Rare Bits Raises US$6M Series A For Crypto Assets, Collectibles Marketplace

The capital will allow the company to expand the crypto assets available on its platform, co-founder Danny Lee said. These tokens run on Ethereum and are provably unique and scarce. The market took off after CryptoKitties, a digital pet game from Canadian venture studio Axiom Zen, launched in November 2017. People paid more than $100,000 for individual digital cats. At its peak, CryptoKitties became Ethereum's largest decentralized application, accounting for more than 13 percent of network transactions. Network congestion from CryptoKitties prevented new ICO launches. Axiom Zen raised $12 million from investors last month.

CryptoKitties lets users buy, sell and breed digital cats. The success sparked similar games: CryptoCelebrities, CryptoPuppies, CryptoPets, Cryptobots and CryptoBunnies from smartphone maker Xiaomi. Lee sees the collectibles phenomenon as more than a temporary fad. More than 1,000 people use CryptoKitties daily, generating 8,000 transactions with trading volumes of 95 ETH, about $48,000. "That's already a ton of traction," Lee said. "The crypto asset market in gaming is already sizable and continues to grow."

Rare Bits operates as a web application paired with the MetaMask browser extension. The team launched earlier this year. Lee intends for Rare Bits to "become THE place to buy, sell and discover all crypto assets." For now, games and collectibles represent the initial market. But the startup expects digital assets to span far wider categories of digital property.

"Going forward, when there's a lot more inventory spanning multiple categories like digital collectibles, art and software licenses, this can easily be 1000x bigger," Lee said. "With many new platforms, we can expect to see many different use cases. Some might be shorter-lived, like games, since they are more entertainment value driven. Others will definitely have longevity due to the practical utility these items provide."