“The biggest market opportunity that has ever existed”: Why crypto unicorn Immutable is going all in on NFTs

Immutable founders

Immutable co-founders James and Robbie Ferguson. Source: supplied.

Aussie gaming and NFT trading startup Immutable may be Australia’s first crypto unicorn, but founder and chief executive Robbie Ferguson says it is merely an early mover in NFTs — tech that presents “the biggest market opportunity that has ever existed … in the history of the world”.

Earlier this month, Immutable closed a whopping $280 million Series C round, bringing its valuation to $3.5 billion.

The raise came hot off the heels of Immutable’s partnership with GameStop, to fuel the iconic brick-and-mortar store’s NFT marketplace, and just six months after an $82 million raise in September last year.

Last year, Immutable made over $30 million in revenue from its games vertical alone, Ferguson tells SmartCompany.

But most of the startup’s growth over the past year or two has been driven by its Immutable X trading platform.

It’s this infrastructure product — and others like it — that are really where the opportunity in NFTs lie, Ferguson explains.

Immutable may have hit unicorn status, but it’s still “small compared to where we want to go”, he says.

“And it’s small compared to the size of the market opportunity.”

NFTs not a passing fad

According to Ferguson, the NFT sector could soon be worth trillions.

While many may associate NFTs with collectible digital artworks, gaming and Twitter profile pics, the use cases of the technology go much further, he says.

“It’s the trading of all forms of unique value across the world.”

Art sales make up a “tiny fraction” of the potential size of the market. We’re seeing use cases emerging for brands licensing work from artists, for example, and in the music royalties space.

Even so, digital art has drawn attention to NFTs over the past couple of years. Over the next couple, Ferguson predicts we’re going to see a massive spike in usage.

Sales volumes for NFTs totalled less than US$100 million ($133.4 million) in 2020, he notes. In 2021, volumes totalled just under $25 billion ($33.4 billion).

And this is just the beginning.

“In the gaming vertical alone, gamers spend $100 billion on items every single year that they don’t have any rights to and that they can’t trade,” Ferguson explains.

“If you make a market like that tradeable, you get multiples of that in secondary marketplace volume. So we’re talking hundreds of billions.”

On top of that, NFTs create potential for secondary financial instruments to manage these new assets. Within gaming, we could see options, derivatives and collateralisation.

Other sectors are ripe for disruption, too. Ferguson points to the term deposit market in finance, which sees chunks of cash locked into bank accounts for a certain amount of time, at a fixed rate of interest.

Today, they account for the largest outstanding global liability, he says, “and none of it is tradeable”.

“If you can make them NFTs, you’ve suddenly created an efficient market for global interest, and created economic empowerment for hundreds of thousands of businesses and consumers around the world,” he adds.

“This is what matters. This is why this is the biggest market opportunity that has ever existed, pretty much in the history of the world.”

“The fight of the century”

Ferguson is heading up a startup at the forefront of this revolution, and he does not take his responsibilities lightly.

The dawn of Web3 represents “the first time that the fundamental incentive mechanics of business is pro-consumer”, he says.

Companies can allow users to own their own assets, whether that’s their data, tweets or financial information, he explains. In doing so they can truly align their incentives with those of their consumers.

But “this is the fight of the century”, Ferguson says.

The internet didn’t just end up being open by default, he explains. There was a battle between private companies who wanted to control the whole global networks and those fighting to make it open to all.

When email was first invented, there were those who wanted to attach a fee to every message, he adds.

“These points in history are incredibly important to get right,” he says.

“The decisions we make today around the digital infrastructure of owning and trading digital assets in the future are the most important infrastructure decisions we will ever make.”

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