It’s been another interesting week in the Web3 world to say the least.
In the last 7 months we have witnessed ETH decline in value by over 75%.
While this drawdown is undoubtedly impacting the value of all our NFT collections — such dramatic drawdowns have occurred many times in the past and will likely occur many more times in the future.
As such, in today’s edition of The Ground Floor we will be breaking down the past, the present and the potential future of NFTs.
The Future of NFTs
Breaking down the past, the present, and the potential future of NFTs...
An NFT is a digital token issued by a smart contract.
Today, however, the term NFT represents nothing more than 3 random letters taken from the alphabet for the far majority of the people.
In the future, we suspect this term will become as widespread as the internet itself, however, before focusing on the future let’s go back in time.
The first NFT may have been created on the Ethereum blockchain in 2015, however, the moment NFTs truly entered the mainstream was some years later when Beeple sold an NFT titled “Everydays: The First 5000 Days” at Christies for $69.3 million.
In the time since, NFTs have continued to gain popularity with celebrities such as Neymar, Snoop Dogg, Madonna and several others having joined the infamous Bored Ape Yacht Club.
In the last year, OpenSea, the primary marketplace for NFTs exploded in popularity.
During this time, NFT collections such as Bored Ape Yacht Club, Doodles and others have gone from assets which anyone could purchase, to assets reserved for the rich.
At their peak, a Bored Ape Yacht Club NFT would have cost $416,000 - 13x the average annual income in America.
Sending Social Signals
While it likely seems ludicrous, perhaps even borderline reckless, that people would pay such large amounts to own these assets — the underlying utility of these assets continued to increase alongside the price.
What utility are we referring to? Social signals.
NFTs such as BAYC allow people to send a social signal that they are wealthy.
While this may seem somewhat limiting use case for NFTs — there’s no shortage of demand for physical goods that service this exact same purpose.
On the high end, items such as Rolex watches, Gucci clothing and Rolls Royce cars come to mind, however, there’s a very long list of successful companies that have been built to service this same human desire.
Creating digital goods that allow people to communicate status is likely a very large market, however, it’s by no means the total addressable market for NFTs.
An item we see on the fast track to joining the Web3 World is tickets.
With sports teams such as Juventus already using the blockchain to issue fan tokens, we expect to see sports teams leading the way when it comes to commercializing this model to remove the existing middle men.
Outside of tickets, keep a close eye on clubs like FlyFish club founded by Gary Vaynerchuk which has issued membership passes to in person venues via NFTs.
2) NFT based games:
New economic models are coming to games.
Candidly, many of the earliest blockchain based games such as Axie Infinity have not delivered on the promise of providing gamers with high quality games whereby you have the opportunity to own in game assets.
To date, gamers have had to choose to between playing high quality games whereby they don’t have the opportunity to re-sell the items they purchase in the game, or playing low quality games whereby they are provided with this opportunity.
3) Early access passes:
Building software in an information vacuum is incredibly difficult.
For startups seeking to find product market fit, building the right feature can be the difference between building a successful product and having to inform your investors that you successful ran out of money.
4) PFP collections are here to stay:
3 Things You Need to Know
Salesforce Allow Customers to Create NFTs with NFT Cloud
Salesforce, the American cloud-based software company, have piloted NFT Cloud - their no-code platform that enables users to mint, manage and sell NFTs. There’s been
NFT NYC is next week!
The NFT world is gearing up for its biggest annual event next week. It’ll be interesting to see what the energy is like considering the market slump but we think NYC will be rocking. Please come and say hi!
Blockchain powered games could be what spurs the next bull run. Dark Forest are doing something super interesting with ZKP technology. There’s some alpha for you from the ground floor team
Okay, the day has finally come.
I am forced to grudgingly admit that I have found a blockchain game that legitimately does something with Blockchain that is genuinely new, innovative, and that you can't do with a centralized service.
That game is Dark Forest.
— Lars "Totally Texas" Doucet (@larsiusprime)
Jun 15, 2022
3 Things You Need to Know
1) Salesforce Releases NFT Cloud
Salesforce, the 100+ billion dollar American cloud-based software company founded in 1999 by , have piloted NFT Cloud - their no-code platform that enables users to mint, manage and sell NFTs. There’s been
2) NFT NYC is next week!
Tweet of the week
The number of unique wallets buying NFT is at a 12 month low.
This should not come as a surprise when we consider the downtwards price pressure on the price of ETH and the broader macro environment.
Thanks for the read,
This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.