I figured since this particular segment of the crypto market has blown up so much lately, it was deserving of its own thread.

NFTs have mainly taken off in the form of digital art/collectibles, with lots of prominent people and artists getting involved including Mark Cuban, Gary Vaynerchuck, and Chamath Palihapitiya. The vast majority of the traction in this sector has happened on Ethereum.

We've seen enormous prices and lots of popularity for cryptopunks (which was the canonical ERC-721 token on Ethereum), NBA Topshots which are built on a blockchain called Flow, Hashmasks, and some others. We've seen the price of the $SOCKS token, representing 1 of 500 limited edition pair of socks created by Uniswap, reach over $60,000. You can redeem the token for an actual pair of socks. We've seen a similar trend among certain real-world art and trading cards (from vintage baseball to modern NBA to Pokemon and everything else).


(currently $61,500, was ~$3-5k a few months ago-- all whole $SOCKS owners also received 1,000 $UNI airdrop in the Uniswap token launch, currently worth $21,000. This has become valuable for a few reasons in my opinion: speculation about future airdrops, privilege related to guarded launches such as those using Proof of Governance [Saddle, Float], as well as an NFT/DeFi status symbol)

Cryptopunks


Hashmasks


Some common criticisms:
(1) NFTs take no effort to create and so can't be worth a lot: Andy Warhol proved this wrong a long time ago.

(2) Right-click savers: can't be worth anything because I can just screenshot it: this is among the dumbest criticisms because your right-click save is worth no more than the photograph you took of the Mona Lisa while you were in Paris or the poster your mom bought you to hang on your wall while you were a kid.

A more reasonable criticism is that it's easy to self-deal. Without identity linked to blockchain, nothing stops anyone from selling an NFT to another address they also control to make it look like the price is appreciating.

I've always been more middle of the spectrum, where I see some pluses and minuses. I'm still there but I do find what's going on now fascinating. The coolest part of digital collectibles is it allows creators to reach a global audience on a completely neutral platform without rent-seeking middlemen.

Outside of collectibles, NFTs have lots of other applications.
-insurance policies (see Nexus Mutual)
-mortgages (which can then be packaged into MBS -- this of course requires a lot more to happen on the regulation side, and is now just a hypothetical possiblity. There is some progress on tokenizing real estate investments, though)
-Unstoppable domains like ENS (Ethereum Name Service) -- allows anyone to purchase a human-readable Ethereum address that maps the hex address to the readable address. I could buy twoshae.eth and point it at my 0x[whatever] address to allow my friends to send me money in a similar way to how they'd send me an email.
-in-game items (think outfits in Fortnite)

Decade+ bull market with especially strong performance from crypto is fueling a massive run in the prices of these pieces of blockchain history.

The bull case for collectibles is something like:
-younger generations love everything digital, digital = can't damage it
-famous creators see the advantage, start doing more digital offerings, social flywheel gets going. after all, all collectibles/art have this idea. lots of very talented artists can't sell their work for much, while others develop cult-like fame (like Banksy) and sell for insane amounts, even for prints (!!).

Lots of the most valuable art like Picasso's or Pollock's are (1) very rare (2) tied to some cultural and/or artistic phenomenon that makes everyone want the same stuff. Other stuff it's unclear why people flock to it, but artists like Banksy, Alec Monopoly, and Peter Tunney are able to sell their work for $$$$. Art and collectibles are a highly social thing, and I suspect that if blockchain ends up being as big of a shift as the bulls think it will be, owning these pieces of blockchain history will be highly coveted, especially by crypto whales who got unspeakably rich from this paradigm shift.

I also talked about NFTX already in the alt thread (Brag: this was 10 days ago and it has 5x'd since.) which, coupled with what I said about original/canonical things + social trends sums up my thesis on these things. Note, all of these things are highly speculative and IMO likely to perform terribly in a greater macroeconomic downturn, like very very high beta stocks. Careful investing.

Hope that got the ball rolling, interested to hear how others are viewing the space and what their investment theses are. PS: Please no right-click savers or "eAsY tO pRoDuCe InFiNiTe AmOuNtS" people as they've already been addressed.

Disclosure: own some but not all of the crypto-based things talked about here.

I'm a huge $meme ape. Also have a decent amount of $rari and $flow

Believe Superfarm launching like right now.

Some of those Cryptopunks have gone in the $800,000 range.

https://www.forbes.com/sites/lawrenc...s-newest-craze

If you're an artist, make some art, make some $$$

Is there an easy way for people in US to interact with pancake that I’m not seeing or am I best off just setting my VPN outside of the US and using binance bridge?

Good post.

There’s enormous upside in this space. Dapper Labs (behind top shot and cryptokitties) has already generated $100M in sales of NFTs.

Still early days too. I believe we’re only scratching the surface of potential use cases for NFTs.

Probably less scope for fraud than some other crypto trends (eg. ICOs).

Actually picked up some after reading that post. Thanks a lot! I have spent a few hours trying to figure out exactly how NFTX works, and I am still a bit lost. It seems to provide some good NFT exposure without having to learn too much though.

Looked into FLOW, looks very interesting, but already with a fully diluted market cap of $25B, I can't really see a huge upside. If someone can change my mind please do.

I do think there is great upside potential for a smaller protocol that specializes in NFTs and gaming. The larger protocols obviously have too high fees. Picked up some WAXP which might have some potential, but looking for other alternatives.

Christies doing a Beeple NFT sale
https://www.christies.com/features/M...spx?sc_lang=en

How will Arweave catch up to Ethereum and overcome its massive network effect? ERC-721 alone is a massive network effect, much like ERC-20 has been. Even "ethereum killers" are creating erc-20 wrapped tokens to be able to move their token to ethereum so it can trade there.

I mean it has to catch Filecoin et al before we even talk about >>>> Ethereum

been hearing all that for a while. TRON is pretty much all of those things too! Same with Solana or Avalanche.

Comparing "from ICO" vs a much later stage project isn't exactly apples to apples comparison, but congrats if you got 15-20x, very good trade. Also looks to be down to .0044 from .017 since September 2020.

It is also competing with things like Matic and NEAR (rainbow bridge), all other Ethereum layer2s, Flow (success w NBA Top Shot). Massively crowded, "better tech" isn't near enough, and every chain claims to be scalable without noting the actual tradeoffs it's making (usually, high degree of centralization). These things all have to compete with each other before they can take on the platform king.

I am pretty strongly convinced the "winning" more centralized platforms like Solana will win vs their competitors because they are synergistic with Ethereum, not because they wipe it out. At this point something needs to be 10-100x better and even then there will be some path dependence for it to win.

Also, weekly reminder that the movement is some part social and some part technological*. Better tech is at best half the battle when you're competing with incumbents with better infra, tooling, more devs, more traction, more $, real ecosystems (Arweave doesn't have a Consensys-like organization with billions of $). Also, all the people in the ethereum ecosystem have $200B worth of ETH bags they care about protecting/growing.

*this is imo the main reason ethereum has flipped bitcoin in everything *except* market cap. Bitcoin's virgin birth super important to lots of people.

Counterpoint, their backers are in lots of stuff, got in at very favorable prices, are also invested in their competitors and heavily heavily invested in the ethereum ecosystem.

a16z crypto has so much $

Multicoin will shill literally anything they get a good deal on so they can dump it on retail. I still remember how EOS was going to kill ethereum. To his credit, Kyle admitted that was a bad take

I commented in the Arweave thread, will do some more reading about it. As Nick Tomaino mentioned, there *must* be a tradeoff.

just my gut but i think these will be the only use cases, primarily the bolded. guess i'll quote 5 years out and see how right/wrong i am.

there will probably be one that survives just from building such a strong community that it builds a native value moat.

Its fascinating to watch but this is probably the dumbest thing to come out of crypto and crypto came out of crypto

@clayton

why?

Tokenized real estate and NFT insurance policies already exist. Will they go away?

also, I don't see collectibles going away. the price may go down a lot, though. Beanie babies crashed, but what about sports cards? they're intrinsically worthless, yet people paying big bucks for them and have for decades now.

This just goes back to my previous thing about DeFi, proof of concept is good but to make waves the trust system has to not only outperform legacy, it has to be perceived as outperforming legacy. We are still in the wild west on smart contracts and I guess I'm just bullish on a vast majority of society wanting to deal with legacy systems on items as meaningful as real estate and insurance. The disruption probably comes from the best tradfi company that can artfully incorporate tokenized concepts into the real world in a way that saves money and delivers a quality customer experience. idk... I could get my mind changed on this but I'm feeling very boomer on this front.

i've said this ad nauseum and don't want to tooth up the thread, but i find a strong difference between items you can hold and touch and items that are digital. warhol build a value moat around the warhol brand. maybe someone can successfully build a long term value moat around something like top shots of cryptopunks but as far as I'm concerned they're all cryptokitties until they aren't, which is to say they're all worthless. i am big on pixels =! "real" things

it is the very fact that it can be destroyed/lost/stolen combined with its rarity that gives it value. items tell a story.

if something is permanent and comprised of pixels, it is unique by declaration only. no different from me yelling in a room that I am a starting NBA player.

I can copy and paste the exact same art and host it the exact same way as an overwhelming majority of society holds their art. the value is derived from the community who gives value to the token. if you build a massive moat on the value of that token, congrats, these meaningless pixels have value. i have yet to see a use case on pixels becoming not worthless long run.

yeah I think the bull case is that tradfi embraces the new, more efficient system, mainly because they have to because their users demand it. (caveat; many reasons the bull case may not play out)

you'll also see lots of real world NFT stuff (ie, IRL galleries where NFTs are displayed). While not being able to "hold" it per se is a negative, focusing on that aspect is imo overly myopic. It is one drawback (some would argue it's not even a drawback-- in the case of sports cards, you no longer need to worry about 1. counterfeiting 2. condition/damage 3. grading mafia). At the end of the day the value of collectibles comes from provenance* (ie, this is an original Picasso) and public blockchains are perfect for that.

*can prove it's authentic, original, and that you own it

"I have yet to see a use case where wood panel doesn't become worthless"**

**except when it was painted on by Da Vinci and the most recognizable painting in the world.

i think this is going in the right direction, don't everyone get mad at me that I'm boomering against pixels.

for example, 2040's decade maybe has more augmented reality and smart glasses. what if a NFT system was build on top of recorded experiences. outside of the NFT environment nobody gets to see it, people can describe it but ultimately the only person who gets to experience the recorded thing is the person who holds the NFT. what could it be?

take the concept of Wu Tang Clan releasing one single album (which Shkreli bought for 7 figures) and apply it to basically anything that you could write into audio/visual thats recordable.

Exactly Clayton! And one of the great benefits of doing these things on Ethereum is creators can reach a global audience on a public, neutral platform. A lot of creators are embracing that. The internet+social media+Ethereum disintermediated 1. discovery 2. payment 3. delivery+storage 4. authentication

you sound no different from beanie baby scalpers in 1998 and i think we're just at a fundamental divide on valuing value.

can i buy something from deviantart and support an artist, sure, I have bought coffee mugs and similar. Do I expect to buy a digital unique piece from an artist and then speculate on the price of it rising? maybe if I am literally the only person who gets to see this art and the artist builds a huge culture moat. but the moment the art and the pixels are seen by the world, the art is effectively useless. an original picasso is not the same as a token attached to an original digital asset.

maybe this is the first case of me turning into an old man shouting at clouds but i sincerely can't see the world changing on this front unless we go full Ghost in the Shell.

idk man kids pay a lot of $ for Fortnite outfits because they think it's cool and play w their friends. Art/collectibles are inherently about 1. social signalling 2. peen measuring 3. nostalgia.


Thread from today worth reading: (ps I hate Kyle but still read)



Lots of musicians like @RAC and @3LAU are highly involved already.

i don't dispute that, i think tokenizing rares in videogames is actually a pretty sick idea. it validates the use case more fluently to me. the experience of being able to play fortnite with a skin that you know only has 5 in existence validates the cost, and that value feels more real and applicable to me.

(obv like anything else, if Epic Games decides arbitrarily that theyll release a very very similar skin in a giant quantity, that prob depresses the value of the original 5 rare skins by some tangible amount)

sure and i think the first 2 are probably responsible for why the current popular NFTs have any value at all. there's a lot of neckbeards who got rich in the last 6 months that wanna show off the size of their dick to the other neckbeards.

maybe the very first popular NFT could hold value longterm just as a museum kinda thing, "here is the first NFT", but as the value of the NFT needs to grow outside the bubble of neckbeards the value plummets when, like beanie babies being just fabric and materials that nobody really gives a **** about, the NFT gang will realize that a lot of this art is just pixels and the ponzi scheme runs dry pretty quick from the next crypto downturn and people needing to liquidate to pay taxes.

this is last i'll comment on NFT collectibles unless thread dives more into what's more possible on user experiences for futuristic stuff which i think is interesting. i don't wanna distract the thread.

Really wished I pulled the trigger on the nftx fund a few weeks ago but honestly just really wasn't interested in the novelty of collectibles such as cryptopunks or hashmasks. Personally didn't see much artistic value in the latter and thought prices too crazy.

On the other hand, I actually dig some of Beeple's art and invested a bunch of money in $B20 tokens to own a small stake in The Beeple 20 Collection art that metapurse purchased for 3.2 million last December. I'm pretty excited to own a miniscule part of some major contemporary art that I actually like . I'm already up a lot and given how much Beeple art has appreciated in such a short time, coupled with news of the Christie's auction later this month, I'm hoping for a lot more up! The B20 fund also includes some digital real estate that I have absolutely no interest in but maybe it's valuable too?

https://b20.metapurse.fund/

the actual pieces of art: https://opensea.io/accounts/the-b-20-bundle

On the trading card side, for those of you who were really into Street Fighter 2: https://www.streetfighter.cards/

I highly doubt these NFTs will be lucrative like topshots but i may score a pack for nostalgia.

Really happy that this thread was created.

Cannot really talk NFTs without Enjin.
https://enjin.io/
https://nft.io/

One of the best wallets out there.
Marketplace and explorer: https://enjinx.io/

Enjin Coin has been approved by the JVCEA and will be listed on Coincheck exchange, making it the first gaming token authorized by JVCEA for use in Japan.

After getting interested into crypto in the beginning of 2018 I only mainly bought up ENJ (recently exchanged most to ETH).

Might be missing something but with huge ETH gas fees, it seems very weird that projects want to use ERC-721 vs ERC-1155 which ENJ team is mostly behind of and which is an official ETH standard.

First issues that come to mind with ENJ is that while they have been building out the full ecosystem/platform needed for FT and NFT use cases, their marketing is not that great, while they seem to have a very solid ability to lock down partnerships.
Also, that they are an ERC-20 token, which puts off many people.

They have some sidechain scaling solution in the works, most likely with Perun and want to make ingame items transactions so that a gamer would not need to know that they are operating on a blockchain and transfers would not be tied to ETH blockchain confirmations on the user end, however that will work.

While they seem to focus on gaming, there are constant hints about building out some enterprise projects (Micorosft Azure community gamification via Azure Heroes, something in the works with the BWM Vantage app in Korea, something with Samsung Galaxy phones wallet), etc.

They have been developing various SDKs for game development, Unity, Godot, Java were out, Unreal still in the works I think. Not tech-savvy to comment on this.

Another thing that has been slightly disappointing to me - that they did not get the Minecraft plugin out sooner - so that private servers could integrate NFTs into the game. Hopefully the connections to Microsoft will make it happen soon.

But all in all their output for a full NFT platform development has been massive. If they do not get run over by projects who are better at building hype like SuperFarm, then imo a really good project to have in your bag if you want to have NFT projects.