How NFTs could go mainstream and your bags could still go to zero
We've heard the narrative hundreds of times: As soon as NFTs go mainstream, as soon as we get more people onboard, our NFT bags will moon. It's just a matter of time. Mass adoption will be our savior. But is that really the case? Let's take a closer look. (2/22)
The most important thing is to distinguish between two things. NFTs as collectibles (what we call "NFTs") and NFTs as a technology. NFTs as a technology has thousands of applications, supply chain management, ticketing, voting, etc. (3/22)
There is no doubt in my mind that such NFTs will be everywhere in a few years. Digitalization is progressing too fast for that not to happen at some point. NFTs as collectibles on the other hand are what we know as pfps. (4/22)
That too could be here to stay. The skins, avatars and loot in most video games will be one such NFT in one way or another. However, somewhat differently than we know it so far. (5/22)
We in the Web3 space live in a world of 10k, 20k collections where the most valuable ones are worth tens of thousands of dollars. The "digital flex" that so many talk about. But this flex could also look very different in the future. (6/22)
Okay, you may think, but my pfp is not only a digital flex but also an entry into a community. And you're not wrong there. If you own an NFT, then you own something that you can freely trade and whose value will also increase with the success of the project itself. (8/22)
You can attend exclusive parties and own a part of the collection. But - and this is important - not a part of the underlying company. Many holders today think they are shareholders, but this is not true. They are stakeholders. (9/22)
That doesn't mean they don't enjoy benefits, but it is a crucial difference when it comes to the future of the Web3 space. There could certainly be a world where the project makes billions of dollars in profit, but the NFTs in the genesis collection go to zero. (10/22)
Sure, many of the big projects today give value back to holders. Airdrops, tokens, all that is cool. However, if we look into the future, this can’t continue forever. The other day I wrote about why dilution is not sustainable long-term: (11/22)
On top of that, pretty much all "bluechip" projects are playing the IP game right now. Hardly any project is building a real business, produces something, or has a product that would be even remotely interesting for the mainstream. (12/22)
But that's not so bad, you might say to yourself. Your bags could be the next big IP, the next Marvel. How cool is that? The reality, however, is that 99% of IPs fail within a few years. For every Marvel, there are thousands of "Marvols" you've never heard of. (13/22)
The chance that all bluechips will build an IP that will still be relevant ten years from now is vanishingly small. Some might make it, but the majority won't. (14/22)
Mass adoption means that storytelling pro's will enter the Web3 stage. Most bluechips, im contrast, have little appeal outside the Web3 bubble. Most normies HATE NFTs. The chance of a globally beloved brand evolving from an NFT project is slim from today's perspective. (15/22)
And even if the IP prevails against all odds, what does that mean for holders? If there are hardly any airdrops left because the now big cooperation doesn't want to dillute the IP any further, then at best you own something like a rare Pokemon card. (16/22)
Sure, the first Pokemon cards are worth hundreds of thousands, even millions of dollars today. But they’re hardly liquid and with basically no utility. Let's say your bags really do become the next Marvel. A billion dollar cooperation with hundreds of millions of fans. (17/22)
Would they really maintain a small, 10k community just because they bought a NFT 20 years ago? How would that make the other millions of fans feel? I don't think corporations would treat those NFTs any differently than rare Pokemon cards. Part of history. But not more (18/22)
But maybe I'm wrong. And that's the positive news of this thread. All this does not have to happen. Because what matters is what we do as space, as holders, as founders of projects. (19/22)
Maybe a project will build the next Facebook & holders will enjoy exclusive benefits. Maybe a project finds a way to let holders really have a share in the financial success - not just with airdrops but with real shares in the company (I know, legally difficult). (20/22)
Maybe a project will really become the next Marvel and the NFTs will not just be treated as old memorabilia but as an exclusive community that is allowed to participate in movies, comics, theme parks. Maybe everything will work out the way we hope it will. (21/22)
What will become of the bluechip pfp collections of today will be decided in the next few years. It can all turn out well. But it doesn't hurt to look at other scenarios as well. (22/22)
