BYU’s new marketplace aims to take some speculation out of the NFT field

Estimated reading time: 7-8 minutes

PROVO — Jon Cheney understands much of the skepticism about NFTs and the Web3 market.

Indeed, last year when the co-founder and CEO of Lehi-based Ocavu launched the business with his co-founders, the marketplace was not in a very good position. Heck, even earlier this year the unregulated market was – at times – out of control.

If you thought the collegiate realm of name, image and likeness was the wild, wild west, just wait until you hear about blockchain, Web3 and non-fungible tokens (NFT).

“If you look at the whole NFT market, it was pretty bloody the last six months, even three months,” Cheney said. “There’s no way a photo was worth $1,000, $10,000, or JPEGs worth $50 million. But they went for it, because it was an NFT — and no one knew what it was.

“But I saw that there is a fundamental shift in the way we can interact with the world in the blockchain. It’s about ownership and letting the right people get paid for the work they do, as opposed to a centralized social network that makes everyone money .”

It hardly seemed like a ripe market for BYU, a school owned and operated by the Church of Jesus Christ of Latter-day Saints. So when Cheney began talks with associate athletic director for corporate sponsorships Casey Stauffer and his team, the first thing they wanted to do was figure out how to tame the highly speculative market and tame it into something that might appeal to BYU fans — and help launch the Cougar athletes enter the familiar territory of the NIL.

Ten months ago after the first meeting, the launch was deemed a success — or at least enough to launch a beta site at cougsrise.com to begin buying, selling and trading NFTs in partnership with Ocavu, the BYU athletic department and most of BYU’s football team, as well as close to 200 athletes on campus.

“I was there this morning and have bought nine so far,” Stauffer said Tuesday during a news conference announcing the new initiative.

With each purchase of an NFT from the marketplace, Ocavu will receive an undisclosed portion of the revenue, as well as BYU athletics and a separate agreement with each athlete via an individual NIL agreement.

So what exactly is an NFT? To borrow the phraseology used by Cheney, it’s essentially a digital trading card for a player, item, moment or highlight from the upcoming football season — the full unveiling is expected to be made in time for the Sept. 3 season opener in South Florida — and is owned by BYU as part of the athletic department’s historical archive.

Some tokens, like a specially designed CougarTail bar redeemable for five of the famous desserts at various games and events on campus, will be redeemable for gifts and real-world experiences. A field pass to the home opener against Baylor, access to VIP logs and parking, and the chance to fire off BYU ROTC’s sideline cannon, George Q., after the Cougars scored a touchdown were among the first perks mentioned.

Previous iterations of the NFT market have been less than lucrative for all but the heaviest investors in the new venture. Some companies, including a few that partner with college athletes, have haphazardly set up shop, released ill-fated versions of NFTs to the public, and walked away with thousands to millions of dollars raised — and very little for the players who partnered with them.

Cheney and Ocavu hope that’s not the case at BYU. He’s a proud graduate of the university, and when the athletic department approached him about setting up the venture, he jumped at it — even at a high upfront cost.

Details of the five-year deal were not available under a confidentiality agreement between the parties. But Cheney candidly admitted that the company will take a necessary cut to cover its overhead production costs, including an investment of about $2 million over the past 10 months to build, maintain and operate the marketplace. Additional NFTs won’t be cheap to make either.

“It’s not a small number; it’s very expensive to develop,” said Cheney, whose company has raised $11.4 million in three rounds of funding. “It’s not an easy technology to use either, so we have to have an expensive group of developers, a large number of design teams, coordination that has to happen with photo, video, athletic department, so many layers down to the bakery.

“But at the end of the day, I’m a BYU graduate, and when this opportunity came to me, I decided we’d do it. I didn’t care what the cost was. Of course, we’re working as hard as we can to make sure that vi I make money from it. But that’s not how I’d judge it successful. I’d judge it successful if the players make money and the fans like it.”

Players sign a personal NIL agreement with Ocavu — non-NCAA teams such as the Cougarettes’ dance company have already signed a team-wide agreement — and are automatically linked to highlights, photos or other symbols displayed in the marketplace for people to purchase. in limited quantities.

For each purchase, the athlete who signed up to the agreement will receive a portion of the revenue, in addition to BYU and Ocavu.

But the price of the token will not change in the market; it is a closed system designed exclusively by Ocave, with its own wallet and collection that will not transfer to other NFT platforms even.

Part of that is by design, as Cheney explained to KSL.com. The marketplace is built on its own engine, designed from the ground up, using horizontal architecture where each subsystem is independent of the next to improve security. Passwords are also stored in a proprietary system owned by Ocavu to help improve security and try to prevent data breaches.

Of course, Cheney says try, because he knows that security is only as tight as those trying to infiltrate the system. Nothing is perfect, but the Ocavu co-founder believes his team has built a platform as breach-resistant as any.

BYU’s NFT marketplace won’t be completely immune to speculation — it’s the market at work, Cheney says. But it will be as contained as possible within the closed network.

“I think you can’t avoid speculation,” Cheney said. “It’s a free market, and that’s the way we want it to be: just do what it does, instead of trying to force it in any way. And you’re going to have (some speculation). But ultimately and lastly, the main focus is a way for fans to support players in a way that is not possible through any other platform.”

Stauffer added that the platform is “as close as we can get” to avoid speculation.

“It’s a platform for buying and selling,” he said, “but from a speculative standpoint, this is as close as we can get because our focus is on experiences and building — as opposed to just throwing stuff out there and hoping it comes true bloated.”

The site went live Tuesday morning and will be available to begin adding more tokens with each BYU home football game. The hope is to add other sports as well — the company is currently working on signing athletes from fall sports, including the popular women’s soccer and volleyball teams on campus.

Redshirt freshman kicker Cash Peterman envisions the project only getting bigger, too. In addition to the highlights and photos offered to BYU’s internal media team that will be sold as tokens in the marketplace, players can launch additional NFTs—and experiences that go with them—for sale among the BYU fan base.

For example, instead of auctioning off a pair of game-worn bricks to fans, Peterman might work with an Ocavu designer to create a digital replica of his signed bricks and attach a special visit, hangout or clinic to accompany them.

“I think the sky’s the limit,” said Peterman, a former Ocavu intern who helped start the effort among the team. “As much effort as we put into it, we get out of it. If the players keep going like they already have in the dressing room, they know that as soon as moments like Tyler Allgeier’s hit from the last game will benefit him — but also made too.”

Early reports stated that the marketplace could earn as much as $200 million, which has been a figure thrown out by previous NFT traders that was rarely – if ever – achieved. For obvious reasons, doubters dismissed the idea.

Cheney would not back down from the claim, although he admits that the actual monetary value of the marketplace and how much each player will receive could be significantly lower. It all depends on how much each individual puts into it.

So no, he will not retire from the show; he just wants to add that caveat.

And one more, from BYU.

“However players want to engage with NFTs on this platform,” Stauffer said, “they are welcome to do so.”

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