TikTok’s Venture into NFTs: The Hype and Alleged ‘Mess’
More than a week later and after a missed deadline, TikTok finally released its first NFT; the price skyrocketed almost 4X in one hour.
Source: tiktok.immutable.com
key takeaways
- TikTok’s first NFT collaboration with Lil Nas X and the artist Rudy Willingham was slated to drop on October 6, but has yet to go live
- A second NFT offering on Monday has been bid up to roughly $100,000 worth of ETH
There was a lot of early hype (and press) surrounding the first creator-led non-fungible token (NFT) collection on TikTok. But the multi-billion-dollar social media app took its first step into blockchain-based digital collectibles — and missed its first deadline.
The plan for the NFT platform, according to the company’s announcement on September 30, is ultimately to pair prominent TikTok creators with artists in the crypto space to make NFTs based on the creators’ culturally significant — i.e. viral — videos.
Big names featured on TikTok’s marketing materials include Lil Nas X, Bella Poarch and Gary Vaynerchuk. In addition to the one-of-one NFT of their viral videos, creators can also sell a set of collaborative editions at a set price.
“TikTok exposing its community of creators to NFTs is a positive boost to the entire ecosystem, and we encourage other centralized platforms to follow their lead,” Adam Jeffries, CEO of Metaplex Studios, told Blockworks in early October.
The one-of-one NFTs will be distributed on Ethereum and the limited editions NFTs will be powered by Immutable X, the first NFT-focused layer-2 on Ethereum. TikTok is planning a series of weekly drops until the end of the month. According to Immutable’s team, the layer-2 has zero gas fees, nearly instant trade execution and is carbon-neutral.
TikTok partnership leaves no time to waste
Robbie Ferguson, co-founder of Immutable, said the tech partnership between TikTok and Immutable took roughly three weeks to finalize, describing it as a “fairly short turnaround” but something that could be potentially “amazing for creatives.”
“I think this is an early foray by TikTok into how they can monetize this stuff. But if you ask me, TikTok is sitting on one of the best possible application [opportunities] in the world because creator monetization is one of the worst problems out there,” Ferguson said to Blockworks, citing patronage models like Twitch.
“Bringing property rights to the value that creators are creating for these platforms is a much more powerful way to monetize.”
Proceeds from the collection would, according to TikTok’s announcement, “largely go directly to the creators and NFT artists involved.” The company did not clarify what percentage creators will eventually receive.
Owning a ‘moment’
The platform, which has over a billion monthly active users worldwide, calls the project a way to own “a moment that broke the internet.”
Trent Elmore, one of five creators of YAM Finance, described the announcement as “encouraging” and “exciting,” but adds that it doesn’t guarantee that “total mainstream [NFT] adoption is right around the corner.”
In addition, TikTok seems to be facing challenges around its first NFT collaboration with Lil Nas X and the artist Rudy Willingham. That NFT was dated to drop on October 6, but it never arrived.
“Rudy Willingham’s 1/1 NFT is experiencing a brief delay. We are very excited about this drop and look forward to having this resolved in a timely manner,” Immutable tweeted and posted in its public Discord channel.
Sources close to the situation said that part of the NFT collection won’t be released at all, Rolling Stone first reported on Monday. In addition, three people with knowledge of TikTok’s NFT rollout said it was “a mess,” “a challenge” and “a complete joke.”
Bella Poarch, a TikTok creator advertised to work on the project, may pull out due to “worries around the [project’s] execution,” a person familiar with the matter told Rolling Stone. Poarch did not respond immediately to Blockworks’ request for comment.
Finally, live
Despite the confusion, TikTok’s first NFT auction finally went live on Monday. Instead of Lil Nas X and artist Willingham, an NFT dropped featuring Detroit rapper Curtis Roach and Coin Artist, an established creator in the crypto space. Initial bids for the NFT barely topped $26,000 or seven ETH.
Suddenly, and with explosive growth, the top bid for the asset jumped to nearly $100,000 or 25 ETH on Wednesday, almost four times in one hour. The auction has roughly three more days to go until it’s officially sold, according to its website.
While the cause of the jump is not known at this time, other prominent NFT projects have encountered problems with wash trading and insiders exploiting non-public knowledge.
TikTok did not respond to Blockworks’ requests for comment surrounding their project.
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