Non-Fungible Tokens: Indians get a taste of NFTs as Bachchan, Salman Khan test waters

The mar­ket for NFTs, or non-fun­gi­ble tokens (NFT) – a type of cryp­to asset in which each token is entire­ly unique – is pick­ing up in India with sev­er­al celebri­ties such as Amitabh Bachchan, Kamal Haasan and Salman Khan jump­ing on to the bandwagon.

While their entry has gen­er­at­ed a lot of buzz, lead­ing to grow­ing aware­ness and “maistreami­sa­tion” of this emerg­ing indus­try, sev­er­al founders of Indi­an NFT projects and sec­tor experts that ET spoke with said some of these NFT assets are oppor­tunis­tic and lack key fea­tures such as unique­ness, rar­i­ty, and long-term credibility. 

Now, NFT is a unique dig­i­tal token that can be used as a dig­i­tal cer­tifi­cate of authen­tic­i­ty for any asset, dig­i­tal or phys­i­cal, be it art, music or a tweet. NFTs are bought and sold online, like cryp­tocur­ren­cies. While cryp­tos are fun­gi­ble, or replaceable,
NFTs are one of a kind.

A big leap for NFTs came about ear­li­er this year when a set of art pieces by dig­i­tal artist Beeple was sold for $69.3 mil­lion in a Christie’s auction.

In India, over the past few months, Bachchan dropped his first NFT col­lec­tion, Salman Khan announced a part­ner­ship with NFT mar­ket­place Bol­ly­coin, for­mer India crick­eter Parthiv Patel’s Crick­et Foun­da­tion launched its NFT mar­ket­place for crick­et, and sev­er­al oth­er actors and Bol­ly­wood musi­cians have signed up with NFT mar­ket­places such as Colexion. 

While some mar­ket­places are sourc­ing own­er­ship rights from pro­duc­tion hous­es, oth­ers are devel­op­ing new con­tent and mint­ing it as an NFT.

“There are a lot of play­ers who have come into this space for quick land grab,” said Anshum Bham­bri, cofounder of Faze Tech­nolo­gies, which has signed a part­ner­ship with the Inter­na­tion­al Crick­et Coun­cil (ICC) to cre­ate exclu­sive dig­i­tal col­lectibles (using NFTs) for crick­et. “They are sign­ing up cer­tain peo­ple, doing a few drops and mak­ing a few quick mil­lion dol­lars,” he said.

Faze Tech­nolo­gies recent­ly raised $17.4 mil­lion, or about Rs 130 crore, in a seed-fund­ing round led by Tiger Glob­al with par­tic­i­pa­tion from Coat­ue and Sequoia Cap­i­tal India. Dap­per Labs, Sam­sung Next and Court­side Ven­tures also par­tic­i­pat­ed in the round. 

Vishakha Singh, vice-pres­i­dent and cofounder of WazirX NFT Mar­ket­place, said, “I think from the enter­tain­ment indus­try’s per­spec­tive, it’s large­ly being seen through the PR lens. But it’s great as it cre­ates aware­ness, and helps us get mainstream.” 

Singh is a for­mer actor and a film producer. 

In India, retail par­tic­i­pa­tion has been min­i­mal so far, which indus­try stake­hold­ers attribute to lack of qual­i­ty NFTs and clar­i­ty around future val­ue of such dig­i­tal items. 

“If diehard fans want to sig­nal they own a cer­tain unique token rep­re­sent­ing a moment or expe­ri­ence, that’s total­ly fine,” said Nitin Shar­ma, part­ner at ven­ture cap­i­tal firm Antler India Fund. “But many retail investors may be buy­ing these only for spec­u­la­tion. They may also not under­stand what exact­ly they are buy­ing into.” 

He said these dig­i­tal assets could be sub­ject to secu­ri­ties laws to some degree. 

Law experts said NFTs could fall under mul­ti­ple laws and present­ly have no sin­gle law apply­ing to it. 

“When seen as a deriv­a­tive of val­ue of an asset like a piece of art that under­lies a NFT, it is impor­tant to note that at present only deriv­a­tive of finan­cial assets are open for trad­ing and that too at recog­nised stock exchanges under a spe­cif­ic Sebi regime and stock exchange rules,” said Sunil Jain, part­ner at Anant­Law. “NFT deal­ing with a non-finan­cial asset like a piece of art are thus not part of any reg­u­la­to­ry or pol­i­cy prescription.” 

Anoth­er rea­son for lack of enthu­si­asm, as per stake­hold­ers, has been the qual­i­ty of NFTs in the mar­ket that has result­ed in tepid sales. 

Nascent mar­ket:

Bachchan’s NFT col­lec­tion was sold for about Rs 7.18 crore in an auc­tion host­ed by BeyondLife.club. The plat­for­m’s founder Keyur Patel told ET that the com­pa­ny is tar­get­ing a glob­al audi­ence for its NFTs. 

Sim­i­lar­ly, sev­er­al NFT mar­ket­places that have come up in recent months are bank­ing on the inter­na­tion­al audi­ence and Indi­an dias­po­ra to take them to the bank, as the indus­try is still in a very ear­ly stage of adop­tion with­in the coun­try, accord­ing to data shared by a few NFT mar­ket­places with ET. 

Kalamint, an NFT mar­ket­place found­ed by an Indi­an, fea­tured in the top 20 mar­ket­places glob­al­ly by Dap­pRadar that tracks sales across mul­ti­ple blockchains. It sold NFTs worth $2.7 mil­lion between April and Octo­ber. Accord­ing to Kalam­int’s founder Sandeep San­gli, demand from Indi­an buy­ers has been slow. 

Cryp­to exchange WazirX’s NFT mar­ket­place said it has sold NFTs worth $400,000 between July and October. 

In com­par­i­son, world’s most pop­u­lar NFT mar­ket­place OpenSea clocked $1.88 bil­lion in NFT vol­umes in the last 30 days, as per DappRadar’s website. 

Oper­a­tors of promi­nent Indi­an NFT mar­ket­places attribute the mod­er­ate growth in sale to socio-eco­nom­ic trends as well as lack of cul­tur­al incli­na­tion to invest in art. “Con­sumer behav­iour is some­thing that we realised ear­ly on, which is why we start­ed posi­tion­ing our­selves as a glob­al mar­ket­place,” said San­gli of Kalamint. 

He, how­ev­er, said there has been a pick up from Indi­an buy­ers in the last two months.