Here are some thoughts on NFTs (non-fungible tokens)
OpenSea is the frontrunner when it comes to marketplace, minting, and hosting of NFTs.
The large majority of NFT collections and clubs as they stand today are just quick "get rich fast" schemes. They are reminiscent of the ICO craze of 2017/2018 where folks with little to no track record of establishing product-market fit whipped together "white papers" describing elaborate projects with sophisticated roadmaps that would rocket tokens to high prices.
Of course most ICO investors cared nothing more than to know (a) if they could get a pre-sale discount (b) which exchange the token would be listed on. ICOs faded relatively quickly as a result of a few things: SEC scrutiny (most folks holding tokens cared nothing more than to flip the coin for a profit) and when exchanges made it harder to get listed (charging high fees to be on the board). They also died because the maintainers of these projects just plain failed. After all, marketplaces are some of the hardest businesses to build due to the challenges that come about due to establishing network effects.
Recipe for NFT Launch
- Set up a one-pager website that looks snazzy (no white paper necessary!). Examples: https://cryptocannabisclub.com/, https://www.penguinfightclub.com/, https://topdogbeachclub.com/, https://www.spacepunks.club/, https://cryptoshack.club/, https://topdogbeachclub.com/
- Build out collection of 10,000 "AI-generated" images that are a combination of "traits" (after all, it's a pain to actually create 10,000 images manually). This voids the entire concept of NFTs because instead of something being rare due to production, it's rare artificially. We value natural diamonds because of how they are produced - otherwise, artificial diamonds would be valued the same.
- Hype the "drop event".
- Rake in crypto via OpenSea. Exchange for fiat right after so you can go launch 5 more NFT projects. Lather, rinse, repeat.
NFTs are the same in that the equivalent of the ICO is the "minting event" where on some day, the collection of NFTs is minted and deposited to the purchaser's account. The sustainability of the project is questionable (especially when there is a pitched utility value to the NFT). When you raise funds for a company but run out and need more, you can issue more shares at some valuation to keep the lights on. ICOs and NFT projects are usually stuck when they can't successfully boot up. The resulting effect is a disintegration of value to all holders and fire sales (again on OpenSea).
Another dubious tactic that NFT creators use to hype their projects is creating a milestone-based incentive program to encourage participation. Sometimes this is in the form of a crypto-back raffle (the creator makes X ETH from selling Y NFT collectibles and now can give to one lucky winner Z ETH - pocketing the difference).
Here's an example of a situation where not all the NFTs from a collection called NFT Collectors Social Club have been purchased (though the floor price is still set at .02 ETH) and one buyer is already throwing in the towel and looking to dump his/her "collectible".
NFTs are actually worse than ICOs in that the folks running the projects stay anonymous. After all, the goal is to take the bag of crypto and run, right? Here's an example of the Team behind the Bones Club NFT collection.
Trust these dudes at Crypto Cannabis Club?
Gotta hand it to all these creators - I've never been able to make websites as slick as them.