Tim Carl, Local Tastes: Napa Valley's Crypto Bros -- And Their NFT ... - Napa Valley Register

Tim Carl, Local Tastes: Napa Valley’s Crypto Bros — And Their NFT … – Napa Valley Register

The crypto currency and NFT (non-fungible token) markets imploded in 2022, but don’t believe for a moment that they are going away any time soon. These digital-asset vehicles are being used as a means to generate speculative and often highly volatile wealth, and they are also being used to rethink exactly what “value” means and how it is distributed. 

For two Napa Valley vintners — Mario Roam Sculatti and his business partner, Trevor Mallett — NFTs, in particular, represent a vast and untapped potential for engagement with a global wine-curious community.

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“In a lot of ways it’s still the Wild West out there,” Sculatti said, “and we are working out the details as we go along, but [crypto and NFTs] are potentially game-changers when it comes to creating value through transparency, traceability and gamification in nearly everything out there, including wine.”

Before we dive into NFTs, first more about these two vintners.

‘Like a gold rush’

Sculatti is not new to either the Napa Valley or the craft of winemaking. He grew up here and can trace his local roots back to the early 1900s, when his family immigrated from Italy. His uncles worked in the vineyard at Beringer, and his father, Ron, worked in some of the area’s most revered wineries, including Chateau Montelena, Krug and Mondavi.

After graduating from St. Helena High School in 1999, Sculatti headed east to study economics and architecture at the University of Virginia. Like many locals who leave, however, the lure of the Napa Valley soon called him back. Initially his plan was to return and earn his MBA at Berkeley, but while working part time at Mario’s, the family-owned clothing shop in St. Helena that was named after him, he found his interest and acumen for selling rare wines both lucrative and exciting.

One day when he was working at the shop a customer off-handedly asked if he knew anyone who was selling one of Napa Valley’s most sought-after and valuable wines, Screaming Eagle. Sculatti — seemingly unfamiliar with the word “no” — said that he thought he might.

It was 2005, and Silicon Valley had recovered from the dot.com crash of 1999. That being the case, many visitors to the region were flush with money, often looking to spend lavishly on trophy wines that were called “cult wines” at the time.

Scouring his local contacts and his contacts’ contacts, Sculatti eventually found what he was looking for, brokering $50,000 worth of Screaming Eagle and taking a finder’s fee. He was hooked. Within five years he had become a wine broker to the rich and famous, jetting between California and Asia, often with millions of dollars’ worth of fine wine in tow.

“It was a crazy time,” he said. “There was just so much money flying around, and everyone was out to get the best of the best. It was like a gold rush.”

And who makes the most money in a gold rush? The merchants and middlemen, of course. Sam Brannan, California’s first millionaire and founder of Calistoga, made unbelievable sums of money in the mid-1800s — not by digging for gold but by providing the picks and shovels.

But there was something missing for Sculatti. Yes, he was successful at being a matchmaker, but the idea of making a wine with his own hands was growing.

“Not to be disrespectful to beer-brewers or France, but wine is the best beverage ever created by humanity and the Napa Valley grows the best Cabernet Sauvignon in the entire world,” he said. “Yes, there are amazing other wines out there — and I was tasting unbelievable and historic wines — but I also was thinking, ‘hey, I think I need to make my own wine from here.’”

Working under the tutelage of Massimo Di Costanzo (Ovid, Screaming Eagle) and Denis Malbec (a cellar master “maitre de chai” at Chateau Latour), among others, Sculatti began making his own wine. He called it Roam.

“Roam is my middle name,” he said. “It was given to me as an homage to Roam Steineke (a winemaker who worked at Chateau Montelena with his father in the early 1970s), but it also reflects how I’ve lived,” Sculatti said. “Not only have I traveled, but I’ve also loved roaming around looking for everything from hard-to-find wines to antiques and collectables.”

As a result of Sculatti’s wine-centric but eclectic interests, experiences and proclivities, beyond making wines he is involved in numerous other ventures that include the Rutherford Wine Vault (wine storage), the Kanamota Portfolio (wine distribution company), the Vault + Artifacts (a tasting room tasting/antique shop in Calistoga) and Evinco Winery DAO, his company that released its first NFT in June 2022. But more about that in a moment.

Mallett is newer to the region and to the world of wine. The not-yet-27-year-old has already packed in a wealth of experiences. Growing up in Southern California, the successful high school athlete had always imagined himself pursuing a career in sports. Attending various colleges to study and play baseball — Sonoma State, Santa Rosa Junior College and with a scholarship to the University of Missouri, where he graduated — he’d gained a growing interest in wine.

“Of course living in Sonoma provided lots of access to wine, but even in the Midwest I found myself seeking out local wineries,” he said. “But when I came back to Sonoma to red-shirt after I’d graduated, that’s when I thought about the wine business as an actual career option.”

While receiving his master’s degree in wine business at Sonoma State he met and began working with Sculatti, helping out at the Rutherford Wine Vault between classes and baseball practice.

“Trevor not only has a good wine palate, but he’s a math whiz and great guy to just hang out with — a perfect business partner,” Sculatti said.

The Calistoga Vault + Artifacts

In 2020, just as the pandemic was causing lockdowns and businesses were beginning to shutter, Sculatti and Mallett decided to transform an antique shop in Calistoga that Sculatti owned into a super-hip wine-tasting lounge that might also showcase winemaking “artifacts” such as vintage winepresses and barrel-making equipment.

“Most people looked at us like we were crazy — trying to open a place in the middle of a pandemic — but we saw it as a way to learn and refine before things opened back up,” Mallett said.

Beyond showcasing their own wines — Roam, Kanamota, Evinco and Mallett — at the Vault in Calistoga they also serve local family-run wine brands. These include tiny hard-to-find producers such as Petrified Forest Vineyards and Y. Rousseau, two of my personal local favorites.

But they also saw the space as exemplary for another idea. Could they create an NFT that was somehow linked to wine, and might they even hold NFT-related events in a space such as this?

A few definitions: NFTs, blockchain, DAOs and cryptocurrency

If you go down the rabbit hole of NFTs and crypto, you’ll discover a lot of acronyms and lingo.

NFTs, or non-fungible tokens, are typically a type of digital asset that represents ownership of a unique item or piece of content, such as a digital piece of art or collectible. NFTs have become popular in the art world as a way for artists to sell their digital creations and for collectors to buy and own one-of-a-kind pieces. NFTs are typically built using blockchain technology.

Blockchain is a decentralized digital ledger that records transactions across a network of computers. Each block in the chain contains several transactions and is referenced to the previous block, creating a history of blocks. Such a structure allows for secure and transparent ways to track and verify digital transactions. This is because every participant in the network has a copy of the ledger and no one can alter it without the consensus of the network.

Cryptocurrency is a digital or virtual currency that can be built on the blockchain and operates independently of any central bank. Bitcoin was the first decentralized cryptocurrency and the most widely known, but there are others such as Ethereum. Both of these are built on the blockchain, so they are considered safer and more reliable than others that are built using less transparent and traceable technologies such as directed acyclic graph (DAG), better known as the “Tangle.”

Today many NFTs are purchased through the OpenSea online marketplace that utilizes the Ethereum blockchain infrastructure. OpenSea allows users to buy and sell these NFTs using cryptocurrency and also provides a platform for artists and creators to “mint” and sell their own NFTs.

Those purchasing particular NFTs might form a community, often referred to as a DAO (decentralized autonomous organization). DAOs are a type of organization that is run through rules encoded as computer programs on a blockchain rather than through a central authority. DAOs are designed to be decentralized and operate independently, without the need for intermediaries. They can use smart contracts, which are self-executing, with terms of the agreement directly written into lines of code, to govern their operations and decision-making processes.

Napa Valley’s Crypto Bros.

In early 2022 Sculatti and Mallett — with encouragement from anonymous online Twitter personalities such as the “Wizard of SoHo” and “KeyboardMonkey” — announced to their Discord community that they would be minting Envico Winery DAO NFTs. Discord is a chat app that is geared to video-game players and crypto enthusiasts.

“The response was encouraging,” Sculatti said. “And the thing is that where most NFTs provide only digital assets, here we were offering people two bottles of wine for every minting.”

The idea was to sell NFTs of the wine for a percentage of the value of an Ethereum crypto coin. For example, setting a minting price of 0.3 would mean that to purchase a single NFT the buyer would need to pay 30% of Ethereum’s price at the time of purchase.

Buyers would mint an NFT but then also gain access to IRL (in real life) events, so long as they were not “rugged” (scammed) or Rekt (the person loses all of his or her money because of a poor investment decision). See, I told you, lots of lingo.

Such buyers would immediately become members of the Envico Winery DAO, meaning they can attend IRLs anywhere in the world, including their potential home base in the Napa Valley, such as at The Vault in Calistoga.

So, on June 29, 2022, Sculatti and Mallett opened the gates. As of today Sculatti says they have sold more than 2,000 NFTs and have had a positive response.

“We are learning as we go,” he said. “The idea is building a community that has interest in wine, that is global and where the DAO might make collective decisions as to which wines to make in the future. It can also decide where to hold events and how best to increase value. The potential of all this is nearly beyond imagination.”

The Vault tasting room is open Thursday through Monday, at 1124 Lincoln Ave., Calistoga. Info, vaultcalistoga.wine/.

More than 35 Calistoga wineries participated in the Calistoga Wine & Culinary Experience at the Four Seasons March 26

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