NFT Insights: What We Can Learn From The Bull Market & Projects To Watch.
January & February of 2022 will go down in the NFT lore as the bull of all bull-markets. Trading volumes were at an all-time high, as was the number of people entering the space.
According to Gary Vee, more projects were coming out every day (in January), then were launched across the whole of 2019, 2018 and 2017 — a wild stat.
However, as we moved into March, that bull turned bearish with NFT projects and holders feeling that squeeze.
Often, you learn more from the down trends than you do in ups. So I wanted to dig into the key takeaways of these current market conditions.
Positives To Come From The Correction
1: Accountability
Personally, I believe the recent market conditions has created an invisible quality barometer. Projects have been tested and those with paper thin utility have been found out. As such they’ve seen their floor prices hit hard.
Too often, we’ve seen founders rely on baseless hype to protect their projects when really what holders crave is solid utility that builds tangible value.
Comparatively, there are other projects that have weathered the storm. Take a look at Doodles, Azuki and even Invisible Friends — these are just some examples of the staying power that can be created by building a tight-knit community with committed holders.
2: FOMO & Learning The Hard Way…
Alongside grinding, FOMO (fear of missing out) energy is a huge issue within the NFT space. It often has the biggest impact on those that are new — the lack of experience makes them more susceptible to buying into projects without conducting much of their own research.
It’s my belief that this most recent market dip, has given us all the opportunity to reflect. The graph below shows you the huge rise in users that joined Opensea during this latest bull run. Whilst we saw an initial hike, there has since been a relative levelling off.
A large number of projects that we might have thought would be huge successes, have had very poor mint-out rates, and/or experienced heavy FUD (fear, uncertainty, doubt) on or around mint day.
The much hyped “Diverse” project had over 100k followers and was even one of the first projects to get Twitter verified. It failed to mint out, selling around 20% of their allocation before deciding to pause the mint. The founders were accused of having artificially inflating their engagement and follower numbers — calling into question the legitimacy of the project.
Clay Friends looked set for a successful mint, announcing a partnership with Adobe Photoshop only a few days prior. Whether it was market conditions, or a lack of confidence in the project — the 0.25E mint did sell out but has since settled at below that, to 0.177E (13.03.22).
The point I am making is that with time, lots of the new faces within the NFT space (myself included), have now got the benefit of hindsight. We might have previously excused some of the red flags in these projects, choosing to follow the crowd.
But those battle scars have provided us with the knowledge base and education to spot red flags.
3: A META Shift & The Future of Profile Picture (PFP) Only Projects
The meta has shifted around recently — loosely aligning to the cartoon PFP (cc. Doodles, Alien Frens, CloneX), into anime (cc. Azuki), then onto animation (cc. Invisible Friends).
The meta is dictated by one key project planting a flag in the ground and saying, “we are doing something different”. Fast forward a couple days and you can bet that the copycats will spring up — boom, a new meta is born. Take Azuki, only a few weeks after their launch, we saw the rise (and fall) of Killer Girlfriends, Lives of Asuna and even Dezuki!
When it comes to the art, we all know the power one possesses if they can flex a Bored Ape PFP — it’s a qualifier that you either got in early, or have plenty of disposable income. However question marks remain — what’s the future of PFP only projects?
I’m going to dig into this question in more detail with a dedicated article soon but my headline thinking is that the projects with staying power will have to have best-in-class art, community or have game / token utility at their core. The rest will fizzle out due to a chronic lack of patience within the NFT space.
4. Some Surprising Failures & The Rise Of OG Projects
PFP projects will not become a thing of the past; I just see the group of popular ones becoming smaller and smaller.
One of the key value adds could become something that you can’t buy, and that is age. Crypto Punks, Crypto Skulls and even Moon Cats — all pixel-based projects that can boast OG status given how early they were.
Full disclosure, I recently bought a Crypto Skull and was actually quite surprised that buy in price was ~1ETH.
It is my opinion that the next 6 months will see some surprisingly big projects fail. I don’t think it is fair to make baseless claims and point out certain names, unless there was some serious evidence to base my theory off. I just feel that so much money has been raised and we are now waiting for many to deploy that capital and prove the competence of their founding team.
When people see more big names fall, they will seek the safe havens of experience — this could push ETH into OG projects like Punks, Skulls etc.
You’ve just got to look at the total sh*t show that is Pixelmon to know that money raised will not, by default = blue chip.
Foundations Being Laid For An Exciting Future
Doodles Got Physical At SXSW
My Twitter has been lighting up with Doodle-related content from their event at SXSW. Shortly after releasing spaceships for their holders, they’ve followed up with an incredible, holder only, event.
Projects need to take note on how Doodles executed this as it creates major holder sentiment and helps build a more unified community. Please can we just make sure the European contingent get some chances too!! :)
Please Consider A Donation: Ukraine FTW!
We all are aware of the atrocities going on in Ukraine. Ugly Sweaters’ founder Ira G has launched a brilliant initiative to help raise funds to donate directly to the official Ukraine Crypto Fund.
You get this cute bear in your wallet and help out, double win! View the collection on Opensea here. It has been incredible to see the community come together and utilise the Crypto / NFT space to raise funds for good causes.
Conclusion
I remain confident that in time, this market correction will give way to more favourable conditions.
Out of these embers will come an elite roster of projects that have stronger utility, more loyal holders and better founder morals.
New Projects To Keep An Eye Out For
I don’t want these write ups to evolve into some kind of tips blog — but I do like to highlight projects I feel are doing things right (IMO).
1. Stay Cool
Staycool NFT has been launched by the team behind the brand Stay Cool NYC. The brand already has a big following and a track record in building brand equity.
The secret weapon? They’ve got Random Character Collective’s Coin Billy in as an advisor — a huge bonus IMO and a surefire signal that if he believes in the project, so can we.
Discord: Private
2. The Possessed
I featured this project in my last post. At the time, The Possessed had 7,000 followers and was sewing the seeds of its exciting future.
Well, fast forward 2 weeks and it’s fast approaching 70k in followers, had an early access partnership with RCC and has become a hotly tipped NFT project.
The team is fully doxxed and they’ve been open and transparent from day one with regards to expectations. I love the fact it is a UK-based team; with so many of the big projects on US soil, we might finally have some top-tier European representation.
The fan art is unbelievable and is a sign that the best creators in the space want to be part of this project.
Discord: NA
3. Bloo Loops
Running on a similar theme to Stay Cool, I first found Bloo Loops because of their affiliation with an RCC holder, Invisible Jake.
I have joined the Discord a couple days ago when it had roughly 2,000 members but in the past two days it has doubled . It is very early doors, but I like the way they are mapping out their EA access through quizzes and activities.
The artist behind the project, Waitlessmess, has two collections listed on Opensea already. The collections, Bloo Guyz and Bloo Loop Moments have both rocketed in price recently as holding these will provide you EA into the Bloo Loops 10,000 piece collection.
Super early doors but more on this to come.
Discord link here.
This is not financial advice. For the purpose of this article I have intentionally not focused on global market conditions but just the forward outlook within the NFT space.
I write a series called, “Why’d You Do It?”. A chain of interviews where I ask a simple question to the founders of some of the most exciting up-and-coming businesses. More recently I’ve started covering my experiences in NFTs.
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Last Three Episodes
NFTs: Three Months In, Here’s What I’ve Learnt
How A 17 Year Old Turned Slime Into a Multi-Million Dollar Idea
Feast On This… “The AirB&B For Catering”
