Enter the World of Physical Backed NFT’s with

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Jason Koeppel // ONE37pm

As a collector of trading cards, I was blown away by the recent ONE37pm x Courtyard Twitter Space and how rapidly it appears that the space is about to change.

To listen to the entire conversation, check out our podcast on Spotify!

The days of purchasing a physical card, taking photos of it, listing it for sale on eBay (or other platforms), waiting for the card to sell, then packaging it up, insuring it, shipping it, and finally, the buyer waiting days for the card to arrive (all the while hoping it's actually delivered safely) could very well be a thing of the past.

In the new collecting world, you will be able to take the physical cards that you have stored in your drawers at home and send them to Courtyard, which will store them in a secured Brinks vault and create NFTs tied to those specific cards. The NFT would be located on Opensea and is traceable.

"We are a collecting company," said Nicolas le Jeune, CEO of Courtyard. "We are trying to improve that space. It's very important to us. Our goal is to help users trade physical assets with no friction, and have something new that they can share and collect with other people rather than have their collection sitting in the basement or in a vault. They can actually showcase their collections and connect with other people. People who collect love to talk about it with other likeminded people, so this is a way of bringing people together and ensuring your collection."

Collectors can then choose to either display their NFTs on the metaverse, sell or trade them, or burn the NFT and receive the physical card. Holders of the NFT also own the physical asset.

Why Collectors Will Enjoy the Fee Structure

Let's say you sell one of your NFTs for $200 – and then the person who purchases it then sells it at any point in the future for $500 – and that person then sells it for $1000, you will have the ability to get a percentage every single time that card that you introduced to the Courtyard ecosystem is sold.

"We can reward behaviors through the fee structure." said le Jeune. "If you bring a collection to Courtyard, not only will you receive NFTs that will likely sell for more, but on top of it, we can possibly give you a small percentage perpetually for each sale of that card until the NFT gets redeemed for the physical asset. So if you sell the NFT to somebody, and that person sells it to somebody else, you would still make a percentage of the transaction fee because you provided that liquidity to the ecosystem in the first place. That's the beauty of smart contracts."

But that's not the only way that the fee structure can be used to bring additional eyes and value to the NFTs and physical assets. Courtyard plans on eventually cutting the players in on the transaction fees, which could incentivize them to drive further value to the space.

"We can also reward players. For example, if a Kevin Durant card is traded, why not reward Kevin Durant and have him get a small percentage of the transactions?"

Security and Authentication

Courtyard NFT secure technology
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With the recent rise in fake PSA/BGS/SGC slabs entering the market, one of the biggest concerns as a collector before getting involved with a company like this would be how they know that the graded slabs they are receiving from collectors are authentic before the NFTs are made and the cards are stored in a vault.

"We are building the authentication capability." said le Jeune. "Even if we only offer slabs and graded cards, we want to make sure we control whatever is getting in and that it's authentic. We are building that infrastructure for authenticating so we make sure that any Courtyard NFT is validated. We are looking to build those partnerships currently."

Taking Loans Against Your Assets

Another potential utility of the physically-backed NFTs could be figuring out a way to take loans using your NFTs as collateral to provide liquidity.

"A lot of projects have been trying to figure out a way to collateralize their NFTs but the challenge is that NFTs are so volatile." said le Jeune. "Apart from some bluechip projects, there is so much volatility that it's dangerous for a liquidity provider. Here you have an NFT that technically could go up as much as the market wants, but could never go much below the value of the physical asset in real life. So there is more security for a liquidity provider."

The Technology Behind Courtyard NFT's

Courtyard NFT collectibles
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Courtyard NFTs are ERC721 Tokens that are built around a single registry on the Polygon Network, a layer 2 scaling solution on the Ethereum Network.

Benefits include:

• Lower transaction (gas) fees

• Supported by Opensea and traded the same way as they are on Ethereum mainnet

Courtyard Genesis Drop

To bring awareness to the brand, Courtyard recently offered to the public the first physical collectible-backed NFT drop featuring NFTs backed by 800 PSA-graded Pokemon cards.

"History is on the blockchain." said le Jeune. "If Gary (Vaynerchuk) owns an NFT and sells it afterward, that would have value on the blockchain. We actually believe that the additional liquidity, visibility, and coolness of having the first physically-backed NFTs will bring a lot more value, so it's a very interesting experiment. We're gonna see how the market reacts. So far, it's been amazing."

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