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NFT Demystified

BAYC Bathroom, a collaborative graffiti board that you can add one pixel to the “wall” every 15 minutes, and opens to BAYC member only.

This note is a summary of what I've learned about NFT from my past 2 months' experiences playing in the NFT world.

NFT is fun, interesting yet also fulfilled with lies and manipulation.

NFT, on one hand, brings new perspectives to artists, creators, companies, to explore digital art and applications in the good way, and also civilize "art" to make creations closer to public. In some NFT projects, you can even chat freely with artist and organizer anytime and co-create together.

NFT, on the other hand, used to be disruptive to monoply and domination from all perspectives (Cryptocurreny to disrupt government currency authority, NFT Art to civilize expensive artpieces normal people cannot afford, etc.), but as the OG community gradually solidify the dominance, history repeated itself (again) and the new hierarchy was establish to start playing the old pump and dump game.

What makes NFT so fun

  • Gamification: blind box for unboxing “rare” NFTs - gambling? / new playing method like mutation / continuing growing etc.; discord is built in a playful and never offline way / gamification mechanisms that already becomes common approaches, like pre-sale, ranking for WL, tier game (select gold/silver/bronze from channel chat etc.)
  • Closer to artist and their world
    • Lucien Smith is strong on coding! He is also the highest chat ranking in Discord haha. All kinds of freely communication, like sharing his “pivotal scene to everything I stand for”, and generating ideas on the fly brainstorming with people in discord, like printing the NFT, etc. Community power: people recommend studio for cutting spines, AR tech etc.
    • Zhang Huan believes in Metaverse and NFT vision, even created his own Hetaverse discord server
  • Anti-Monopoly comes with instinctive impulse, chances to get across fixed classes get rich.

What's the dark side of NFT

  • The first batch of users is the only players - the later batches of users are so hard to get in to game with the setup price. The first batch of users can always get new NFTs at a super low "pre-sale" price like 0.088ETH, yet the public floor price is usually starting above 1ETH with at least 10x higher.
  • Not yet a healthy market:
    • Highly manipulated that 0.1% people owned 34% of NFT and top 10% of NFT traders perform 85% of all transactions
    • Small in size and lack of fludity in general: Daily trade avg of the whole NFT market is 150MM, comparing with stock symbol BABA alone, which is 23MM daily. NFT is just around 6.5 BABA in trading volume as of Jan 2022.
  • Abuse of discrimination , all kind of words full with stereotypes like “whitelist”, and with arrogant like “drop”.

What will be the future of NFT

  1. You need artist if you want to call it art; You need super star if you want it to be popular enough to power the secondary market.
  2. NFT need to be used, art trading is never a fluid market, OpenSeas will maintain status quo; NFT application layer like NFT plus Game and VR virtual space is the next hype
  3. Democrats is the eternal topic of NFT, but Particles is doing it in a brute force stupid way and so do !!!
  4. Channel between meta verse and universe needs to be evaluated. Seattle NFT museum , seed NFT, treasure Hunt in CryptoBatz by Ozzy, Damien Hirst “Currency”

Interesting chats from communities

SoftAndFluffy#7625 in Lucien Smith's SEEDS Discord channel:

This is a bear market for NFTs so no one should get worried if seeds takes a little while to sell out. The new project market is evolving and changing. This project to my eyes has a few things others do not: 1) Lucien Smith. 2) the art is very distinctive and different from other projects. 3) inherently positioned as fine art because of Lucien’s rich history (would Damien Hirst’s NFTs sell for what they do if he had no history? No.) 4) the concept of flowers growing and being able to be sold is interesting. This appeals to holder’s greed (not saying this in negative way! but it’s true). This would be received very positively as “utility” to many buyers. 5) whatever comes from STP artists which is a wildcard - could be anything 6) plus whatever else Lucien has planned or can come up with. Web3 sentiment right now I think is that art alone doesn’t make a 10,000 unit project successful. And sure, community is important but I wouldn’t count on community to add or create value/demand. So much of “community” in other projects disappears when there’s no $ to be made…literally evaporates. That’s the truth. There will always be some community that is long lasting formed over ideas, and STP has ideas behind it that will be very meaningful to some. So that is great (but remember: so do most charities!). I don’t have insight into all that is possible with SEEDS - I am just pointing out really that this is a dramatically changing market. If this had come out 6 months ago, buzz and expectations would be different even if nothing else was! To stand out of the crowd is just a taller order in current environment. Just my opinion!

What are the Risks to know before jumping in?

  • Steep onboarding curve - pay by card?
  • High gas fee
  • Fraud
  • Scam. The recent
  • 0.1% people owned 34% of NFT - this is a managed market for sure
  • And more mkt manipulation:
  • Daily trade avg is 60MM, comparing with BABA: 3B… NFT is still a very small market and not as fluid.
  • Security of Discord. Alien Fren has been hacked…

$124K was stolen! Knowing that the floor price of fraud sale was 0.1 meaning around 400 were sold within 30 minutes!!
Fraud is so fucking easy.. The total code lines <200 .. <- do NOT mint!! This is fake.

The fraud cost is so low, can be finished within half hour and get $124K… DON’T BE EVIL..

Then Lord Society, Antonyms, and Little Lemon Friends are also hacked.

Other interesting things I have noticed

  • Many oriental contemporary artists have no fame in western world at all… Even if their art piece can sell at super high bid.
  • Compared with art, holder cares about making money a lot
  • Topic: Artiest’s guide to be successful in NFT world?
    • Community interaction! Need alignment on value with NFT OG, build confidence by giving time into the community discussion, cooperation and collaboration
  • MKT strategy is also important
    • Most project: MKT on pre-sale
    • 24 hour stats, 7 day stats are most valuable as all platform uses these time ranges as the partition in diagram and ranking, planing activities accordingly can ensure good place on lead board.
    • SBFC: release by phase, limit MKT to use at the dip of price tide.
      • sharks will be released in phases! 🙂 REVEAL DATES AND TIMES: 2222-3500 1/13 10PM PST 3501-4888 1/15 10PM PST 4889-6000 1/18 10PM PST 6001-8888 1/20 10PM PST
  • There are several platforms doing data fin e.g. NFTGO, but there are still massive opportunities in these area to migrate existing fin models to this NFT and even do auto-trading.
  • Flooz NFT is trying to build an empire covering OpenSea, limited access, offline premium access, etc. literally a good example on what currently people is thinking about NFT utility:

Extended reading

Updates on 2/20/2022:
Project Nothing! = almost the truth of NFT as of now.

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