I recently covered NFTs in March, but given the activity this past month, I thought it was worth revisiting. To start off, the volume of transactions grew ~10x this month. Transactions on the OpenSea marketplace crossed $3.3B in transaction volume in August, up from $325M in July (source). CryptoPunks, the most expensive collection with 10,000 unique pieces, has a floor (lowest listing price) of $390k, and the highest price ever paid for a 24×24 pixel CryptoPunk is $7.5M! There are an increasing number of collections putting up not quite as high, but nonetheless impressive numbers. Check out rarity.tools for a sense of pricing/volume/metrics for various collections, but just to share a few…
- Bored Ape Yacht Club (BAYC) – Floor: $81k (10k available)
- MeeBits – Floor: $24k (20k available)
- Cool Cats Gang – Floor: $24k (9999 available)
- Pudgy Penguins – $10k (8888 available)
- World of Women – Floor: $9k (10k available)
- Hashmasks – Floor: $4k (16,383 available)
What’s most fascinating to me about NFTs is how many industries the implications are relevant to. An NFT transaction is a legal contract that automatically and immediately transfers both the money (payments) and possession of purchased item (logistics), using a specified technology in the contract – all the data is tracked, reliable, and available (accounting). These collectible projects are often run by teams, collaborating remotely and leveraging influencers and social channels for marketing. The movement is driven by art, community, and wealth generating opportunities, with an eye on equality and justice – free from corporate and government interference. These communities are starting to spin up DAOs to make investments into startups and NFTs. The transparency in data provides a fascinating opportunity for further economic and psychological studies (example: Nansen). As we spend more time in the “metaverse”, this brings up philosophical/ethical discussions.
I’ll do my best to explain what’s happening in the “collectible” space right now. It’s a large and growing community, broken down into what I might call “camps” of sorts, which are the holders of a specific collection (eg. CryptoPunks, Bored Ape Yacht Club), each with a set limited amount. You can buy into these camps, or sell your spot anytime – price goes up if the camp is popular. Being part of a camp, in many cases, has unique benefits, starting with simple ones such as access to private discord groups and events. The most popular tool for this is Collab.Land which does NFT ownership verification for Discord. There’s also MintGate, allowing people to easily spin up token-gated content, and Atlantis World for spinning up a token-gated digital world w video call capabilities. Beyond capital gain, the immediate mutual respect and camaraderie amongst strangers online seems like a strong driver (people who buy a Punk or Ape and update their avatar usually see an immediate uptick in followers). The buy in cost fo each of these camps always start low ranging from $0-$250 when they launch, and go up from there (if popular). The fascinating thing about these communities is that it includes random people who bought in early, as well as celebrities and corporations who bought in late. I was on a Twitter spaces listening to an art collector, an ex-con, a teenage girl, and a famous musicians sharing tips on their NFT collection strategy. Celebrities who own CrytoPunks include Jay-Z, Steve Aoki, 3Lau, and Visa. BAYC holders include Stephen Curry, Logal Paul, Chris Camillo, and LaMelo Ball.
It’s not just people buying jpegs, but the innovation surrounding it that you should pay attention to. For example, people who wanted exposure to the expensive collections, but couldn’t afford it, have purchased fractional shares of through fractional.art and PartyBid. Artists who collaborate on an artwork can get royalties split automatically as defined in the contract. There are countless experiments tying NFTs to the real world, such as commemorating events (proof of attendance), offering access/discounts to physical products, or finding ways to legally tie the ownership of an NFT to the ownership of a physical object (allowing you to transfer ownership instantly, across long distances).
While I’m not here to say your health records, MLS records, and diplomas will all be NFTs, it seems logical to believe that some learnings, lessons, and code can be applied to various industries. As one example, Carnomaly is building what’s essentially a decentralized CarFax, which makes sense to me.
The best way to learn is to do, because the soul of innovation isn’t in the facts and figures, but the emotions of those impacted by it. You have to experience this yourself. Which is why I’ve started to collect and mint NFTs.