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Everything you need to know about 🟢 NFTs

Why it matters

NFTs transform art, governance, gaming, finance, charity, communities, logistics, and more.

Problem

Authenticity and ownership were hard to prove...until now.

Solution

NFTs help you prove ownership of unique assets without intermediaries.

Players

Marketplaces

Collections

Tools & Platforms

Predictions

  • NFTs will unlock online and in-person experiences.
  • NFT owners will force appreciation via ownership. Jay-ZJason Derulo and Odell Beckam Jr. own punks. Steph Curry and Dez Bryant own apes. Their ownership boosts the value of their items and everyone else's.
  • Physical versions of NFTs will create embedding effects. Buying prints of your NFT makes it less likely that you'll sell the underlying asset.
  • NFTs will transform charity. Donations are easier to make. Funds are easier to trace. Donors can receive NFTs representing their contributions.
  • Activity based income will be used to deploy treasuries and direct efforts.
    • Each Noun in the Nouns DAO is a vote in the treasury.
    • Lazy Lion holders get Roar Rewards for updating their profile picture and adding a crown emoji to their name.
  • Fractionalization will make "blue chip" NFTs more accessible. Boosting liquidity and valuations. There are 6969 CrypToadz. Fractionalization will lead to millions (or even billions) of owners. See Fractional and PartyBid.

Opportunities

  • Build tools to make, exchange and manage NFTs. DuneNansenRarity and Icy help you find buying opportunities. Collab.Land adds token-gated access to communities. OpenSea helps you mint and sell NFTs. There are still gaps in the market:
  • Launch an NFT media company. See the Forefront newsletter, Proof podcast and Finematics YouTube channel. Learn while building distribution and optionality.
  • Launch an NFT-gated community. Gen.art grants membership with NFTs. This assumes that your audience are early adopters. Shared tokens create deep alignment.
  • Advise NFT teams. There are DAO politiciansWhere are the NFT advisors? Our fast-moving space has lots of information problems. Which smart contract should you use? What's your go-to-market strategy? Which pitfalls to avoid?
  • Look at successful NFT projects to build a go-to-market strategy.

Key lessons

  • Building an identity on an NFT creates embedding effects. The switching costs of selling are high.
  • NFTs create deep alignment in communities. PFP projects align community members on identity, emotion and ownership.
  • Status symbols are changing. Signalling is an old job. NFTs are new tools. JPEGs are better signals than rolexes.
  • NFTs are a form of social investing. Owners can affect outcomes. As a Proctor & Gamble shareholder, you may buy the brands' toilet paper. This has little to no effect on the stock price. As an NFT owner, you can meme and build utility. Asymmetric efforts.

Haters

"I can just copy an NFT. Then I own it."
The more you copy an NFT. The more value accrues to the owner. You're spreading the meme.

"NFTs harm the environment."
Carbon-negative projects like CryptoTrunks address this. As well as Nori. As for Ethereum, proof of stake takes less energy than proof of work. Everything affects the environment, including the infrastructure that supports you reading these words.

Links

Thanks to Hiten Shah (Nira), Max (Solid NFT), Linda Xie (Scalar Capital), Patrick Rivera (Mirror), Ethan Jones (Tools for MGMT), Ashwin (Trends.vc), Stewart Townsend (Channel as a Service), Yarty KimRahul Prakash (Unlocking Blockchain), Lu (OS Bundle), Monika Birkner, Edward Mcenrue, Edward Rooster (The Big Stack) and Edward Danilyuk (dock90). We had a great time jamming on this report.

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