Solving problems of NFT marketplaces + connecting NFT to DeFi and DAO
We are pleased to introduce a text version of the Picipo founder & CEO, Sergei Rusak, interview with Eugene Romanenko aka Cryptoemcee.
Eugene: How did you get into the crypto realm and started to deal with NFTs?
Sergei: I personaly have more than 10 years of experience in IT and mostly I have been involved in the implementation of complex infrastructure projects. When creating such projects, an important issue is to exclude fraud on the part of participants and blockchain technology can greatly help in this way. As early as 3 years ago, I began to actively explore ways to use this technology in my projects, but did not receive a positive response from institutional stakeholders. Therefore, I continued to use the classic stack of development until the end of 2020, when NFTs started to gain popularity. It became clear to me that NFTs will change the world and become an additional incentive for mass adoption of the blockchain technology.
Eugene: How do you explain what is NFT for non-crypto people?
Sergei: NFT is currently a very broad concept that can be applied to absolutely everything: physical objects as well as intangible assets. The most important issue here is that any NFT is unique and cannot be replaced. So, it’s not interchangeable for other items because it has unique features.
In order to understand the difference between fungible and non-fungible I will give the following example.
Let’s say, you’ve lent one hundred dollars to your friend. A certain time passes and your friend returns you one hundred dollars back. And here are two options arise: if he returns you the same banknote with the same serial number that he has received from you, then this is a non-fungible asset. If he returns you back another banknote, then this is a fungible asset.
The value of two different one-hundred-dollar banknotes is the same, but let’s imagine that one of them is signed by a famous person, then its value increases significantly.
The same thing happens with NFTs, they do exist in a single instance and cannot be replaced.
Eugene: How do you see the potential of NFT technology to change the world?
Sergei: NFTs create opportunities for new business models that didn’t exist before.
The potential of NFTs goes much further simple digital art because they completely change the rules of ownership. Transactions in which ownership of something changes hands have usually depended on layers of middlemen to establish trust in the transaction, exchange contracts and ensure that money changes hands.
None of this will be necessary in future. Transactions recorded on blockchains are reliable because the information cannot be changed. Smart contracts can be used to automatically ensure that money and assets change hands and both parties honour their agreements. NFTs convert assets into tokens so that they can move around within this system.
This has the potential to completely transform markets like property, vehicles, and much more. Also, if more of our lives are spent in virtual worlds in future, the things that we buy there will probably be bought and sold as NFTs too.
There will be many other developments in this decentralized economy that have yet to be imagined. What I can say is that it will be a much more transparent and direct type of market than what we are used to.
Eugene: What are the main pains of the current NFT market participants you have discovered during the Picipo custdev?
Sergei: Before the Picipo team started the software development, we’ve conducted a customer development and communicated with more than 300 artists in one month and a half. They described their pains and problems and it became clear that my team that we can solve them.
For now, we can distinguish the following main issues: high commissions, long moderation, low quality of artworks, difficulties with converting fiat money into cryptocurrency, lack of tools for promotion and communication, lack of working DeFi tools and mechanics.
So, now we clearly understand, that our mission is, firstly, to create a platform that is convenient, simple and exciting to use, and then proceed towards solving the liquidity problem of the NFT secondary market.
We can divide our mission into 3 elements: NFT mass adoption, community involvement & NFT finance.
Eugene: What is the role of existing marketplaces in creating this pains and problems?
Sergei: I cannot say that already existing platforms intended somehow to create problems and make life more difficult for their users. Most of the marketplaces, that have the largest number of users and sales volumes were developed and launched a long time ago. At that time everything was different.
We live in the most competitive environment, where everyone has the opportunity to take a good place on the market. Therefore, an open issue for the existing marketplaces is how quickly they can change and maintain their positions. Of course, it is difficult, very expensive and would take some time, but everything mentioned opens up new opportunities for new projects like Picipo, which is convenient, simple and exciting to use.
Eugene: Do you build Picipo as the “just another NFT marketplace” or you want to disrupt the current NFT marketplace ecosystem by adding features which no one existing marketplace has?
Sergei: Picipo is not an ordinary or another marketplace, it is a unified NFT management platform.
And I will highlight some of the features that differentiate Picipo from others:
1. Picipo will also operate on Polygon, which community is constantly growing, having 700k+ wallet addresses now with more than 7 million transactions per day.
2. Fiat gateway. For now there are many users who would like to buy an NFT, but cannot, since they do not know anything about cryptocurrencies and do not understand how to transfer fiat money into cryptocurrencies. For this reason, we will create onboardings and connect the fiat gateway.
3. Moderation — Picipo will have real moderators who will evaluate the quality of artworks, on the first stage it will be a centralized solution based on the opinion of creative advisors, then the moderation will be controlled by DAO.
4. On Picipo, there will be tools for collaborating with artists. It will be possible to sell a collection of NFTs of different authors in one lot and divide the funds between them in different proportions. Or it’ll be possible to sell one NFT but authored by several users and split the funds after the sell between them. The authors set distribution proportions in a user-friendly interface on Picipo.
5. Picipo will allow any author to establish a lifetime royalty for each subsequent sale of his NFT, even if the NFT is resold on other marketplaces.
6. Picipo will have social tools and mechanics to allow authors and collectors to communicate directly on the platform.
7. Special projects — anyone who wishes will have the opportunity to tell an interesting story about themselves and present their artwork or collection of artworks to the community on a separate page with personalized design.
8. Different tools to promote artworks, such as advertising areas, will be created on Picipo. It will be possible to promote the artworks for a certain period of time on Picipo.
9. On Picipo NFT + DeFi tools and mechanics will be implemented.
Eugene: How NFTs may be combined with DeFi?
Sergei: Nowadays, the use of NFTs in conjunction with DeFi tools is becoming more widespread. We will also use such mechanics on our platform: classic ERC-20 loan — collateral ERC-721 and fractionalization of NFTs.
Such approaches will allow everyone to earn extra money, and not just keep NFTs in your pocket.
So, it becomes possible to get a loan secured by NFT, as well as the opportunity to create a pool in which to place valuable NFTs, issue dERC-20 and to receive additional funds.
Now I’ve described the DeFi mechanics that will help the NFT segment to become more stable and predictable.
And vice versa, NFTs can be helpful for DeFi if we consider an NFT as a function, not just as an object. And I do believe that in the nearest future there will be more and more mechanics that will take this aspect as a basis.
Eugene: How NFTs may be combined with DAO?
Sergei: The future is definitely in multi-level DAO with different levels of access to decision-making, since the whole community cannot be equally competent in different issues.
I will give a simple example regarding DAO on our platform. In the future, we plan to use the opinion of the community for moderation, and in order to improve the quality of the artworks, it is necessary that decisions are made by experts in art, as well as those who are especially interested in the development of the platform as a whole.
For this, NFT can be used as a control token in a multi-level system, which gives the right to get access to certain types of voting. And in this case, the community will decide who will receive such a right and who will not.
Eugene: How do you see the world of NFTs in 3 years?
Sergei: The crypto community, through simple pictures that are tied to NFTs, has passed the first stage of adopting this technology. Software developers learned how to work with these smart contracts, understood more complex connections, are actively developing infrastructure, product engineers learned how to build new business models based on NFTs, and finally users just understood what an NFT is.
That’s why I would definitely say that there will be much more to come!
You can watch the full video here.
