Part 1 presented a broad thesis for Botto. In this followup, we look more at where Botto stands today, its potential catalysts moving forward, and the best ways to invest in it.
Why Is Botto’s Art Undervalued?
If we are to claim that Botto presents asymmetric upside, we must be able to explain why it is currently selling for less than its justified value.
The growth of the digital art market and AI will take time to play out. There are also several project-specific barriers:
- Botto can be hard to grasp and is often misunderstood. Many people think of Botto as just another “AI artist.” Establishing Botto’s image as an autonomous artist will take time.
- To date, Botto has lacked dedicated outreach to prospective collectors. This is changing as we speak.
- Botto currently has a poor voting UX for surfacing promising fragments. This is also about to change with the launch of an upgraded gallery UX.
- Botto lacks a distinct visual identity, unlike other projects such as CryptoPunks or Chromie Squiggles that have an instantly recognizable style. Botto may evolve this over time. But perhaps more importantly, what it lacks in visual identity it may make up for in story and narrative over time.
Potential Catalysts for Botto’s Growth
Long-term, non-project-specific catalysts include both the growth of AI as mentioned in Part 1 and of the digital art market.
The current total value of art sold as NFTs is ~$2.1 billion, compared to an estimated global art market of $1.5–3 trillion.
Tokenized (NFT) art is more globally discoverable, shareable, and transferrable than legacy art with superior provenance and verifiable authenticity. It also offers better value capture for artists via perpetual royalties.
As such, it is likely to capture a larger slice of the global art market in the long run. Additionally, the space may reflect the broader growth of crypto as an asset class, with crypto-rich individuals and funds using NFT art as a way to store wealth, diversify holdings, and derive status and meaning.
Project-specific growth catalysts include physical exhibitions and other live events, Botto access passes for aligned communities, a new dedicated collector outreach role, and art collaborations.
Botto is working on its first art collaboration as of this writing. Botto is uniquely poised for collaborations due to its prolific and flexible output and its reputation. Collaborations will increase Botto’s cachet and visibility to a new base of collectors.
Weekly auctions draw ongoing attention to Botto and reinforce its visibility to collectors.
Art vs. Token
What is the best way to invest in Botto — to buy its art or token?
There is no definitive answer here, and I personally own both. That said, I view the art as the purest long-term investment in Botto, the artist. While the token has other benefits, it also has more team dependencies and factors influencing its price.
Botto 1/1 Benefits:
- Fewer dependencies
- Scarcer. By 2050, the supply of Botto 1/1s will be ~15% that of CryptoPunks
- Less effective inflation/sell pressure especially given collector base strength and individual attachment to the art
- More direct investment in Botto as 50% of funds go to the project treasury
- More aesthetic and meaningful
BOTTO Token Benefits:
- Earns protocol revenue
- Grants voting power to train Botto or mint preferred fragments
- Grants governance rights in protocol
- More liquid
Early Work Premium
As new Botto 1/1s are to be minted in perpetuity, its earliest works are likely to maintain and build a market premium.
There will only ever be 52 Genesis Period 1/1s — works minted in Botto’s first year of existence with its original art engine. Genesis Period 1/1s are held by a loyal collector base with only one listed for sale as of this writing.
Genesis phase Bottos have already sold on the secondary at a significant premium to newer pieces.
That said, any 1/1s that Botto mints before ~November, 2023 will be among its first one hundred works and likely be considered “early” — someday.
