Many intelligent individuals in the Crypto Space, whether it be Vitalik or Cobie, aren’t a fan of 99%-100% of NFTs that exist today. If you look at it from the angle of Crypto trying to restructure broken financial systems or Bitcoin trying to be the global digital currency. The concept of NFTs is pale in comparison and are currently rich people having fun, going beyond their basic needs and satisfying their “desires”.
Of course, it’s a bit more complicated than that, but it is a general truth. The other side of the coin is that most of these early NFT buyers became rich through these JPEGs, so it’s not just a “rich man’s game”. But, again, you have to be rich to spend six figures on a monkey JPEG (even if it’s an investment). NFTs probably won’t ever have as significant an impact on the world as some of the other things being built in the Crypto space. Especially when 99% of the projects in the NFT space are just speculative garbage combined with a lot of gambling, it doesn’t help persuade anyone.
But, NFTs have actual use cases disparate from the ponzis being recreated or the constant derivatives of the trending project.
Unfortunately, there are no NFT projects that properly utilise the tech for what it can do. If we use the example of NFTs in blockchain games, there are no fun blockchain games that involve NFTs (yet?).
A few years out, when we have these innovative NFT projects — I’m not saying it will be more beneficial than some of the other things being built in the Crypto space. And, if you are in Crypto, it doesn’t mean you need to start caring about NFTs from that point on. However, that’s fine because it doesn’t need to be, and you don’t need to.
As 4156 says, the second and third-order effects of NFTs are what will lead more people towards the decentralised future many of us yearn for.
Now that’s out of the way, I thought I’d do a post talking about the “NFT narrative”.
These are just my personal thoughts on the top projects, and why I believe they are at the top.
Each leading project, whether it be BAYC, CloneX, Azuki, MoonBirds, or CryptoPunks, has a unique reason why most people had/have such high conviction in them. I’ll try to outline them for the following projects:
BAYC: Heavy belief in Yuga Labs after constant great execution.
CloneX: Acquired by Nike, the team is known for delivering.
Azuki: Anime Meta and a great founding team with lots of experience.
MoonBirds: One of the top teams with lots of experience as founders/investors in the Web2 space.
CryptoPunks: Historical significance and inspiration to all avatar collectible projects.
Each of these projects also has similarities in doing something innovative; underpromising and overdelivering. The airdrop meta, high-quality 3D meta, ERC-721A, nesting>staking or one of the first projects in the space with an on-chain timeless design.
“Underpromise with no limits, and then overdeliver”
The NFT space likes speculating over executing more than the actual execution, but it doesn’t mean you shouldn’t do things anymore. These projects always have something they are working on behind-the-scenes, without announcing them to the public to maximise community engagement and hype.
The no-limits part is important here, too, a familiar tagline: “Web 3 brand, access pass to what we are doing” is perfect. It may just be buzzwords, but it’s the ideal way to not limit the potential of an NFT by binding it to specific things.
A recent example of this is the MNLTH drop by RTFKT, with max hype and weeks of challenges to open this box. They were setting very high expectations; it was probably impossible to deliver something that would have satisfied people. However, they are marketing experts. The announcement of their Nike sneakers, Skin Vials and MNLTH 2 instantly pushed the price back up, punishing paper hands.
Similarly to how the Nike announcement happened after CloneX started to drop below the mint price.
You can’t always control the price, but you can maximise the impact you have on it through the events that take place.
Being in the space, you start to understand how NFT buyers act, and you can use that to your advantage. At the base level, all of these projects have executed very well. The next level up is creating your narrative. Azuki wasn’t the first anime NFT project, so why did it blow up? Timing is critical. There will always be things that you can’t control. They instantly stood out with the very talented team and then ERC-721A being developed beforehand.
Being a top project already gives the founders leverage. A secondary dilutive airdrop to allow holders (made famous by Yuga) to liquidate without selling their original NFT was very common after the first BAKC drop. However, it doesn’t work if the sentiment around the collection isn’t there or the floor price is too low.
You still don’t have to understand them to benefit from these projects. You need to understand that others understand.
It’s not just top projects with a specific narrative (which is usually the catalyst for fast growth). Narratives can come, and they can go. Trends.
Memes are probably the best example of this in the NFT space. People usually are confused when something very silly is the trending topic, and in this market, it usually means it would forever be immortalized on the blockchain.
Most recent example if I can recall correctly is Kevin. Others would be CryptoDickButts, KamaGang or the numerous derivatives that pop up from the top trending project.
From what I’ve seen, 2-3 days is usually when people stop talking about specific projects and move on to the next. Kevin was a perfect example of this. If you are trading, 1) you should not trade based on emotions. 2) you should be willing to exit quickly based on any new information presented.
Don’t be mad at the players, be mad at the game.
Most people will capitalise on the opportunity to sell higher in a game of hot potato with these memes. There is no specific reason why “Kevin” was the meme of the day. But I don’t question. It wasn’t surprising based on the Twitter activity around Pixelmon after the reveal. Simply:
It was the narrative of the day.
Now, not everyone will catch onto the correct narrative. But even if you have no financial exposure to the projects. The time spent in the space “missing these projects” won’t go to waste, at least if you try to identify the similarities between them.
An example for me is PhantaBears which I thought people would purchase because of the “Asian BAYC” narrative. However, no one cared. 32 ETH down the drain. But that’s fine. You win some, you lose some, and you miss some.
[Keep in mind that narrative is one of the things I look for when buying a project. And is not the only thing, there are many other things you should look at, but that would be a massive list for one article. Statistics and the chain is your best friend].
This article shouldn’t be taken word for word. As said above, narrative is one of the few things that would lead for a project to be successful. One may argue that Bored Apes “haven’t executed anything”. But they were in a favourable position so when they did do their merch drops, IRL events, treasure hunts or mini-games — the demand was there, and they delivered with hardly any problems. Popular to contrary belief, I believe for what Yuga has done, they’ve done it well.
Founders usually play a big part in starting the vision. Depending on what role they play in the company (some may hire CEOs) they also have a big impact on completing the vision. As a founder, you want to create your own narrative. Why should people care about your project? Answer that in 1 sentence. Innovation is important. Don’t just blindly follow the community, think about what’s best for the project long-term. The harsh truth about most financially incentivised individuals short-term is they will pick any decision that helps their investment, even if it may be the worse one long-term. Most common example is buying back + burning tokens.
If you haven’t created a project yet or you don’t know what business to create, I recommend reading this:
Founders tend to focus more on the initial sale than the plan after the sale. Don’t maximise primary volume at the beginning just because you see hype. Secondary price action is important, it will allow you to then monetize in the future with a dilutive collection. Figure out exactly how much you need and then raise enough, think more about your long-term plan than the initial primary sale.
Anyways, hope you enjoyed my rambling. As I say every single time, I’ll try to keep posting on any subjects that may come up. Will most likely create a new one for articles like these and keep the rest of my posts here.