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The digital world of NFTs is bleeding into real life thanks to Solana-based NFT marketplace Neon, which closed a $3 million seed round last month. The company soft-launched the first NFT vending machine—located at 29 John St in Manhattan—back in December. Now, the vending machine is open 24 hours a day and allows collectors to buy Solana NFTs with fiat currency.
NFTs—unique blockchain-based tokens that signify ownership over an asset—have exploded in popularity recently, with Ethereum-based marketplace OpenSea claiming over $5 billion in sales last month. But OpenSea has faced its fair share of challenges and lawsuits. Competing NFT marketplaces are looking to offer something different to the average consumer.
Neon CMO and co-founder Jordan Birnholtz says he came up with the idea for an NFT vending machine with summer intern Drew Levine in mid-2021. Birnholtz wants to make buying an NFT as easy as possible.
“My thought was that there is literally no simpler way to buy something than a vending machine," Birnholtz told Decrypt. "We built it because it shows how powerful and easy it can be to support digital artists, and to demystify the process of getting an NFT.”
Neon’s brick-and-mortar method lets buyers walk up to a vending machine and buy an NFT using Visa or Mastercard credit cards, or with the Samsung Pay or Apple Pay mobile apps. Then, buyers use a smartphone’s camera to scan the QR code inside the dispensed item and claim the NFT online.
“Neon started with fiat because our mission is unique, to bring digital art and collecting to the largest possible audience,” Birnholtz said.
Right now, purchasing an NFT can be a daunting task to those new to Web3. Users must go through cryptocurrency exchanges, transfer their crypto to digital wallets, and then connect those wallets to an online NFT marketplace. Sometimes there are other friction points too, like needing to pay gas fees for Ethereum assets or having to deal with wrapped cryptocurrency.
While crypto and NFTs have become more mainstream, they haven’t achieved mass adoption quite yet. According to recent research, while 16% of Americans hold crypto, nearly 80% have a credit or debit card. Neon’s vending machine lets most of the 84% of people who don’t hold crypto get a taste of NFT ownership.
That being said, Neon plans to offer crypto as a form of payment soon. “We will accept crypto later this year and are building that now,” Birnholtz shared.
Unlike your typical soda or candy bar vending machines, Neon’s visitors won’t know exactly which NFT they’ll get. Buyers can pick the collection and will have to punch in a number to dispense a specific box, but the boxes don’t reveal exactly which NFT is being purchased. But examples of the types of NFTs on offer plaster the walls of the NYC location, giving collectors a taste of what they’re buying into.
Neon’s vending machine experience is more like a physical alternative to an online NFT minting process, which also involves blind-purchasing tokens without knowing which ones you’ll receive.
The machine currently has two different kinds of NFTs for sale: Party Pigeons and Project Color. The Party Pigeons were designed specifically for Neon by artist Typfy, and the Project Color NFTs were also commissioned for the NYC vending machine project.
Birnholtz says Neon is looking to add more vending machines and artists to its roster.
“We are expanding our vending machines to a handful of cities this summer. Having ironed out the technical challenges in dispensing and redeeming NFTs, we're inviting artists and creators to feature their NFTs in our machines,” Birnholtz said. He added that many of the artists on Neon’s waitlist learned about the brand after stumbling upon the NYC-based vending machine.