(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
Gm frens and happy halloween. We’ve just made it through another hectic week in crypto land. ETH is nearing price discovery, NFT NYC is currently underway giving anons nationwide an opportunity to gather / move their online relationships IRL, and all of this while nfts take an absolute beating. If you are at NFT NYC, we hope you were smart enough to leave your wallets at home. For anyone that likes to steal shit for a living, NFT NYC is like the super bowl – hundreds (maybe thousands) of wealthy art owners whose entire portfolio is held on something the size of a flash drive – what could possibly go wrong :). Anyway, enough theft talk, let’s get right into it.
Macro Update
Some are calling this the top, others are saying we’re just getting started. Either way, whenever we start to feel overwhelmed by all the possible turns the market can take, we make sure to zoom out and do our best to think long term. In the big picture, we are steadily marching toward our fate as a digitally native species whether we like it or not (great thread on this inevitable shift here). Big tech and the people who control large portions of the internet recognize this and are adjusting accordingly. For example, unless you’ve been living under a rock, you probably heard that Fuckerberg and Facebook are pivoting to become ‘Meta’, a metaverse company. Say what you want about that pasty robot, but he’s one of the most influential fixtures in technology, so when he lays out his vision for the future, you should probably listen. Cuckerberg recognizes what most notable folks on CT have been preaching for months/years – in a digitally native capitalist society, where pirated online content runs rampant and centralized middle-men unjustly take the lion's share of profit from hardworking creators, proof of digital ownership is paramount and NFTs are the vehicles which will facilitate, democratize, and scale truly verifiable digital ownership. And while art and multimedia projects broadly are a natural “wedge” that will usher in mass adoption, do not sleep on the myriad of use cases with even larger total addressable markets. NFTs are here to stay.
Regarding strategy going forward, we’ve said this since day 1, but to reiterate for new subscribers – there’s tons of short term opportunity to flip for profit, though in the big picture 99% of nft projects will go to zero, and 1% will moon. When assessing which projects you intend to buy and hold for the long term, make sure to bet on high quality teams with long term vision, with strong devs, and with a clear path toward building a community-driven media company (see stoner cats as a prime example of this – how could you possibly bet against Vitalik).
Overall Market Health: Punk/BAYC Floors
The floors for Punks and BAYC are flat again this week, with no more than a 2-3% move in sales from the 100 ETH floor. As mentioned last week, this stability is bullish since Punks/BAYC remain a solid bet on ETH. If ETH rises and the floors remain flat, the price just keeps going up in USD value. Punks remain a veblen good (or in layman's terms “a type of luxury good for which the demand for a good increases as the price increases, in apparent contradiction of the law of demand, resulting in an upward-sloping demand curve). As long as Punks continue to hold steady while ETH value rises, the general health of the NFT market stays intact.
Guest Post: Understanding Minting Strategies; For Builders
The following is an educational guest post from our friend W3nzel.eth - highly recommend you go check him out and throw him a follow on twitter, he’s constantly dropping alpha. While NFT’s expand more and more into the mainstream, it’s important to know the differences in the types of launches and ways to mint, which is exactly what W3nzel is laying out below (if you’re not a noob just keep scrolling):
A brief discussion of various methods to mint and launch an NFT project. We want to discuss the four most common methods, which are:
Regular mint (with or without whitelist)
Raffle
Dutch auction
Faucet
We all know how the regular minting process works. It usually involves super-high gas costs as all users try to use the blockchain simultaneously to do the same thing.
To offset this problem, some projects use "whitelists'', which is just a list of wallets that are allowed to mint at an earlier date. It sounds like a good idea on paper but comes with its own set of issues, as we saw in the doodles drop—a highly anticipated drop, which reserved 50% of its total volume for people on the whitelist. As a result, they minted without a gas war for .123 ETH - while "regular" fans had to fight a gas war, which got to the usual highs of 1-2 ETH per transaction. After the public launch, the price on Open Sea was instantly at around 1 ETH, which meant people on the whitelist had an instant return of 10X. That fact led to many people skipping the project (see here) altogether.
The now-legendary MekaVerse drop famously used the raffle method. Many things went wrong with that drop, but the raffle itself worked flawlessly and had no downsides. To reserve your spot, all you had to do was login via Twitter or Discord (client-side) and connect your wallet with a simple signed message (no gas). The only problem the team faced was the use of bots, but more sophisticated solutions should keep most of them at bay.
In dutch auctions, projects try to space out the incoming minting requests by slowly decreasing the price of the mint over time. Using this method can help with price discovery as well as gas fees. People who value the project higher also pay an initially higher price but don't have to fight for room on the blockchain once the majority of the buyers come in at the bottom. [This method works to a certain degree, but it often still ends in a gas war, esp. with a mediocre project as everybody waits to the last second to pay the lowest price.]
The probably newest method to launch a project is a so-called "faucet." The very popular gaming NFT project Parallel used it in its latest drop.
The team pre-minted the NFT, and you sign-up on the client-side (just like with the raffle) and then only pay fees for a transfer transaction instead of a minting transaction. One of the mods in the Parallel Discord described the process figuratively like this:
“Parallel is like going to the US Mint and buying coins that already exist, in an easy process.
Other projects, you have to pass security, wear a special outfit, weigh the ore, select the die, and then physically mint the coin... Oh and you have to pay for this experience, too. And then pay for the coin after.”
Web3 poses its own challenges, and teams will tackle the issues using different methods. But one can see the development going quickly from almost broken techniques such as regular mints to new modalities like the faucet (link).
Sponsored Content: Bubbly Booties
Mint / Launch Date: November 6, 6:00 PM EST
Mint Price: 0.04 ETH
Mint Limit: 20 mints per wallet / transaction
Website: bubblybooties.com
Discord: https://discord.gg/KpH22FZEs3
Twitter: https://twitter.com/bubblybooties
Super pumped about the drop of our sponsor Bubbly Booties. Now you ask yourself, why would anyone want to mint a butt on the blockchain? Well, you can ask the same to the zoomers buying dog coins and becoming millionaires overnight - it's simply fun and funny. With that being said, let's dive into the meme-ability of this project.
We mentioned jungle freaks a few weeks ago and this project has done extremely well, consistently sitting above a 1 ETH floor. What we joked about was the weird hypersexualization of the project that could lead to memetic potential. While Jungle Freaks has a different vibe to it, that hyper sexual and memetic potential is similiar to what Bubbly Booties offers. We can already envision a crying anchor on CNBC reading the story "NFT of a Butt sells for $40,000 USD". We live in crazy times and this definitely isn't out of the realm of possibility. CryptoDickButts are sitting at a floor of .5 ETH or over $2,000 USD, might as well throw some more butts into the mix.
Regarding project logistics, Bubbly Booties has a unique reward system to keep its community engaged. First, every week they are going to use all of the royalties from OpenSea trading to sweep the floor of the collection, and then re-distribute the Booties randomly back to holders in the community. Additionally, all "minters" will get a free claim to all future collectibles such as Bubbly Babes, Giganerds, and Genius Tots. They're working on building a lot of content around their own community metaverse (Bootyverse) and are super engaged in the discord. We know this project is definitely not for everyone, but that's NFTs (and especially these types) – high risk / high reward.
Under The Radar:
Rich Gator Golf Club
If you’re thinking about some new mints this week, it may be a good time to instead consider a newly established under-the-radar project like Rich Gator Golf Club. The Mint sold out in a few short hours around 2 weeks back, and the price has struggled due to ETH ripping. Sitting at a low floor of .006 ETH right now, this may be your chance to make a nice asymmetrical bet.
This is one of the first projects we’ve analyzed in a while with a much smaller collection size of around 2,222. At about a 50% unique owner rate, we’re comforted by the diversity and disbursement of holders. The discord is super active and due to the smaller size of the project, the team is able to more directly interact with individual community members. They do multiple AMAs per week and already have a planned airdrop of Baby Gators lined up.
The community is structured in a way where 1 Gator = 1 governance vote when hashing out future plans, and voting will take place within a proprietary portal known as The 19hth Hole. The team also recently donated 10% of the mint to The First Tee, a charity that uses golf to help children improve social skills. We haven’t seen many (if any) projects geared around golf which is a niche full of passionate fans. DYOR, but we highly recommend joining the discord and connecting with the team.
Food Frogs
Keeping this short and sweet but felt obligated to mention the Food Frogs since we wrote about them in the past. When we first mentioned Food Frogs, they had half the number of twitter followers and weren’t minting for several weeks. Since then, they’ve sold out their presale, doubled their twitter following, and have now been adopted by a significant number of “crypto influencers.” One of the most redeeming qualities that this project has going for it, is that their artist is extremely quick to jump on popular twitter threads, commenting with a custom food frog designed for whoever wrote the viral tweet. The most successful marketers on the planet share 2 common traits – they’re creative and quick. Food Frogs ability to capitalize on fast moving internet culture make them strong contenders to build a real noteworthy brand.
Up-And-Coming Blue Chips: Doodles
Despite the gas war and some issues around the drop, we think doodles is the next potential blue chip. Over the last few weeks many of you may have noticed a lot of high profile twitter accounts starting to change their pictures to doodles. As a fairly new project that minted ~2 weeks ago, this project has weathered the recent storm as well as any other, even in the face of the minting problems the team faced with an oversized white list. Since minting, floor prices rose quickly to 1 ETH and are now sitting comfortably above. People far and wide seem to love the Doodles (we don’t blame them) and the community is all over the place, constantly spreading positive vibes on Twitter. For a 10k project, they have a 47% unique holder rate already and we wouldn’t be surprised to see this trending up. No reason to overthink it, this new project has a solid base that looks like it may be a true medium/long term winner.
That’s all folks! Hope you all enjoyed this week's addition. Feel free to shoot us a DM or email for what you’d like to see more of! We’re super active on twitter so tag us in anything interesting and if you’re feeling friendly feel free to share this with your NGMI newbie friends so that they can make it. Have a wonderful week!
--------------
Disclaimer about sponsorships: We’ve been getting A LOT of dms about sponsorships and upcoming drops. Many are NGMI but a few projects stood out and have teams that we’ve taken the time to speak with and are excited to share info on in the near future. If you're launching a new project and are looking to work with us on promotion and/or consultation on how to plan a successful drop, feel free to slide in the DMs in Twitter.
ETH Rips – Jpegs Sink
How do you feel about Mad Rabbits Yacht Club ser… worth buying in secondary?