Precarity in the NFT Space
It’s better to be an average Founder in a well-structured industry than an amazing Founder in a poorly structured market.
The move to 0% fees in the NFT space is exposing some structurally inescapable issues and is going to make it more challenging for Founders and more precarious for NFT collectors.
Exposing the “profit at the expense of others” mentality, “overexposure”, and “duration mismatch” issues in the space will be healthy if and only if the long-term investors and talented Founders are in sufficient numbers to support the ecosystem (doubtful today…unclear in the future).
It will force Founders to mint at a price that will put enough money in their treasuries to build things of durable value. Lighting up revenue streams outside a project’s immediate community will be essential and will have to be done using the initial proceeds of a mint.
Bots can now own ALL floor price liquidity outside of the rare pump where demand exceeds supply. Regular traders will have to accept WETH offers from bots and longer-term holders when they’re ready to sell floor assets in a project.
And most existing projects that haven’t yet figured out where non-royalty revenue is going to come from are in trouble. A LOT of trouble.
It will be interesting to watch how this plays out but what’s clear is that it will take talented, business minded Founders to navigate the choppy waters!!!!