NFTs are expected to be the focus of the new fund, Starry Night Capital, which wants to invest exclusively in those that are “the most sought after.”
Executives from Singapore-based fund management Three Arrows Capital (3AC) have developed an art fund that would gather premium digital art in the form of nonfungible tokens, according to a press release (NFTs).
In addition to Su Zhu, CEO of Three Arrows Capital, co-founder of 3AC Kyle Davies, and the pseudonymous NFT collector, Vincent Van Dough, the fund was created by Three Arrows Capital co-founder Kyle Davies and the CEO of Three Arrows Capital.
Announcing the fund via a tweet on August 31, Van Dough wrote: “Our thesis is simple: we believe that the best way to gain exposure to the cultural paradigm shift being ushering in by NFTs is to own the most desirable items within those highly sought-after sets.”
It was shared by Zhu, who wrote: “Excited to make history with you.”
Three years after its founding, 3AC has become a digital asset-focused fund manager. Investments in leading layer-one blockchains, such as Ethereum, Avalanche, and Polkadot, have been made by the firm, which has also amassed a substantial DeFi portfolio that includes blueships Aave, Synthetix, and Balancer, among others.
At this point, Van Dough has provided few specifics about the new fund’s roadmap. However, he has stated that Starry Night Capital hopes to open a physical gallery “in a major city,” launch an NFT education portal, and investigate other “community-building initiatives” before year’s end, according to Van Dough. And he went on to say,
“The NFT space is not a zero-sum game, it is driven by strong flywheel effects and functions best when the pie is growing for all.”
Zhu, Davies, and Van Dough appear to have already formed a group to purchase nonfungible art as a group.
On Aug. 27, NFT fan “pixelpete” tweeted that he had sold his one-of-a-kind Art Blocks NFT of Dmitri Cherniak’s artwork, Goose Ringer, to Zhu and Davies in a transaction that Van Dough facilitated. The NFT is from Cherniak’s series, Ringers, in which each piece was generated algorithmically on the Ethereum blockchain.
The token was purchased for 1,800 ether (about $5.8 million) by the couple. However, it is unknown whether or not Starry Night Capital will acquire ownership of the artwork.
Van Dough’s wallet on the OpenSea marketplace also contains a remarkable collection of 1,913 NFTs, including work by renowned NFT artist Pplpleasr.
The response to the fund’s opening on Twitter was very favorable, with individuals such as Ryan Wyatt, the head of gaming at YouTube, and Bankless founder David Hoffman praising the team.
However, user “Edgar Dubroviskiy” questioned the idea of just purchasing the “top pieces” in the NFT sector, pointing out the exorbitant cost and little liquidity of premium NFTs.
Wow! Out of interest: wouldn’t “owning the top pieces from the most desired sets” mean buying the very top at the very top – so it will cost A LOT to be a part of + low liquidity and/or high premiums if we talking fractionalised (currently these at like 10x to the actual floor).— Edgar Dubrovskiy (@Edgar_DOP) August 30, 2021