Celebrities don’t deserve NFTS

NFTs were the craze of 2021 and 2022 set out to tokenize private ownership and put everything on the blockchain. From property ownership, membership tickets, donation certificates, and crowdfunding to gaming assets and funky profile pictures. All on the blockchain for anyone to verify.

But things took a different turn. With every layer 1 blockchain launching its NFT marketplace and the hype that followed, it was a jpeg collecting bonanza. Companies raise millions of dollars to develop kindergarten-level art and sell them for tens of thousands. They get the money and the buyers are suckered in with the hope of someone else paying more for their NFTs. The largest use of this FOMO, Ukraine announced an NFT for anyone who donates to the war. Turns out everyone wanted a jpeg to represent their so-called noble deed and hurried in. They took a U-turn and ended up with more funds because of the hype. It was then evident that celebrities won’t rest to get their hands dirty in public attention. They launched their collections focused on extracting value from retail investors and the publicity they gained was a bonus.

“The peril is you have these $3 million monkeys and it becomes a different kind of gambling.”

Vitalik Buterin

So where did we go wrong? What happened to the whole revolutionary concept and its implementation? To answer that, let’s look into what an NFT represents and how much you own it.

NFT rights and ownership:

It is important to note that NFTs(Non-Fungible Tokens) are lines of code that ‘point’ toward a particular URL. Usually, when we think of NFTs we think of digital art and images. In reality, no image or graphic is stored on the blockchain, which would be too expensive because of the immense amount of data. Instead, a URL is stored on the blockchain that serves to represent the image. Hence you don’t own the image but rather a pointer. The image could be changed anytime if the owner has access to the server on which it is stored. When it comes to rights on IP for NFTs, the owner or the company behind it decides how open the license is for the buyer. For example, Yuga Labs, the creator of Bored Ape Yacht Club allows a broad license for buyers of the Apes including packaging, restaurant themes, and music projects. It is analogous to the presence of USDC and USDT on Ethereum. They may run on a decentralized blockchain but to seize, issue, or allow anyone to use it is in their control.

Likewise, the video of Snoop Dogg will continue to exist on the internet for years, until the tech on which it’s hosted becomes obsolete; for now, it’s freely available for all to “enjoy”.

~The Telegraph

A Cash Grab for Celebrities:

So, how could celebrities be left out of this new craze? Especially at a time when they have fewer physical goods to sign and sell. We saw big names coming into the NFT space including the likes of Justin Bieber, and Jimmy Fallon, music icons including DJ Khaled, Eminem, and Snoop Dogg, and sports stars such as Floyd Mayweather and Tom Brady. The list becomes huge when including YouTubers and brands. But the main point of concern is that are these people even educated about the potential of the technology? Are they shilling their collections only in the hope of making money from the sponsorship deal? This is aligned with the fact that they promise you bigger gains, exclusive items, and a roadmap up until it is rugged and you are left with one thing: hope. Your attention is their source of income. They will exploit that to whatever extent they have to.

Let’s look at the change in floor prices of some of the most famous collections:

• Justin Bieber’s “Inbetweeners”: down 30% from mint price
• Reese Witherspoon’s “World of Women”: down approx. 75% of ATH
• Tyson Fury’s collection: not clear if you can sell these
• Floyd Mayweather’s “Floyd’s World”: down 99% from mint price
• Kevin Hart’s “Confessions from the Heart”: down 50% from mint price
• Mike Tyson’s NFT collection: down more than 40% from mint price
• Steph Curry’s “2974 collection”: down 75% from mint price although the sales were to go to charity
• Stan Lee’s “Chakraverse NFT collection”: down 75% from mint price
• Grimes’s “Earth Collection”: down 97% from mint price
• Gary Vee’s “Vee’s friends”: up 300–1000% for early investors

Now, you notice a trend here, every celebrity launches or promotes an NFT collection, raises the hype, people FOMO in, and then the price just falls off a cliff showing a lack of demand and no actual utility. However, you’ll notice the odd one out which is Gary Vee’s collection. His NFTs have stood away from the “cash grab” and show a sustained interest. This is because Gary Vee, himself, is an active social media icon who is seen energetically interacting and engaging with his fans. In addition, the NFT is used as a ticket for an exclusive event each year. The art of the collection is not as elegant or mind-blowing as the price. This is mainly attributed to his ambition, as he says:

For me, success [with NFTs] is only if I’m able to execute over the next several decades to build a truly meaningful — I’m shooting for like, Scooby Doo, Smurfs, that’s big big. And I really think I can.

Now let’s talk about the 90% that is garbage. Just because the NFT space is filled with desperate retailers trying to make a buck does not mean that people in power should exploit them. Commitment is necessary to make an NFT collection worth owning which is mostly not seen in the class of people already in the spotlight. Why use NFTs specifically? The lack of expertise ultimately leads them to be advertised as the next big thing. This is unprofessionalism which needs strict regulation. In traditional finance, these types of rug pulls would be avoided because of bad publicity. They turn to NFTs as it is a free market and blame investors on their ‘lack of research’. Truth in Advertising (TINA), a non-profit, has announced that it has sent letters to celebrities involved in promoting NFTs. To quote their statement,

“NFTs generally aren’t helping improve the financial literacy of their fans and followers.”

Most people in 2021 got their introduction to the crypto ecosystem through NFTs. These were the shiny images that were easy to trade and looked cool owning one. The ethos of decentralization and open-source must be upheld. Many content creators and artists that build on the actual technology of NFT are often shadowed. NFTs have manifold use cases and only by understanding and spreading awareness we can see them revolutionizing private ownership. Commitment to the project, clear strategy, and community support is necessary for an NFT project to thrive.

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