Recur, the NFT startup known for hosting the intellectual property of several big brands like Hello Kitty and Nickelodeon, announced on Friday that its Web3 platform is winding down. The decision comes despite a $50 million Series A funding round and a valuation of $333 million.
The company cited “unforeseen challenges and shifts in the business landscape” as reasons for the shutdown. This news sent ripples through the NFT community and raises questions about the stability and future of the NFT market.
The Rise and Fall of Recur
Founded in 2021, Recur quickly made a name for itself in the NFT space by offering businesses Web3 “building blocks.” Its platform was used for creating in-game assets, loyalty programs, and digital collectibles leveraging NFTs. In July of the same year, Recur embarked on a “jet-setting NFT experience” with Hello Kitty and Friends and noted “unprecedented demand” for its TV Packs containing profile-picture NFTs of Nickelodeon characters.
However, the company’s ambitions were grounded a little more than a year later. Over the next several months, Recur’s platform will steadily lose its core features, including the ability to withdraw NFTs, cash out stablecoin balances, and trade collectibles on Recur-hosted marketplaces.
In late 2021, Recur announced a valuation of $333 million after a $50 million Series A funding round led by Digital, an investment fund backed by billionaire hedge fund manager Steve Cohen. Other notable names participated in a $5 million seed funding round, such as investor and NFT creator Gary Vaynerchuk, Gemini’s Tyler and Cameron Winklevoss, and Ethereum co-founder Joe Lubin.
The Challenges and Headwinds in the NFT Space
The decision to shut down has not been an easy one, as stated by the company on Twitter. The NFT market has seen fluctuations and shifts that have affected several platforms, including Nifty’s, a social network turned Web3 creators portal, which also announced its shutdown.
Recur’s move to wind down its platform reflects the challenges that even well-funded and well-backed companies face in the rapidly changing landscape of NFTs. The company’s shutdown raises questions about the sustainability of NFT platforms and the factors that contribute to their success or failure.
Preserving Digital Collectibles
Despite the shutdown, Recur has plans to ensure that various digital collectibles will live on. The company stated that metadata and media for its NFTs would be migrated to the InterPlanetary File System (IPFS), a peer-to-peer file-sharing network built by Protocol Labs. Other assets will be hosted on Filecoin’s network.
This move highlights the importance of decentralized file-sharing networks in preserving digital collectibles and the value they hold for their owners. It also underscores the need for robust solutions to maintain the integrity and accessibility of digital assets, even in the face of platform closures.
A Cautionary Tale for the NFT Industry?
Recur’s shutdown, despite significant investment and big-name backers, serves as a cautionary tale for the NFT industry. It underscores the volatility and unpredictability of the market and the need for careful navigation and adaptability.
The decision to migrate assets to decentralized networks like IPFS also points to emerging best practices in preserving digital value. As the NFT landscape continues to evolve, the lessons from Recur’s journey may well inform future strategies and approaches within the industry.