SeaCows is the world’s first true NFT AMM with a hybrid off-chain AI valuation + bonding curve pricing model, allowing for instant and constant NFT trading and yield earning for NFT holders. SeaCows provides it’s target market, active NFT traders and rich NFT power users, with constant liquidity, low fees, and opportunities for yield. While SeaCows provides clear and unique value to NFT and DeFi users, marketplaces are a winner-take-all game and winning market share against OpenSea and Blur will be difficult. I recommend that SeaCows implement a three-pronged GTM approach. First, mimic Blur’s airdrop strategy to incentivize sticky users, second partner with highly trusted names and threadoors to increase visibility and trust, and third to cultivate a sense of community using the cute sea cows theme. Tokenomics are also critical to incentivizing users, but is outside of the scope of this strategy and could be covered in the future.
SeaCows Product Explanation
SeaCows is an NFT AMM and uses a hybrid off-chain AI valuation + bonding curve pricing model. Buyers can instantly and constantly trade NFTs without worrying about bidding or finding sellers and Sellers can earn yield by depositing their NFT and ERC-20s into the pool. SeaCows’s product has two key differentiators versus other NFT AMMs.
First is Seacows’ hybrid off-chain AI valuation + bonding curve pricing model. The AI valuation accurately prices NFTs based off rarity and traits which differentiate the NFT from others within its collection. You can think of the market demand for the collection as expressed by the bonding curve while the market demand for unique traits within the collection is expressed by the AI valuation model.
Seacows’ second differentiator is that any user can deposit their NFTs into any liquidity pool. On other NFT AMMs, users are free to create their own pools but cannot deposit into another user’s pool. This fractures liquidity is a bad user experience. Both buyers and sellers want a simple one-stop shop to both buy NFTs and provide liquidity — similar to Uniswap.
SeaCows Value Proposition
NFT AMMs provide key advantages to buyers, sellers, and liquidity providers. Buyers and sellers gain access to instant and constant liquidity. AMMs algorithmically determine price so buyers don’t have to worry about finding sellers (or vice versa) like on OpenSea. Also, because AMMs do not require an intermediary or custodian their fees are typically lower than in an order book model.
NFT holders would also benefit as they can now earn a yield on their NFTs. Investors always want to earn yield for holding their assets and through LPs and staking crypto has brought yield to the most popular assets. However, there are still few reliable sources of yield for NFTs despite their market value. Similar to how AMMs solved this for cryptocurrencies, now AMMs can solve this same problem for NFTs
I will also stretch and reason by analogy. DeFi usage exploded with AMMs as they found clear product market fit versus order books. AMMs are fully decentralized and autonomous, provide constant and deep liquidity, and are much more composable than order books.
Target Market
SeaCows is an AMM meaning it is a three-sided marketplace where buyers, sellers, and liquidity providers (LPs) are needed to make SeaCows work
Buyers + Sellers
- Active NFT traders — Power users who transact multiple times per week are more likely to value SeaCows instant + constant liquidity and lower fees. While casual users may appreciate SeaCows’ lower fees, liquidity is less of a pain point for them
Liquidity Providers
- Rich NFT power users — In a liquidity pool, you are guaranteed to be able to withdraw the same amount of NFTs as you put in. However, there are no guarantees around which NFT from the collection you will receive. Users who have only a few NFTs and have built an identity around their NFTs will likely not deposit their NFTs. Therefore users who have many NFTs and do not care about their specific traits are more likely to deposit into liquidity pools. Richer NFT users are also more likely to be DeFi-aware and have greater demand to earn yield on their assets
Tokenomics
Creating a tokenomics model is a large endeavor. I would expand on this in the future given more time. Overall, I think the SeaCows tokenomics model should create a symbiotic relationship between buyers, sellers, and liquidity providers. I think GMX is a great example of a protocol that incentivizes all three sides of the marketplace and has sustainable economics. Strong tokenomics incentivize activity and make the asset more investable thus creating stronger narratives. I think the key tents of strong tokenomics are real utility (likely in the form of a % of fees) and limited/known inflation (both in total supply and in longer vesting schedules from investors)
Airdrop
The goal of the airdrop is broadly to incentivize “sticky” users. In the case of an AMM, we want to attract both liquidity providers and traders. Arbitrum and Blur both had extremely successful airdrop strategies. In both cases, the hype and expectation for an airdrop was used and actually more effective than the actual airdrop itself
Blur took this a step further by creating a “point” system which was clearly for an airdrop but the exact exchange rate of points for $BLUR tokens was unclear. This unknown exchange rate actually creates more hype as it plays to people’s “gambling” and “speculation” instincts. So, people’s excitement around an airdrop and the unknown conversion of their points to $BLUR tokens incentivized long-term activity.
Blur also incorporates “seasons” to incentivize users to continue to use their application so they can qualify for another airdrop. An unknown date increases and extends the excitement. A known amount of points but unknown conversion formula allows for speculation which also increases and extends excitement
SeaCows should implement a similar model, gameifying the points process. Provide dashboards and bonuses when certain “tiers” are hit. Gift them an NFT that shows their level of activity/points (similar to GMX blueberries). The point system also allows SeaCows to incentivize desired activity more directly. If swapping is prevalent but liquidity is lacking, you can distribute more points to LPs and vice versa
Liquidity is more important to incentivize than trading. Good UX and unique features will incentivize traders to use SeaCows, but if liquidity is low and slippage, fees, and prices are high they will not use the platform
Protocols like GMX also use multipliers and lock-ups to incentivize longer-term liquidity. Liquidity may be better incentivized with actual tokens you can sell rather than points
Marketing/Community Building
Similar to airdrops, marketing is meant to build hype around the protocol. Equally important though is community building. A strong community can be a huge boon for any new crypto protocol. Because the crypto space is so narrative-driven, your community can become your vocal advocates on Twitter, Telegram, and Discord.
From a marketing POV, I believe it’s critical to build hype and trust with the NFT community. This means building partnerships with likable and highly trusted names and potentially sponsoring popular NFT podcasts. The most critical communities to win will be the blue-chip NFT names like BAYC, CryptoPunks, Azuki, Pudgy Penguins, Miladies, and more. These communities are more likely to have richer NFT traders; plus in a bear market, there is more demand for blue-chip NFT names. I think boots-on-the-ground marketing will help as well. Working with threadooooors will help build narratives and trust around SeaCows. Post screenshots of otherworldy yields!
I think a community can also supercharge this growth. SeaCows should lean into its cute aesthetic similar to pudgy penguins. This means that its messaging, copywriting, and aesthetic should all be cute and playful. You could play on the ocean theme talking about diving into “pools” for example. I also think a profile pic NFT would generate community and increase notoriety in the space. GMX Blueberries became a source of clout and pride for GMX holders and I think SeaCows could do something similar.
Partnerships
I think partnerships will also be critical in the space. Generally, I think you could partner with aggregators (like LooksRare or Blur) or you could partner with protocols that build on top of other yield products like PendleFi.
For fun, I think a partnership with Pudgy Penguins would be great. The community is strong, they are a blue chip NFT, and they match the cute ocean theme.
Recommendation/Conclusion
I recommend that SeaCows execute a three-pronged strategy to win market share against Blur and OpenSea. The first is to mimic Blur’s airdrop strategy, gameifying the process using points, withholding the actual date of the airdrop, and utilizing multiple seasons to incentivize sticky users. The second would be to partner with highly trusted names in the NFT space and threadoors to build hype, trust, and understanding of the platform. Lastly would be to cultivate a sense of community using the cute sea cows theme (Dugongs? MANatees?).
Establishing trust and legitimacy will be critical. Since SeaCows would be targeting high-value NFT traders, they have to trust the security of the contracts before depositing into the liquidity pool.
Already, I see some easy low-hanging fruit to accomplish the above. First, the documentation is bare and has some grammar + spelling mistakes. I think documentation on HOW the AI pricing model works and why SeaCows liquidity pools can have anyone deposit versus Sudo which cannot. I think making an NFT collection would be helpful and could be done with minimal effort. I also think discord should be utilized more. There is no general chat as far as I can see, so there is little hope of real community development. Make a general chat! Make a channel for how to optimize yields! Make a channel for huge PnL gainz porn!
