Proof’s Kevin Rose on Building in the NFT Bear Market: ‘Holy Shit Has It Been Tough’

Nearly one year to the day after the massive Moonbirds NFT drop, Proof co-founder and CEO Kevin Rose is standing outside a gallery show that the collective put on during NFT NYC 2023 week, telling Decrypt why his Web3 startup recently reasserted its focus on digital art, artists, and collectors.

“When everything is just ‘up and to the right’ and crazy and chaotic—like the whole crazy run-up that we saw [in the NFT market]—it's easy to lose your true north,” Rose explained. “Because you're just running, running, running, running, and you're so busy with all of the chaos that you don't have time to sit down and say, 'Okay, what do we really stand for?'”

It’s been a decidedly up-and-down year for Proof since the April 2022 Moonbirds mint. The Ethereum profile pictures (PFPs) saw enormous demand at the launch, generating some $280 million worth of trades within the first two days. Proof raised money off of the buzzy launch (and again a few months later) and quickly expanded its team with grand ambitions in mind.

But the NFT market tumbled soon after the mint, and some holders weren’t on board with Proof’s decision to open-source Moonbirds artwork for anyone to use and commercialize. And some of its plans fell through: this year’s Proof of Conference event was canceled after lacking demand, and a planned Project Highrise “social universe” platform was also scrapped.

“It's a lot of work to do. Great businesses take many years to be built, it turns out. It can't be done in less than a year,” Rose explained. “I know we get some shit sometimes… [but] building in public is really difficult. And so if you show all of your dirty laundry, your community has to be willing to understand that it's messy along the way.”

Rose recalled a bit of advice given to him by mentor Ben Horowitz, co-founder of VC giant Andreessen Horowtiz, who told him that “it’s better to be right than consistent.” And for Proof, that meant tightening its focus around digital artwork and collecting, and trimming projects that either weren’t working out or didn’t support that focus.

At NFT NYC, that renewed focus meant using Proof’s resources and connections to put on exclusive events for collectors. The aforementioned gallery show at Venus Over Manhattan, “Evolving Pixels,” was curated by generative artist Emily Xie (“Memories of Qilin” on Art Blocks) and featured a selection of works from generative and AI-assisted artists.

Rose said that Proof has already been focused on “curation with a point of view”—as seen with its exclusive Grails mints for Proof Collective NFT holders—but that it wanted to expand beyond its own ranks and tap other noted curators to join in, as well.

Proof also held an exclusive event with Mike “Beeple” Winkelmann—the artist behind the top NFT sale of all time—for just 400 of its community members, in which Beeple live-created a piece of artwork while taking suggestions from the crowd. Just 10 copies of the artwork were ultimately minted as NFTs and given to select attendees.

While the core NFT NYC 2023 event felt significantly subdued compared to last year’s, the various side events hosted by projects, communities, and startups still captured flashes of the peak excitement seen around Web3. Rose said the vibes remained strong at the events he held or attended, but admitted that the NFT bear market has weighed on almost every creator.

“Holy shit have the last few months been tough, right? Every NFT collection has been impacted in some way,” Rose said. “But we're finally getting to a place where I think we're kind of bottoming out, and people are like, 'Okay, these are the people that are going to continue to build this space, and they're going to be for the next decade to come.'”

Rose gained prominence in Web2 as a co-founder of Digg who later landed at Google as part of an acqui-hire, and then turned venture capitalist with Google Ventures and later True Ventures—where he remains a partner. Working in the volatile world of Web3 and building in the open has been a real shock to the system, he said.

“No one's been a part of something like this that’s been this much of a roller coaster like that,” Rose said of the NFT market, “outside of, say, the stock market in general—but even that is way more defined and more stable than what this has been.”

For each thrilled NFT collector who bought an asset low and sold high, Rose said, there’s someone on the other side who bought the top and may be disappointed. Proof can’t control market fluctuations, but Rose said part of the learnings over the last year include how and when to communicate with collectors—and when to pivot, as needed.

“As an entrepreneur, it’s a really weird dynamic,” he admitted, adding that Proof’s products are focused on delivering events, NFT mints, and other exclusive opportunities that provide “value [that] has to be seen over years. It can’t just happen in three months.”