A conversation with the prolific and pseudonymous NFT investor Vincent Van Dough

Last month, a prolific NFT collector who goes by the pseudonym "Vincent Van Dough" drew the attention of the crypto community when they revealed a new NFT fund, formed in partnership with Three Arrows Capital co-founders Su Zhu and Kyle Davies.

The fund, dubbed Starry Night Capital (after a famous painting by Vincent Van Gogh), aims to raise $100 million to invest mostly in NFTs. About $45 million has already been raised, Van Dough told The Block in an interview. If Starry Night raises its full target amount, it will probably be the largest NFT fund in the market.

Van Dough wants to use the fund to help others curate NFTs and help them make profits on their investments in the future. They say they want Starry Night to be like the Modern Museum of Art (MoMA) but for the digital art world.

Below is a transcript of the full interview, in which Van Dough explains how they got into NFTs, how they value them, and their plans for Starry Night. 

The transcript has been edited for readability. 

Please tell us about yourself. How and when were you introduced to crypto and NFTs?

I've been in the crypto space since 2013. I was initially attracted to bitcoin as a trader. The volatility was exciting to me. So I started to learn a little more about the space, read the Bitcoin white paper, fell down the rabbit hole like so many people tend to do, and decided I wanted to work in the industry. So, yeah, I've worked in the space ever since. My involvement with NFTs was as one of the original CryptoPunks claimers, one of the first CryptoKitties participants, and an early adopter of Axie Infinity. So I've always kind of had a pulse in the NFT space. 

Is crypto your primary focus, or do you have a day job outside of the space?

Crypto has been my focus since 2013. Before that, I traded all sorts of stuff in the traditional finance space, including stocks.

Why are you so bullish on crypto and NFTs?

So I like crypto in general. I mean the idea of being able to be essentially a sovereign individual, controlling your own finances, and having responsibilities for all sorts of stuff that in the normal system is in other people's hands. That was all very appealing to me. I guess I kind of have a bit of a libertarian mindset. So crypto just seemed to make sense from an ideological standpoint.

And then NFTs. Growing up, I always collected stuff. I loved Pokémon cards, I collected basketball and baseball cards, and I collected prints from Disney World. All sorts of things like that. So collectibles just kind of clicked with me. I've always loved them. So when I saw them on crypto, also of which I'm a big fan of, it just seemed like the perfect combo.

We continue to move more and more towards the digital world and the physical world being blended in it. We spend most of our time in the digital world these days. So as that increases further, it just makes sense for these collectibles to be in the digital world where we spend most of our time.

NFTs are like the perfect medium for these collectibles to be distributed. Considering that you can use blockchain to verify that something is what it is, and no one else owns it, that's really important for collectibles. In the normal world, you see a huge issue with forgeries with basketball and baseball cards and all those sorts of things. There's a profit that could be obtained by faking items. NFTs are like the most surefire way to ensure that something is what it is supposed to be and that you're the true owner. NFTs are the first crypto application that the whole world is likely to be interested in. Everyone likes art. Everyone likes to collect things.

What percentage of your portfolio is in crypto and NFTs?

Since 2013, more than 90% of my portfolio has been in crypto. I pretty much have been all-in since the start.

I would say I'm more of an Ethereum person than Bitcoin, to be honest. But I don't really identify by any one camp. I use all blockchains that provide utility. At the moment, I'm collecting stuff primarily on Ethereum because that's where all NFTs are. But then, if NFTs start moving to other ecosystems, I will explore those. Like I purchase some stuff on Tezos and Solana. But at the moment, all the action really is on Ethereum in terms of the NFT space. But I think that's going to probably start changing a little bit as gas fees are high as they are. Like last summer, a lot of DeFi activity got offloaded on Binance Smart Chain. Similarly, I think we are going to see NFT activity moving to other blockchains such as Solana and Tezos, especially low and middle-tier priced NFTs.

How many NFTs do you own, how much have you spent on them?

I own over 2,000 NFTs. I have spent a little bit over $20 million on these pieces.

To date, my most expensive NFT buy is Ringers #377 from the Art Blocks collection for 350 ether (worth over $1.2 million at current prices). Other top buys include Archetype #213 from the Art Blocks collection for 320 ether (worth over $1.13 million), Autoglyph #290 from the Autoglyphs collection for 280 ether (worth nearly $1 million), and Peg 103 from the PEGZ collection for 269.42 ether (worth nearly $996,000).

(Vincent Van Dough's full collection can be seen here: https://opensea.io/VincentVanDough)

How do you decide which NFTs are valuable?

It is a lot about aesthetics. If I think something is pleasing to look at, something is fun, or it is evoking some emotion, then all these are signs to me that something is good work and that I would like in my collection.

I don't overcomplicate it too much. I buy what I like and what seems like has a good price relative to the rest of the market. Market shifts really quickly, so you have to adapt to your pricing models pretty quickly with the pace of things going. But that's kind of have been typical for crypto for a long time. These markets move quickly. You've got to be quick to adapt your views.

But largely, these things are all very community-driven. Art in general and its valuation is almost just a measure of mimetic desire — whatever people are willing to pay for something because they want to be the person who holds it. It's not unlike people who buy expensive Rolex or a car or something. It's largely all just for mimetic desire.

What is your exit strategy with NFTs?

I don't have an exit strategy for my portfolio. I'm very much a long-term collector. And everything I bought, I like a lot and plan to feature it in my galleries for a very long time.

How are you preparing for a potential bear market for NFTs in the future?

I am very much a long-term holder. Lots of the NFTs in my collection will never be sold. As with any market, there are going to be lots of ups and downs, but by focusing on high-end pieces with historical precedence and cultural relevance, you can weather downturns in the market without losing much sleep. These pieces tend not to change hands very often and are held by people who know the true value of what they are holding and aren't inclined to panic sell.

Why did you set up the NFT fund Starry Night Capital? 

While curating mine and Three Arrows Capital's collection, I received requests from quite a few parties looking for help doing the same. The interest was there, and I think we have an opportunity to do a lot of good and help promote the space at large, so it seemed like an obvious move to me. I envision what we are building at Starry Night as the MoMA of the metaverse and growing it to become a lasting force in the art world.

How and when did you meet Three Arrows Capital co-founders Su Zhu and Kyle Davies, and what is their specific role in the fund?

The Three Arrows Capital co-founders and I have been friends on a personal level outside of crypto for ten years now, so I've known them for a long time. My role in the fund is to curate the collection, and they will pretty much handle all the rest. They are like general partners for the fund.

What is the fund's investment approach and thesis, and what are your specific plans with it?

I think we have an opportunity to curate a collection of world-class pieces and display these in commercial galleries and sort of build mimetic desire around them and ultimately place them with an appropriate buyer down the road.

I think we're at the forefront of generative art becoming the defining art movement of our time. And I think crypto is going to act as an accelerator as it typically does and bring that into fruition a little bit quicker than we've seen in the past. I think we're going to see traditional art collectors move into this space in the next one to three years. And I think it's not very far off before we start seeing works like Fidenza or Ringers in places like the MoMA or similar institutions.

Will the fund only invest in NFTs or also NFT projects?

Primarily NFTs, although we do reserve the right to participate in NFT projects that we think are moving the space forward.

Will it stick to Ethereum-based NFTs or will it explore NFTs based on different blockchains?

We're very much open to exploring NFTs on other blockchains. But to be sure, the NFT world has a historical context. So there's certain stuff like CryptoPunks and ArtBlocks that is always going to remain on Ethereum. But then there's newer stuff that is going to pop up, and it will be looking to launch on other blockchains. Considering gas costs, Ethereum would probably be tough for them. Blockchains like Solana are getting some traction. Tezos also already has its NFT marketplaces. So it seems like there's going to be some other blockchains that take off some of the NFT volumes from Ethereum.

What is your ideal NFT trading platform? What improvements are needed in existing marketplaces?

If OpenSea had better uptime and better filtering options, it would be pretty good. And I would like to see Art Blocks build their own marketplace. I think Art Blocks would benefit from having higher resolution displays on some of the pieces and having better filtering, for sure. Filtering or searching for pieces on Art Blocks is currently a pretty bad experience. If you go and type Fidenza into the search bar, you probably won't even see any real Fidenza stuff initially. You'll see a bunch of other knockoff stuff. So that's an issue that should be solved. I also like what Foundation and SuperRare are doing. I think they both could make some improvements on the curating side and servicing some underserved artists.