Builders Will Build The Future of NFTs
Anyone with a vested interest in NFTs needs to watch this video by Dan Olson (@foldablehuman on Twitter) with an open mind.
The crypto and NFT space can be such a closed silo that we’re unaware of outside opinions, and it’s important to always question the investments and effort you’re putting into anything. We need to listen to the feedback we’re getting from content like this instead of just dismissing it.
Contrary perspectives are badly needed right now. It’s going to be very difficult for NFTs to reach our goal of mass adoption and mainstream acceptance before we look in the mirror at these difficult perceptions that are rooted in truth. Dan clearly put in a ton of effort to properly research the NFT industry, so I encourage you to set your bias aside and absorb what he’s saying. Even if you disagree with 100% of it, he presents what many people think about NFTs outside our bubble — and most importantly why they have that perspective.
Shouting “FUD!” (Fear, Uncertainty and Doubt, the standard response to criticism in the crypto space) in response from the fear based retaliation part of your brain disregards the opportunity to see how the mainstream audience views the current state of NFTs. If the audience we’re looking to bring on board are holding up a mirror to how we are perceived, then we need to take a good, honest look at it. The massive number of comments below his video bashing on NFTs serve as the the strong slap in the face we need to wake up and realize what the outside world thinks.
Please, PLEASE do not jump into the comments and fight. Sit. Listen. Recognize what they’re saying, why they’re saying it, and the validity of their arguments. Even if you disagree, their perception is their reality. If we want their respect, it’s on us to change that perception regardless of why we think they’re wrong. Smug “You don’t get it!” responses do more harm than good. We need to show our work.
In that spirit: Dan frames NFT project developers scamming holders out of their money as the industry standard. But I know firsthand how hard the developers work on the projects I invest in. These devs often work ungodly hours to the detriment of their own mental, emotional and physical health, motivated by their obligation to return value to the communities that support them.
So my aim is to strike a healthy balance here, because both sides of this debate are correct. Dan rightfully illustrates the . . . for lack of a better term sleazy, predatory nature that’s been pervasive in many parts of the NFT space. But at the same time, the arguments he makes to show that overlook the projects that are truly building substantial value through hard work and innovative concepts.
Let’s start from the foundation.
Up until recently, the NFT market almost entirely existed on the Ethereum network. It still carries the lion’s share of liquidity. And I fully agree with Dan: it baffles me that this is the case considering how expensive and unusable the network is, with transaction fees easily costing around $100 (referred to as the “gas fee”)
Adidas launched its first metaverse project on Ethereum back in December. It was a hot item, one that everyone knew would sell out quickly. So customers dedicated to the brand piled onto the NFT platforms for the first time. They went through some tutorials, figured out how to download a Metamask wallet, loaded it with ETH and got ready to mint.
It . . . did not go well. Go figure, people with no previous experience in crypto and NFTs weren’t expecting a $100 charge simply for trying to make one purchase. Many also lost the gas fee without even getting the NFT! This is an accepted and known risk in the crypto world when using Ethereum, but an infuriating experience for first time users.
Please enjoy the many comments in the Tweet below as mainstream consumers are formally introduced to their first (typical) experience on the Ethereum network.
Despite all this Ethereum is still the #2 cryptocurrency in marketcap, second only to Bitcoin. Even though it’s practically unusable, the crypto community and its influencers still love it, regularly citing upcoming solutions that will definitely be out soon to solve its clunky and expensive user experience.
(Also they want you to keep buying Ethereum and sternly warn that you’re going to miss out if you don’t buy more now. But you probably could have already figured that one out.)
I wanted to get into NFTs for months, but Ethereum’s crazy high $100 gas fees were a no-go for my financial comfort level. I know, it’s a little weird that I’m a stickler to this kind of tight budget. But I was also too cheap to go with the cell phone plan that wanted to charge me $100 for each text I send. We all need to work within our own budget.
So I figured I was priced out of NFTs and moved on. Then I found Solana, and I’ve been in love every since.
Solana provides a much needed alternative with extremely low gas fees and fast transactions. And while this is a huge change in itself in terms of accessibility, it also creates a massive paradigm shift in terms of what NFTs can be.
When the barrier of costs for transactions is removed, users can easily move assets back and forth to different places on the blockchain, and that expands opportunity for designing projects in a whole new way. Suddenly, the technology becomes an open canvas for creativity.
Far too many still use that fresh canvas to make something redundant like “The Stoned Snake Skin Shedding Society of Saskatchewan. 42,069 slithering to the metaverse and coming soon to their own awesome cartoon!”
Side note thinking through this theoretical project: over a period of time the snake NFTs shed their skin. This leads to $SHED tokens. Accumulate enough $SHED and you can get . . . an NFT of a shed. In Saskatchewan. The art shows it proudly waving the Canadian flag on the roof and growing a weed garden on a farm outside because of course it does.
The cartoon will feature their wacky adventures as the snakes get stoned, stick to their couches for 23 minutes and try to figure out a way to order delivery for mice to eat.
You know, frozen and already dead like you’d get for your snake at Petco. Because who wants to chase after them? They get up every now and then on the big episodes to shed around their sheds.
Major networks will see the brilliance and bid up the rights to air it. The rare combination of mainstream success with critical acclaim for its groundbreaking storylines and character development will lead to the blockbuster AAA video game promised in the roadmap. WAGMI.
(Feel free to jump on this brilliant concept by the way, just be sure to hit me up for a wallet address to send my rightful 2% of all royalties.)
Anyway! We need to look past the noise, garbage and absurd promises. There are quality human beings creating and delivering wonderful things on the same canvas. And with this outlet, they’re able to come up with new businesses, brands and experiences that are only possible thanks to the blockchain.
We are seeing this happen in the Solana system right now. In the Discords for the good projects, I have never once seen the “WAGMI” phrase or attitude that Dan rightfully criticizes tossed around. Instead, the rallying cry is “Builders Build”. And in that spirit, I want to highlight a handful of projects that illustrate how the NFT industry will change, along with the negative perception they carry today with many in mainstream culture. These are just the tip of the iceberg, there are many others putting in the same level of hard work and long hours.
First, let’s look at Anybodies. So many NFT projects rehash the same tropes and creative laziness that Dan rightfully takes the woodshed. Amid that sea of redundant, mediocre projects, Anybodies stands out in so many ways. Be sure to check out the Forbes article on it for a top level view, but I’ll summarize here.
The NFT profile pictures themselves completely reject the bro-centric marijuana themed aesthetic* of the NFT space. Instead, they made a conscious decision to create a collection that celebrates diversity. Different religions, races and gender identities are celebrated and represented in a way that flips the standard convention for NFT imagery into a whole different direction. It’s a true brand concept.
*To clarify, on a personal level I have many positive things to say about cannabis and few negatives. I fully agree with the excellent takes the great Bill Hicks provided. I’m just speaking to what I see from my background in marketing and brand development.
I hate that it’s a ubiquitous NFT trope that serves very little purpose at this point and will repel the demographics we’re aiming to bring in. For one example: kids, teenagers and the financial approval needed from their parents. Keeping it real, we are more or less a new business class turning away truckloads of money on their way to our door.
This isn’t an all or nothing thing. Tomorrow’s inevitable “Capybara Cannabis Club” and “High Kite Flying Kush Kangaroos” projects have their profitable niche for our current demographics and I fully endorse creating something of value for that audience.
But if that’s not the target market, we need to be mindful of our decisions. “Marijuana as a default aesthetic” is a massive negative for audience acquisition in exchange for no tangible positive. Perspective on perception is badly needed here.
Back to Anybodies, they have a remarkable business model that wouldn’t be possible without blockchain. There are 3,000 Anybodies NFTs in circulation. Buyers have the option to put theirs into the “Diamond Vault”, where they become locked for thirty days. During this time, holders are unable to list them on the open market, increasing scarcity and value. As a reward, they get assets like $LOCO tokens airdropped into their crypto wallets for each Anybodies they have locked up.
Dan pointed out how scammy the vast majority of these token schemes are. It’s true! But please allow me to illustrate how that will change: what you see below are the limited edition Anybodies X AF1 custom Nike sneakers, available only to early supporters of the project.
The $LOCO tokens can be used to buy the Anybodies brand high quality fashion NFT items, and you can only “mint” one (buy the item on its release) for each of the 3,000 Anybodies NFTs. Holders can buy and sell these NFTs just like on any other marketplace.
But this is more than a JPEG. If you hold one, you can redeem it for this pair of sneakers that will arrive at your doorstep. They are legit of the highest quality on market, designed by elite Nike fashion designers VijzBespokes.
FYI you can’t right click that. I mean, you can save a picture of the sneakers, but you ain’t getting them for realsies.
Once you’ve redeemed the NFT to get your real sneakers, it creates double value by transforming into a digital version that can be used with your metaverse avatars. And this metaverse clothing item can also be bought and sold on the NFT marketplace.
Anybodies is a textbook example of how NFTs open the door for a business model that wouldn’t have otherwise been possible. And I don’t say the word “business” as hyperbole: Anybodies is a registered LLC with a full team of employees. They regularly post pictures of their clothing items arriving and being shipped from their warehouse.
The original NFT mint of a project like this often acts as a positive catalyst, providing funding to launch a new business. It’s similar to what we’ve seen Kickstarter, where the earliest adopters get exclusive rewards.
The company followed up their sneaker with a new drop a few days ago, a hoodie designed in collaboration with DeGods — a core and extremely passionate community within the Solana NFT space (I am a part of this community, please peep the stylish profile picture with the Communist ushkanka trait). It has the same business model as the Nike’s: buy and sell the NFT on the open market, redeemable for the real thing delivered to your front door, replaced by a new NFT of a metaverse DeGods suit.
DeGods reflects the brand and attitude you’d expect from a classic NFT project. It’s not going to create the warm fuzzy feeling you’ll get from Anybodies, but there’s still innovation and value created.
This week, the team launched their much anticipated $DUST token, and like $LOCO it has real value. Typically, new token launches in crypto involve VC investors getting the bulk of the token at a much cheaper price. This allows them to sell in large quantities and use retail investors as exit liquidity after the plebs buy at a higher price. By contrast, $DUST is launching with a quantity of zero.
There are two ways to generate $DUST attached to the sacrifice of DeGods themselves: burning your DeGod (destroying it out of circulation forever) or “staking” it, which means temporary removal from the marketplace. $DUST can then be used to purchase NFTs from the highest value projects on Solana, with more uses in the works by the DeGods developers. The funds for this expanding utility are created by the 10% royalty tax on sales, and the community votes on how to use this treasury.
There’s one more way to generate $DUST: you can burn the NFTs from projects that “rugged” holders — a term for when a project rips off buyers after it launches as the developers take the money and run. DeGods is doing this as an acknowledgment of giving back to the Solana community who have been taken advantage of. And also provides much needed catharsis to destroy that bad memory of stolen money constantly mocking you in your wallet.
Since the announcement of $DUST, the floor (lowest price available for the NFT set) for DeGods has doubled in one week. Putting in the work and a new value concept reinvigorated the project, which had stalled for months with declining market interest and volume. They could have left investors holding the bag like in the examples of scammy projects Dan uses in his video. But they didn’t. They got to work.
Most of all I need to address the last point Dan makes about NFT gaming. He only talks about Axie Infinity, and there is truth to all the negatives he mentions in his video. I get that there aren’t many NFT games out right now that provide alternatives to Axie and Sandbox, but that’s about to change in a big way. Again, thanks to faster networks like that can handle the necessary transaction speeds with small fees.
Look at Panzerdogs. It’s being developed by Lucky Kat, a high-level game studio with a portfolio of work that’s already generated 200m+ downloads.
Click here to check out the demo, then click on Play Now under the sales stats. It is genuinely FUN. Like I mentioned in this review, my kids can’t stop playing, and it’s just a small sample of what the finished product will be. They constantly ask if new features have been added and when the beta will be released. I asked if they would spend $10 from their Apple store allowance to get it without a P2E feature, and got a resounding yes.
The Panzerdogs team made a point with their economic model that unlike Axie, their game will not be Pay to Win. The NFTs will give some advantages in terms of bonus tokens or faster crafting times, but ultimately it’ll be possible for any player to compete, have fun and earn money.
Now let’s consider an important detail when it comes to value of the NFT model vs. the traditional gaming economy. In the Panzerdogs whitepaper, they point out that mobile app stores will take around a 30% cut from the studios on each sale. The NFT model takes away that intermediary and replaces it with 50% of Panzerdog revenue going back to the players. This is not the NFT model Dan rightfully criticized: it’s the giving the customers a big chunk of the profit as a reward for mastering the game and showing faith in the team.
Aside from rewarding the players instead of the companies that act as a middle-man, there’s a specific aspect of the gaming NFT economy that I absolutely adore (getting mushy here, I know).
There’s been a distinct predatory dynamic of the crypto and early NFT markets. People who buy in early convince those who come later to buy in next and hold so they can be used as exit liquidity. For every investor who wins, there’s another one who loses.
But the gaming NFT model creates a consistently equitable win-win transaction environment where both parties walk away happy. In Panzerdogs, players create their own custom tanks by combining turrets, tracks and bodies. There are countless combinations available that add a complex element of strategy to the game. And because the core format is a three player PvP, teams are going to want to customize their squad based on roles.
Let’s say I’m going to play the role of the tough tank in front who protects the other two players and absorbs damage. This is referred to in many competitive AAA games as the “Tank” role (in Panzerdogs it’ll be the “Tank Tank”, and I plan on relentlessly running this joke into the ground with zero shame).
So my strategy requires a strong body that can take a lot of hits. I take a fast set of tank tracks that I don’t need for my build and put them on marketplace. Another player who is playing a quick DPS role gets the part he needs, and now I can grab the one I’m looking for. Both of us got what we wanted, no one had to lose value for the other to gain. And even if a player sells an in-game NFT for profit, they’re being rewarded for their efforts while the buyer gets to improve their in-game experience.
On the other side of the coin compared to Lucky Kat, Knife Fork Spoon is a community oriented project with a small team that’s been bootstrapped from the ground up. The lead on the project lists an MBA as one of his qualifications, and his professional messaging/project management shows that’s a warranted claim.
KFS is marketed as “The Mario Party of Solana”, giving out prizes in SOL (Solana’s native token) on a weekly basis to holders through their mini-games. These events are streamed live on Twitch with commentary, in addition to weekly poker games and video game nights that also provide prizes in SOL.
These prizes are provided from a large portion of the 10% royalty tax for each NFT sale. When the project first launched, sales were slow and these funds weren’t as readily available. But the team still put in prizes at a loss while continuing development. Now they’re reaping the rewards, along with the community that supported them.
The amount of personal sacrifices and long hours the KFS team made to push forward and keep building is unheard of in a traditional workplace. One of the developers had COVID and still worked through it because he had to.
These are not the lazy devs in the NFT industry Dan illustrates so well. This is a small team with no HR department or paid leave, and they push so hard that we need to encourage them to take breaks. Yet when you talk to the KFS guys either in Discord chat or voice, it’s clear they’re doing it out of the pride of making their project as good as it can be. The genuinely want to give back to the community that puts faith and financial support in their ability to keep creating value.
Soon they’ll be releasing the Spoonverse (a service that rents out their product to other NFT communities), and their second mini-game is ready to go. The top Solana influencers recognized their hard work, and joined in on the fun. The results speak for themselves, as everything from little details to new games are constantly launching and streaming live.
On subject, perhaps the most professionally qualified project in the Solana space in terms of resumes is Fractal. President and Founder Justin Kan is best known for founding Twitch, a groundbreaking presence in the gaming space that was sold to Amazon for $970m. The Fractal team also includes Google Drive co-founder David Wurtz, XPD Media mobile gaming founder Robin Chan (his studio was sold to Zynga) and twenty year Shopify veteran Mike Angell.
Fractal launched a markeplace specifically designed for NFT games, with features tailored to the needs of the gaming community. For one example — in traditional NFT marketplaces, an owner needs to put their asset into an escrow account where it leaves their wallet and becomes unavailable (until sold or the owner cancels the listing to get it back). But for games, players want to keep using that item even if it’s up for sale. The Fractal marketplace makes this possible by removing the escrow requirement.
The eventual goal of Fractal is to build a community of blockchain games that allows players to transfer their assets across multiple titles. To kick this off, the team distributed their 100,000 Fractal NFTs to their community for free. They will be a vital part of this new cross-game asset model.
In terms of the NFT community, Dan brings up a great point with the concept of “diamond hands”: investors in projects being shamed into not selling for the sake of maintaining price level for the rest of holders (who can then sell for more when the price is propped up). But I’ve rarely seen this attitude in the overall Solana community. For example, The SOL Army is a group motivated by the aim of creating “Positive Vibes” — a healthy environment that fosters organic growth and project integrity on Solana. The group advocates holding to support projects over the long run, but actively encourages selling if that individual’s financial situation and strategy warrants taking available profits.
Again, I fully embrace Dan’s criticisms and we should all thank him for presenting a badly needed outside voice. He deserves a lot of credit for putting in the effort to do thorough research on what we do here before making his arguments. In fact, he knows more about the intricacies of the underlying technology than I do, and I’m sure the same applies to the vast majority of us.
The flaws he points should not be written off as FUD. They are a much needed wakeup call to weed out the elements we all need to change. A reputation of professionalism, dedication and innovation needs to be earned. Only then will NFTs receive the mainstream acceptance we’re all looking for.
With time, I have full confidence it will happen. A famous story in the history of video games is how Atari crashed the market by releasing far too many rushed games with low quality. Believe it or not, this decline got to a to a point that gaming was considered a dead fad by most of mainstream culture. That is, until the Nintendo Entertainment System came out and showed what was possible.
NFTs are currently working through their Atari moment of growing pains. A market flooded with bad projects looking to make a quick buck that rightfully cause the perception of a bubble ready to pop and pass as a fad.
Beneath all that is the next step powered by upgraded technology — the Nintendo, Playstation and Xbox phase that will bring far more quality and effort. In the face of this evolution, Ethereum users are terrified to lose their market share. It’s like if we were in the process of moving on from Atari, but all its users had massive stock shares in the company so they kicked, screamed and insulted Nintendo players about how the new system was inferior.
The argument Ethereum users make to defend the network is that it is the most “decentralized”. In other words, they feel it’s similar to Bitcoin with control in the hands of many vs. new networks funded by a small number of VCs. But this assumes new users coming in with mass adoption will care about the same moral libertarian ideology that’s been used in the space for over a decade; the idea that participating in the crypto market with the “right” altruistic networks is a noble, altruistic act.
It’s not. Let’s be real, it’s about making money. And as long as that’s the case, with new networks emerging to take the throne, the mass adoption coming in could care less about the decentralization narrative. JP Morgan recently cited Solana taking 15% of Ethereum’s market share. The snowball is off and rolling down the mountain.
Layer 2s, ZK Rollups and other solutions to make Ethereum usable are in the works, but there are countless blockchains on the market similar to Solana that are more efficient, specialize with different uses and ready to take the place of ETH. And to be fair, Solana has had its share of slow transactions and network outages as users flock to the network. But these are growing pains that can be fixed on its sound foundation vs. patchwork bandaids.
When I look at the arguments of Ethereum’s long term viability I can’t help but think about the Sega Genesis, and how they kept adding clunky patchwork solutions while the rest of the industry passed them by.
Ethereum will probably have its place as the network for users who can afford the high transaction fees for the sake of buying the more expensive assets. Entirely possible I’m wrong and their 32x + Sega CD stack works, and keeps them on pace with new technology. Who knows! But my money is on new networks designed from scratch to fix Ethereum’s flaws allowing for true mass adoption at the expense of the decentralization narrative. I doubt customers will care about a libertarian ideology when it means taking away the $100 transaction fee on that Adidas NFT.
On subject, where does Bitcoin fit into all of this? Well, there are many devoted “Bitcoin Maxis” who refuse to buy any “(Poop) Coins” because it goes against their beliefs of Bitcoin being the one true force in recorded history that will overthrow the tyrannical government and oppressive banking system to free all of humanity. Or whatever.
So as long as they’re in that . . . (religion?) they’re not allowed to own any other crypto tokens, which means they’re not allowed to own NFTs. Kinda like the Amish and electricity.
If you had to sum up Dan’s point into one sound bite, it’s this: the WAGMI attitude serves as a deceptive rallying cry to keep people invested in their NFTs to their own financial detriment so others can profit.
Not anymore. Builders Build.
Thanks to new networks everyone can afford to use, and the hard work of dedicated people grinding to bring true value to NFTs, this space will see massive amounts of positive change and growth. With time, there will be more great projects as the bad ones looking to scam out a quick buck fall by the wayside.
When that happens, even hardened skeptics like Dan will change their view on NFTs. It’s up to us to make that happen sooner than later.
I take transparency and integrity very seriously, so please note that I hold NFTs for all the projects mentioned above. This piece is not intended to promote them for my individual gain. Rather, a project with a great vision, work ethic and business model is something I am going to invest in from seeing their fundamentals. Because I am active almost daily in the communities for the projects mentioned, I have firsthand knowledge of how hard their teams work and can credibly speak to the details involved vs. other projects with great reputations that I’m not involved with. There are many other quality projects I’ve invested in that are not mentioned here.
As always, please note I am not a financial advisor and nothing here should be considered financial advice. Please do your own research as NFTs are very risky with most going to a value of zero. Only invest what you can afford to lose.
