B20 Investment Summary

January 2021

This article is a Sfermion guest post. I will begin posting more content from Sfermion to Zima Red because it is related to the broader NFT ecosystem.

Substack has recently started banning URL links pertaining to NFTs so if you would like the full post with clickable links please check out the Sfermion Medium blog.

Note: Sfermion has exposure to B20

Investment Summary — B20 is an effective method to obtain exposure to a basket of extremely high-value NFTs, mainly consisting of Beeple art pieces.

What is it? — B20 is a tokenized bundle of high-value NFTs that consist of:

  • 20 1/1 art pieces created by the artist Beeple.

  • 25 plots of Decentraland land. 5x5 layout near Dragon Kingdom and The Battleground districts.

  • 1 extra-large, waterfront Somnium Space plot.

  • 2 adjacent parcels in Cryptovoxels in the Frankfurt neighborhood (tallest build height area).

  • 1 audio NFT created by the famous DJ 3LAU.

  • 3 builds created by VoxelArchitects.

Value Driver(s): Diversified, easy exposure to high-value NFTs — B20 will accrue value as the assets within the bundle increase in value. Consisting of different types of NFTs, the B20 bundle is a highly effective means to quickly get exposure to some of the most valuable NFT assets in the world. The virtual plots of land alone are worth hundreds of thousands of dollars, the 3LAU NFT is also likely in that range (especially considering some of his NFTs recently sold for +$3m), and the Beeple pieces are worth tens of millions of dollars. There are twenty 1/1 Beeple pieces in the bundle and in February 2021 a single Beeple piece sold for $6.6m. There is an upcoming Christie’s auction set to complete on March 11th with a current bid of $3.5m (as of March 3, 2021), the final sale price is expected in the range of $10m-$20m. If the Christie auction final sale price is $15m, the Beeple pieces in the B20 bundle should be valued at roughly ~$10m per piece which would make the market cap of the Beeple pieces alone ~$200m. That represents a ~100% gain from today’s B20 market cap of ~$100m.

Buyout — The B20 connection to this bundle of assets is extremely straightforward as anyone can bid on the bundled assets and if the community of token holders votes against the bid then the minimum bid is increased by 8%. The minimum bid is $10m and there needs to be at least 25% of token holders for consensus on to accept the bid.

Team — Metapurse is the entity behind the B20 token and launch. Metapurse is an entity formed and funded by Metakovan and managed by Twobadour. Part NFT fund and part production company, Metapurse is a multifaceted vehicle that is well-known and respected in the NFT ecosystem. Metapurse also has the highest-valued portfolio of NFTs in the ecosystem and has been involved in these markets since its inception in early 2018. So although they are anonymous, which is generally a red flag, this team has proven over the years they are respected, consistent, and a force for value creation.

Community — There are currently over 2,000 token holders which is a large number for such a niche product that does not have a central Discord channel or even a dedicated Twitter. Most projects of this size would have dedicated marketing and community building channels but this product is in such high demand it is growing quickly without this infrastructure. The community is also being buoyed by the broader excitement around the NFT markets as a whole. As NFTs increase in popularity and as Beeple increases in popularity, we expect the number of tokens holders to grow significantly.

Risks — Beeple Risk — The diversified nature of the B20 bundle greatly reduces overall risk but because the Beeple art pieces are so much more valuable than the other NFTs in the bundle, the main risk is Beeple’s brand and reputation. If the Beeple Christie’s auction were to fail and the piece only sells for $3.5m then it is likely the current price of B20 (~$10) would decrease.

Smart Contract Risk — There is also clear smart contract risk because if there were a bug in the B20 bundle that could allow hackers to siphon away the NFTs. This is the case for essentially every asset on a blockchain but still a clear risk that people should be made aware of. Luckily there have been smart contract audits performed and all (known) issues have been solved and accounted for.