January was a heady time for the Secret Network. The two-year-old platform had launched a cryptocurrency – SCRT – and was preparing to make a big splash in Hollywood. Teaming up with Quentin Tarantino, the network was preparing to auction an NFT based on the screenplay for “Pulp Fiction.”
In the network’s Telegram chat room, Guy Zyskind laid out the stakes. Known as “The Big Guy” in the chat, Zyskind is the CEO of SCRT Labs, the development team behind the network. He explained that a successful sale would be critical to convincing celebrities and brands that the network could generate demand.
He urged the Anons – the 300-plus people in the chat – to bid as a group, saying it would create “a lot of PR for Secret,” and that more auctions would follow. Tor Bair, the head of Secret Foundation, a sort of outside marketing agency for the platform, rallied the group to crack seven figures.
“We just want that sweet milly number,” Bair wrote, adding that the winner would own “a piece of history that’s guaranteed to moon.”
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To help get there, Zyskind said that he would join in the bid.
“Put me at $100k-$250k,” he wrote. “Likely the higher end.”
On Jan. 24, Zyskind issued a press release announcing the sale of the “Royale With Cheese” NFT for $1.1 million. He did not mention his own role in the winning bid.
“This groundbreaking NFT sale represents a monumental moment for our community, Quentin, and the Secret Network,” he said in the release.
Since then, however, a plan to auction six more “Pulp Fiction” NFT’s has been scrapped, purportedly due to “extreme market volatility.” And recriminations have begun among the group that bought “Royale With Cheese.”
One member told Variety that he loaned the group $100,000 to help boost the winning bid over $1 million. The bidder – who goes by B00p3r in the chat rooms – said he has since tried to get his money back from Bair, but to no avail. He said he has also been prevented from viewing the NFT that he helped purchase.
“The NFT does exist,” he said in an interview. “Nobody has access to it. That’s the problem.”
NFTs are collectible art tokens stored online and are often bought and sold with cryptocurrencies. As they went mainstream last year, Hollywood rushed to get in on the action. Studios began formulating NFT strategies to engage with superfans and exploit a new revenue stream.
But in 2022, the NFT market crashed in tandem with the value of most crypto tokens. In Hollywood, the market – or at least a portion of it – has started to resemble the market for offline memorabilia, where strange characters abound and value is often only in the eye of the beholder.
In the case of “Royale With Cheese,” the auction was also clouded by a fight over ownership of the underlying IP. Miramax sued Tarantino, claiming it alone owned the rights to sell “Pulp Fiction” NFTs. They settled earlier this month on confidential terms. It’s safe to say that neither has any plans to sell any more tokens on the Secret Network.
Tarantino’s rep declined to comment, and Zyskind did not respond to inquiries.
Blockchain technologies are touted for their “trustlessness” – that is, their transparency means they don’t rely on trust to function. But since at least 2015, when he was a grad student at MIT, Zyskind has been working on how to incorporate privacy into blockchains – combining the advantages of both.
His first effort was Enigma, which raised $45 million in 2017 through the issuance of Enigma tokens. In 2020, the company settled charges with the SEC for issuing an unregistered security and agreed to pay a fine and refund money to investors.
Zyskind then pivoted to the Secret Network, which, like Enigma, is intended to allow users to transact securely and privately on the blockchain. But the Tarantino NFT sale highlights some continuing concerns.
The NFT was supposed to go to AnonDAO – the decentralized group comprising everyone who chipped in on the winning bid. One of the Anons, who goes by Luigi, told the chat room that each member’s ownership stake would be proportional to their contribution. But other terms, like viewing rights, were left “TBD.”
“A lot of agreements are made without signing contracts, which is very foolish,” said another member of the Anon group, who decided not to bid. “You get to, How do you enforce it? And it does kind of come down to mob or community sentiment.”
At one point prior to the auction, Bair wrote in the Telegram chat: “Are we still over $1M… If we end up short someone needs to throw in and I can pay em back.”
B00p3r responded: “Fine I’ll do i”
He sent in 10,000 SCRT coins – worth about $100,000 at the time. (SCRT has since plummeted from around $10 to less than $1.)
After the sale, he asked to be paid back. Bair responded that he had not made “a blank check promise of a loan to any party,” according to direct messages provided by B00p3r. Bair suggested that other members of the group might agree to buy him out.
“Clearly it’s a miscommunication,” wrote Bair, who declined to comment for this story.
According to B00p3r, Luigi – who is considered the most trustworthy member of the group – continues to hold the NFT in his wallet. But no DAO has been established to govern how it is shared, monetized or sold. At one point, Zyskind suggested that the group could hold watch parties at different locations around the globe.
“And who knows maybe I’ll be able to get Quentin to show up if it’s in LA,” he wrote.
But that has not happened. Instead, B00p3r said he has only seen about 20 seconds of “Royale With Cheese” during a video chat – just enough to confirm that it’s real. It’s not clear what the NFT would be worth – or who would buy it – if it were put up for sale again.
“What happened to B00p3r, whether legally it’s enforceable, morally and ethically it’s appalling to me,” said the Anon who opted not to bid. “He really got the crap end of the stick.”
Zyskind, meanwhile, has continued to seek other Hollywood opportunities. In June, SCRT Labs minted NFTs of a new Kevin Smith film, “KillRoy Was Here.” The NFTs – which started at $210 apiece – also provided access to an in-person premiere at a crypto conference in Austin.
Zyskind touted the potential of NFTs on stage last week at Mainnet 2022, a crypto conference in New York. He took aim at “misconceptions in the media,” and argued that during a bear market for NFTs, “it’s easier for the media to come attack.”
He also spoke of the challenges of breaking through in Hollywood.
“It’s easier to convert the likes of Tarantino and Kevin Smith,” he said. “These are people who are outliers or misfits in their own way. They were trailblazers. They started this indie movie movement. They really resonate with the message of Web3.”
