Logan Paul’s new website will take collectibles, lock them in a ‘chest’ and then sell tokens
Netizen Logan Paul, who just wore a $6 million Pokemon card to Wrestlemania — a phrase I’m in shock I had to type — also opened a site this week called Liquid Marketplace, which claims to sell physical collectibles, but in reality it looks like a disaster waiting to happen on every level imaginable.
Teaming up with Ryan Bahadori and Amin Nikdel, and having raised $8 million to open, the site says:
We want to make high value collectibles accessible to anyone interested in building their collection. Create a level playing field where those who truly appreciate these unique items can own something legendary.
Ah yes, egalitarian rallying cry of the technocrats, cool. The idea behind the site is that it will take collectibles, split them into tokens, and then sell a limited number of those tokens. Once the tokens are all purchased directly from the site, they can then be bought and sold on a secondary market.
They do this with digital collectibles, like NFTs, but more interestingly – and much more precariously – they also do this with real, tangible collectibles, which must be shipped to their vault – whose name and /or location are not disclosed. –and locked up, after which the property will be theoretically transfer to holders of site tokens.
NFTs are dumb and worthless, but they’re also relatively easy to manage on a conceptual basis because they only exist in digital space. Trying to split a real thing into digital chunks and somehow come to a consensus on who owns it is a near disaster. The site has rules for this, of course, but they’re full of loopholes for exploitation and/or peril, like The block report:
Another tricky issue regarding the tokenization of assets – whether physical or digital – concerns what happens at the end of the process. Once an object has been split into thousands or millions of pieces and those tokens are owned by thousands of people, how do you put it back together to regain ownership?
In this case, there is a redemption system. If a person manages to acquire a certain redemption percentage (not stated in the terms and conditions of the platform), then they are able to trigger a redemption vote. If 80% of token holders vote in favor of a buyout at a given price within 72 hours, then that person is able to buyout everyone. In this case, they can then claim the item and have it physically delivered.
There’s only one way for this to end, and that’s:
As we just saw yesterday with the licensed F1 game, this NFT/crypto/blockchain stuff still looks so utopian on paper. And every time the rubber meets the road in a real-life scenario, it completely crumbles. In this case, what if the actual collectibles in the vault are damaged (Note: I contacted the site for more information on this)? Or stolen? Or the site goes bankrupt and the physical items are lost while people still have their digital tokens? Or are users getting their tokens hacked?
It’s so…complicated and unnecessary. A solution in search of a problem, the same way all other blockchain “innovations” always have been.