The current state of digital entertainment ticketing is plagued with issues. Online ticket resale sites are some of the most loathed in all of the digital economy. Hidden and exorbitant fees in combo with DDOS-like bot attacks output terrible UX. It is no surprise ticket retail sites have some of the worst NPS and equivalent ratings (not that NPS is end-all be-all but decent barometer IMO). This is not an uncommon outcome in web2 two-sided marketplaces because these systems are closed and siloed. Stubhub, TicketMaster et al each manage their database of inventory, bids and offers; each has to independently verify the legitimacy of all postings; each has to connect buyers and sellers. Maybe most important, each has to rent-seek enough to continue as a going concern.
The result? Fragmented liquidity and monopolistic tendencies for the largest players. It is a bad experience for everyone except the middleman. So this industry should be ripe for disruption.
Solution:
What can be done? Let’s think about what the ideal state looks like:
ticket holders post inventory and buyers bid or lift offers (preferably the latter);
ticket transfer that is simple, secure, and effectively free;
ticket verification is automated and guaranteed;
Simple account management, backup; 99.99% accessibility
This is tried today in places like FB Marketplace, eBay, Craigslist etc. There are several problems, but all generalize around manual processes. Users must create their own 2-sided market with entirely manual upload, bid, ask, verification, payment and transaction.
Instead of this, we take the incumbent model and replace it with crypto rails.
A global state machine is required. A global state machine ensures all participants in the network have an agreed view of ticket availability and ownership, or state, at all times. Atomic swaps allow for payment and ticket sending in one transaction. SCs allow developers to enable customizable rules in this environment like scalping prohibition and limiting automated buying “at the open” typically seen and blamed in web2 equivalents for higher pricing (maybe, more on this later). The immutable blockchain prevents duplication and fraud as seen in web2 equivalents. Issuers, like artists or bands, can issue soulbound-type tokens, a type of NFT that is non-transferrable and can easily be imagined in a loyalty program. Programmatic guarantees can improve the artist-fan relationship in addition to improved pricing by way of destroying the rent seekers.
Implementation
An NFT marketplace should suffice. NFTs are still largely expensive jpegs today. I have no real view on NFT as art, but NFT use cases are shifting in real time from speculative scarcity to mainstream utility. Compressed NFTs on Solana have decreased the cost to mint NFTs over 1000x lower than Ethereum L1: about $.001 vs $20. I have not seen a similar innovation on Base, for example, which neither means it doesn't exist today or can't exist in the near future. I think the fragmented reality of the Ethereum L2 ecosystem is largely irrelevant to this use case: the application would live on a single L2 and there'd be no need to bridge across L2 or to L1. L1 bringing to fund wallets could be a pain point. So, Solana or one of the leading L2s like Base, Op, Arb would work. A Solana compressed NFT is the perfect wrapper for the digital entertainment ticket.
Some problems / unknowns:
It is unclear how best to verify legitimacy of tickets being on-ramped onchain that were issued on Ticketmaster, Stubhub etc. A transfer from existing platform and a resulting onchain mint could work. Incumbents would likely not integrations so this transfer would need to fit in the existing digital ticketing apps frameworks today.
The easiest technical implementation would be to have verified issuers like bands, sports teams or their distribution partners, issue tickets directly onchain. This social coordination and biz dev problem is, of course, likely the hardest problem, of all problems, to solve.
The bot problem:
It is to be determined whether an onchain ticketing system can prevent the latency arb we see on incumbents today. It strikes me that this latency arb would fit within MEV in the onchain world. I think there are potentially some features of tokens that can help or completely prevent this. FYI, the latency arbitrage looks something like:
1 bots buy up pre-sale or new-issue sale tickets in mass
2 bots reprice tickets at once
3 real consumers buy from bots as effectively new-issue
4 bots deployers profit, everyone else loses
While it may seem obvious, it is important to note that these bots in this latency arb are providing no value to the platform or end users. It is pure value destruction.