaginable.
New tools will be needed to help people manage, value, buy and sell these assets. Hawku wants to be at the forefront of helping make this new change a reality, he said. And he’s hiring.
“I want to expand the team and make this a much bigger project,” he said.
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