- William Quigley is a venture capitalist and co-founder of WAX, an NFT blockchain.
- Over the last year, WAX has secured major brand partnerships with the likes of AMC and Funko.
- He shares how WAX competes with crypto heavyweights and how he invests in the metaverse.
Non-fungible tokens captured the attention of a mainstream audience in 2021, so much so that “NFT” became Collins Dictionary’s word of the year.
But for William Quigley, it captured his attention four years prior when he was CEO of OpSkins.com, a marketplace for trading virtual video-game items. In 2018, he tried to move OpSkins onto the ethereum blockchain, but faced a number of challenges with speed and pricing.
To solve the problem, Quigley forked a version of the EOS blockchain and moved OpSkins to the new blockchain. This became an early version of Worldwide Asset Exchange (WAX), a blockchain built specifically for NFTs.
Quigley and his co-founder continued building out WAX throughout the crypto
that lasted through 2018 and 2019. By 2021, it was perfectly positioned to capture the trend of the year and started snapping up partnerships with major brands such as Atari, Funko and Hasbro.
WAX focuses on specialization and is a combination of Quigley’s experience as a venture capitalist that has interacted with leading consumer companies since the 1990s and his early adoption of cryptocurrency, where he co-founded Tether (USDT), the $78 billion market cap stablecoin, and was an early investor in ethereum.
He envisions a need for more specialized blockchains, similar to the need for more websites on the internet.
“Even a year and a half ago, I think the vast majority of people in blockchain were thinking there would be one, two, maybe 10 blockchains and that all the rest would die out,” Quigley said. “That just seemed preposterous to me.”
“It reminded me back in the day, when I started the first consumer internet venture capital fund and there were about 2,000 websites globally at the time and investors kept saying, `Why do we need more websites?'” he said.
Despite most of the market attention going to the more generalist blockchains, such as solana and ethereum, major brands continue to gravitate toward WAX for NFTs. In December, WAX tokenized the tickets for the most recent Spiderman release, which helped generate movie theater chain AMC’s second best one-day sales in its history.
Quigley shares three reasons he believes his blockchain has been able to successfully take on crypto heavyweights in securing these deals.
1) Delegated proof-of-stake mechanism
The delegated proof-of-stake consensus system that WAX uses enables around 15 to 20 million transactions per day, Quigley said. This would be just impossible to do on a more general purpose blockchain, he added.
The higher speed is made possible by a voting system that allows a few delegates to secure the network on their behalf. This type of transaction style appeals to larger brands that may have a bigger audience, or require more frequent transactions.
“Solana, I think, is a good general purpose blockchain,” Quigley said. “It has one advantage over ethereum, it’s cheap, but it’s still a general purpose blockchain and anytime you get a general purpose technology, it’s going to work okay for everybody and poorly at scale for everybody.”
The mechanism has some trade-offs, it could become more centralized if only a small number of users could act as witnesses, or if users with a small stake decided not to vote.
2) Brand stewardship and royalty accounting
Prior to becoming a venture capitalist, Quigley worked in Disney’s licensing group. During this time, he developed a strong understanding of brand stewardship and awareness of the challenges that brands face in licensing across various regions.
Many of these major brands want to know that there are procedures in place to collect and calculate the royalties they are owed, as well as being paid large minimum guarantees and having the creation of high-quality products, Quigley said.
Royalties accounting is built into WAX smart contracts.
“Some of these partnerships took more than two years,” Quigley said. “They were very slow. But in 2021, things accelerated a lot, as they realized there was an opportunity and they just had to start to move fast.”
3) Hybrid NFTs
WAX also created a new category of NFTs called vIRL. The vIRL technology allows the asset to be owned physically in the real world and traded digitally.
Companies like toy manufacturers Mattel and Funko were interested in what the vIRL technology could offer.
When Insider spoke to Quigley in early 2021, he explained how any consumer product that can’t be eaten is going to be turned into an NFT. He still expects e-commerce to remain one of the biggest trends for NFTs and is excited about how it can solve environmental challenges, particularly around gifting.
The global video gaming revenue base is around $200 billion a year and growing, without including the secondary market, Quigley said. Combining that with the ability to tokenize just 10% of the consumer products base creates a massive market opportunity.
Many investors are throwing lots of money into the metaverse, which in some ways is much more specialized than NFTs, Quigley said. However, he metaverse is also much further away in reach compared to many potential NFT use cases, he added.
“The metaverse is going to be a big deal,” Quigley said. “But in its current form, I would call it more of a dollhouse than I would a full ‘Ready Player One’.”
This is because individuals can only visually interact with the metaverse right now and the “real full blown economic activity” won’t exist for several more years, he added.