Here’s the next big thing in NFTs, according to Multicoin Capital’s

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Episode 16 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Kyle Samani, Founder and Managing Partner at Multicoin Capital.

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Multicoin Capital co-founder and managing partner Kyle Samani, an early investor in both Solana and FTX, is turning his attention today towards the NFT space.

In this episode of the Scoop, Samani shared his strategy and investment thesis on where he sees NFTs going in the coming months. Samani believes that NFTs will evolve from their current form of mostly static jpegs and become more dynamic, similar to how Web pages evolved since the early days of the internet.

"So far in NFTs we don’t really have a lot of ‘pieces of state’ that have a relationship to one another," he said. "You vaguely have this in the notion that there are 10,000 apes in a collection, but beyond the fact that they all have the ‘ape tag’ on them, they actually don’t really have a relationship to one another.”

Samani used Beeple’s 5000 Days, a collection of 5,000 small NFTs in a 2x2 grid as, an example:

“[MetaKovan] who bought it should introduce some sort of game and say, ‘if you can assemble 9 of the 5,000 in a square, you unlock something.’ Now you can start to say that these NFTs have relationships to each other in some sort of unique way.”

Another way Samani sees the NFT ecosystem evolving is through the introduction of NFTs that change over time. “Today, NFTs are pristine. With physical art you have transport costs and there is risk of things getting damaged. You could imagine NFTs that actually degrade over time, or degrade when they’re traded.”

While Samani sees a lot of potential for innovation in the NFT design space, he believes that it is “unlikely” that Multicoin Capital will hold even a 1% position in NFTs. Instead of buying in NFTs directly, Multicoin Capital is investing in the underlying technology.

“There are three major layers of the stack to think about, and we are investing in two of them,” Kyle said. Those two layers are the 'primitives or infrastructure layer,’ and the second is in NFT exchanges or marketplaces directly. The third layer, outright ownership of NFTs, Samani doesn't currently see as being viable enough for Multicoin Capital to invest in at scale. During this episode, Chaparro and Samani also discuss: A breakdown of Multicoin Capital’s specific investments in NFT infrastructure The “infinite scalability” of the internet and web3 valuations Samani’s predictions for 2022, including crypto social media