“Popular! I’ll help you be popular! You’ll hang with the right cohorts”
– Popular, Wicked
In the crypto world, almost everyone wants to “do an NFT collection launch.” And, well, the reasons are pretty obvious. People look at Bored Ape Yacht Club and see that each NFT now sells for almost $500k, and has a $75M trade each week. The company which owns BAYC is valued at over $3B. All for a club!
Who wouldn’t want that. And, selling NFTs is non-dilutive. Effectively, if the original mint (creation of the NFTs) sells out perfectly, you end up with money, no dilution and a rabid following. I’m in!
Yet, even a quick peek reveals how hard this is, and that the time of “just mint it baby” has passed.
First, let’s take a look at the biggest NFT collections by volume:
As the post shows, the drop off from BAYC, to the number 10 collection is steep, very steep. It’s not hard to say that except for really two or three collections, very few actually trade. This means that BAYC is much more of the outlier that the rule. Most NFT mints will have very few sales and very little ongoing volume.
Making this even worse, is the volatility within the NFT market in general.
In this file, also from nonfungible, we see that after a spike in August, volume has cooled. A lot. In fact, the high volume looks much more to be the anomaly, than the expected outcome.
But, if we do want to create a successful NFT community, what do we do? And, let’s look at BAYC, to see what they did.
First, they realized that it’s all about community. What collectors care about is positive, non-bribed, organic, user testimonials. That’s hard. That’s creating something that people really value. It’s not the NFT per se, but what the NFT offers. If you’re minting NFTs because you think you can pump and dump, I would dissuade you, on both moral and likelihood of success. In addition, BAYC had something already launched, a New Orleans style speakeasy vibe. It was original and fun. This is also hard. Finally, they did some other things technically well. They cared about the art and made each artwork unique, not just using programmatic art to make a mashup. And, they wrote their own contracts. I’m not as convinced that they would have to today, but it shows the complete package, form brand, community, art and technology that all came together.
Needless to say, almost no one else had done that. I’ve heard estimates that 99.75% of NFTs have never sold. So, when people say 99% of NFTs are useless, we can safely say that it’s actually a good deal more than that.
Yet, with all that, there still are phenomenal communities and projects and winners will emerge that build the authentic communities and create users who are passionate about their products. So, if you want to “just sell some NFTs” you have your work cut out for you!