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Chronicle has raised $3.2 million to create a fan-friendly marketplace for digital collectible cards based on nonfungible tokens (NFTs).
NFTs have exploded in other applications such as art, sports collectibles, and music. NBA Top Shot (a digital take on collectible basketball cards) is one example. Built by Dapper Labs, NBA Top Shot has surpassed $540 million in sales, just six months after going public. And an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. Gaming has a couple of new unicorns, or startups valued at $1 billion, in Animoca Brands and Forte. NFTs are now selling at a rate of $247.8 million a month, though the initial hype around NFTs is dying down.
NFTs use blockchain, the transparent and secure digital ledger, to uniquely identify digital items, which otherwise can be easily copied. NFTs turn digital items into one-of-a-kind, uniquely identifiable items. They can establish authenticity, and that’s critical for digital collectibles. That unique trait is why Singapore-based Chronicle, like other NFT startups, wants to use NFTs to create collectibles that people can own, buy, sell, and trade — and that can also guarantee payments for the original creators of the collectibles.
But earlier efforts to take NFTs mainstream have met with challenges, and so far many brands have stayed away from them. Chronicle has tried to learn from that, said CEO Tim Glover in an interview with VentureBeat. Chronicle plans to launch this summer, and it’s hiring people to do that. It will also use the money to develop its platform, build an in-house studio for digital collectibles, and grow its international presence. Chronicle hopes to tackle marketplaces for film and television, animation, arts and culture, music, games, celebrities, and fashion.
The funding came from blockchain VCs — 4SV, AU21 Capital, Aussie Capital, Bella Protocol, Blocksync Ventures, DAO Maker, GBV Capital, GravityX Capital, Legos Capital, Magnus Capital, Moonwhale Ventures, Pluto Digital Assets, Three M Capital, Twin Apex Capital, VBC Group, Vysyn Capital, X21 Digital, and 499+ Block.
In 2014, Glover was an avid Jurassic Park fan, and he was excited when Universal Pictures announced it would make a fourth film, Jurassic World. He and his friend, Jack Anthony Ewins, created a fan website, Masraniglobal.com, and they added their own speculations about what the film could be about. It gained a lot of traction with hundreds of thousands of fans reading it. Some people, like a journalist at IGN, mistook it for an official website.
Universal and director Colin Trevorrow took notice and then started working with Glover formally. They did the same thing with Jurassic World: Fallen Kingdom, which came out in 2018. By that time they were immersed in the phenomenon of fans and collectibles.
“We came up with Chronicle,” Glover said. “The blockchain is complex. Our mission is to make them as simple as possible.”
Glover cofounded Chronicle with Jim Jin, an experienced blockchain investor, after they saw the success of NBA Top Shot from Dapper Labs.
“We loved how they marketed it to NBA fans, and not crypto fans,” Glover said.
Doug Neil, a former executive for digital marketing at Universal Pictures, is an adviser. The idea was the create a platform for fans of beloved franchises and brands, but one that’s easy to learn without needing to know how blockchain works. One of the ways that Chronicle is doing that is by not requiring users to transact their deals with cryptocurrencies.
Chronicle plans to take popular brand collectibles and “tokenized” them as NFTs, which enables them to be authenticated and then bought and sold. Its internal team can work with brands to create the collectibles in NFT form. License holders of brands and Chronicle will earn a percentage of revenue, typically on the sale of packs and the marketplace transactions. And if an NFT rises in value, users can make money on their transactions as well. Chronicle’s share of secondary transactions is 2.5%, and license holders get a cut every time an NFT is sold or resold.
Chronicle has nine employees, and it is hiring.
Challenges of blockchain
One of the big problems is the “minting” and transfer fees associated with transacting NFTs from one player to another. Blockchain taps a big peer-to-peer network of computers to verify transactions. If one computer in the chain loses data or is tampered with, that’s not a big deal, because all of the other computers in the network can verify the data. But those who operate the computers have to be rewarded, and the cost of those computers can be hefty. So blockchain transactions have associated “gas” or energy fees.
The user experience is another big problem. Cryptocurrency wallets are hard to use. Someone can hack your account and steal your money. Or if you lose the code associated with your cryptocurrency, then it’s gone forever. No one else can retrieve it for you. These factors make crypto wallets into complicated beasts that are difficult to use for mainstream consumers.
So far, the digital collectibles (NFTs) market primarily consists of users who are already familiar with cryptocurrency and the operational use of the blockchains they’re hosted on. They have mastered details about cryptocurrencies that are tough for the ordinary person to learn. They understand the different blockchains and technologies, how to set up a crypto wallet, how to export tokens from one exchange to a wallet, and they understand the fees involved in transferring NFTs across the network.
“The opportunity with NFTs has been very crypto-focused,” Glover said. “We want to team up with brands and fans for officially licensed collectibles, with easy signup, where you can pay using a credit card, and we work with all the blockchain technology for the user to create an easy, immersive experience. With Chronicle, we decided to simplify it from a crypto perspective to a fan perspective.”
Chronicle plans to introduce an easy-to-use marketplace to maximize the availability of unique, authenticated, digital collectibles from the world’s leading entertainment and sports brands for
fan communities worldwide. Within Chronicle, each user will be able to buy, sell, trade, bid, and gift collectibles to grow their personal wallet.
Chronicle is also building an in-house studio with top artists from around the world to develop and design the collectibles that will be available within its platform. The team already boasts talent from the entertainment and business world — including creative directors Ewins in the United Kingdom and Manuel Bejarano in Spain, who worked on the Jurassic World digital fan campaigns with Glover and Universal Pictures.
Chronicle has been designed and built so that no previous blockchain knowledge is required to transact on the platform. Users will onboard via a simple email registration process and transact
with the collectibles in U.S. dollars. Glover concluded that transacting in dollars without full decentralization can make it harder to satisfy crypto fans, but it will make it easier for mainstream users to understand how to do the transactions.
“We are looking to stay within U.S. dollars as much as possible, and that’s a result of some of the feedback that we’ve been having with other studio partners,” Glover said. “That’s how we make it as simple as possible for fans.”
Glover said the company will make it possible for fans to withdraw money via crypto, if they want to do that.
You should be able to sign up for Chronicle with an email address signup. You can pay with dollars or payment partners like Stripe or PayPal. You’ll be able to buy, sell, swap, bid, and gift collectibles. You can buy the NFTs in auctions or in a regular marketplace. You can show off the collectibles on social media and build up your Chronicle profile to earn rewards. Each user is assigned a wallet and Chronicle will handle all of the blockchain details on its backend.
The tech behind Chronicle
This summer, the company plans to come out with a web desktop platform as well as iOS/Android apps. Several entertainment brands are expected to be available at launch. Discussions are happening with sports teams and several game companies, among others.
While Chronicle is set to be blockchain agnostic, the company has made an important decision to only utilize blockchain networks that are environmentally aware and not driven on high-energy “proof of work” systems, including Bitcoin and Ethereum, because they require too much computing power to be used in the course of operating.
Chronicle will be backed by major brands when it launches in the summer, Glover said. The NFTs can be anything the creators want them to be, such as still images, GIFs, or videos. Brands can get real-time reporting on sales, since they can see the transactions on the blockchain. Chronicle’s engineering partner is creating its wallet.
But Chronicle is using a centralized platform, where it will manage the wallets on behalf of users, to mask the complexity and reduce fees such as Ethereum’s “gas fees,” or energy costs for every transaction. Chronicle will use the Near Protocol for blockchain transactions. Near has committed to a carbon neutral network and it uses proof of stake, which offers a measure of protection through decentralization through trusted parties. With Near, the transaction fees are less than a penny. Chronicle uses the XNL smart token, and it will use Chromia, a decentralized database, for storage of collectibles.
“There has been a narrative around digital collectibles, and more specifically, NFTs, being adverse for the environment, which we, we’ve recognized and picked up on,” Glover said. “And so for that reason, we have made a commitment as a company to only utilize networks that are carbon neutral. And we do everything we can to ensure safety and security,” including using Certec auditing to audit smart contracts.
The risk is that the demand for NFTs will cool down, which would have an effect on every NFT related project in the ecosystem, and influential brands may be slow to make moves into NFTs. And rivals include established companies like Quidd, which is owned by Animoca Brands. Glover said it has room for multiple competitors, just as multiple companies make physical collectible cards.
“This ecosystem will have multiple companies in it,” he said.
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