Antveteran Goes NFT Verification for SXSW Festival’s VIP Party

Image credit: Redeem

As funding for web3 projects cools during the crypto winter, startups in the space are increasingly focusing on building bridges for mass adoption and exploring revenue opportunities to stay afloat. The key to driving mass adoption? Offer experiences that are so seamless that users don’t realize blockchain is involved.

One company demonstrating how blockchain can be useful in real life is Kansas-based Redeem, which allows users to claim non-fungible tokens using phone numbers instead of having to set up crypto wallets. On the back of its latest $2.5 million pre-seed funding round led by Kenetic Capital, the startup is deploying its NFT solution to manage a VIP dinner at tech festival SXSW this week.

Co-founder and CEO Toby Rush is a third-time entrepreneur who in 2016 sold his biometrics company EyeVerify to Alibaba’s fintech affiliate Ant Group for $100 million. Few other companies in the world are as good as Ant in building intuitive fintech products. Together with its nemesis Tencent, Ant popularized the use of scan-to-pay to over one billion people in China.

Rush was subsequently acquired by Ant’s corporate venture team, focusing on blockchain deals. It was an experience that paved the way for finding practical use cases for blockchain.

“As you know, cryptocurrencies are not allowed in China. NFTs like we have here are not really a thing in China. But hardcore business use cases are. How can blockchain make businesses better? That was my investment focus,” Rush told TechCrunch in an interview.

“So when I started learning about blockchain, it was very practical, realistic. It’s not about how do we trade in NFTs, how do we create a new token, it was really much more what I would call hardcore business cases,” he added.

Rush eventually identified a use case for NFTs and started Redeem early last year. He was fascinated by the technology “not as images, but as a digital resource that can live outside the walled gardens of Apple, or Google or Facebook, Ticketmaster or Visa,” he admitted.

“When I can own a small piece of data outside of their walled gardens, many other people can engage and collaborate with me in an open ecosystem.”

The challenge with using NFTs, he believed, is that the onboarding process and even using them after onboarding is very difficult. Instead of building an NFT infrastructure from scratch, Toby looked to an established, ubiquitous global directory system – phone numbers.

“Operators have spent billions of dollars making sure that only one device in the world can use my phone number right now. There are already 6.8 billion smartphones deployed, so use it – if you have your phone, you have a wallet,” he explained.

This is how Redeem helps bring users into web3 by opening their first wallets, the gateway to all things crypto. Say they’re attending an event that distributes NFTs as swag, they’ll first scan a QR code with their phones. Two links will appear – onboard via SMS or WhatsApp. Say users choose WhatsApp, Redeem will then automatically create wallets for them in the backend, put NFTs in the wallet and send them a message on WhatsApp linking to their newly created wallets.

Basically, Redeem uses users’ phone numbers to authenticate who they are and create unique wallets. Instead of letting them go through the process of signing up for a wallet and writing down their 16-word recovery phrase, it leverages the popular methods of QR code scanning and text messaging.

“When you send a message, there’s only one entity in the world that can send a message from your phone, and that’s you. Once you can select your preferences, it creates a message, so it pre-populates who it sends it to, and this is the NFT you want to claim. When you press send, your phone number claims this NFT. So we create a wallet and send you a response back and you’re on board.”

The system can similarly be used to authenticate people’s access to events. At the VIP dinner at SXSW hosted by Arkive, a company building a decentralized museum, Redeem’s solution helps verify the identity of 200-some attendees. When they scan the QR code at the gate, Redeem’s backend will check if they have the required NFT ticket in their wallet associated with their phone numbers.

Redeem is not trying to be a wallet per se, but more of a connectivity layer through a B2B2C strategy. Users can bind their wallet, whether Metamask or Phantom, to Redeem as a default solution.

And why should event organizers use NFTs instead of the traditional ticketing system? The differences lie in the control. In existing practice, centralized ticketing options such as Ticketmaster control users’ data. In web3, any group can engage with an audience through NFTs without having to ask permission from Ticketmaster.

Redeem is already getting attention from event organizers. While Rush declined to reveal who his company is talking to, he suggested that these are “brands that do a lot of sponsorships and marketing and live events.”

“So they want to do on-site activations, but they don’t want the activations to stop on-site. If they get NFTs, it’s a way for them to do a lot of post-event engagement,” Rush said.