7 Jun 22 – Of Degen Mints And A Shifting Global Economy
Micro trends amidst a gloomy macro landscape
If it hasn't yet been clear to you enough, yes the macro landscape sucks. All assets are on a decline, a complete U-turn from what we were experiencing half a year ago when the markets look infallible. So what changed?
The macro view contends that it's the Fed doing quantitative tightening, reducing the money supply, and adding selling pressure on mortgage-backed assets as they look to reduce their balance sheet and taper their buying. Add to that the global supply chain issues that has extended since over a year ago, things are just looking bleak.
In my previous article, I suggested that:
BTC/Crypto is a risky asset to some, and a hedge/alternative to others. Depending on your view, you'll either sell it off or accumulate on the dip.
Most crypto people are of the view that it will rebound – the question is how hard and how long the crash will be.
NFTs are extremely risky – a derivative of crypto in a way, and may not be a good time to buy especially if you have no idea what most of them are.
Having a diversified portfolio may in fact be the best defense mechanism against a broad market decline.
While these will hold true, opportunities abound whichever side of the fence you're on, as seen from the latest NFT fad.
Goblins And Degen Mints
You see, for those who are zoomed in on the NFT market, there is the latest trend of "free mints".
In a time where no one wants to take on added risk of paying for NFTs, free mints have become an increasingly popular for projects to launch and earn solely off royalties with no upfront pay out in mints. In fact, this has been a proven model by a number of projects but Goblintown took it to the next level.
With Goblins, they cleverly devised lots of "easter eggs" hidden within their website, their smart contract, and pushed out the right narrative as the best possible time. As a result, they went from free mint to around 9ETH at the top in less than two weeks – a notable feat considering that many other projects failed to mint out while some choose to push back their launch dates.
And in true NFT copy-pasta style, a host of derivatives popped out, from Elves to Orcs, to Goblins adapted in other project styles. Many of which offered a quick flip, especially if you got in on the free mint and tossed the hot potato off to someone else who believed he could sell it for higher. But many of these are really just a ponzi, where bag holders will be left with worthless NFTs with no buying demand even if you drop it to cents.
What about Goblins? It remains to be seen because the team has not yet doxxed themselves, or have any roadmap in place. There are however many prominent collectors and that support can mean something if the team is doing something legit. It has also cemented its place in cultural history for producing something so unexpected yet much talked about in the most bearish of times, one that set itself a new meta.
Following Goblins, the next controversial one might be WAGDIE, or We're All Gonna Die. Like Goblins, they were a free mint, CC0, and have some interesting mechanics being unveiled. Most recently, they held a cult-like sacrificial ceremony where participants sent some of their NFTs into the abyss, a burn address, which means they'll never be able to be recover. This included over 100 WAGDIE and a Mutant Ape worth around 20ETH.
Call it performance art, which can be something. An entertainment during the bearish times perhaps. What the project seeks to achieve, who are the holders and what are they aiming to achieve with holding/participating, these are all unknowns and risk factors to consider should you decide to join the horde.
NFTs Are Just A Small Sector Today
If you're paying attention to the NFT scene, you'll get by fine not jumping on these degen mints. Even if you're not, none of what these trends or even the price of BAYC will matter. That's how insignificant the NFT sector is at the moment. That's how early the concept is, how little understood the utility of NFTs are, and how low on the adoption curve we are.
Yet, the reason some of us choose to pay so much attention is because we believe at how much this space will grow and how NFTs will be an intrinsic part of our lives. For me, I believe that NFTs will be a platform/tool/channel/avenue for us to manifest our social identities and it will exist invisibly in many areas of lives. As for the high-valued blue-chips we see today, I believe they will form a segment of the market that's more like the collectible market we know today.
Outside of these, NFTs will be tied to many social experiences in our day-to-day lives and these will probably be non-tradable or of minimal token value, and possibly priced for their represented utility rather than for the speculative value of the token. This will also be a vastly different NFT market from what we see today.
This brings me to my final point – why even buy or invest in NFTs today?
I do not have a recommendation but I'm keenly aware of my rationale and my risks. As such, there are also specific types of NFTs that I put my attention on – fashion, and accessibility.
There really isn't one right answer. If you haven't found an area of interest, staying out of the NFT market might in fact be one of the soundest financial moves. Yet, if you want to treat it as a learning journey, putting a small disposable sum and getting behind a couple of projects might end up opening new doors for you.
They say that if the only tool you have is a hammer, you'll treat every problem like a nail. In reality, the carpenter sees it as a hammer, the killer sees it as a weapon, and the writer might see no use for it except as a paperweight. I can only describe NFTs as a shapeshifting tool, which you accept any view you're presented, but it might in fact be more than just a hammer.