Sailing in Rough Seas
Dear Future Whales,
In today's note, I recognize the volatility in the markets and the concerns many in the Web3 space have. In light of this, and in an attempt to build more in the public view, I share our experiences of building in these markets over the last two years, the challenges we've faced, and the future state of what we're striving to build. Let's dive in.
My note touches on:
Innovative Fractional Ownership
Market Adaptation
The Future Vision
Navigating the Shifting Sands of Web3 Collectibles
In a world of extreme volatility, where tremors of uncertainty ripple through global markets, it’s crucial for builders in the Web3 space to adopt a long-term vision. This is especially true given the recent tumultuous landscape affecting not only the crypto world but broader financial markets as well.
Source: https://x.com/MattBartlettVE/status/1820457234595303801 With the worry expressed on social media outlets like x.com, I'll share insights into our journey with SegMint.io, the challenges we've faced, and how we've adapted to the ever-changing environment over the last 18 months. I hope this encourages those of you building now and the rest who are participating in the growth of Web3 in general.
A Challenging Beginning
At the request of my CEO in late 2022, I embarked on a journey to create something truly innovative for our firm during one of the most challenging times for the industry. Emerging from the NFT boom of 2021, the environment got truly ugly and started the downturn for our beloved JPEGs. With the market awash in hype and speculation, I sought to create a new Web3 business model centered on the concept of shared ownership.
My goal was to explore how participants could have trustless, shared ownership of high-value NFTs—a concept that promised to redefine the way digital assets are managed and traded.
This vision led to the creation of SegMint.io, a platform designed to solve the complexities surrounding fractional ownership of NFTs. We introduced a novel approach through a series of smart contracts that we dubbed the “Lock and Key” model. This protocol aimed to address the challenges faced by similar platforms and offer a more intuitive and secure way for users to fractionalize their NFTs.
The Lock and Key Model: Innovation Meets Practicality
Our "Lock and Key" model was built around two core components: the Vault and the Keys. The Vault allowed NFT owners to securely store their high-value NFTs while retaining control over their Web3 wallet by default. This self-custody solution enabled NFT owners to fractionalize their assets without sacrificing security or utility.
The Keys, on the other hand, were ERC-1155 tokens—semi-fungible clones of the vaulted assets. To access the full value of the Vault, a user needed to own all the Keys. This innovative approach allowed for the sharing of NFT ownership and experience without requiring liquidity. The Keys held the same visual representation of the vaulted assets, making it easier for users to engage with, flex, and benefit from the fractional ownership model.
source: SegMint.io Despite the innovation, we faced an uphill battle. The concept of fractionalization was still niche, and it took time for the Web3 community to fully grasp and embrace it. We still have a lot of work to do but are committed to our vision and continued to develop and refine our platform.
Navigating Market Shifts and Technical Challenges
Our journey took an unexpected turn right from the start, when SegMint.io launched in February of this year. The day after our launch, Ethereum gas fees surged due to migration activities, prompting us to pivot to Polygon. Within a month, we successfully deployed our platform on Polygon, but the market sentiment surrounding digital collectibles was shifting. The enthusiasm that had characterized the NFT boom was giving way to a more cautious outlook.
The State of the NFT Market
The NFT market has undergone significant consolidation, with a few projects continuing to thrive despite the overall downturn. Blue-chip collections like Apes and Punks, once considered safe havens, have lost some of their luster. The intrinsic value of these primarily art and gaming-based projects has come into question, leading to a reassessment of their long-term potential. In fact, even as I write this blog, there are posts on x.com asking if anyone is still buying art. Given the chance for a global meltdown, my guess is not right at this moment.
Source: nftgo.io/macro/market-overview In contrast, Real World Assets (RWAs), particularly tokenized collectibles, have emerged as a beacon of stability. Items like tokenized rare wines, hard-to-find watch models, and trading memorabilia offer tangible value that resonates with both traditional and Web3 collectors. These collectibles are less prone to sudden fluctuations.
Adapting to New Realities: SegMint's Refocused Vision
In light of these market shifts, SegMint.io has pivoted its focus towards offering the world’s best tokenized collectibles. It’s a lofty goal, but my hope is that SegMint can become the Web3 equivalent of eBay, with a curated selection of highly sought-after collections.
Source: SegMint.io
I see a future where our platform provides a place where collectors can trade and engage with the finest tokenized assets, leveraging our fractionalization model to enhance accessibility and liquidity.
Where We’re Going
I’m committed to continuing to build and find the right partners that allow collectors of all types to gain access to the most unique items. Just this week, Dvin Labs brought over a 12-pack of Egon Muller wine, arguably among the best Rieslings in the world. Through SegMint, collectors have the chance to potentially or wholly own this 12-pack, which at the moment is the only one offered on any global marketplace. So, when I say the best and most unique items, I mean it.
x.com Going forward, we will continue to work with platforms tokenizing various collectibles with the idea of bringing them into the light for a global audience, while at the same time adapting with the times and skating to where the puck is headed.
In Conclusion
Our journey with SegMint.io has been marked by innovation, adaptation, and resilience. As we continue to navigate the evolving landscape of Web3, we remain committed to our vision of redefining fractional ownership and offering exceptional tokenized collectibles. Stay tuned for more updates and developments as we push forward into the future.
Authored by Matt Bartlett, CAIA. Follow Matt on x.com @MattBartlettVE
NOT INVESTMENT ADVICE
IMPORTANT INFORMATION
This is a marketing communication.
This content is intended for educational purposes only. Please note that the availability of the products mentioned may vary by country.
This communication is issued by SegMint GmbH, Kreuznacher Strasse 30, 60486 Frankfurt am Main, Germany.
The information herein may change at any time and from time to time. Non-SegMint proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the digital assets, tokens, NFTs and SegMint keys mentioned herein.
With regard to the delivery, minting and/or receipt of non-fungible tokens (“NFTs”), fragments of NFTs (“SegMint Keys”) or any other tokens to/by/from SegMint (all together “digital assets”), you represent, acknowledge, accept and agree to the Terms and Conditions of SegMint.
The above content is for informational purposes only, you should not construe any such information or other material as legal or other advice. Nothing contained in this email constitutes a solicitation, recommendation, endorsement, or offer by SegMint or any third-party service provider to buy, sell, mint or otherwise dispose of any digital assets in Germany or in any other jurisdiction in which such solicitation or offer would be unlawful under the applicable laws of such jurisdiction.
Risk Factors associated with the use of SegMint
There are specific risk associated with the use of SegMint. The services of SegMint and the associated digital assets involve special risks, including technology, political, economic and currency risks and differences in accounting methods.
All content in this note is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the email constitutes professional advice, nor does any information in the note constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. The author is not a fiduciary by virtue of any person’s use of or access to the site or content. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on the site before making any decisions based on such information or other content. In exchange for having access to this newsletter, you agree not to hold the author, its affiliates or any third-party service provider liable for any possible claim for damages arising from any decision you make based on information or other content made available to you through the email.
You could potentially lose all your Digital Assets in your SegMint account.
Risk associated with Digital Assets:
Use of SegMint including acquisition of digital assets involve a high degree of risk. These risks include, but are not limited to: the technology is new and many of its uses may be untested; intense competition; slow adoption rates and the potential for product obsolescence; volatility of the value of digital assets, including but not limited to, inability to sell a digital asset; loss or destruction of key(s) to access accounts or the blockchain; reliance on digital wallets; reliance on unregulated markets and exchanges; reliance on the internet; cybersecurity risks; and the lack of regulation and the potential for new laws and regulation that may be difficult to predict. Moreover, the extent to which Web3 companies or digital assets utilize blockchain technology may vary, and it is possible that even widespread adoption of blockchain technology may not result in a material increase in the value of such companies or digital assets.
The monetary value of digital asset changes very quickly and frequently and Web3 companies, can rise or fall dramatically and quickly. If their value goes down, there’s no guarantee that it will rise again. As a result, there is a significant risk of loss if you acquire digital assets.
Digital assets are not guaranteed, generally backed or supported by any government or central bank and are not covered by FDIC or SIPC insurance. Accounts at digital asset custodians and exchanges are not protected by any consumer protection or investment schemes and are not insured. Furthermore, markets and exchanges for digital assets are not regulated or not regulated with the same controls or customer protections available in the financial industry.
Digital assets include, but are not limited to, cryptocurrencies, tokens, NFTs, assets stored or created using blockchain technology, and other Web3 products.
Web3 Companies include but are not limited to, companies that involve the development, innovation, and/or utilization of blockchain, digital assets, or crypto technologies.
THIRD PARTY LINKED SITES
As a convenience to you, SegMint may provide hyperlinks to web sites operated by third parties. Because SegMint has no control over such sites or their content, SegMint is not responsible for the availability of such external sites or their content, and SegMint does not adopt, endorse or nor is responsible or liable for any such sites or content, including advertising, products or other materials, on or available through such sites or resources. Other web sites may provide links to the Site or content with or without our authorization. SegMint does not endorse such sites and shall not be responsible or liable for any links from those sites to the Site or content, or for any content, advertising, products or other materials available on or through such other sites, or any loss or damages incurred in connection therewith. SegMint may, in its sole discretion, block links to the Site and content without prior notice.
YOUR USE OF THIRD-PARTY WEB SITES AND CONTENT, INCLUDING WITHOUT LIMITATION, YOUR USE OF ANY INFORMATION, DATA, ADVERTISING, PRODUCTS, OR OTHER MATERIALS ON OR AVAILABLE THROUGH SUCH WEB SITES, IS AT YOUR OWN RISK AND IS SUBJECT TO THEIR TERMS OF USE.
No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of SegMint.
SegMint GmbH, Kreuznacher Strasse 30, 60486 Frankfurt am Main, Germany.