Upshot, a blockchain-based protocol that offers incentives to experts to give their honest opinion, raised $7.5 million Thursday to help answer a foundational question of non-fungible token (NFT) mania: Is a Beeple artwork really worth $69 million?
NFTs are worth as much as their buyers will pay, but most digital collectibles can’t conduct price discovery the way Beeple's "5,000 Days" did on Christie’s auction block, said Jake Brukhman, CEO of blockchain venture firm CoinFund. That’s why he’s co-leading the bet on Upshot.
The Series A round of funding was backed by Framework Ventures, CoinFund and Blockchain Capital. It will be used for a new product called UpshotOne that solidifies Upshot’s transition to NFTs. The protocol launched in 2019 as an insurance-focused prediction market but saw more opportunity in pricing collectibles.
“There is this incredibly impactful space for peer prediction,” Brukhman said of the NFT market.
Upshot will aggregate real-time NFT appraisals by asking its decentralized user base to compare collectibles. It incentivizes honest answers: Proven “experts” get more weight to their opinions; dishonest participants get less.
“The more people that participate, the more accurate it becomes,” Brukhman said.
Over time UpshotOne could generate revenue by pairing its consensus-driven price predictions with on-chain data for a marketable application programming interface. There’s also the crypto angle: Upshot has a native incentives token atop its blockchain.
Slow Ventures partner Jill Carlson, who also invested in this round of funding, said Upshot’s peer prediction and incentivization model can also have other uses, although she said she's confident that Upshot's new product will outlive the current hype about NFTs.
“It's always exciting to me when you see a fundamentally new primitive come along that not only serves a really important function within whatever is being hyped at the moment,” she said.
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