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Illustration: Annelise Capossela/Axios

Some of the shine might be coming off NFTs. The platforms selling them, however, fresh off of raising hundreds of millions of dollars in new capital, are likely to relish the challenge.

Driving the news: Daily volume has dropped to about $3 million, down from a peak of $19 million. Still, Dapper Labs managed to raise $305 million in its most recent round, at a valuation of $2.6 billion.

  • Opensea, a more artistic marketplace, raised $23 million. Other companies taking advantage of the funding environment include Zora, Enjin, and SuperRare, which is one of the few sites to build artists' resale royalties into its cryptographic contracts.

How it works: One of the great attractions of NFTs to artists is the promise of being able to get paid a cut of every future transaction, in perpetuity — much like songwriters get paid every time one of their compositions is performed.

  • Reality check: High-profile NFT platforms like MakersPlace (which minted the $69 million Beeple) and Nifty Gateway do not include royalties in their cryptographic contracts.
  • If a collector buys an NFT on one of those platforms and then chooses to resell it on the same platform, the site in question might remit some of the proceeds to the artist. That percentage, however, is generally not divulged to the collector when the item is purchased.

NFTs are also unique among collectibles in that no one selling them is collecting sales tax.

  • Sales tax is collected by states, rather than the federal government, and so long as no states have specifically released guidance on NFTs, the platforms are all just assuming that they don't have to pay it.
  • "Definitely I think it's a little Wild West," says Wendy Walker of tax compliance software firm Sovos.

The bottom line: NFTs have a lot of growing up to do before they become a remotely mature asset class.

Go deeper

Investors are pouring big money into the infrastructure behind NFTs

Illustration: Aïda Amer/Axios

The "non-fungible token" hype sweeping the country has invigorated an appetite for the backbone of the phenomenon.

Driving the news: Investors are pouring big money into the phenomenon's infrastructure — betting it's here to stay.

Dan Primack, author of Pro Rata
Mar 31, 2021 - Technology

Apple invests in Steve Stoute's music distribution startup

Illustration: Sarah Grillo/Axios

UnitedMasters, a music distribution platform that serves as a kind of Substack for musical artists, on Wednesday announced that it raised $50 million in Series B funding led by Apple.

Why it matters: Apple rarely participates in venture capital rounds, let alone leads them. In fact, the last one we can find was a 2017 investment in Didi Chuxing.

17 mins ago - World

Biden adviser warns "there will be consequences" for Russia if Navalny dies

The Biden administration warned the Russian government "that there will be consequences" if jailed Russian opposition leader Alexei Navalny dies, National Security Adviser Jake Sullivan told CNN on Sunday.

The big picture: Sullivan also defended President Biden for not mentioning Navalny in a Thursday speech about Russia or in a Tuesday call with Russian President Vladimir Putin, saying the White House aims to deal with the issue "privately and through diplomatic channels."

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