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Peer prediction protocol Upshot raised $7.5 million Thursday to help answer a foundational question of non-fungible token (NFT) mania: Is a Beeple really worth $69 million?
NFTs are worth as much as their buyers will pay, of course. But most digital collectibles can’t conduct price discovery via the Christie’s auction block “5,000 Days” enjoyed, said Jake Brukhman, CEO of blockchain venture firm CoinFund. That’s why he’s co-leading the bet on Upshot, a protocol that crowdsources NFT appraisals.
Backed by Framework Ventures, CoinFund and Blockchain Capital, the debut product, UpshotOne, solidifies Upshot’s transition into NFTs. It launched in 2019 as an insurance-focused prediction market but saw more opportunity in pricing collectibles.
“There is this incredibly impactful space for peer prediction,” Brukhman said of the NFT market.
Upshot will aggregate real-time NFT appraisals by quizzing its decentralized user base with head-to-head “which is more valuable” matchups. The protocol incentivizes honest answers: Proven “experts” get more weight to their opinions; dishonest participants get less.
“The more people that participate, the more accurate it becomes,” Brukhman said.
Over time UpshotOne could generate revenue by pairing its consensus-driven price predictions with on-chain data for a marketable API. There’s also the crypto angle: Upshot has a native incentives token atop its blockchain.
Slow Ventures Partner Jill Carlson, who also invested in this round, said Upshot’s peer prediction and incentivization model can port to various crypto vetricals. She’s confident that non-fungibles’ “sticky value,” and thus Upshot’s contributions to it, will outlive the current hype cycle, though.
“It’s always exciting to me when you see a fundamentally new primitive come along, that not only serves a really important function within whatever is being hyped at the moment,” she said.