Let's explore long term economics of NFT projects.
How do projects go from 0.1 ETH to 5 ETH, back down to 1 ETH then boom to 30 ETH?
How do flippers, hodlers, newbies, hype contribute to different phases of projects and thus effect prices?
Thread 1/
How do projects go from 0.1 ETH to 5 ETH, back down to 1 ETH then boom to 30 ETH?
How do flippers, hodlers, newbies, hype contribute to different phases of projects and thus effect prices?
Thread 1/
2/ We'll go off the above image. Hope it's clear, (zoom in).
It seems many projects follow a similar trajectory.
This is just my opinion through my experience 3-4 years here Full-time NFT investing - so of course DYOR, share what you know and don't take anything as gospel.
It seems many projects follow a similar trajectory.
This is just my opinion through my experience 3-4 years here Full-time NFT investing - so of course DYOR, share what you know and don't take anything as gospel.
3/ Also much of this is relation to the whole "10,000 Avatars/land plots/loot/etc"
A fixed supply with ongoing demand at different periods.
This probably won't apply to Art, Virtual land or projects with much more supply/different value drivers.
A fixed supply with ongoing demand at different periods.
This probably won't apply to Art, Virtual land or projects with much more supply/different value drivers.
4/ Phase 1: The beginning.
Discord lurkers, early investors, etc stumble upon a seemingly cool NFT project.
They buy in, some whales take massive positions, (200-500+ mints).
Some just early. Riskiest time to invest but highest reward if it goes right. IF.
Discord lurkers, early investors, etc stumble upon a seemingly cool NFT project.
They buy in, some whales take massive positions, (200-500+ mints).
Some just early. Riskiest time to invest but highest reward if it goes right. IF.
5/ Phase 2: Social Buzz
It has its moment on social media. A bit of momentum turns into huge FOMO as "everyone" is talking about it.
New idea, seemingly a hit? Too early to tell.
Flippers/whales/early investors sell but way more buyers so price goes up.
It has its moment on social media. A bit of momentum turns into huge FOMO as "everyone" is talking about it.
New idea, seemingly a hit? Too early to tell.
Flippers/whales/early investors sell but way more buyers so price goes up.
6/ Phase 3: Peak FOMO
Projects reach a "peak FOMO day/days".
This hype is unsustainable.
Flippers/whales sell more aggressively.
Projects reach a "peak FOMO day/days".
This hype is unsustainable.
Flippers/whales sell more aggressively.
7/ Phase 4: Post-peak sell off.
More aggressive flippers selling.
Newbies/investors caught up in hype sell off. A little paper handing happening.
Flippers/short term investors start losing interest.
More aggressive flippers selling.
Newbies/investors caught up in hype sell off. A little paper handing happening.
Flippers/short term investors start losing interest.
8/ Phase 5: Project needs to prove itself.
Well past hype/FOMO crowed has passed. Projects are slowly building as it takes time to roll out roadmap.
It's quiet on social media but people are finding the project and long believers helping growth.
Well past hype/FOMO crowed has passed. Projects are slowly building as it takes time to roll out roadmap.
It's quiet on social media but people are finding the project and long believers helping growth.
9/ Phase 6: Some big sales/moments.
Some larger investors coming in, seeing growth and buying in.
Bringing some faith back in to the public but still mostly quiet.
Some larger investors coming in, seeing growth and buying in.
Bringing some faith back in to the public but still mostly quiet.
10/ Phase 7: Most if not all short term flippers moved on.
Most of the community have seen growth and believe in the project.
Project founders proving trustable, steady growth this time way more organic and not much "sell pressure" as flippers aren't as many.
Most of the community have seen growth and believe in the project.
Project founders proving trustable, steady growth this time way more organic and not much "sell pressure" as flippers aren't as many.
11/ Phase 8: Organic Buzz.
Some social buzz brings in interest, this time people are like "WHOA they're actually doing it".
Definitely a lot more maturity - strong investors/community.
6 months have gone by and now it's about participation.
Some social buzz brings in interest, this time people are like "WHOA they're actually doing it".
Definitely a lot more maturity - strong investors/community.
6 months have gone by and now it's about participation.
12/ Phase 9: Long hodlers sell, big collectors come in that will probably go on to hold for a long while.
Project sort of reaches "top project status" with respect among the NFT community as a project worth watching.
Project sort of reaches "top project status" with respect among the NFT community as a project worth watching.
13/ Now the above process isn't a once off - these phases continue to repeat themselves until it goes something like cryptopunks.
Cryptopunks are 4 years old so most NFT projects aren't even close to reaching this sort of "blue chip" status.
Cryptopunks are 4 years old so most NFT projects aren't even close to reaching this sort of "blue chip" status.
14/ So WHEN should you invest?
Most people don't catch the presale but tbh it doesn't matter long term imo*.
There are ample "slower" periods you can analyze the market without FOMO brain.
The yellow line shows this, (where I aim to enter).
Most people don't catch the presale but tbh it doesn't matter long term imo*.
There are ample "slower" periods you can analyze the market without FOMO brain.
The yellow line shows this, (where I aim to enter).
15/ Again, it doesn't always turn out like this.
In fact mostly, it doesn't.
Most of the time, projects just don't continue building hence why pre-sales are extremely risky, (especially with 5-10 projects launching a day now).
In fact mostly, it doesn't.
Most of the time, projects just don't continue building hence why pre-sales are extremely risky, (especially with 5-10 projects launching a day now).
16/ Many projects are yet to prove themselves 2-4 years down the line.
I'm fairly confident most won't make it. It's easy to build during hype, VERY hard during a slow period.
Good luck to all tho!
Hope you enjoyed the thread, give it a share and add your thoughts!
I'm fairly confident most won't make it. It's easy to build during hype, VERY hard during a slow period.
Good luck to all tho!
Hope you enjoyed the thread, give it a share and add your thoughts!
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