In May, at Consensus Miami, OpenSea's own CMO, Adam Hollander told The Block that the next NFT wave isn't going to look anything like 2021. No more apes, no more punks. He named Pokémon cards specifically. And then, kind of offhand, threw in Rolex watches too. Said it "makes nothing but sense" for stuff like that to end up tokenized and trading onchain.
The thing is, by the time he said that, it had already started.
Back in March, a couple months before Hollander's comments. Courtyard, the Polygon platform basically built on vaulting graded Pokémon cards, partnered with a reseller called Luxury Bazaar. There was a press release, dated March 4th. And what they launched was the Premier Watch Box. Where collectors pay $10,000, Courtyard sends a mystery authenticated watch. Rolex, Patek Philippe, Vacheron Constantin, that tier of value. Unworn, box and papers, sitting in the same vault setup they already use for cards. And if you don't like what you've got you can sell it back for 95% of the listed value, or list it yourself for free.
It was basically the same trick used with Pokemon card packs.
Except now, instead of the bottom of the box having a $200 Charizard, you’re hoping it has a five-figure watch. A watch newsletter ran the numbers on this back in March, and for one of the top-tier watches, the kind of worth is somewhere between $40,000 and $160,000, and your odds per box are around 0.1%.
That’s one in a thousand. And the probability didn’t work the way people imagined it to. Buying 1,000 boxes didn't mean a jackpot as you could spend all that money and still miss.
To get chances of hitting the tier at least once up to around 95%, you’d need roughly 3,000 pulls meaning three thousand boxes. At $10,000 each.
If the math is done collectors were looking at about $30 million spent chasing the possibility of one big hit. And realistically, most people weren't getting that hit. They end up in the lower tiers, where the watch is worth roughly what they paid for the box, maybe a little less once you account for the built-in buyback spread.
So handing over $10,000 in actual money for a watch that, if you decide you don't want it, can be sold back for 95 cents on the dollar, sounded like some kind of safety net but really, isn't protective enough from losses and drawback because the 5 cent per dollar subtracted is the fee but isn't labeled as one.
In a broader context, this actually fits a pattern a lot of people in crypto have started noticing.
The broader NFT market is currently a shadow of what it used to be. Trading volume has fallen from around $57 billion in 2022 to roughly $1.6 billion per quarter now, while NFT art alone is down more than 90% from its peak.
And yet, somehow, the parts of the market tied to physical assets are among the few areas that are still growing. Courtyard is a good example of that.
So the reaction from most of the crypto community isn't shock, it's more like, of course this is what's working. It's one of the only things in the space people are buying because there’s an actual Pokémon card or luxury watch attached to it.
And participation doesn't seem to be dying off either. The watch packs are still live months after the launch, they’re still being restocked weekly, and new reviews are still popping up. Whether that holds once the novelty wears off is anyone's guess. But right now, it's growing, and the trend is moving in the opposite direction from most of the NFT market, not slowing down.