Keep only things that speak to your heart. Then take the plunge and discard all the rest.
Marie Kondo, the celebrity Japanese TV presenter, organising consultant and author often said these famous words in a valiant effort to declutter many households across the world. While her words were particularly focussed on physical items, the core value of minimalism that she’s attempted to promote certainly has a place when it comes to Web3 projects — especially in particular relation to NFT projects.
So many projects seem to go down the same path. They mint out an NFT, and then, right after mint, they commence “staking” that yields tokens over time. As initial investors cash out by selling their tokens and these tokens become increasingly worthless, they try to “save the token price” by making yet another NFT collection, or by “upgrading the art” of their original NFT — using the tokens as payment. This occasionally produces short term gain and they find the token and NFT price going up. For a brief moment, everyone is happy again. But sooner or later, these founders realise that their project is in possession of yet a new burden in the form of a new collection — a burden that they are obliged to create yet more value for. The token price goes down again eventually, and, at a loss as to what to do, they create yet another collection, and the cycle goes on. And when people call them a Ponzi scam, they rub their heads and are genuinely shocked — assuming that they hadn’t actually set out to be a real Ponzi scam in the first place.
Thankfully, not all projects follow this same playbook, but a vast majority of projects (including many blue chip projects) have, at the very least, elements of this.
So instead of going into automatic mode and just doing one thing after the next in the same way that “all the other “successful” projects have done it”, I think it’s important to just stop and think hard about every step of the process from the point of a project’s conception. This is particularly important for us as founders, thought leaders, and advisors in this space.
The focus on minimalism has to be there on the outset. So much so that the first question that must be asked is whether an NFT collection is even necessary in the first place.
Is an NFT collection really necessary at all?
When one seeks to create an NFT marketplace for instance, or a website for raffles, or a trading tool — is an NFT needed? If the answer is yes, then the next question that needs to be asked is, does a completely new collection need to be created for this?
Is a completely new NFT collection necessary?
Why can’t this project just use one of the existing NFT collections and give value to that collection instead while mutually benefitting from their community? Surely, a pre-prepared collection complete with art and a community would be less resource-intensive than creating a brand new one from scratch.
This question is far easier to answer. An answer could be that the project needs start-up capital and therefore needs to sell NFTs in order to actually do what they want to do, and, on top of that, to continue collecting royalties from the collection as a source of continued cash flow. With the introduction of pNFTs as well, simply tagging onto a collection could prove tricky since the founders of the original collection can change the permissions for their collection and leave one high and dry without warning. Ultimately, being in control of one’s own collection does provide some autonomy, stability, and peace of mind.
Moving on, tokens. In fairness, many NFT collections have now begun to move away from the token-emission meta. But if a project decides that they want to emit tokens (or any other equivalent such as non-SPL tokens), then they really need to ask the following question.
Are tokens really necessary?
NFT emission tokenomics, otherwise lovingly named ponzinomics, have actually far trickier dynamics than founders think — and very often, they are not necessary at all. If a project emits, say, 50000 tokens through staking a day, they need to find a way to organically (and no, I don’t mean just making new collections or art upgrades) sink an average of 50000 tokens every single day in order to be sustainable — and this is incredibly difficult. Many founders feel that they must create their own token for the microtransactions that their projects want to provide as utility — but why can’t they use their chain’s native token to do that instead? Surely, Sol itself will work just as well as any private emission token. The disadvantage of using Sol, of course, is that founders then do not have the option of selling into the decentralised liquidity pool that they’ve initially provided liquidity for in order to fund the project — although most founders wouldn’t even consider tapping into that option in the first place.
Last but not least, second collections.
Is a second collection really necessary? Or a third? Or a fourth? Or a fifth?
As alluded to earlier, extra collections bring more burden to projects in the long run. They undoubtedly provide excellent short term gain, especially through fundraising and/or raising token prices, but this must be balanced against the utility that they’d be able to provide for it in the future. It’s far better, in my opinion, to concentrate all the utility and “goodness” into the original collection and boost that instead. This is not to say all second collections are bad. Second collections can be incredibly useful especially if there is a clear plan for them — for instance, Claymakers and Clay in the Claynosaurz project. While these are second and third collections, there will be a downsizing and “re-minimalising” when the time comes for a vast majority of these to be burned to create armour for the Claynosaurz in the main collection.
The answer to all the questions above might be yes. Truly yes, absolutely everything is needed. If that’s the case, then a project should go ahead and make an NFT collection, tokens, and even extra collections. Even if it ends up being the wrong decision, at least some proper thought had gone into it prior to that decision being made.
It is also worth noting that even established collections that have already previously said yes to all of the above can go back to the drawing board and ask themselves whether everything they’ve created is still required. If not, then the option of burning unnecessary baggage is always there. Marie Kondo would be proud.
Gone are the days when we just created extra collections and tokens to reignite hype and increase floor and token price. We, as an ecosystem, are now paying dearly for it. Honestly, those days should never have existed — but here we are, and it is not too late to rectify past mistakes.
Written by: Jpegtologist
