NFTs Are the Ticket to New York’s Newest Social Clubs

(Bloomberg) — When the Maxwell Tribeca opens its doors in July, it will have all the elements that define a certain kind of social club: a prestigious address, elegant décor, exclusive member perks and a well-connected, well-heeled community. founding team. But that’s not enough for David Litwak, founder and former CEO of travel tech platform Mozio. To become a member, you will also need to get involved in one of the busiest corners of the cryptocurrency market. The 8,000-square-foot space, which will be located at 135 Watts Street, is modeled after the food clubs known as txokos in San Sebastian, Spain. Entry will require owning a non-fungible token, or NFT, a type of crypto asset that everyone from Tom Brady to Melania Trump touts.

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NFTs are digital tokens that act as certificates of authenticity and, in some cases, represent ownership of assets ranging from expensive ape artwork to collectibles like celebrity autographs to physical goods like a case of rare whiskey. Increasingly, as is the case with Maxwell Tribeca, they function as a kind of passport to rarefied spaces and experiences, access that in this case includes their own liquor lockers. The venue will function “like a house party. Instead of ordering a Negroni at the bar, you go get your own gin from your locker and pour yourself a gin and tonic,” Litwak tells Bloomberg. “We are trying to create thousands of second homes, not third spaces, where people belong, and NFTs are a means to an end,” he says. “Web3 often treats them as an end in themselves,” he adds, referring to the term popularized by venture capitalists to refer to online services that are based on the decentralized technology known as blockchain. Maxwell Tribeca memberships start at $1,000 per shared liquor lockers; small liquor lockers will be $5,000 and large liquor lockers $8,000; the monthly membership fee will be $250.

“Social symbols and social status have always been an important part of society and culture, I think NFTs give us a different way to mark you as a consumer and a different way to create exclusivity as a business owner,” says Nick. Casares, Product Manager at PolyientX, a platform that provides tools to create rewards for NFT communities. Litwak, who already has another NFT club in the works in partnership with professional soccer player Kyle Martino, argues that a crypto-based membership makes the experience more accessible than more. traditional mechanisms. Using NFTs as a cost of entry makes it “easier to democratize your fundraising base,” according to Litwak.

Read more: Is New York’s romance with social clubs just a pandemic love affair?

Buying and selling NFTs typically requires incurring transaction fees that can represent a significant percentage of the sale, in addition to the complexity of needing to create and fund crypto accounts and wallets. Litwak intends to fix these problems by creating an entirely new marketplace, called Maxwell Social, instead of relying on companies like OpenSea that act as a kind of eBay for NFTs. “OpenSea is great at selling art NFTs to the highest bidder, we want to sell membership NFTs to the right bidder,” says Litwak. “Communities curate more than just finances. But OpenSea doesn’t.” He said there will be no transaction fees for buyers, but there will be a 2.5% fee on membership reselling. There will also be no end date for the sale of your NFTs: “We will sell them as long as it takes, to find the members of our social club.” Litwak says he is targeting about 600 members. Litwak plans to provide a kind of concierge service to help potential members get started with cryptocurrencies and overcome any technical hurdles: “The minting will be done in person, in our space, at a designated location.” event. This will streamline buying in the community and allow us to help them mint the NFT in person and resolve any wallet issues, crypto issues.”

But Maxwell Tribeca will have to fight for the attention of New Yorkers interested in NFTs, because there’s also Flyfish Club, a high-end seafood experience. Flyfish Club is run by VCR Group, a hotel and restaurant group whose partners include Gary Vaynerchuk, co-founder of online reservation system Resy.

Flyfish, which has plans to open in early 2023, has so far generated just over $14 million through its original NFT launch during which members purchased tokens directly from its website. They got an additional $2 million in royalties from OpenSea, where some of the people who bought one of those original 1,051 NFTs chose to sell their tokens (and their associated memberships) on the secondary market. FlyFish receives 10% of the proceeds from these sales. David Rodolitz, founder and CEO of the VCR Group, told Bloomberg that there have been a total of about $21 million in secondary sales to date.

“Everything we do is the exact opposite of a typical membership,” he says. “Ours is a one-time purchase of the NFT that becomes an asset for the token holder, there is no recurring fee each year and that person is in control of their asset and can use it, sell it or lease it.”

He stressed that people who buy Flyfish have the ability to monetize their membership, “which no other club in the world could do because you don’t own anything. You’re basically just renting an experience from them.”

Litwak contends that Maxwell Tribeca will be a very different experience than Flyfish.

Gary [Vaynerchuk] he raised $14 million, good for him, but he sold his memberships to the highest bidder. That club is likely to be 90% cryptocurrency types,” says Litwak. “It has shown the potential to raise capital. But he doesn’t know why people care about a place to belong. [At Flyfish Club] anyone who can afford it can buy and then pretend it’s a community.”

Despite the recent volatility in the crypto asset market, which has seen wild swings in the prices of tokens like Bitcoin and Ether, Rodolitz is undeterred. “We are not using NFT as a form of speculative crypto investment strategy,” he says. “So whether Ethereum is up or down, left or right, it doesn’t really have any bearing on our business model.” Not everyone thinks the New York food scene needs NFT. “The technology behind NFT makes a few things easy: buying your token, trading your token, subletting your token, providing proof of ownership, etc. Chief Innovation Officer of sous vide device manufacturer Anova and an early adopter of crowdfunding. Heimendinger also questions whether the prospect of spending time with people who are comfortable spending thousands of dollars in crypto would be appealing to most New Yorkers. As he said, creating a community “could be a tall order if you’re building a caviar clubhouse for the Kendall Roy crowd.”

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