First look: Dems’ NFT dreams
A group of Democratic operatives plans to turn political memorabilia and photos into NFTs, looking to raise money by minting — and then selling — digital assets beyond the sports and entertainment arenas.
Why it matters: With both conservative and liberal groups already spending millions to pressure lawmakers over President Biden's social safety net expansion, Democrats are looking to tap into non-fungible tokens to outraise their opponents.
Driving the news: On Monday, a new group, Front Row, will launch a political NFT marketplace — and only allow Democratic campaigns and causes to use it.
- The first NFTs for sale will be digital collectibles from the Texas Democratic Party.
- For example, for $250, a political activist can purchase a digital "Wanted" poster, with animation, of different Texas lawmakers who fled the state this year in a failed effort to block its new restrictive voting law.
Flashback: In August, Scott Jensen, a Republican candidate for governor in Minnesota, released two NFTs to raise money for his 2022 campaign.
- He claimed to be the first politician to offer an NFT.
- Sports and entertainment stars were early adopters of the trend, with Tom Brady and Tiger Woods the latest to cash in.
How it works: A political organization or campaign will create an NFT, establish the number of tokens and then set the price.
- Buyers will purchase the NFT through the Front Row website, much like a traditional donor would donate to a campaign through the Act Blue website.
- The donor — or more accurately, the purchaser — would then own the NFT.
- The proceeds will go to the campaign, with Front Row taking a transaction fee.
- The sales will have to conform to campaign finance laws. Federal candidates will be limited to selling NFTs for $5,800 — the maximum per-cycle contribution — while PACs and party committees can up their prices accordingly.
The big picture: The first-ever NFT, artist Kevin McCoy's "Quantum," was auctioned off for $1.47 million in January.
- The NFT market has since exploded, with trading volume rising to $10.67 billion, according to CNBC.
Go deeper: While NFTs mostly use blockchain technology, they don’t need to be purchased with cryptocurrency.
- The National Republican Congressional Committee has tried to tap into the crypto craze by announcing it would start accepting contributions in cryptocurrency, Axios reported in June.