NFTs Will Onboard The World: Introducing 'PartyBid'
Mr. Fox breaks down one of the coolest innovations in the infrastructure of NFTs, PartyBid.
Hello all and welcome back to another email. I hope this finds you well.
In the NFT world there is a constant supply of cool projects and concepts. There is a never-ending flow of funny avatars or new takes on tokenomics, some of which we have discussed here together.
Oftentimes though, the coolest things being built are actually found in the technological infrastructure of NFTs. These inventions are what make it possible for all of the mainstream projects to succeed, because they create easier ways for people to deploy their money.
We will talk about one of the smartest inventions in NFT infrastructure today.
Before we can discuss the core of this email - PartyBid - I have to familiarize you with a concept know as Decentralized Autonomous Organizations, or DAOs for short.
What is a DAO?
Put simply, a DAO gives people the ability to form groups that make decisions where the number of votes one has is equal to the amount of money they have invested in the group. A group of people pool funds (think about it as a shared bank account) and they decide how to deploy these funds. Everybody gets as much of a say that is proportional to the amount of money they put in.
Let’s run through an example.
Mr. Fox and his buddies Badger, Rat, and Ash all know a lot about crypto. The only problem is none of them have enough money to buy high-quality NFTs on their own, so they can’t put their knowledge to use. As a solution, they come up with the brilliant idea of combining their money, but there isn’t a great way to go about this. Who makes the decisions? Who do they send the money to? Do they need to register a corporate entity? Are they even allowed to be doing this? All of these unknowns and variables likely would’ve discouraged the group from executing on their idea and stopped them from investing. That is before the creation of DAOs.
If Mr. Fox and his friends wanted to do this today, all they would have to do is go online and form a DAO.
How do they form a DAO?
They would go to DAO builders like Syndicate or Aragon that would code the DAO for their specific purposes. The DAO would exist on a blockchain (most likely Ethereum) and have its own wallet. Because the DAO has its own wallet, each friend simply has to send their investment amount to this wallet and the funds will be automatically pooled. Each friend gets as much say of what to do with the money as the amount they put in. For example, if the total pooled amount is $100 000, and Mr. Fox invested $25 000, he would get 25% say in all voting matters.
But, the beauty of a DAO is in its name - it is decentralized. This means there is no one person who controls the DAO (oftentimes DAOs will restrict investors to a certain percentage of less than 50% (usually even less than this) so that no one person has total control). The team doesn’t simply vote on how they deploy their money, they also vote on the rules of the DAO. They can vote on whether or not they will accept new members, what type of investments they will focus on, the name of the DAO, anything.
Why is this revolutionary?
DAOs automate and speed up the often long and drawn-out processes of big and/or important organizations. In what before would require emails, meetings, personality clashes, hurt feelings, and hierarchies, is now as simple as basic voting procedures. Want something added or changed? Propose it in the DAO and it will be voted on.
This is a very surface-level explanation of what a DAO is and what it can do. A DAO is not limited to use as an investment vehicle. In fact, it can be used as the structure for a startup, a political party, and even a non-profit. I encourage you to continue research into DAOs, and I look forward to discussing them more with you in the future.
Ok, Mr. Fox, I understand what a DAO is (somewhat) but what does it have to do with PartyBid? What is PartyBid?
PartyBid is a new application that allows people to bid on NFTs together. When someone auctions one of their NFTs, you can 'Start A Party’ and try to win the highest bid (or meet the reserve bid) with others. If your party successfully outbids everybody else, a DAO is immediately formed around the NFT and the group decides on what they will do with it. Again, the number of votes one has is directly proportional to the amount of money they invested.
PartyBid has already experienced wild success and user engagement. Its launch featured the creation of a party to purchase CryptoPunk #2066, a zombie, for just under $4 million dollars spread across 478 contributors.
Another example is Jack Butcher’s piece ‘HR 3684’, an NFT of a cellphone where all proceeds of the sale will be donated to Coin Centre in their aim to defend cryptocurrency from unfair regulation by the government. A party was started around to buy the NFT and won it for just under $20 000.
Not only has PartyBid created amazing infrastructure around the acquisition and management of NFTs, they’ve also made the process akin to how everything surrounding NFTs should be - really fun. Their user interface is attractive and their Twitter is account has its finger on the pulse of the tastes of the Web3 community.
But what is the greater point here?
NFTs are becoming easier and more fun to acquire. Fractionalization was made possible by fractional.art, but PartyBid has progressed the NFT game one step further by allowing for the management of a fractionalized NFT on top of that.
Everytime the barriers to entry to NFTs come down, everybody’s NFTs become a lot more valuable.
Another consideration must be that PartyBid has now given the opportunity for individuals with little ETH to not only gain exposure to expensive NFTs, but build relationships with all of the others in their party. Today I hopped into the PartyBid Discord server to check out if there were any active parties and saw a channel for a Hookah CryptoPunk that contained major crypto players such as Jack Butcher, Alex Masmej, Packy McCormick, and many others. As is the nature of DAOs that is the destruction of hierarchies, PartyBid is bringing down the borders between investors like you and I and those I outlined above. Imagine being able to invest and manage your investment with the founding members of Web2 - Dorsey, Zuck, Brin, etc. That is the opportunity we have right now.
Just think. People are in love with NFTs because they’re fun, artistic, allow for the composition of identity, and bring you into communities. PartyBid just increased the number of participants in this market exponentially by allowing friends to buy NFTs together and no longer forcing one individual to play the game on their own.
Group bidding on NFTs allows real-world communities and groups to join digital ones. The perfect bridge.
This is why NFTs will onboard the world. The only reason people ever traded stocks was because it was the closest they could get to sports cards and sneakers. Now we can trade sports cards and sneakers for a living, their names have just changed to CryptoPunks and Bored Apes. Add the ability to buy fractions of these things and you open the door for millions to get involved. Allow them to buy fractions with their friends and billions will follow.
Oh, and by the way, the creators of PartyBid work for an organization known as …
PartyDAO.
And down the Rabbit Hole we continue.
Mr. Fox.
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