What makes an NFT project special? What gives it the potential to grow to many multiples of the initial investment? Maybe to an infinite multiple, in some cases where the initial investment is 0?
And how are most projects doing it wrong right now?
Read on for my perspective.
I’ve been asking myself what NFT projects actually are, for some time. And, as an investor in many projects, I’ve also been asking myself, why do I feel a strange irritation that most of these projects are getting something fundamental very wrong.
Avatar projects, specifically, are basically crowdfunding on steroids, with a strong open source ethos foundation that unlocks participation from everyone. The purchase of the NFT aligns incentives, provides some initial funding, and then it’s down to the whole group to make it a success, or not.
This is an important point: success is rarely going to be down to the founding team alone. By themselves, they cannot compete and make the project stand out and be extraordinary. Any NFT project founders who think that they can, are having delusions of grandeur, imho.
Really successful projects are the ones who have figured out how to get everyone to participate enthusiastically in building awesome stuff. They have figured out how to reach critical mass and trigger a creative explosion.
Joining new projects, I’ve felt a kind of background irritation about how they’re going about trying to do that. Recently I joined a project, and they said, “create some memes with our sneak peek art and we’ll aware whitelist spots”. And that triggered the insight for me.
When I joined Lazy Lions, I created probably about 20 memes involving Lions. I was an enthusiastic contributor. I posted those memes everywhere. I collated a Twitter list. I felt engaged to participate in the project. Nobody was telling me to do these things, or paying me with whitelist spots or airdrops or whatever. The aligned incentive from being part of the project was enough.
And, perversely, I think if they had tried to pay me for it, I wouldn’t have done it.
Creative participation is voluntary. It’s not something that can be bought. If you ignite people’s imagination, they will perform miracles for your project. If you pay them in whitelist spots, they will do the bare minimum to get a WL spot and move on to the next project.
Case in point: Loot. It was basically nothing, a free mint, the barest of starting points, but it lit NFT twitter on fire and ignited a sizeable wave of creativity, far beyond what the creator of Loot could have achieved even with a well funded team. So I’m starting to think that this is a critical factor to enable a project to “make it”: can they unlock the creativity of their community, ignite their imaginations.
Now onto how most projects I see are getting it wrong.
Back in the earlier days of NFTs, gas wars became a problem. A pattern was imagined to solve that problem: whitelisting. It solves the problem of gas wars effectively, but does it create a different, much worse problem?
People are coming up with all sorts of ways to gamify whitelisting. Project founders know that engagement is key, but, like most people in the world, they think that can be bought.
Contests: we’ll pay you with whitelist spots if you do X.
Invites: we’ll pay you with whitelist spots if you invite N people.
Engagement: we’ll pay you with whitelist spots if you grind to L10 on our Discord.
This seems sensible on the surface – after all you need some kind of filtering mechanism. But who is it filtering in and even more importantly who is it filtering out?
I believe the kind of people who will trigger a creative explosion are your “crazy ones”, “round pegs in square holes”, troublemakers, unruly ones, etc, like in the famous Apple advert.
Let’s call them the crazy ones.
The crazy ones is who you want to attract to your project.
You know what the crazy ones hate?
They hate drudgery. They hate doing pointless work for work’s sake. They hate jumping through stupid hoops. They hate being *made* to do what they love to do anyway, for some light financial incentives. In other words, they hate most of the mechanics people have come up to restrict whitelisting.
In other words, current whitelisting practices are filtering OUT the people who are most needed for a project’s long-term success.
Who are they filtering IN?
People willing to do some work for a lottery ticket, essentially.
And I know a lot of NFT investors will fall in that category. But hear me out: we (investors in many projects) are the least valuable members of an NFT project. We may not be paper hands, and pride ourselves on not panic selling. But anyone who’s in 15 different projects is definitely not investing much time in making any of those projects a success.
“Investors” who aren’t also engaged creators are dead weight for an avatar project.
We’re willing to grind, or come up with creative solutions (I’ve heard of people hiring people on Upwork to grind whitelists) to avoid the grind… but ultimately, investors are there for the financial return, not to help reach that creative critical point.
We have the term “whale investors” well established in the crypto/NFT community. I think we need a new term:
Whale contributors are the ones who will sit there and make awesome new cool shit for your project. Not because you incentivised them to, but because they feel inspired to do it. Because they just fell in love with the project and that’s what they’re thinking about all the time.
I suggest that Whale Contributors are way more valuable than any other project members, including whale investors.
AND THE CURRENT, TYPICAL WHITELISTING PROCESSES IS VERY EFFECTIVE AT FILTERING THEM OUT!
I might be wrong about all this, but at this point, I think that any kind of remotely grind-like whitelisting process in an NFT project is essentially an ANTI-PATTERN.
It’s a signal that this project is NGMI.
If you think that you can pay people (with WL spots) to trigger a creative explosion… YNGMI.
Because the people you need to GMI are going to be turned off, because they hate being made to feel like they’re being creative just to get some cheap reward.
I don’t have the solution for how to attract whale contributors repeatably. I think it is possible such a solution does not exist. Each project may well have to figure out their own unique solution, which will work once, and then be aped by NGMI projects and rapidly become an antipattern.
This is a lot of weight on project creators.
And it may well be what they need to do to have a chance at unlocking the creative potential of their communities, trigger a creative explosion, and end up building something much bigger than any founding team could do by themselves.
Thanks for reading. If you want to talk about this, please hit me up, I’d love to hear other people’s perspectives.