Compiler: Perry Wang
Compiler: Perry Wang
The NFT art ecosystem is here to stay – it will have its ups and downs, but it’s here to stay, and it’s bound to grow faster than you might expect, and surpass the physical art market in terms of capitalization.
Here’s why: the combination of art, extreme mobility, and economic incentives will fundamentally change the very nature of art—more on that later.
From a long-term perspective, I believe there will be an unprecedented amount of capital entering this ecosystem. In the short term though, my biggest concerns are illiquidity and oversupply. The combination of illiquidity and oversupply could lead to a severe liquidity gap as screening increases too rapidly, outpacing the rate at which new capital can enter the ecosystem.
But that's okay. Please continue to hold it!
But you may ask. Where should capital be allocated?
I believe that if you have a good NFT screening framework, you will hold NFTs that make you happy in your hands, instead of leaving a collection of low-value items that break your heart. This is especially important in an environment where capital and attention are too fragmented due to oversupply.
Advantages of a good screening framework
A good screening framework can save you time by allowing you to ignore most items and focus on your own bets.
To me, a good filtering framework looks like a hierarchy of filters. Filters help to systematize one's approach to predicting what will be valuable so that everything else can be filtered out. I ordered the filters according to the reliability of the predictors.
Optimal Filter → Most Reliable Long-Term Value Predictor
Worst filter → least reliable predictor of long-term value.
The most important, most important filters should always be:
In the long run, could the project be a self-reinforcing Schelling point for capital inflows and social identity? Examples include CryptoPunks, Autogylphs, Fidenza, BAYC.
frame
frame
1) Is this a groundbreaking project?
In other words, has the project played a significant role in the cultural or technological evolution of NFTs? Some prominent examples include Autoglyphs (the first on-chain generative art on the Ethereum platform), Fidenza (the first groundbreaking long-tail generative art), and CryptoPunks (the first successful avatar project).
In the long run, breakout winners in new categories will attract capital and attention. Hint: Generative art is going to be a huge category.
2) Is the collection credible/legal?
Is there a legendary artist, DAO, or other credible source behind the relevant NFT series? (eg: Curated by Art Blocks/AB, Axie, Deafbeef, etc.)
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The Chromie Squiggle is the first project curated by Art Blocks, created by Snowfro
Narrator: I believe ArtBlocks (AB) has become a Schelling point that will attract a self-reinforcing inflow of capital and attention. It is truly remarkable that AB has attracted so much attention in such a short period of time. People "play Art Blocks" as intensely and consistently as they play video games. This is a strong signal.
3) Will ownership come with incentives or utility?
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"Eternal Pump" by Dmitri Cherniak
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Punks Comic NFT represents ownership in its DAO
Aside: Can someone put together a spreadsheet for me of creators/projects that might do this or have done so for token holders?
4) How collectible is the item?
Collectibility is a quality that should be felt on multiple levels – entire collections, subcategories within collections, and individual pieces.
The key here is to maximize versatility while maintaining ease of assortment. Let's break down these two things:
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Also Tyler Hobbs' "Fidenza" series. They are #938, #314 and #367 coins respectively... These NFTs are all derived from the same algorithm... 🤯
Classification: It should be easy to form categories using commonalities within sets. It should be easy to understand how the work differs and how this difference pushes the work into a new category. If the changes between clips are too random, or look like chaotic noise, it's not ideal. Each work should also be independently identifiable as part of the same collection.
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"Ringers" by Dmitri Cherniak
As generative artist Tyler Hobbs put it in his recent post:
"With a state-of-the-art algorithm, each output will have something new, a little bit of a surprise, that will give you more insight into what's possible. You shouldn't be bored scrutinizing these results."
Basically, each piece needs to feel special, but you should be able to easily understand why it is special. In general, collectors want to feel that the pieces they are buying are rare, special, and likely to appreciate in value over time.
5) How aesthetically pleasing is it?
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"View Cards" by Jeff Davis is Art Blocks Playground's first collection
In my experience, when I show "Fidenza" to a random person, they are instantly wowed, even if they don't know anything about generative art or NFTs.
6) What is its meme potential?
This point is to discuss whether the project is extended from a social perspective? Does it have a unique ability to bring coin holders together? Especially if the answer to any of the above questions is meme potential, this filter is a strong predictor of long-term value. At the end of the day, community is what makes projects thrive, and memes are at the core of building community on the internet.
There will also be a Dogecoin-like project in the NFT space, which will determine the Meme that brings NFT holders together, its supply may exceed 10,000, and it will not be very dependent on crypto whales.
7) What is the total supply?
Scarcity is a difficult thing.
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Only 100 Photos in Justin Aversano's "Twin Flames" NFT Collectible Collection
Summarize
Summarize
Keep in mind that the filter metrics above are ranked in order of their value predictive power. For example, if an item doesn't meet the first filter, you can completely ignore it unless it passes filter 2/3/4 with an excellent score.
I recommend trying to evaluate already successful projects using this framework to see if they pass. A good screening framework should explain the success of most projects. Of course feel free to share feedback or criticism - it's a way to make the framework better.
Source link:
Source link:medium.com
