Rumble Kongs and the New Rules of NFT Venture Capital

By Gold Mamba

Having been blessed to work at multiple tech companies in my career, I’ve had a front row seat to the tactics of venture capital firms, the allure of stock options, and the toll that venture backing can take on a fledgling organization. With all this research into NFTs that I’ve been doing recently, I can’t help but notice parallels between equity investing and NFT projects. And I have to say, the NFT economic model offers some real advantages for all parties involved.

• Efficiency of investment — the Ethereum blockchain provides the financial system and currency infrastructure without involving slow moving elitist traditional finance
• Governance and voting — token holders of a project have a meaningful voice in what happens with the project and can actually vote on initiatives from the bottom up
• Transparency — while not all wallets are identifiable to a specific person, it’s always transparent what is being bought and for how much
• Shared incentives — When all token holders have an aligned interest in the success of the project long term, cooperation and value emerge organically from within

The Rumble Kong League project’s growth over the last few days has been incredible to watch. At times the discord chat is so busy, you’ll get lost if you look away from it. I also like to see in discord that there are always new people asking questions about the project and they’re getting warm welcomes and help from an enthusiastic community.

While new retail participants continue to flow in, significant investments have been getting made too. As reported on Twitter by Diego Lara, The Sandbox (a leader in Metaverse development), dropped 33.66 ETH (~$134,000). What a bullish sign of belief in this project!

Personally I think that projects like RKL will continue to benefit from the fact that investments can come from many types of contributors simultaneously:

• Metaverse Partners — like the Sandbox or other similar projects
• NFT Collector Whales — looking for medium to long term growth of token value
• Celebrities — wanting to be part of the club and budget is no issue
• Corporate Brands — who already advertise and partner with similar projects IRL

In the traditional business world it would take many months for interested parties to work out a stake in a business they believe in. In the web3 metaverse it can be transacted in less than a day. No corporate attorneys needed! (no offense to the corporate lawyers out there)

Now you might be quick to point out that a fungible cryptocurrency can already sell its tokens to investors and whales and that’s true but there are some important differences with the NFT based investment model, namely:

• Commitment to the community through involvement in the project
• Tangibility of the investment in the form of the NFTs themselves
• Brand intellectual property rights (meaning that NFTs can be used as IP for the brand)

In her appearance on the Modern Finance podcast, crypto investment expert, Amy Wu explained how bullish she was on the NFT gaming innovations happening right now in the market. Here’s two of her quotes which really stood out to me:

“The play to earn shift is an absolute paradigm shift right now… I think Axie Infinity is the tip of the iceberg.”

Amy is a savvy investor representing major money bags that know what they are talking about in the web3 and gaming markets. They are doing advanced research and talking to the major web2 companies worth billions. That’s why we should all be paying attention when she says something like this in the podcast:

“A gaming native team is going to come out with a really fun game in the open world space and it’s going to be crypto native. It’s going to have a token, NFT trading, and it’s going to feel really organic and it’s going to attract all of the communities that want to come in and play the game but also are really interested in trading the items.”

When you listen to what Amy is saying and then you read the Rumble Kongs white paper, it’s not hard to see why the RKL investment activity is picking up quickly in the past week!

In the B2B tech world, everyone is focused on their valuation and raising the next round of capital. I wondered to myself about calculating valuation for an NFT project. Now I’m sure there are other ways to approach this and I’m just an average guy who took some business classes in college but the formula I’m currently using is:

Avg Price (past 24hr ETH) x Pieces in Collection x ETH/USD Rate = Valuation in USD

Applying this formula to Rumble Kong League as of the time of this article we get:

2.6 x 10,000 x $4,000 = $104,000,000

$104 million might sound like a lot of money but it’s nothing compared to some of the largest projects out there. Let’s remember Axie Infinity is the canary in the coal mine and the market cap of its currency is currently $4.6 billion. With a B. And that doesn’t even account for all of the NFTs in the Axie ecosystem which have been so abundant that Axie created its own Ronin sidechain just to scale all of the trading volume.

While no one knows for sure what will happen, there is certainly precedent to envision the RKL growing to a billion dollar valuation. In my formula above that would mean an average NFT price of 26 ETH.

Just as web2 gave rise first to social media platforms and then eventually to ground breaking mobile platforms for commerce such as AirBnB and Uber, the top NFT games will make themselves into platform-based businesses where they play the role of orchestrator in the exchange of value between multiple parties:

• Token collectors
• Gamers
• Club owners
• Investors
• Corporate partners

A successful platform will generate massive amounts of cash flow from the transactions conducted daily in its ecosystem and it will be incentivized to grow the value proposition for the ecosystem’s community and the community will be incentivized to participate and grow it from the bottom up.

As an example of the power of this model, let’s imagine that a leading sneaker brand such as Reebok decides that it wants to partner with the RKL. Moving at the speed of light compared to traditional business partnerships, in a matter of a few weeks it could:

• Purchase rare NFTs in the game with the IP rights to use them in advertising
• Buy currency tokens in the platform in game to spend on advertising placements in the game platform as well as running giveaways and contests
• Create its own unique NFT collection for the platform and airdrop it to token holders

The possibilities here are only limited by our imaginations. Right now, somewhere within these major B2C brands, there are social media managers and advertising brand managers working on calculating the ROI on metaverse investments of this nature. I have no doubt that the ROIs in this space will far outpace that of web2 and corporate investments will grow exponentially.

The venture capital model is being reborn right before our eyes and it’s far more decentralized and more fair for the average person to actively participate in. In the US, the wealth gap can often be drawn as a line between those who own equity investments and those who don’t. In NFTs, the community becomes the shareholders and anyone with a smartphone can become a part of it. It’s a true win/win. I’m excited to see where this goes.

In addition to Steph Curry, JaRule, and Kristopher London, today we welcomed NBA Players Javale McGee and Josh Hart to the RKL jungle club. The rumblings are getting louder my friends!

Whether you agree or disagree, I’d love to hear your thoughts! Gold Mamba is on Twitter @stevenshill21

Disclaimers: NOT investment advice. Do your own research. Make your own decisions. Gold Mamba is a holder of Rumble Kong League NFTs.