Eight Weeks in the NFT Wilderness: Part I
My first piece of digital art was gifted to me 228 days and 20 hours ago according to EtherScan.
A 10-second gif of a spaceman stopped at a red light of an orbital intersection, I love(d) it but mainly forgot about it.
Two months ago, though, I fully committed to the NFT space backed by a crypto war chest purchased four years ago when Bitcoin and Ether were relatively super cheap.
Propelled by some free time and a thirst to learn something new, I first PhotoShopped a few NYC-inspired variations of Crypto Punks.
I then entered multiple projects — both at mint and on the secondary markets. I missed out on some projects that took off and even bought into one mere minutes before accusations of an artist’s racist caricatures from the 70s nuked the floor out from underneath it. Mostly Ls. They say it’s an NFT bear market.
Discord and Twitter are the main marketing conduits for the space. These channels seem largely filled with moonbois holding a mob mentality about floor price valuations. Dev teams reward Discord participation and Twitter raids with whitelist spots that afford buyers discounted launch-day mint prices. Moonboi slogans like “LFG” and “grind time” are regularly spammed.
B- and C-list celebrities as well as NFT influencers are frequent Twitter targets. Get them to buy in and your project earns some cachet and maybe even a tweet. Holders of blue-chip profile pics lord over the plebs and “pull rank” every once in awhile. I find the hierarchy and delusions nauseating.
Thus, I’ve been having a bad time, which I’ve relayed to my Bitcoin-inclined friends: The NFT jpg economy is the trenches of crypto. Still, I find there’s enormous opportunity. For any developer, designer or marketer eyeing a campaign in this space here’s a beginner’s primer that may inform your early considerations so you may avoid a Discord room or two :)
Overview
An NFT is tokenized proof of ownership residing and recorded on a blockchain ledger. Chains supporting NFTs include Ethereum, Solana and Cardano.
Current & Future Applications
The most visible NFTs are in the art collection space. Digital art NFTs have sold for hundreds of thousands of dollars and the market could be worth up to $1 trillion.
Early projects like Crypto Punks and BAYC are static profile pictures (pfp) worth multi-six-figure sums. However, that’s enough these days. Thinking like Gary V., projects and devs have adapted to move beyond art by adding utilities like membership-based perks, merch (clothing, figurines), and native token pools in order to hold value. A Steve Aoki NFT can get you into one of his shows.
What the market’s also been seeing with new releases include NFT-based pay-to-earn gaming projects (Wolf Game) as well as metaverse-compatible bridges. A favorite TikTokker of mine stumbled (paid or not) upon an enormous swath of virtual land branded with Meta, formerly known as Facebook.
Major industries involving possessive deeds — think automobiles, real estate — are speculated to be candidates to adopt NFT/blockchain functionality in the future.
State of Market
Cryptocurrency adoption is picking up overall. Regarding NFTs, established crypto exchanges like Gemini, Coinbase and Binance are all getting in on the act, offering NFT marketplaces to grab market share and onboard new audiences.
Major corporations like Nike, Disney and Burger King are hiring for NFT/blockchain-related roles and some have already launched NFT-based campaigns.
Web 3.0 companies from public companies to startups, and DAOs are hiring like mad.
NFT liquidity largely depends on how their parent blockchains fare in price on the open market: Volatility is the norm.
NFT bear market: Projects that would moon 5x to 10x after mint, e.g. Artblocks, now drop in value after launch with some investors at a loss immediately (source: NFT vet friend).
Market Opportunity
The wave of blue-chip NFT pfp projects may be over with imitators, competitors and scammers flooding the market, however, there is still an authentic appetite for great art, community and, of course, ROI.
Let’s look at some recent projects whose values have tumbled and how the teams made out (all very rough estimates):
MekaVerse
One of the most hyped NFT projects to be released. Dominated social mentions and the NFT market’s attention leading up to launch. Commanded a 0.8E ($800~) if you were lucky enough to win a raffle spot that allowed for up to two purchases.
Mint price: 0.8E ($800~)
Sold: 8,888 minus pieces reserved for marketing. At $4,000 Eth price, that’s $28 million~
Current price: 1E floor price ($4,400~)
Hor1zon Troopers
Mint price: 0.12E ($500~)
Sold: 6,999 for $3.3 million~
Current price: 0.015E ($66~)
ShogunSamurais
Mint price: 0.08E
Sold: 7,200 for $2.3 million~
Current price: 0.025E ($111~)
Let’s look at some bigger name projects:
RTFKT Studios
RTFKT (pronounced Artifact) has released multiple fashion-related NFT projects that have held high floor prices. Their much-anticipated release of CloneX avatars were marred by DDoS attacks, Discord spam and a controversial, cancelled Dutch auction but went on to sell out.
Mint price: 0.05 for Whitelist / 3E ($12,500~) Dutch auction for non-Whitelist
Sold: Sold out 20,000 pieces. 11,000 at 0.05E. 2,000 at between 2.5–3E. 7,000 at 2E ($60 million~ and up)
Current price: 2.3E
BAYC
Overall leader in space today with merch, events and celebrity buy-in.
Minted at 0.08E
Current price: 40E floor ($160,000~)
CryptoPunks
One of the OG projects.
Mint price: Free
Current price: All owners have delisted so there is no floor price. When there is a sale, it’s for obscene amounts.
Other examples: Ether Cards, Artblocks
With these kinds of returns, it’s also important to look at team makeup. Since long-form is dead, I’ll post later about project structure, target audiences and tech stacks.
