Investor says NFTs are being ‘suffocated in the Ethereum bubble’

Jillian Godsil meets Alex Mitrovich , CEO of…

Alex Mitrovich is both an investor and an entrepreneur, but the latter definitely comes first.

“More specifically I am an entrepreneur in the tech space and have been so for the past 20 years,” he says.

” I understand tech without being a developer. I understand the opportunities.”

This is clearly reflected in his previous enterprise, Luxoft, which he built with his partner over ten years into a global operation and into one of the Fortune Top 500 companies. Next up UseTech, formed in 2017 with co-founder and CTO, Gregory Zaitsev, which has been busy building blockchain projects ever since for its clients.

The blockchain penny dropped for Mitrovich around 2016. A good friend of his and successful tech entrepreneu, Zoe Adamovitz was posting blockchain stories on Facebook. It made him do some digging and very soon he understood that blockchain had the potential to be mainstream. He looked at the different chains, offering faster, cheaper, better solutions. He worked on different projects, upskilling his team and figuring out which chain was going to pop. He admired Ethereum but recognised its main asset is the network effect of the community.

“It’s hard to stand out in a crowded market.”

Accordingly, when Mitrovich decided to step directly into the NFT space he already had his seasoned team of developers headed up by Zaitsev on board. And as a startup in PolkaDot, he came armed to the teeth.

Mind you, he admits the deeply technical nature of PolkaDot hurts his head.

“But I could see the power of the emerging community, the beauty of the Web 3 Foundation and the endless flexibility of Substate as a building block.

“It also harnesses the benefits of other chains in its unique parachain approach. I don’t believe in being a pioneer who wants their own particular blockchain to dominate the world. I believe in a philosophy of collaboration in a decentralised world where everyone can thrive.”

Suffocated in the Ethereum bubble

For Mitrovich, opportunity is also about solving a problem, seeking a challenge. His focus is NFTs but sees the fact that this technology is being suffocated in the Ethereum bubble where DeFi is the dominant player, and the gas fees are just crippling.

“I also don’t want to work on a blockchain which only has two software upgrades a year and which are not backwardly compatible. That makes no sense – it’s like old mainframe development. On PolkaDot there are seamless upgrades every week, sometimes several times a week.

“I want to work on a blockchain that keeps improving every day.”

PolkaDot offers the flexible infrastructure to handle NFTs well.

“Web 1.0 was good for fungible assets, data, emails etc. For social media like Facebook you needed Web 2.0. And for NFTs you need Web 3.0 and a powerful, flexible blockchain which for me is PolkaDot.”

Mitrovich’s choice to work with PolkaDot has already proven successful.  From 2019 his company has been awarded no less than five Web 3 grants, won two Hackusama Awards, curated the first NFT collectible set on Substrate and Mitrovich is now on the Kusama NFT Strategy team.

As part of the first Hackathon they needed a project. Mitrovich was talking to the CryptoPunk founders and wanted to do an iteration of their punks on Kusana but the integration was not possible in 2019. Instead, his subsequent collection of 10,000 SubstraPunks is a homage to the originals.

“If you are doing static NFTs as collectables then you can use most of the blockchains. People collect a range of things – coins, stamps, books – so why not NFTs. It’s a great hobby and people are very passionate about their collections. But collections are a very small part of the role that NFTs can play.

“Unique digital assets can be moving objects, live objects, real estate, cars, so many things. We are only at the beginning of this journey.”

Minecraft breaks the rule

Gaming is also a big part of the picture and along with NFTs has the potential to drive mass adoption. Gaming and gamers are already online, however most gamers play in a freemium model, where they begin playing for free. 90% are mobile and 100% are freemium. If gamers really like the game, then might choose to buy stuff or invest in a subscription. In fact, Minecraft might be the only popular game to break this rule.

“The difficulty for gaming on the blockchain is that the user has to pay for transaction fees, even if they are small. So economically and psychologically this is a barrier. In fact, Dapper Labs and NBA Top Shots did a great job removing this barrier, but doing it seamlessly under the hood.

“Transaction fees play a role in securing the blockchain and eliminating bots and other unwanted behaviour, but there needs to be a way to remove them. Unless you are building on Ethereum or Bitcoin, no one is looking at transaction fees as a revenue stream. So, fees are only going to slow down any uptake or growth by acting like gatekeepers. It’s only when the games are truly popular that fees might kick in as a reward.”

Mitrovich believers game studio developers to be among the most highly talented economists around, building as they do complex games and games ecosystems.

Heading back to NFTs, Mitrovich sees two key attributes that the flexible PolkaDot ecosystem can offer. Flexible NFT ownership and true NFT interoperability.

On the first objective, Unique.Network is working with partner RMRK Association to look at ownership based on property, tackling the issues of ownership within say an apartment block with complex relationships between parties. They are also looking at property and ownership within a metaverse. It requires nested NFTs and refungible ownership.

Together Unique.Network and RMRK are developing a NFT universe through a collaboration with RMRK’s first NFT collection, Kanaria. The intrinsic design of this collection enables each NFT to grow and upgrade over time, the NFTs will first begin as eggs which hatch into unique and rare Kanaria birds, which evolve with the platforms around them. The Kanaria birds will offer additional benefits to holders including permanent platform benefits and entitle owners to a fair drop of $RMRK tokens.

On the topic of interoperability, Mitrovich explains that it is achieved through common standards and bridges or integration technologies.

“The beauty of PolkaDot is that it recognises multi chain is the future.”

In terms of roadmaps, next stages are determined by auction slots on both Kusama and PolkaDot. But it’s not a public sale as might be ordinarily considered.

“We want to decentralize ownership of Unique.Network tokens so we won’t release them until they have a utility – otherwise they will act like security tokens. I committed to delivering a working chain back in 2017.”

Mitrovich’s hands are tied somewhat in terms of timing as determined by the ecosystem but he is hopeful of movement in the next three to six months.

So, what keeps this entrepreneur motivated? In short, the wild west nature of crypto.

“Everything is new. The land is open and free. You just need to find your land and start building. And success for me is to find land that suits me and that I can quickly turn into something that produces food for everybody else.”

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