Last year, the narrative about Polygon (CRYPTO: MATIC), which is a Layer 2 scaling solution for Ethereum (CRYPTO: ETH), primarily focused on The Merge. But with The Merge complete, the focus of investors in 2023 has shifted to Polygon's initiatives in the non-fungible token (NFT) space. And nothing Polygon does here seems to move the needle with investors. The crypto still trades at just $0.98, which is approximately where it was trading in the lead-up to The Merge.
Polygon's latest initiative is a collaboration with Sports Illustrated on the launch of an NFT ticketing platform called Box Office. If successful, this project could change the minds of many investors about Polygon's future growth prospects.
What is Box Office, and why does it matter?
The Box Office NFT ticketing platform is built on top of Sports Illustrated's existing ticket marketplace (SI Tickets). As a result, Box Office will function much the same as a traditional ticketing platform -- with one key difference. Instead of receiving a ticket with a barcode that can be scanned, ticket buyers will receive an NFT. This digital asset will reside in the blockchain wallet of the buyer and can be used for admission to the event. You simply show the NFT at the venue the same way you would show a digital ticket on your mobile phone.
Image source: Getty Images.
Moving the ticketing platform to the blockchain means that Polygon has the opportunity to transform a regular ticket into a "super ticket." This super ticket could include extras such as exclusive video highlights, one-of-a-kind images, or other forms of premium content that would make it an instant collectible. If anything, your ticket might become even more valuable after the event. Theoretically, you could resell the NFT on the secondary market. But more likely, you would hang onto the NFT as a form of sports memorabilia.
Polygon's new NFT project could have instant appeal for die-hard sports fans, sports memorabilia collectors, and just about anyone who would like to hold onto a piece of sports history for the next generation. Moreover, since ticketing is handled via the blockchain, it should make the business model for selling tickets more efficient and transparent. That means lower ticket costs for consumers. And it should also help to eliminate ticket fraud and other scams. To check that a ticket is real, all that you would need to do is check the real-time data on the Polygon blockchain.
Are NFTs still a growth catalyst?
That being said, it's OK to be skeptical. After all, Polygon has already partnered with some of the biggest names in the worlds of entertainment, sports, and media, and nothing has really seemed to resonate with investors. In mid-April, for example, Polygon announced a new collaboration with Nike (NKE -1.24%) on premium NFTs for the company's new Web3 platform. Over the past 30 days, though, the price of Polygon is actually down 13.5%.
In part, Polygon is struggling with the collapse of prices in the NFT marketplace that occurred in 2022. When the NFT marketplace was booming, it seemed like everybody wanted to create or buy NFTs. But now, a lot of the energy that went into NFTs is going into areas such as the metaverse or ChatGPT. That might explain why investors are now lukewarm on Polygon.
That being said, Sports Illustrated, which is now owned by Authentic Brands Group, thinks this new NFT ticketing platform could disrupt the primary ticket marketplace. By changing the way you gain entry to events, this NFT project could also impact any segment of the media and entertainment world where live events are important.
While many NFT projects seem to be aimed at the 18-to-34 demographic, this NFT project seems to have appeal for an older demographic as well. At one time, Sports Illustrated was the most important sports media property in the world. Getting on the cover of Sports Illustrated magazine meant something. An older investor headed for retirement might not care about collecting digital images of Bored Apes but would probably care a lot about collecting Sports Illustrated NFTs from important events, like a World Series Game 7 or the final game in the career of an iconic sports figure like Kobe Bryant.
Is Polygon a buy?
The decision of whether or not to buy Polygon is really a litmus test for how you feel about NFTs. If you roll your eyes at any mention of the Bored Apes, Polygon is probably not the right crypto for your portfolio. But if you're impressed by the creativity and ingenuity of next-generation NFT projects, then Polygon might be worth a closer look. For now, I'm bullish on Polygon long term and have been ever since Polygon linked up with Disney last summer.
