Calaxy, or Creator’s Galaxy, is a new social media app targeted at content creators founded by NBA player and blockchain enthusiast Spencer Dinwiddie. The app enables creators, including basketball stars, to issue personal crypto tokens.
The NBA star played around with a related concept last year by being the first NBA athlete to attempt to tokenize his player contract. NBA contracts ban players from transferring rights to their income, so he restructured the offering as a bond backed by business assets. However, the project only raised $1.35 million in tokens, 10% of his initial target. The key point is Dinwiddie was trying to tokenize an asset as a security token. In many ways, he was ahead of the game as security tokens are less established than cryptocurrency but are likely to be big in the future.
Now Dinwiddie has realized crypto tokens often represent something more vague. A creator or celebrity can simply issue tokens with no assets backing them. Those tokens could be used to pay for engagement with the celebrity, perhaps take a picture with them, message them or participate in an audio jam.
That sort of engagement could be done using conventional money. What crypto provides to fans is the perception that they’re getting a ‘piece’ of the celebrity. And potentially, by holding the token, they might make a profit (or loss). Whether or not it raises legal issues of being classed as a security may depend on how it’s marketed, and that expectation of profit is something that would likely be excluded from any sales pitch. It’s a token. It doesn’t need communication. Imagine what the market capitalization of an Elon Musk token might reach.
In some ways, Dinwiddie’s journey is the reverse of Justin Sun’s, the founder of TRON. Sun lost out by a small margin on the Christie’s $69 million Beeple NFT auction. Christie’s figured out that if Sun was willing to spend that much on something as nebulous as a nonfungible token, then they might be able to sell him something more tangible. He ended up winning auctions on a Picasso and an Andy Warhol piece. Yes, the physical pieces of art. And now another Warhol work is also being tokenized.
Back to Calaxy, the app has reached beta testing and the latest news is it announced its advisory board. The four-member group includes founder and CEO of Dapper Labs Roham Gharegozlou, Liquify CEO Adrian Lai, Twitter’s BlueSky researcher Rahil Kothari, and Legal Counsel at the Centre Consortium Chad Richman.
Dapper Labs founded the Flow blockchain, but Calaxy is using the Hedera Hashgraph distributed ledger. The Dapper Labs CEO was upbeat about Calaxy’s “ability to deepen their direct fan engagement and expand the crypto universe to the masses.”
Meanwhile, the concept of fan tokens has been touted by Socios.com, which has deals with numerous sports clubs worldwide and the UFC. Socios has a similar fan engagement concept, but it has a far more investment-like feel when a token is tied to a club rather than a person. That highlights what a minefield the legal issues present.