The idea of investing in a legos app that allows users to buy, sell and trade legos digitally has gained some traction recently. As an alternative investment, it provides opportunities to tap into the lucrative collectibles market. However, such apps also come with risks that need careful evaluation. This article analyzes the prospects and pitfalls of investing in a legos app business.
High demand for legos among collectors
Legos have a vibrant collector culture with rare sets fetching extremely high prices at auctions. For instance, a rare Cafe Corner set sold for $2,000. As collectibles, people are willing to pay far more than the original price for certain Lego sets that are no longer manufactured. A digitally-enabled marketplace makes trading and price discovery easier.
Potential to disrupt the collectibles industry
The global collectibles market is worth over $370 billion but lacks transparent pricing as well as liquidity in trading. A legos app can leverage blockchain technology to introduce greater transparency and liquidity for Lego collectors and investors. Just like NBA Top Shot did for basketball collectibles, a legos app has the potential to drive mainstream adoption.
Business model reliant on user growth
As a two-sided marketplace, the value of a legos app depends heavily on its ability to rapidly grow its user base. Network effects play an important role here – the more users there are, the more viable matches and trades can occur. Thus the app needs strong viral marketing and partnerships.
Uncertainty about user experience and fees
While NFT-based collectibles apps draw a lot of hype, actual user experience and economics remain unproven. Aspects like transaction fees, learning curve for users, frequency of trades etc. will shape adoption. Intuitive design and low fees are thus crucial.
A legos app holds good potential provided it can create a sticky, economically-viable marketplace with blockchain-enabled transparency and liquidity. But strong network effects and user experience remains key.