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This is the third part of a three-part interview series with William Quigley, a cryptocurrency and blockchain investor and co-founder of WAX and Tether, runs exclusively for crypto.news. The first part is about the prison sentences given to Sam Bankman-Fred and Changpeng Zhao. The second part is about cryptocurrencies and banking. The third part is about the future of NFTs.
1) In the first part of our interview, you mentioned that you co-founded the Worldwide Asset eXchange (WAX), the first decentralized marketplace for trading virtual items for video games. Tell us about WAX.io, the number one online gaming platform.
WAX is specifically designed to address the demands of blockchain players and NFT collectors. We initially built WAX on the Ethereum blockchain; However, the platform's expensive gas fees and slowness prompted us to develop the WAX blockchain and wallet.
The WAX blockchain has the largest NFT ecosystem, with over 250 million NFT assets and over 30,000 dApps in NFT projects. The WAX platform handles more than 23 million transactions daily for more than 30,000 dApps and 15 million users. Wax blockchain technology is ultra-fast, secure and carbon-neutral.
As the world's leading blockchain for NFTs, dApps and digital games, based on the number of daily active users, WAX was designed from the ground up to be environmentally friendly. Our carbon neutral status is not just a claim, it is certified by Climate Stewardship, demonstrating our dedication to maintaining a minimal environmental footprint.
This Earth Day, we're launching the Earthen WAX Walker NFT Drop. For every Earthen Walker NFT claimed, WAX will plant a tree. This initiative combines our passion for innovative digital collectibles with tangible actions to benefit our planet, offering a collection of exclusive digital art that will allow us to contribute to reforestation efforts globally.
2) Cryptocurrency analysis company dappGambl report for 2023 is found That 95% of NFTs are worth practically nothing. The report found that after the massive hype around NFTs between 2021 and 2022, about 79% of all NFT collections remained unsold. Values of the popular Bored Yacht Ape NFT are down nearly 90% from their market highs. With the collapse of NFT markets at the end of 2021, NFTs are here to stay, he wrote. What are your views on the future of NFTs?
According to Zion Market Research, the size of the NFT market was value With a value of $36.12 billion in 2023, it is expected to reach $217.07 billion by the end of 2032, with a compound annual growth rate of about 22.05% from 2024 to 2032.
Today, the global NFT market cap is $68.68 billion, up +1.12% in the past 24 hours. I expect most of this growth to be in utility NFTs, collectible NFTs, and web3 gaming NFTs.
3) In 2021, art NFTs looked like the biggest disruptor in art, with artists minting, displaying and auctioning coins and investors buying, selling and trading art NFTs. nicole sills giles, Vice President and Director of Digital Art Sales for Post-War and Contemporary Art at Christie's said:At Christie's, we view digital art as just another category of contemporary art. The Web 3 art community is collaboratively building something very special. I believe that in the future, the art world will look back on the current camaraderie between artists, builders, curators and collectors as the time when it all began. What are your thoughts and views on the future of artistic NFTs?
Art market Projection 4% last year to $65 billion annually globally, with a small number of art sales making up the bulk of that figure. Art NFTs will likely be handled by global art companies such as Christie's, Sotheby's, and Phillips.
At WAX, we focus on collectible NFTs and gaming NFTs with high trading volume by owners. We hope we achieve it Earthen Wax Walker NFT The drop generates such intense interest from collectors that we can plant many trees.
4) Gains from collectible NFTs are taxed at a rate of 28%, which is higher than current capital gains rates. What are your thoughts on the higher tax rate applied to collectible NFTs? Will a high tax rate hinder collectible NFT investing?
The global collectibles market — valued at more than $360 billion in 2020 — is is expected To grow at a significant rate of about 4% during the forecast period 2022-2028. Therefore, the higher tax rate of 28% shows that the IRS expects significant growth in the area of collectible NFT sales and wants to tax them at a higher tax rate than the current capital gains rate.
5) The IRS recently issued 1099-DA The form is in draft form. “Under proposed digital asset reporting in August 2023,” said Jonathan Cutler, a senior director in Deloitte’s Washington national tax team who advises on reporting information related to digital assets. SystemsAn NFT is included as reportable when it is “a digital representation of value that is recorded on a distributed ledger secured by cryptographic (or similar technology).” In April, a draft form by which an NFT or other digital asset can be reported — Form 1099-DA — was published by the IRS. Importantly, the cover page notes that this early draft version is based solely on the proposed regulations and is subject to change based on public comments, the volume of which appears to be significant. Until these comments are absorbed by the IRS and Treasury, it is difficult to extract meaningful information, whether from this draft model or otherwise, about the ultimate scope of the definition of “digital assets” for reporting purposes. Do you have any comments on the draft Form 1099-DA that applies to NFTs?
If the draft 1099-DA is finalized in its current form, NFT marketplaces will need to issue a 1099-DA. After all, collectible NFTs are taxed at a higher rate.
6) A new NFT project is taking cannabis sales out of dark web marketplaces and into NFT marketplaces. Billionaire Maximilian White, often referred to as the “Cannabis Elon Musk,” said, “I have signed a partnership agreement with British rapper Fredo just weeks after his release from Dubai prison to release the first-ever song Dr. Green.” NFTs are being sold on the NFT marketplace drgreennft. .com which will allow holders of Ethereum-based NFTs to legally sell recreational cannabis worldwide. The global cannabis market value is expected to reach nearly $33 billion by the end of 2024 and reach more than $69 billion by 2029 at a CAGR of 15.4%. Do you have any thoughts or comments about this first-of-its-kind cannabis NFT initiative?
No comments.
7) NFTs appear to be the next wave of SEC enforcement actions in the digital asset space. Last year, the SEC classified two NFT projects as securities. In August 2023, The SEC charged Impact Theory, LLC, a Los Angeles-based media and entertainment company, conducts an unregistered securities offering for crypto assets in the form of NFTs. Impact Theory raised nearly $30 million from hundreds of investors through the offering by claiming to be the next Disney — its former employer. Two weeks later, in September 2023, it was done The SEC charged and entered into a settlement with Stoner Cats 2, LLC (SC2), found that SC2's NFT offering, which raised $8 million called Stoner Cats, was a security, and thus SC2 participated in an unregistered offering of securities. What are your views on the SEC's enforcement actions in the NFT space?
I wasn't aware of the two settlements the SEC had with NFT projects, Disney's Next and an animated web series called Stoner Cats by Mila Kunis and Ashton Kutcher.
However, it seems to me that in both of these cases, the NFT offering documents were poorly drafted by their attorneys. The top three things that can trigger an NFT securities rating are hashing out the NFT, offering passive revenue, or participating in governance – such as staking. Therefore, the SEC found that these NFTs were offered and sold to investors as investment contracts and were therefore securities. Accordingly, these NFT projects violated federal securities laws by offering and selling NFTs to the public in an unregistered offering that was not exempt from registration.
Given the regulatory compliance involved in issuing securities, this classification should be avoided, and the features of offering NFT documentation should be carefully considered before launching.
8) The vast majority of current NFT projects across art, gaming, sports, the metaverse, and even cannabis are built on the Ethereum blockchain. in April, The SEC issued the Wells Notice to Ethereum-based Consensys, revealing that the agency could potentially take action against Consensys for violating federal securities laws through its MetaMask Stake and other products. The SEC is seeking to regulate ETH as a security after Ethereum successfully changed its consensus mechanism by moving from Proof of Work to Proof of Stake back in September 2022. This view is also shared by the New York State Attorney General's Office (NYAG). ), which, prior to the Securities and Exchange Commission meeting on March 9, 2023, A lawsuit has been filed to impose fees on the cryptocurrency trading platform KuCoin for “failing to register as a securities and commodities broker and dealer and misrepresenting itself as an exchange” and in particular claiming that the ETH traded on the platform are securities. BlackRock CEO Larry Fink said he is not concerned about the SEC classifying Ethereum's ETH as a security. What are your thoughts on the potential classification of ETH as a security? How will this affect the NFT market?
no comment.