We still continue to debate what NFTs are. Are they art as defined by Beeple’s 69m Christie’s Sale? Are they representative of a real life object as Otis is doing? Or are they a digital representation of a digital good that can be transferred across the metaverse? Event tickets? Are they a representation of history as evidenced by Jack Dorsey’s first tweet sale?
just setting up my twttr
— jack⚡️ (@jack) March 21, 2006
Or some kind of hybrid as the Bored Ape Yacht Club project is? Partial membership card, partial digital flex, partial party invite? Perhaps they are all of the above, however, it seems that there are a few aspects of NFTs that successful projects share.
1 – Community Value
As most NFT creators know, they need to create a vibrant community on Twitter or Discord in order to have success. GaryVee, a vocal proponent of NFTs, is betting it all on the community. With his latest endeavor, the Flyfish Club, GaryVee is turning his latest NFT into a tradeable membership. As they say, membership has its privileges. The project has 3035 total memberships available. 2650 are regular memberships that started at 2.5 ETH and 385 special memberships starting at 4.25 ETH.
The regular membership gets you into a cocktail and outdoor lounge along with a high end seafood restaurant and invitations to events. The Omakase membership gets you into a 14 seat omakase room as well. While not all the available tokens have been released, the anticipation is high. On the secondary market (on OpenSea), a regular membership is asking for about 4 ETH. Once you are in the restaurant, you are able to pay in fiat currency, but getting into the restaurant is 75% of the battle.
2 – Press
Community can lead to hype which can lead to NFT sales, but it is the press that drives the secondary market which drives demand. The Bored Ape Yacht Club project continues to go up as shown by its price. Through a combination of press, record breaking auction sales, FOMO, celebrity owners, and well timed parties, the Apes project continues to generate more interest. GaryVee, a master of generating ink, has seen his Flyfish Club NFT increase 60% in its short lived life.
3 – Artistic Signature
Many artists have a signature that can easily be recognized from afar. The success of many projects like the profile pictures (PFPs) is due to the fact that while all are different, they share common elements that allow users to recognize them quickly. In a world where many cannot wait to get to the metaverse, digital “flexes” play a large role. Having a popular NFT PFP transmits status, early adoption, trend setting, and other elements of cool in the metaverse and in social media that fashion, sneakers, cars, and watches convey in the real world.
4 – Progress
Gamers are big buyers of NFTs and leveling up and making progress is a large motivation of many games. Leveling up is also a motivation for NFT holders. While no one is sure where things are going, forward progress is always a positive indicator and constant innovation keeps things interesting.
When the founders of the Pudgy Penguins project left holders with broken promises, the market punished existing holders, thereby sealing the project’s fate that the founders would not have the resources to execute their promises at all. The price of a penguin has dropped drastically from 25,000 in the summer of 2021 to about 5000 today at the start of 2022. (Contrast that with the Apes project that is currently at 80,000). The Apes have signed brand deals and are creating a game while the Penguins haven’t created any new drops or the video game that was promised.
No one is sure how the NFT market will shake out, but we can count on these four characteristics to be constant on future successful drops. A strong community, a press worthy project, beautiful art, and a project roadmap are a good starting place as you plan out your next NFT drop.