Volatility is something people are talking about given the skyrocketing prices and volume on NFT, but a new trend seems to be emerging in this area.
Aesthetics aside, for many investors, buying an NFT is like throwing a hook full of bait into an opaque body of water hoping a fish will bite. Sure, when the Bored Ape Yacht Club (BAYC) got listed, some buyers thought “it looks great” and “the community is really strong and engaged,” but these aren’t real valuation metrics.
Community activity and owner statistics are important traits to look for when buying NFTs, but beyond that, buying and hoping someone will buy back at a profit is nothing more than speculation.
In recent months, several projects have recognized that it is necessary to offer “more” to the owners or to be “approved” through a roadmap or a decentralized autonomous organization (DAO) in order to maintain and diversify the hierarchy of owners ( instead just owning the majority of the project) and providing incentives for future buyers. As a result, a number of projects have implemented Airdrops, the Metaverse utility, DAOs, and token issuing capabilities to meet these needs.
Council of Kongz | Source: CyberKongz
An example of a utility-equipped NFT is CyberKongz, a cool Kong-themed project where NFT issues BANANA tokens, which are currently traded at SushiSwap and OpenOcean for USD 63.7. Each Genesis CyberKong spends 10 BANANAS per day for a 10 year period and at the current valuation that means Genesis owners are bringing in $ 637 per day.
In addition to selling tokens on available markets, owners of two Genesis CyberKongz can also hybridize them to create a Baby CyberKongz NFT that can be minted by issuing BANANA.
Other “blue-chip” projects from NFT that are adopting the “add-on” model are Cool Cats, which plans to issue “MILK” tokens, and Winter Bears, which offer staking in the NFTX vault and Enter into partnerships with PieDAO. BAYC also offers real perks such as exclusive gear from streetwear brand The Hundred, airdrops for keepers and a scheduled utility in the Metaverse.
NFT generates the greatest return for investors | Source: BrokerChooser
As shown in the graphic above, the data is from Broker selection shows that 6 out of 10 NFT projects that generate the greatest returns for investors are currently offering tokens, airdrops or utilities planned in the Metaverse.
Cool Cats NFT ATH Price | Source: OpenSea
About a month ago, Cool Cats traded for between 1.5 and 3 ethers, but after the project announced its plans to airdrop, issue tokens, and develop a metaverse utility, it hit a new all-time high (ATH) average price at 25 , 75 ethers. According to data from OpenSea, the minimum price of Cool Cats is currently 9.6 Ether.
Bored Ape Yacht Club NFT price for the past 90 days | Source: OpenSea
Similar results can be seen in the BAYC project, where Sotheby’s auctions, BAYC-related airdrops, and the publication of the roadmap match the rise in NFT price.
No token issuance due to regulatory concerns
There are some concerns about token projects that look very similar to an unregistered security offering. And with the US Securities and Exchange Commission (SEC), Senate and White House threatening crypto regulation time and again, not every project is in a hurry to supplement its NFTs with utility tokens.
In fact, over the past week, several projects have gone so far as to clarify their view that these tokens are intended to facilitate the “utility” of the project and are not assets intended to reflect the value of a project in the open market.
– The Boggartt (@TheBoggartt) October 10, 2021
“Remember that BANANA is not a passive source of income. 1 banana = 1 banana. It’s just a utility in the CyberKongz ecosystem, that’s all. “
Some of the newer projects like CrypToadz not only offer metaverse usage and token issuance, but have also set up DAOs to allow the community more interaction with the direction of the project, or have the project presented under creative means that it is in the public domain and the creator has denied “all copyrights and related rights” in the project.
This allows CrypToadz owners and admirers to create, mint and sell derivatives of the original project that can be sold in the open market or allocated for sale to CrypToadz NFT owners.
In the past week, two CrypToadz sold for over $ 1 million and the project quickly hit 21 ethers, which should give many collectors hope for one of the NFTs. The project’s CCO status allows owners to benefit from proprietary derivative services while bringing more public information about the original project. After the success of CryptToadz and a number of other projects such as CryptoZilla and Pixelglyphs, the DAO / CCO model was adopted.
– NFT whale alert (@nftwhalealert) October 6, 2021
“Bought CrypToadz 1519 for 420 ($ 1,504,364)
Average price: Ξ12.19
Adjustment: Licked – Hallucination – 0.07% ”.
As with cryptocurrencies, the price of NFT is extremely volatile and is determined by various trends, sentiments, paid and unpaid influencing factors, and a host of other intangible factors. The very experimental nature of the field means that projects are constantly experimenting with new methods to attract investors, build a community and stay relevant.
Token-bearing NFTs could be a fad that is losing its appeal as every project on the block follows the model. The same thing can happen with airdrop-to-holder tactics, and there’s really no way to tell if the current “create a DAO and buy all the money” approach will work.
It is important that the NFT space is always in a state of innovation and that the most successful investors and collectors are those who keep up with emerging trends.
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According to Cointelegraph