Finally A Complete NFT Guide

“I earned monthly salary on the way from home to work,” crypto friend of mine writes to me on Telegram. “NFT is now the main game, it can make money like bitcoin ten years ago.”

This person has been reselling flipping crypto tokens called NFT for a year. Today, he owns over half a million dollars in crypto images, and only one his monkey is worth as much as an apartment.

This article is the ultimate guide for all of you who want to get into NFT

This article is the ultimate guide for all of you who want to get into NFT and trade crypto art. The whole field is still young and developing fast, those few who figure out the rules of the game can thrive in this new economy.

In this article I will focus on the artistic side of NFTs, for which many are going that far that they think that getting into crypto art now in form of NFT is like buying Amazon stock in 1997.

In closed Discord groups you can see people who teach others how to trade NFTs. In such groups, you could regularly see how people were flipping NFTs – they buy them for few hundred dollars, and resell them for 10x higher price week later.

What is NFT and why are some crazy people out there paying a million dollars for one JPEG image?

This is like asking “Why would someone pay a millions of dollars for a painting of Mona Lisa by Leonardo Da Vinci?”

“Yeah but that painting is real, jpeg is digital. I can right click on it and download it, look at it all day long without having to pay anything!”

Well, you can do exactly that with picture of Mona Lisa: You can download it, print it, and put on a wall. There are a lot of Mona Lisas in the world, I passed by some cafes that have Mona Lisa on the wall.

“But that is printed image, it is not same as painting!”

It can also be handmade, but only one is original, the one in the Louvre. And only for that one Mona Lisa there is a certificate of authenticity.

Did you know that there’s a village in China called Dafen where they paint a third of all the oil paintings in the world every day? They’re doing paint-by-number in volume. They are making near perfect Mona Lisa paintings by volume, but is that the art? It is not, it is a copy. You could get exact same copy as Da Vinci’s picture, except it is not Da Vinci picture. It looks the same, has same colors, same size… but the chances are , you would not be able to sell it at any price.

Same is with Rolex watch replica. There are quite good replicas of Rolex for 10% of price, and even professionals have hard time figuring out if it’s fake or not. But would you wear a fake Rolex watch with pride? Even if it is looking like a real one, it is still a copy.

But with digital jpeg picture is somewhat different, everyone knows how easy is to do copy-paste or download a digital image. So it is not unusual that people were telling (and some still are) how everyone who is buying an NFT is wasting their time because it is downloadable.

Well, they were wrong. NFT is not just any image from the internet, because in order for some digital image to be NFT, there must be a proof of authenticity, proof of ownership and origin, just like the picture of Mona Lisa has it.

When you buy a painting made by a famous artist that died like Leonardo Da Vinci, you have some certificate for it which says that it is a Leonardo Da Vinci’s painting, because some art historian, a forensic scientist, validated that it is indeed a image of Van Gogh, and there is some institution that guarantees that

1) it was really painted by Leonardo Da Vinci

2) that it is yours.

NFT is exactly all this, except it’s not written on some piece of paper with a stamp like the Mona Lisa because the image is digital, and the “institution” that guarantees that the image is authentic and that it is yours is the (decentralized) software called blockchain. Now, if you don’t know what blockchain is, you can later read my text about blockchain where I explained it all.

But in short, blockchain is a system of hundreds of thousands of computers nodes (validators) around the world that records ownership of data, like a global cadastre, and it is impossible to counterfeit it. On the blockchain, for example, everything about cryptocurrencies, who has how many bitcoins, ethereum and so on, is recorded.

NFT is, therefore, a digital token on the blockchain, just like Ether ETH token or Bitcoin BTC coin is. Where it differs is that it is non-fungible token, which is why it has a name – Non Fungible Token (NFT).

Non-Fungible

This is a weird term we never really had to use before. There were no need for that expression, and many did not hear it until now.

A $100 note, is fungible. If you lend someone $100 he can give you back $100 one week later, but that will not be the same $100 note you gave. Which is not the case with NFT, where it can only be ONE single token which is unique and can not be replaced.

You can think of each NFT jpeg image as a digital Mona Lisa.

BTW, you can make pieces (small parts) of it by copy-ing it in another format which points in smart contract that says: “these pieces represent parts of X token” which is called wrapping, but that is not important right now.

Now is important for you to understand what non fungible means. There is almost 22 million ethers right now that have same property, or there are over 19 million bitcoins with same property. But in order for cryptocurrency to be NFT, it needs to be only ONE, single, unique token.

Ok, there can be only 1 token, so what’s so special about that?

Exactly that’s what is special. For the first time ever, digital items can really be owned, and when you can easily prove that you OWN something digitally, you can trade it, and do all sorts of crazy shenanigans with it, by programming it to do whatever programmer make it to do – that’s the story about smart contracts btw.

So NFT can represent anything, physically or digitally, but what is revolutionary as I said is that it can represent anything in the digital realm.

How is that possible? Simple – you just need to put in “description” in NFT what it is that it represent. When you look at smart contract of the NFT, there is written: “This token represents this and that.”

And that’s it!

After minting (creation of token through smart contract on decentralized blockchain) token with all descriptions you want, it is put on the blockchain and it will be there forever.

But how NFT represents something?

Can I just write that token represents entire Earth and that’s it?!

Exactly that’s the case – you just declare it! You code into a smart contract statement: “This token represents planet Earth.”

It is totally different topic how will you make that statement a reality, because remember, law is not important if it can not be enforced. People don’t want to be told what to do, what they can and what they can’t do, especially they don’t like when they forcefully need to give money. To make sure that people obey the law, civilization made institutions like police to enforce the law.

When you are born you already have contract with the government of the country you are in, all laws of the country apply to you, and you don’t even know your own name.

If you can make possible that owner of the token actually own planet Earth, what happens when someone do the same after that?

Well that’s easy, by looking at the time when block with token is “mined” (when block was added to previous blocks in the chain), everyone can check which token was made earlier. The first one is original, all others, although exactly same tokens like first one, are fakes. If others would be legit, we could not call them NON FUNGIBLE tokens.

I remember how there were someone who took NFTs and put them on different blockchains, and they were unique and original – but only on that other blockchain. Then he declared them as original… but, no one cared.

So if you can enforce the declaration in description, that’s all that matters. That’s why digital realm is more exciting than physical – you can make anything digitally, and put token on decentralized blockchain which points to that digital item, and voilla, you have made unique NFT because it represents unique digital item. Then you can trade that token, which is exactly like trading that digital item.

Yup, NFT is not that fancy JPEG images you see, NFT is just a certificate for these images, or any digital items that can be hosted anywhere on the internet.

Evolution of NFTs

When you look at bitcoin for example, what is it at its essence? Bitcoin is non-forgeable piece of digital item. There will be maximum of 21 million bitcoins ever created. So Bitcoin seems to be the first digital collectible, something like NFT predecessor.

Having something that is limited by nature, is surely somewhat valuable. With having that on mind, it will be easier to understand all this hype about NFTs further.

First NFTs were just representation of simple digital images, and famous crypto kitties which were released in late 2017 were first game with these images of kitties who could breed, and some had more rare “features” than others. These features were colors of eyes for example.

Nothing special was happening with NFTs during the crypto bear market next few years, and then in early 2021 in the beginning of the new crypto bull cycle, there were auction of digital collection of art at Christie’s. It was “The First 5,000 Days” by Mike Winkelmann who is known now as “Beeple” which is his Twitter username.

Beeple was making an digital artwork every day for the last 5000 days. So yeah, he started in 2007 – even before bitcoin existed! Then he decided to sell them all at once as an NFT.

This auction spread like fire among crypto community, and price were getting higher and higher which everyone was amazed at. Some people who wanted publicity were trying to buy it just so that it can be said how they offered crazy amount of money for it.

This collection of digital images were sold for $69 million!

Now this have not happened just like that, this self-taught digital artist had a large fan base before this auction, so what started auction rolling to high numbers were his already established fans. The similar story is with book “50  Shades Of Grey:” This book became bestseller because writer was already well known before the writing of the book. Author was writing stories on forums for years before releasing a book. Many who bought the book on hype were scratching their heads in shock why this book is so popular.

This auction of $69 million is what artistic community noticed, so they started making their NFT art, which is the type of NFTs that will be primary focus here.

Now you know how NFTs that took over the crypto space are a digital work of art, such as this image that was sold for $465,000 (in eth):

Or maybe this one which was sold for $1.6 million (in eth):

Look at any history of 20th century art, they’re all scribbles like this, worth a million dollars each today. This is nothing particularly unusual.

I know, I can already hear you commenting, “5 year old kid can draw this, I could understand that someone pays for van Gogh’s picture that much, but not this sh*t!” We’ll get to that, but first let’s explain the basics and see how it all works together.

It also looks like a piece of crap to me, but I don’t care what it looks like, if someone with a lot of money gets excited about it and want to buy it, that’s enough reason for me to consider buying it before them.

What the heck gives value to that drawing?!

That’s actually also pretty easy – People do! As is same with anything else when you think about it. Something can be very valuable to a fish, but only people express value in currency. If someone wants to pay for it, its valuable, and value is expressed in price.

To better understand nft collections, watch YouTube clips from Pawn Stars. That is the show of family-run small pawn shop in Las Vegas you have probably already seen on History channel.

People are bringing all kinds of things, an old coin, an old gun, an old book, and some are worth really a lot. It will be the same with NFTs, but the advantage is that it cannot decay over time as objects do. The dialogue will go something like this: “This is a 2021 nft collection, and this one is rarer than the others in the collection, this one is worth $x to the right collector.”

You can also look at NFT in collections like philately, or numismatics, or photos of athletes, badges, napkins, medallions, or Lego toys.

If you think that something digital can’t be valuable because it doesn’t exist in the “real world,” that’s perfectly fine, but think about for a second about why are you consuming this digital content right now? If it isn’t valuable to you, then you are an idiot because you are completely wasting time and energy on activity right now.

Because controversial British artist Damien Hirst had same dilemma, so year ago he launched NFT project “The Currency” as experiment. It is just some colorful dots with some note, for example:

The artist minted his 2016 physical collection as 10,000 NFTs and NFT buyers had a year to decide if they wanted to keep the NFTs or they want to exchange it for a work in physical form. They cannot hold both forms. The project was supposed to show which form collectors are more interested in: NFT or physical. After one year the result is: 5149 for physical form against 4851 for NFT.

It doesn’t matter why someone is willing to pay for NFT, because if he is paying for it, that’s how much it is valuable to him at that moment. Price of NFTs you are seeing is just last recorded trade of 1 NFT in collection.

Fortunately, it is not random why some NFT is worth a lot of money, and the other is pure junk that no one cares about.

Why would someone want to own an NFT?

NFTs share a lot of valuation methods with regular cryptocurrencies. I have written article about how to evaluate cryptocurrencies, I would add here to that simply:

A) It is useful

B) It will be more expensive/valuable in the future (or owner thinks that)

C) Owner likes it

A and B is something called tokenomics, which answers the question how is cryptocurrency used, why is it needed and how much, under which circumstances?

C is visual appeal or what it represents (cultural aspect). This is the art which is something unique to NFTs, and that is bringing artistic aspect to the valuation, but it doesn’t have to. You can have NFT that is serving only as utility which I touched a little at the end of this article, but I will be focusing on this unique aspect for the majority of this article.

Inside of an NFT

Let’s look closer now at NFT art from technological stand point. In the blockchain it writes:

  1. who is the author of the work
  2. detailed description of NFT (what it represent, if image link to the image)
  3. who is the current owner (which crypto address)
  4. who was the owner before us and how much money was that NFT sold for each time it changed hands

You can easily gather these data when the image that NFT represents is opened on the official website that lists NFTs. There are several sites where NFT art are bought and sold, some like Foundation is good for single 1 piece NFTs, but the most famous is OpenSea, because it is a site that deals with NFT collections.

Collections and “open sea” for collections – OpenSea

OpenSea started with listing only NFT collections from Ethereum, but recently added second most used blockchain for NFTs – Solana.

Remember the Pawn Shop Stars? It turns out, that being something just rare isn’t enough. I remember one episode of Pawn Stars where one guy wanted to capitalize on rarity came with an item saying this is very unique and rare item. The paws shop owner immediately saw where he is going with that and interrupted him with following words: So is the rock outside my shop!

Something rare out of context doesn’t amount to anything.

99% of all NFT millionaires were made from images that are part of some COLLECTION, not individual artwork. So if you thought that you will just draw something and turn it into NFT art, the chances are that you will not achieve anything with that.

A collection is a series of images, or anything else really. There is x copies in collection and all have some similarities, connections with each other (all have some points of contact and some common story), that would be a collection.

For example, American artist Andy Warhol made collection of 32 can designs for same soup in the early 1960s which helped him grow his reputation to the point where he was not only the most-renowned American pop art artist, but also the highest-priced living American artist

Once again, where money in NFT has been made was by buying and trading images from collections, not individual artworks. To understand why this is happening, we will go back in time little more.

NFT 0.1

At the end of the 19th century, painters figured out how they could make their art accessible to the wider masses, and at the same time earn more money: to make their work as a printed graphic.  They print a limited number of copies, say 100 pieces, and call it a “collection.” They could not do unlimited amount even if they wanted to, because after 10th print the subtleties of the drawing will begin to show up after multiple inkings.

That’s how painting graphics were created, you remember that from art classes. The process took several steps and looked something like this:

1. Graining the stone

2. Drawing on the stone

3. Processing the stone

4. Washing out and rolling up

5. Printing the stone

It is often said that this printmaking technique “democratized art” because it made works of art accessible to everyone.

Let’s say that a Picasso painting is worth an average of one million dollars. Only the richest people in the world, some elite, can buy that. But Picasso came and said “I will make my next painting as a graphic, I will make a woodcut that serves as a printer, print a hundred copies on paper, and then burn the original woodcut so that it is known that there will only be those hundred copies.” Picasso made his first deal with art dealer who bought his prints for initial price of “only” 1,000 dollars per piece in today’s value.

Now someone who is not ultra-rich can buy Picasso’s work. He can keep it and sell it in a few years for double, or triple and so on.

Picasso made 2400 prints during his lifetime. Collection of copies varied: some had 15, some 50, some 260. This is, for example, Picasso’s “Crying Woman”, which he did like that – in 15 copies. 

Today, one of these 15 may be in the house of an Internet millionaire in California, another is in a luxury villa of a drug boss in Paraguay, the third is in a museum in Berlin, and so on. This work #3 was sold for $5,122,500 on 1st November 2011 at Christie’s in New York.

For the NFT thingy, it is important to remember the principle – in this way, a famous artist came up with a way to “print” his work, to lower the price so that it would be affordable for many more people, but he did not print too many – just enough copies to still hold a solid price.

A similar thing is happening in the NFT world. Artists put out collection that have, say, 5000 pieces, and they are initially sold for, let’s say, $200 per piece, so that anyone can buy them. Over the course of a few days or a few months, their value increases, sometimes 100x.

The “sweetest money” in NFT trading is made when we find out in time about a new collection from an artist that will grow 100x and we are the first buyer. This is NFT trading strategy, more on that later.

Now let’s see in detail how the price is made at the expense of rarity.

Why are there limited editions? Well if the artist would have said “I’m going to print an infinite number of copies,” then no one would want to buy it because it would be worthless in the long run – no one would want to pay more money for something that is printed in countless pieces.

However, if an artist only makes a hundred pieces and then burns the base from which it was all printed, now that makes some sense. We now know that only one hundred people in the world can have that work, so it has value. But that’s not all.

Imagine that Vincent van Gogh made his “Starry night” as a graphic and that there are a total of 100 pieces in the world. Today, each of them would be worth less than this one, but it would still be a huge sum because it is van Gogh.

However, there is another important element in NFT – the rarity of individual specimens within the collection.

Let’s go back to this example. So, let’s imagine that van Gogh made his “Starry night” in 100 copies, so he literally took a printing press and “photocopied” 100 pieces.

After that, van Gogh takes a brush and on only 5 of those 100 adds a comet.

Now, those 5 graphics are worth far more than the other 95. Because they are rare within the collection. If the copy without the drawn comet is worth a million, the one with the comet is worth at least ten million. Because of rarity.

This is exactly the principle by which NFT collections are made, and it is one of the parameters which determines how much profit can someone make on resale.

Even kids have figured this out:

You probably remember when you were a kid that you or some other kids collected pictures in an photo album. The company that printed those pictures deliberately printed some in a small number of copies, so the kids noticed that not every picture has the same value because there are some pictures that everyone have, and there are some that almost no one have. And then when someone get a rare image they can complete the album, or they can trade it for 10 or more other images.

Generative Art: Dumb Donkeys

NFT collections are made according to a principle called generative art. To understand this logic, I created a fictitious example. By definition, Generative Art is a form of digital art that’s generated randomly, whether that’s by using autonomous machines or algorithms.

Let’s pretend that I am an artist, and I decided to create a collection called “dumb donkeys.” I decided that my collection would only have nine donkeys, in order to keep their value. The base of my collection is this naked ass, and then I add one of these elements to his head and mouth.

The key moment is that I defined the rarity of elements. Four donkeys will have a twig on their head, three will have fire, and only two will have a mushroom. Likewise, four donkeys will have corn in their mouths, three eggplants, and only two carrots. When I put it all together, my collection looks like this:

The most valuable NFT in this collection is a donkey that has the combination “mushrooms on the head, carrots in the mouth”. Because mushroom and carrot are the rarest traits in the collection (there are only two of them).

Likewise, the least valuable donkey in this collection is the one with a twig on its head and corn in its mouth. Because those two traits are the most common – there are 4 of them.

Monkey Business

Let’s take a look at the most valuable NFT collection in the world: “Bored Ape Yacht Club.” That collection is here. It was created last year and it started the whole NFT frenzy wave. These monkeys today cost from 140,000 dollars and upwards. One was sold for $2 million. The initial price was $190, which means that those who bought one back then can sell it for 1000x that amount today.

The authors of the collection made 10,000 of these monkeys, and with that limit they made the initial rarity. But there is, as we said, an additional rarity of specimens within the collection. Check out nine randomly selected monkeys to see what they’re all about.

These monkeys are an example of generative art, just like my donkeys, only there are more of them. Simply put, the artist first creates a basis, a foundation, which is the same for all characters, and that is a naked monkey in this half-profile pose. Then, on each naked monkey, the artist adds elements such as “navy shirt”, “crossed eyes”, “wide eyes”, “captain’s cap”, “Turkish cap” and so on. These properties are called traits of the NFT collection. In the image above, you can see that some elements are repeated, for example the striped shirt.

And as with my donkeys, here is also each of these traits more or less rare within the collection. For example, out of 10,000 monkeys – as many as 412 monkeys have a striped navy shirt, while only 103 monkeys have a pink dress. The combination of all these factors affects the price of monkeys. A monkey that has a combination of rare traits costs far more than one that has all the “common” elements, just like my donkey with carrot and mushroom is the most valuable.

If 5 out of 10,000 have glasses and 3 out of 10,000 have ties, the monkey who has the glasses and the tie will be much more valuable than another monkey whose trait 1000 monkeys have.

Legendary are 1/1. They are totally unique, you can’t even find something similar in other nft collections, and they are obviously most valuable.

This, in short, is the system by which generative art works. On the OpenSea website, we can see a list of all these features, “traits,” and their rarity for each collection – it’s on the collection page. For example, for these monkeys it looks like this:

These “traits” are made by special software where you put one base that is same for every specimen, and then “traits” are added. Then software combine them and generates 10,000 monkeys by assigning each one some combination of these elements, “traits”. 

Types of NFT collections: PFP, 3D, metaverse…

The most popular type of NFT collection is the so-called PFP – profile image. Profiles are most often displayed under the angle of 45 degrees. There are also collections with front profiles, but they are exception in the NFT art world. Apart from the mentioned monkeys, popular examples are DoodlesAzuki

3D NFTs are another type of NFTs, they are 3D modeled characters, like the CloneX collection. 

Then there are metaverse NFTs, which are plots of land in some metaverse (virtual world), for example Otherdeed for Otherside.

Mint – initial sale

When a collection is created it is called a mint. Mint is the initial purchase (or sell from the creator’s point of view) of NFT when its code is generated and written into the blockchain. This is NOT same as with ICO – Inicial Coin Offering where creator first mint all coins and then sell them to first buyers. With NFTs, you are bringing them into existence by minting.

Before minting you don’t know which NFT you will get. It’s like when kids buy a package of sticky images for album, and all packages look same in the store. When you mint an NFT, it means that you bought it directly from the artist at the “mint price,” which is usually some affordable price, currently it is usually around $200 in ether or sol. You can then resell it to the collector (or longer term speculator) at a higher price and make a profit.

Let’s go back now to the example with Picasso and his graphics. Let’s say that Picasso announces that on the 1st September all 50 pieces of that graphic will be available for purchase at an auction in Paris. Some Parisian newspapers publish a representative image of the graphic in advance, people see how the graphic will look, and then they start “desiring,” they can’t wait for the day when they can buy it.

Likewise, NFT collections are usually announced months in advance and artists do marketing during that time by “hitting the desire.” In crypto circles this is called “shilling.”

NFT marketing is anticipatory marketing.

Let’s go back to the example with my “dumb donkeys” collection. Let’s say that today I post on my Twitter account that I plan to publish that collection on September 1st, when my donkeys could be purchased for the first time, that is, you will be able to “mint” them. And today is, let’s say, June 1st. For those three months, my task is to do that marketing of desire, anticipation – which means posting on social networks what the donkeys will look like, announcing that a couple of my donkeys will be drawn by a famous artist, announcing that my donkeys will be able to be used as characters in a game and so on.

The most successful and valuable collections are from authors who know how to do that marketing well.

Social Networks and Celebrities

One of the strangest phenomena in the NFT world is that everything happens on only two networks: Twitter and Discord. If you want to trade NFTs and research which collections, and which specimens from collections is worth buying, all you need to follow are these two networks – Twitter and Discord.

Instagram, Facebook, any other social network, does not help at all. Maybe that is why they are integrating NFTs on their platforms as avatars to represent you. NFTs are like a new culture shift, new status symbols. If someone put an NFT as profile picture, it’s like someone coming to his or her house and seeing a Van Gogh’s painting on a wall.

Snoop Dogg is one of the biggest NFT collectors in the world. We know that because he has revealed himself to be the owner of the @CozomoMedici Twitter account. All those rappers stopped wearing Rolexes. Rolex watch has become lame. Rolex is not cool any more, nor even more expensive watches (not to advertise them now). Btw they are made in limited numbers per year on purpose, and for some you need to get on the waiting list and wait several years. Do you see some similarities with NFTs?

NFTs are now cool, a way to flex in digital arena. And not just digital, people can put image of their NFT on background of smart watches. Celebrities are buying NFTs and pushing them to become part of the new culture. Here is the video spot featuring bored apes NFTs that represent Snoop Dogg and Eminem in the recent song they did together:

Another good example is Jim Carrey who secretly dropped an NFT collection on Foundation platform. Now we know that he released the collection called Germinations, and that his crypto Twitter alias is String Bean.

Now when we know who are celebrities behind, we can see what they bought, because remember – blockchain is very transparent. If you find one NFT that some wallet holds, you can find others as well, and it is a good practice to check who holds NFTs from the collection you want to buy. Or maybe you do not know by name who owner is, but if some NFTs are holded by a whales (very rich person with lots of NFTs, for example Snoop Dogg) then that is a very positive sign. When whales buy NFTs from new collections, there is a high possibility that such collections will gain huge success.

Let me explain to you why, generally speaking, celebrity releasing NFT is a big red flag. Note that this is very different from celebrities endorsing existing NFT collection, like Snoop Dogg and Eminem did.

When a celebrity releases their NFT collection, it’s automatically a red flag because they’re doing it to cash in on their popularity and milk money from the people who follow them. I’m not saying it can’t be a good trade when the hype around NFT is generated, but it’s not for long term hodl.

For example, Floyd Mayweather released an NFT collection, literally “rug pulled” people (took money, didn’t even say thank you, and that’s how it stands now), and then soon after announced another NFT collection. Something similar did Gary Vaynerchuk. The original VeeFriends collection featured 10,255 NFTs and the second iteration featured 55,555 NFTs – simply too much.

Gary Vaynerchuk holds one of the VeeFriends drawings he created “Passionate Parrot” Source:VeeFriends.com

Going back to the Social Networks now (which celebrities use abundantly).

Artists tried to promote their works on Instagram, through Instagram influencers with 10 million followers, but the effect was completely missed out. The NFT community even despises that. When they see that some classic “Instagram girl” is promoting some NFT, they won’t buy it out of spite. NFT community are innovators and early adopters, they are into nerdy stuff like Web 3. Social networks are web 2 which are diametrically opposed. Everything that is valid in the web 2 world is not valid in the web 3 world. So stick to only Twitter and Discord.

We have long known what Twitter is and what it is for, but for NFT there is something called “crypto Twitter.” That is a set of Twitter profiles that post primarily about cryptocurrencies, and there is now even subset of that – Twitter profiles that deal with NFTs, and when a profile is in the NFT phase, it usually adds .eth to the username (mark for Ethereum) to emphasize that someone is trading NFTs.

Having .eth shows which Ethereum address is yours so everyone can see which NFTs do you have. This is possible because .eth is like a domain (domains are ending of websites like .com .net .org) for your Ethereum address, so instead of displaying your Ethereum address which would go like this 0xAb5801a7D398351b8bE11C439e05C5B3259aeC9B you can display anything.eth (anything that you registered) and when you use it in your wallet like Mist or Metamask, you can instead typing 42 characters eth address, enter username.eth to open that long eth address. Twitter recognized this and made it possible to use your nft as profile picture

There are around 100 profiles of the main NFT influencers on Twitter that traders should follow in order to find out in time what the “next monkeys” will be, because the whole point of it is to buy a image in time for $200, to sell it later for much more.

Discord, on the other hand, is a completely new network for most people. It has been used by gamers for years, and for some reason it has profiled itself as the main network for NFT. Something similar happened to Telegram during ICO mania.

On Discord there are so-called servers created by the author of the collection, and then on that “server” there are channels #general, #announcements, #questions and so on. Who used Slack, the logic will be quite similar, or like say IRC from the beginning of the mainstream internet.

This is what it looks like, for example the Discord server from the NFT collection “Imaginary Ones.”

But be extra cautious when it comes to evaluating if there is enough interest when you are looking at social networks! People often get fooled by the number of followers on the project’s Twitter account. They falsely assume that the more followers some project has, the better project will be.

However, the number of followers doesn’t have to mean anything. Scam projects often buy followers just to trick inexperienced noobs and cause the so-called’ hype’ around the project.

That is why you need to check is these projects are made primarily of bots. You can recognize a bots because they are not very active, have a small number of followers, have joined recently (you can see this on Twitter), and hold their “personal” photos for profile pictures which are by rule some attractive young females.

There are many web services online that can tell you how much fake Twitter followers someone has for example, google them and use them.

While I am touching the subject of scams (you should be extra careful regarding everything in the crypto space), always examine if something can be gamed, for example false metrics like pumped followers on social media, or artificially pumped number of downloads of the app etc. which has a goal to simulate popularity and buzz.

White Lists

Remember how I said earlier that the price is made at the expense of rarity? It is not only that traits are rare, but artist can on purpose limit how much digital items each buyer can buy. Maybe collector wants 10, but can only buy 1, so the rest he must get on open market from 10 people who also could buy only 1.

So in order for artists to “hit the desire” even more before the release of the collection, there is something called a whitelist, and it has now become the standard of every new collection. Getting the whitelist spot brings you the benefit of getting a minting priority.

Let’s imagine that Picasso says, “You know what, these prints of mine will be sold on September 1st in the ballroom of a Parisian hotel, but we decided to let 100 people who are on the VIP list into the hall first. They will be able to purchase them at a discounted price of $900.”

Two types of people enter that list – one type are established collectors, and who already have some paintings made by famous artists. But unknown people can also enter, if they deserve in some way to be there, those who somehow show that they appreciate the artist. For example, someone tattoos a portrait of Picasso on their shoulder, Picasso’s assistant sees it and says, “for this you deserve to be added to the list.”

Something similar happens with NFT collections. There is a whitelist, which the authors of the collection and their assistants slowly fill months before the official minting (first sale). That takes place on the collection’s Discord server. Anyone can join Discord and do something called “grinding” for the whitelist. This means that in the chats he is trying to be noticed in some way, I will explain to you later how. The idea is that the moderators of the Discord server say, “let’s add this guy to the whitelist, he deserves it.”

When you get on the white list, the benefit is that you get the privilege to buy a piece from that collection at initial selling price. For example, for $150. If the collection is “hyped” (everyone is talking about it, how it is the “next big thing”), then you already know that you will be able to resell that NFT for 10x, for example. Or, if you estimate that they are the “next monkeys” then you will keep it and wait it’s price to grow 100x and more.

By the way, the name for “next monkeys” is “next bluechip.” When it is said that a project has become a bluechip, it means that the value of the specimens from that collection has increased to 100x or even 1000x from the original price at which they were “minted” and now are very expensive. Bluechip is expression that is coming from poker – blue chips are the most valuable ones. Some of the bluechip projects are Crypto Punks, Doodle, Bored Ape Yacht Club and so on.

Let’s go back to white lists. One of the ways to get on the white list is to make fan art. This means that you make, for example, some images that are a ” homage” to the collection. Since there are “preview” images of the collection on Twitter, people are making fanart based on it.

For example, someone will have their daughter draw that character and post it in Discord, on the #fanart channel. Someone can make graffiti on a wall in their city with a character on it, then take a photo and put it in a group. Someone will do an animation or something completely different, and then they will post it in Discord. Those who post interesting fanart are getting approved to enter into whitelist by Discord moderators.

Second way to get whitelisted is to be active on Discord chat, and not just active but helpful by answering people’s questions, providing insights, reminding community of why this collection is greatest in the world etc.

Third way is to be member of existing Discord group which members follow NFTs, and these members are receiving whitelist of various projects because they receive the information very early.

Likewise, people who hold NFT piece from a well-known collection get regular access to whitelists of new collections. For example, everyone who holds Azuki will get access to the whitelist for some new collection by another artist.

Now, of course, it is not mandatory to enter these white lists in order to engage in trading. Those who don’t want to deal with it don’t have to.

You can wait for everyone to buy on mint day, and then buy from the people who have listed them for sale. There will always be a large number of people who will immediately after the mint put their NFT up for sale for say, 30% more than the price they paid. If the collection gets traction later on, you can still make a nice profit.

Word of caution: You can’t just buy any NFTs of the most popular collections, especially the more rare ones. You can buy on OpenSea what is listed, but you can’t choose a lot.

To buy what you want, you need a fixer, his job is to go and negotiate. There was a rumor that Elon Musk bought like that a golden monkey. Golden ones are very rare, and if you wanted to buy one, you had to send a fixer, because whoever has a golden monkey, he doesn’t care who the buyer is, he won’t sell it, and that’s it. Then the fixer comes and negotiates, offers a price, ask if he would think about if he would be willing to consider more and more money.

Reveal – opening the pouch

One of the standard phenomena in the NFT world is the so-called reveal.

On the day when the project is being minted, that is, when it is released for sale at the purchase price, the images are still not visible. When going to the collection page on OpenSea, all the images look like this:

This means that people do not see what they are buying on the day the collection is minted. You are literally buying a “cat in a bag,” as if you bought an image packed in a bag. The artist then announces the day when these “bags” will be opened, and that moment is called the reveal.

Only on that day forward you will be able to see what kind of character you got, what features it has, and how rare it is. This is usually in a week after the mint. During that time, you CAN trade and resell these tokens representing undiscovered images, because there are sometimes people who will pay three times as much as you, even if they don’t know what’s inside – simply because they believe in the artist and the project.

One of the reselling strategies is the flip on the reveal, because just in those first ten minutes after the images are revealed, solid profits can be made if you’re smart. In those moments, special applications called rarity snipers are used. They can tell you very quickly what the rare specimens are, and since you have that information before everyone else, that’s where the profit is made. 

Resale (flip) strategies – where is the money made?

The prices of these NFT collections can go up or down, hardly any collection has constant growth all the time. Here’s how the price of one of the bluechip Doodles collections performed (just keep in mind that price is denominated in ETH which cost now $1715):

This means that there are various ways to make a profit. Whitelist chasing is just one strategy and it’s good for beginners who don’t have a lot of money to put, so they rush to jump in at the beginning of a good collection in a good market conditions.

Whoever has a little more money to get into all this (a couple of thousand dollars and up), can trade in various other ways. 

One of the easiest ways is to buy when it’s cheap. The principle is the same as with classic shares on the stock market: shares of a company start to fall, people who hold shares are afraid that the company will fail and sell their shares fast at a very low price, just to “get whatever money while they can.” On the other hand, experienced traders, if they estimate that the company will return to 10x or 100x higher value, that’s when they buy.

It’s the same with NFT collections. Well-known collections should be bought when they are in decline, of course not always, sometimes they decline and never go back up.

Let’s see what things you need to know in order to always make money, that is, to always be in the positive with decisions.

DYOR

No, this is not Christian Dior. DYOR stands for Do Your Own Research, and refers to the phrase that is basic advice for buyers. If you ask me as a previous crypto moderator, the expression is coined so that immature participants would realize that they are responsible for their actions. If the crypto they bought tanked, it is not fault of the management but their own fault because they tend to buy after the price is rising for longer time.

By Doing Your Own Research, means that you should NOT fomo and buy some NFT just like that, but you should do a good research on who is behind the collection, and various other details before you decide if you should buy it. Of course, this is in collision with the mania environment where everyone is chasing the new hot thing.

NFT bubble was so intense that they even coined the expression “to ape in” NFT when someone “fomos in” without much thinking. When someone says that he ape-into a project, it means “Ahhh fu*k it, I decided to buy this because everyone I know is buying, I have no clue why, I aped-in.” It is very risky to trade like that because this works only around peak of the bull market.

It is always better to do DYOR, and if you know how to do it, you will significantly increase chance to make decisions that will bring you profit. This is done by investigating several things.

“Doxxed” team behind the project

First we look at who the artist is, if he is someone famous (established artist, not celebrity), if he has had collaborations with famous artists in the past, if he has worked for some famous brands, etc.

Second, the whole team behind the project is looked at. Most often it is not only the artist, but also people who deal with marketing, public relations and so on. What is their history? If these are people who have successful projects behind them, that is also a good sign. Do they have already failed nft collection?

When the entire team behind the project is known and has credibility, the team is said to be doxxed (with two x’s). This means that the authors are credible and inspire confidence in the success of the collection.

Doxing or doxxing is the act of publicly providing personally identifiable information about an individual or organization, usually via the Internet. This started being important because many artists were anonymous, or they published anonymously their NFT collection. And since no one knew who they were, there were no consequence if they just run off with the money, if they rug-pulled the NFT buyers.

Because of that, to increase trust, NFT founders started publicly revealing who they are by name and surname. Even some specialized services emerged, Civic was doing identity verification of NFT founders by checking their ID documents, control of Twitter handle and project domain, liveliness check etc. Unfortunately this did not stopped scammers, so they used this service to establish trust, and they rug-pulled anyway.

Roadmap, Utility, Airdrops, Royalty, Metaverse, Web3

The next important factor in assessing the future value of a collection is something called roadmap and utility.

A roadmap is, in short, a set of plans that the authors have committed to doing in certain time periods after minting.

For example, a collection has 10,000 pieces, and when 2,500 pieces are sold, everyone who bought will receive a gift.

NFT has something that classical art does not, and that is utility. Utility is a benefit (use value or usefulness) or more benefits that come with NFT.

For example, Gary Vee has his own NFT collection called Vee Friends and anyone who owns one NFT gets free tickets to Gary Vee’s “VeeCon” conference. Or Supergucci NFT collection, which is limited to 500 pieces. Everyone who minted this NFT received a porcelain figure designed by Gucci. Some people would pay a thousand dollars just for a Gucci figure of which there are 500 in the world. Also owner of Gucci’s NFT are getting discounts in Gucci stores.

Benefits that NFT provides to owners is what makes NFTs really valuable. When you sell NFT, you also sell all the benefits it provides. So if you don’t want to be a part of something anymore, you haven’t threw money away on NFT that enabled something, because by selling NFT you get money back, and probably more than you paid, and the buyer now continues to enjoy the benefits of the utility.

Airdrop is one of the main benefits of a good NFT.

The authors of a well-known collection often create a new collection after some time. All “holders” (owners of one NFT from the previous collection) receive a free NFT from the new collection as a gift. So, for example, a friend of mine who were into NFTs from beginning woke up one morning and saw that he received $15,000 as a gift – that’s how much NFT from the new collection was worth, and he received it through “Airdrop” – that NFT just appeared in his wallet as a gift.

On the website of each NFT collection, it is usually put which roadmap and utility it is. That’s one way to estimate future value. If the roadmap and utility sound poor, that’s a bad signal and you should avoid such projects.

For example, many of those projects copy the same one sentence, that they are “metaverse ready”, that is, they try to get on the hype created by Mark Zuckerberg about the metaverse. If the roadmap is full of generalities and “overhyped” phrases, that’s a “red flag.” If it is full of specific mechanisms, that is a good sign.

There are many more details about which 10 more texts like this could be written – about utility, metaverse, etc. “NFT nerds,” developers, etc. are pumped about the utility. They will often tell you that the utility of NFTs is the only thing that matters, but that’s not really true, at least when it comes to flipping.

The collective name for the complete technology on which NFT is based is Web3. This is the name for the “crypto web,” where everything rests on the blockchain, and a complete financial system called DeFi (decentralized finance) is slowly being built. You can already take out a loan for an apartment by pledging a monkey, or a certain amount of cryptocurrency, through applications that are part of the DeFi system. No banks, no intermediaries. If you are interested in that, explore further, it is another universe in itself.

Royalty is when creator code into the smart contract percentage of each buy/sell transaction that NFT owners make, goes to the creator. For example if he put 10% and sold NFT for 0.1 eth, and then that owner sells it further for 1 eth, creator is getting 10% of that which is another 0.1 eth. This is significant if you want to just quickly flip it.

Artwork – how much does the aesthetics and artistic value of NFT affect the price and future growth?

NFT is currently predominantly a type of digital art, but how much does the appearance of the artwork itself affect the price?

This can be talked about for hours, but I’ll try to keep it short.

First, there are a lot of copies in the NFT world. Monkeys alone have hundreds of copies, for example here is a Chinese copy. These are literally the “AliExpress Monkeys” 🤣🤣

Last year, when the news broke that the original monkeys were worth millions, hundreds of their copies immediately appeared, and people were started buying them like crazy. Of course, after a few weeks the hype around this kind of collection dies down and it is no longer worth anything, whoever got caught and bought wasted money.

By the same token, copycats of other bluechip collections also appeared. Doodles, Azuki… all bluechips have dozens of copies. Such projects should be avoided.

However, there is one type of “copies” that can be relatively successful, the so-called “degen collections.”

Degen collections are collections that are satirical, more in the sense that someone made a joke at the expense of some other famous collection, or at the expense of some recognizable aesthetics from popular culture outside of NFT. Dogecoin was first cryptocurrency that thrived because of this.

The Degen collection can also be an homage, something that is openly inspired by the existing one.

This is one of the more famous degen collections, Degen Toonz, which is an homage to the “rubber hose” style of early 20th century animation (cartoons like Betty Boop from Max Fleischer), combined with the later Loonie Toones aesthetic, but it’s all again, in some “punk” fashion.

Such collections have the potential to be very valuable and they should be chased on time, everything that is a juxtaposition of known styles, aesthetics, cultural movements.

Projects that have a postmodernist vibe have the most potential, but to recognize that you need to know contemporary art, say you follow Juxtapoz magazine or High Fructose magazine.

Another way is to get a recommendation from someone who knows how to recognize all these parameters, from someone who have been working with famous contemporary artists which are having their NFT renaissance this year. For example, Takashi Murakami recently released the Murakami Flowers collection, which achieved instant success – their value increased within a few weeks from mint and reached price for an average of $10,000.

This is something that beginners can’t easily predict – a beginner in the world of art would open this, say “what the hell is this, some silly pixelated flowers” and not pay attention to a collection like this.

In general, beginners easily fall for the wrong artwork and waste money on some crap. A classic mistake is that beginners grab some 3D collections, something that seems “complicated to make”, because that is how they perceive art – the more complicated and “harder to make in a program” the more valuable it seems to them.

On the Fiverr website, you can now find thousands of 3D artists who offer services to create a collection for you, and all of them advertise that they “know how to make complicated, high detailed art,” because allegedly – the more details, the more value.

Such projects should be generally totally avoided, because this is “how little Johnny imagines art,” just like most uneducated people think that valuable art is some oil on canvas with a lot of details, etc. Whenever you see something complex, colorful, animated, when something swishes too much, jumps, tries to get a lot of attention, it’s an automatic red flag.

The most valuable projects are those that have very simple strokes, thick lines, minimalist design, and some common concept.

For example, take a look at this project, Doodles, one of the most valuable collections today:

The artwork here is specific because it has pastel gradients, and not just any, but in the so-called “flashy pastel” colors (high saturation, high luminance), which has been a trend in design and art for a couple of years. Another connective tissue for each character is that the right eye is always outside the face.

If the collection additionally contains elements that are subtle references to popular culture, it is a good sign that the artist is someone who has the knowledge. So, minimalist collections like this with an authentic concept are always a good sign. Of course, this is not the only factor, you should always investigate the other elements I mentioned.

The number one factor for artwork is, therefore, some authenticity, meaning, that the concept is something new. The issue with this is that very few knows to recognize what is “new.” Someone who has been following Juxtapoz and High Fructose magazine for many years, can notice much faster what is trash and what is good artwork.

OG – “Original Gangster” collection

OG is the collective name for the old collections that ran in the NFT world before the monkeys, it’s something of an ancient art, and they also hold up well in the market because, well, they were first NFTs. The most famous OG collection is Cryptopunks:

One of these is worth around $200,000 today – just because this is one of the first collections ever made, back in 2017. Back then, only “crazy ones” who like to experiment with new bought this, it’s just like those stories when someone paid 10,000 bitcoins for a pizza in 2010, and now it looks like that pizza was worth half a billion dollars today.

Community of NFT Collection Holders: “All of us who hold…”

New times bring new practices, so new culture emerged. Although recent NFT hype was just part of the narrative which represent a silver bullet (a metaphor for a simple, seemingly magical, solution to a difficult problem), I really think that it represent a wider cultural shift that will stick simply because this is the most convenient way to brag about yourself in the digital realm.

As with all new hype environment with lots of exuberance, people started acting strange, and annoying for someone witnessing it but not buying a narrative (like me). So if you would enter the Discord group of the collection you could easily spot the sentiment of the group.

In the chats the members were overly optimistic, helping each other, have a good relationships, and did not want to sell their NFT piece easily, then that environment was encouraging for others to be optimistic as well (crowd psychology) and there was a good likelihood that the price will jump. This is what other speculators (people who do not know what they are doing) gave confidence to buy simply because others were very enthusiastic.

The expression for the sentiment of such groups were WAGMI (We’re All Gonna Make It) which they repeated over and over again, along with gm (good morning). I am not kidding, if you spent 1 single day watching CryptoTwitter then, you would bombarded with such nonsense at least 20 times in a day.

Then, as prices inevitably started falling, a negative sentiment started prevailing in the groups, in the sense that the members were not optimistic and immediately start to “gloom” when the price drops. This means that the community is not healthy and that such a project should not be invested (speculator’s mindset is like this). The expression that describes the group’s negative sentiment is FUD (“Fear, uncertainty, and doubt”). This is when majority of community gave up on their WAGMI and gm BS and sold their NFT jpegs, and others who kept bagholding in deep regret, and most likely became toxic in the community sooner or later.

Generally speaking, everyone is optimistic in the beginning, and pessimistic as price is falling, so assessing the sentiment is in vain. Please do not speculate on the things that you do not understand (buying just because you think that others will buy too). This is known as a greater fool theory, but most precise for NFTs and cryptos in general is later fool theory as I like to say.

NFT Research Tools and Software

There are dozens of tools, browser extensions, applications… that help you to make decisions. Since the entire blockchain is transparent, various tools can extract useful data for you through data mining. For example, some of them can tip you off that people holding millions of dollars in NFTs are currently buying some collection you’ve never heard of, but they obviously know something you don’t.

By the way, people who hold millions in NFT are called whales.  Simply, if the NFT is one ocean in which small and larger fish swim – the whale is the largest. When whales buy or sell something en masse, it is called a “whale alert,” and if we find out about this whale alert in time, we can jump on the wave and make a huge profit.

We will not deal with tools in detail in this text, most of them are free, some are not, but the main things can be done with free tools such as traitsniper.

Some other handy tools:

Rarity Sniper (Chrome extension for OpenSea), use it to check rarity

https://raritysniper.com/

Compass Art, use it to check out trending NFT projects, monitor live mints and volume in real time

https://compass.art/

Sunspot GG, to create alerts for NFTs on OpenSea

https://sunspot.gg/

Ethereum vs Solana NFTs and “gas fees”

First NFT collections were created on the Ethereum blockchain. Ethereum is the second most valuable cryptocurrency after Bitcoin, and is best known for the fact that various other things can be done on its blockchain, such as NFTs. All the most popular collections are still on Ethereum.

Over time, NFT collections appeared on other blockchain networks as well. The most famous NFT network after Ethereum is Solana. Solana is becoming popular this year. In the beginning, the collections on Solana were heavy trash, but over time more and more serious artists came to it, and more serious collections such as Okay Bears or OG Atadians.

What is interesting to me is the logic of being the first one, and that is the only reason why some NFTs have high price. It was hard to be the first one on Ethereum and grab some NFTs there because no one knew about them then, but it is not that hard to grab on of first NFT collections on Solana at decent prices. So if you think that Solana will be the big thing in the future, maybe it is not bad idea to buy one of the first NFTs on Solana.

The key difference between Ethereum and Solana is something called the gas fee. When you buy and sell NFT on the Ethereum network, a so-called “gas fee” is paid, like a “network commission.” That gas fee can sometimes be quite high, if the network is loaded, which happens if there is an important moment when everyone wants to trade as quickly as possible.

Conclusion?

As you may noticed, I mentioned ICOs (Initial Coin Offerings) several times in this text. That is because it really reminds me of ICO mania that happened in 2017.

The main rules of the game being played here in early hype stages is search for hype, and aping in. So you must act like an ape wondering around, and when you find the party join asap.

All this is driven by fomo and greed. There are buyers who genuinely like the art, or community, or the (promised potential) benefits of owning an NFT, and they want to own several items from the collection and be collectionaire to which NFT flippers can resell at profit.

But NFTs are at the beginning like bitcoin. Was my friend and all of you who shares his opinion right?

Yes you are completely right. Where your thinking may be flawed is that you presume that some of these NFTs that exist TODAY will be the huge winners in the future. That is true for cryptocurrencies from ICO mania era, but

All in all, flipping can be a lot of fun and on the other hand, you can earn a lot if you know all the tricks. Everyone is enjoying while the music is playing, but what happens when is stops can be devastating.

I personally believe that the crypto market was in just one of the narratives and that NFTs are indeed revolutionary, but not yet. Just like first cryptocurrencies were revolutionary, but it is hard to imagine that Litecoin or Dash will take over the world.

If you will buy some NFT, do not buy it because you speculate that someone will buy it from you for more money that you were. People call this the greater fool, but I call it the later fool.

Don’t be fool, buy only what you genuinely want to have for long term (many years in the future).

What Is Next For NFTs?

For the end, I will copy-paste one tweet thread here from user @chriscantino that I think can be beneficial to you. This is also why I think that utility is the most important ingredient for the success of future NFTs:

The value of NFTs has been expressed primarily in speculative short-term gains. The resulting collapse of the market and its dependence on milking IP through derivatives and airdrops is not shocking. But what comes next is more inspired and creative than anything we have seen.

Tokenized Hobbyism

Every pastime – from cooking, to sports, to wellness, to woodworking – will establish high-value tokenized networks. The token value will not be derived by how much one can flip it for, airdrops, or staking, but through engagement, learning, and networking.

Professional Networks

You can pay member dues to join your local chapter of builders, OR you can buy NFTs granting access to seminars and 24/7 global chats with people exploring web3. Plus, you OWN your membership. Tokenized networks will be key to building in a bear market.

Minimum Viable Communities

Many projects forged promising utility, but struggled to create sustainable models. Rather than call it quits, they will decentralize, minimizing expenditure and passing off operations to contributors in an effort to create minimum viable communities.

M&A

As NFT project funding and resources dry up—whether due to crypto winter, mismanagement, or failure to compete—communities will strategically unite to pool capital, access, and tooling to combine resources and member benefits. From PFP mergers to holding DAOs.

Retail

Retailers from 7-11 to Gamestop will use NFTs to incentivize IRL transactions, leveraging creators to drive traffic to storefronts. For example, Yeezy NFTs that airdrop with purchases from Gap stores, or NFTs that unlock exclusive features for Tesla vehicles.

R&D

Brands and creators will exchange NFTs for insights on product development: pain points, marketing claims, roadmap and more. The NFTs will unlock early access to product releases and potential profit sharing. Brands will track and maintain these key relationships.

Loyalty Exchanges

As brands and creators seek to reinforce loyalty, community behavior will be rewarded with NFTs. Did the member contribute content? NFT. Complete surveys? NFT. Make a purchase? NFT. Tokens are more liquid and bragworthy than traditional discount codes.

Multiplayer

NFTs will create hive activity by incentivizing group behavior. MMORPGs that unlock levels once 10k users have aped in. Airdrops of rare NFTs to collector cohorts that have signed contracts to merge their base-layer NFTs. Collecting is going to become a team sport.

Content Submission

Users will submit content like short form videos, reviews, and tutorials in exchange for loyalty NFTs. It’s a marketing flywheel. Rights can be programmed into contracts so that the use of the contributor’s content in advertising could yield future profits.

Services

NFTs will unlock access to services and hobbyist communities. Q&As and tutorials with influencer chefs, photographers, doctors, and niche enthusiastic communities will boom. This will also extend into IRL services like transportation, hotels, and spas.

Customer Cohort NFTs

Imagine receiving an NFT for being one of the first Air Jordan customers, and how valuable that would be today. How Nike might reward you years later with special access and product. Cohort NFTs prove that you took a certain action, at a certain time.

Education and Customer Support

Upon demonstrating exceptional knowledge of a brand’s product, users can receive NFTs in exchange for onboarding newbies into the community, or providing support. This can be exponentially more impactful than a brand employee doing the same.

NFT Indexes

Getting exposure to hundreds of NFTs via indexes will boom as market movers tap collectors for funds. Imagine a Christie’s NFT ETF. They have the influence to get assets to liquidity—investors will ape into that. It will also broaden support for NFT communities.

Social Investing

Web3 streamlines investing by reducing manual processes like spreadsheet mgmt + signature collection. It also acts as a social record—startups like @PartyRound will build networks around such activity, and reinforce them with NFTs.

Leaderboards

NFT communities will gamify by highlighting the performance and participation of top holders. Top contributors will receive rewards and clout, thereby incentivizing communities to hold and participate in order to secure better returns on their investments.

Activism

Communities where NFT ownership supports political causes will gain traction as millions flow into community wallets. NFT collectives where sales are directed towards lobbying efforts, with efforts coordinated by a community DAO.

“Soulbound” NFTs

NFTs are lauded for their transferability, but there are many use cases for non-transferable tokens: driver’s licenses, diplomas, certifications, proof of attendance, etc. Soulbound NFTs lock in provenance, and can not be sold.

Vertical Marketplaces

NFT projects will shift towards DTC marketplaces like @larvalabs and @SolanaMBS. Managing user experience is critical for retention, and eliminating 3rd parties doesn’t hurt.

Legal

The benefits of block security and its ability to trigger transactions via oracles will accelerate the adoption of web3 legal services + contract development. A DocuSign killer (or acquisition target) will be built in 2022, and it will deliver NFTs to contract executors.

Social Feed Marketplaces

Social feeds based on NFT collections will emerge, providing insight into the strategy of top collectors, and a platform for collectors to interact. These feeds will evolve into social commerce marketplaces, featuring reviews, analytics, and more.

Fractionalization

Splitting up NFTs into individual shares with tools like @prysm_xyz gives more exposure to blue-chip assets, like owning a piece of a CryptoPunk. The result? More liquidity for holders, and more appreciation of blue chip assets as money enters the markets.

Collateralization

To date, lenders have been averse to NFT holders borrowing against their assets. But as institutional $$$ flows in, and assets become better stores of value, collateral markets will promise flexibility and liquidity for all NFT holders, not just whales.

Borrowing Platforms

Because NFTs can unlock temporary access – like entry to conferences – markets for short-term lending are emerging. For example, I’ve personally leant friends $FWB so that they could attend local events. Imagine this as a marketplace: StubHub, but for NFTs.

Whatever more is in store, I can promise it will break paradigms and transform whatever it touches. Get ready for disruption.

About the author

Robert Bartus

Robert has a marketing background, he worked as internet marketing growth hacker. He bought first "altcoin" in the mid of 2014. From 2017 he worked for 2 crypto exchanges and dozen various crypto companies as advisor and community manager which gave him valuable insights about the crypto industry.

Add Comment

Click here to post a comment

Learn Cryptocurrency!

Crypto secrets revealed about which no one is talking about.