NFT Project Primer

By Rekt | Rekt Report | 20 Jan 2022


What's a cardinal mistake that new entrants to crypto fall for, time and again, inevitably resulting in rug-pulls and lingering bad feelings directed to blockchain tech?

Investing in a project with no prominent backers or no visible leaders.

Many anonymous projects, most conspicuously generative art, present themselves alongside Bitcoin or CryptoPunks as following the model of offering no transparency or authentic community, but still demand exceptionally high valuations.

When you dig deeper, these two examples are wildly different than this purposefully misguided representation.

Bitcoin may have a anonymous founder, but it also has a strong community of industry backers like Tyler Winklevoss Tim Draper Brock Pierce Sam Bankman-Fried who integrate its tech into important use cases, driving demand and utility.

These anonymous projects will almost always have no major backers and an executive team with no last names.

CryptoPunks may not have a vocal leadership team immediately apparent to those looking at billboards in New York City displaying these early NFTs, but, behind the scenes, Larva Labs has Matt Hall & John Watkinson with exceptionally deep competencies in tech, an enviable rolodex, and are visible at Christie's sales or important events.

If someone is really intent on investing on an NFT project and doesn't have a technical understanding, I would rather you use Bright Moments or Instagram to find an artist who really speaks to your artistic eye and then support their work by purchasing a piece.

These are the type of projects that, as far as I've seen, have done well for collectors who back artists who are full-time into their life's pursuit of creating visually arresting art and a following, which will drive the demand for their art in the future.

Just as those discovered Alexa Meade early and now have a highly sought after piece of digital art, with a deep pool of demand, being early to the ballgame on an artist, much like a company, can yield huge dividends.

Investing in artists is also more accessible to the everyday person, too, without the accredited investor laws that bar the lion's share of Americans from getting early on deals. While the SEC may feel that wealth is the only useful metric to determine financial literary, this may change overtime. In the intervening years, art, through NFTs, does afford the opportunity to invest in early, emerging artists meaningfully, but requires the same sharp eye that one might bring to an IRA investment.

Many generative art projects sell themselves as the next #NFT sensation, but every dollar they get it put back into Google or Facebook ads to continue to grift from people who are tragically trying to turn a little into a lot.

It's worthwhile to have discriminating, discerning eye and:

- Never click on a crypto-specific ad on any platform
- Invest in people, not profile pictures or promises

 

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Rekt
Rekt

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