The founder of an NFT-based business that was about to close down told me last week how it felt running a NFT platform. “fighting the market.” The market for expensive JPEGs is still recovering from its 2022 decline.
One group of investors, though, seems to be able to predict the future of NFTs. Drip Labs announced today that it had raised 8 million dollars in seed financing. Drip Labs is the company behind Solana’s creator platform DRiP. NFX led the round, with Coinbase Ventures in addition to Progression.
DRiP allows artists and musicians to list their works, sell them and receive tips in the form its currency in-app Droplets. DRiP utilizes Solana’s NFTs that were originally created for Instagram when it first ventured into digital collectibles. CNFTs cost less to produce and store than NFTs. A large part of DRiP’s ethos involves airdropping free or inexpensive collectibles by creators.
You can tip artists with as little as a few Droplets. These microtransactions are enabled by Solana’s cheap fees and presumably wouldn’t be feasible on pricier traditional payment rails — one of the commonly-cited reasons that Solana rails could make for a better internet experience.
Vibhu norby, DRiP’s CEO and founder, was asked in an email about the use of NFTs.
“We were never going to make it with $100,000 ape JPEGs,” Norby also wrote that an approach that is based on affordable collectibles will be more successful. You could get DRiPs for a few dollars, or even tens thousands. But you’d be limiting your market to the first.
Norby explained that the main source of DRiP’s income is a percentage taken from Droplet sales. Droplets can be bought in app for fiat. DRiP makes money by sponsoring campaigns for creators, and a royalties on collectibles released on the platform.
In an ideal world, DRiP’s model could separate the helpful traits of NFTs from the unsustainable ones — verifiable ownership, but less wild speculation on highly-priced profile pictures. Solana’s platform 3.land and Ethereum’s native Zora were built using a similar approach. Base’s Onchain Summer promo, recently concluded, was similar.
Also, DRiP is acquiring users without the promise of a future native token airdrop — a mechanism that has been perhaps the most successful user and deposits magnet this cycle, at least for the short term.
“The history of consumer apps launching tokens has been extremely poor so far,” Norby said. “I’ve seen so many crypto apps drink their own Kool-Aid thinking they found product-market fit when they were under attack by sophisticated sybil farms and arbitrageurs.”
Norby stated that DRiP was already facing 2.5 million sybil attack attempts in the past 18-month period. “Imagine an app that’s actually promised a token,” He has written.
DRiP intends to launch a mobile application using the new funding. A spokesperson said that the app is likely to begin launching in October. Norby, when asked what he thought the future would bring, said that he believes music will be the biggest growth area, as musicians have the highest potential. “economically challenged creative class” DRiP’s direct-to consumer model is also suitable for those who wish to use it.
“Check back with me in [three] years to see if I was right,” Norby said.
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